TORONTO — An Ontario judge has rejected the provincial government’s request to lift a stay on legal proceedings against three major Canadian tobacco companies.
The Ontario government’s request, if granted, would have allowed its lawsuit to recover smoking-related health costs to push forward.
Ontario Superior Court Justice Thomas McEwen dismissed the government’s request in a one-page ruling released on Friday, with a promise that “reasons will soon follow.”
The province launched its lawsuit roughly a decade ago against a dozen Canadian firms and their parent companies to recoup past and present health-care costs related to smoking.
The case was expected to go to trial late next year or in early 2021.
But pre-trial preparations stalled last month after three of the tobacco companies involved in the suit — Imperial Tobacco Canada, JTI-Macdonald Corp. and Benson & Hedges — sought creditor protection in response to a separate legal battle in Quebec.
Earlier this year, Quebec’s highest court upheld an earlier judgment which ordered those firms to pay more than $15 billion to smokers in that province who took part in two class-action lawsuits.
The companies then sought relief in the Ontario court and obtained orders suspending all legal proceedings against them while they attempt to negotiate a settlement with all their creditors, including Ontario and other provincial governments.
In a hearing on Thursday, lawyers for Ontario said the trial cannot move forward without the three companies that are seeking creditor protection, because the case includes joint allegations that involve them.
The three companies opposed Ontario’s motion and argued that resuming trial preparations would distract from and undermine the negotiations. The companies also argued that the Ontario government cannot claim to be committed to mediation while it devotes resources to a parallel legal process.
McEwen had previously extended the stay of legal proceedings, saying it was necessary to ensure a level playing field between the parties.