MONTREAL – The country’s largest tobacco firms will not have to make an immediate $1-billion payment to Quebec smokers who won a landmark class-action suit.
In a ruling Thursday, the Quebec Court of Appeal said it could be problematic for the companies to recoup the money if they are eventually successful in appealing a judgment ordering them to pay $15.6 billion.
The initial $1.13-billion payment was due this Sunday after a judge ordered it handed over to smokers within 60 days of his ruling.
Imperial Tobacco, Rothmans, Benson & Hedges and JTI-Macdonald have appealed the overall decision that saw a Quebec judge rule that they must fork over the $15.6 billion to smokers who either fell ill or couldn’t quit the habit.
Lawyers for all three firms argued earlier this month they simply didn’t have the funds to cover the $1.13 billion, saying it could cause irreparable harm to their ability to appeal and even put them on the brink of bankruptcy.
They also argued the amount would not be recoverable if they eventually won on appeal.
The appeal court touched on that point in its ruling.
“There is the nagging issue of reimbursement if appellants succeed on appeal,” the panel of three justices wrote.
“The potential necessity of seeking reimbursement of $10,000 from each of 100,000 class members is by any objective standard a prejudice that cannot be ignored.”
Imperial Tobacco welcomed the ruling.
“We knew all along that we had very strong grounds to appeal and today’s (Thursday’s) unanimous decision confirms that there was no legal basis for ordering the provisional execution,” said Tamara Gitto, vice-president law & general counsel.
The executive director of Physicians for a Smoke-Free Canada said she wasn’t unduly disappointed by the decision.
“No, not really, because it was a bit of a sideshow,” Cynthia Callard said in an interview. “It would have been very nice. It was important symbolically that the initial judge recognized that people needed money.
“It was a very nice add-on but the big show is yet to come.”
“They (the companies) were successful but the court made it very clear in this ruling that they’re only successful on this particular pre-payment. They said it was administratively difficult to see how the money could come back.”
The case stemmed from two 1998 suits that were consolidated, with the first witnesses heard only in 2012.
Cecilia Letourneau filed on behalf of the province’s smokers who were addicted to nicotine and remained addicted or who died without quitting _ some 918,218 people.
The other was filed by the late Jean-Yves Blais and sought compensatory and punitive damages for smokers who’d suffered from cancer in their lungs, larynx or throat, or emphysema. That group was comprised of 99,957 people.
For the plaintiffs under Blais, an expert testified at the trial that 85 per cent would be dead within five years.
The lawsuit is believed to be the biggest class-action ever seen in Canada, and lawyers have acknowledged the appeals process could take several years and likely end up in the Supreme Court of Canada.
In ordering the three firms to split the $15.6 billion as follows: 67 per cent to Imperial Tobacco ($10.5 billion), 20 per cent to Rothmans, Benson & Hedges ($3.1 billion) and 13 per cent to JTI-Macdonald ($2 billion), Quebec Superior Court Justice Brian Riordan wrote that they chose profits over people’s health.