National

Japan Tobacco, British American Tobacco and Philip Morris lose appeal in $13 billion Quebec lawsuits

Bloomberg, Reuters

Subsidiaries of Japan Tobacco Inc., British American Tobacco PLC and Philip Morris International Inc. were ordered to pay damages of more than 17 billion Canadian dollars ($12.8 billion) after losing an appeal of class-action lawsuits filed by smokers in Quebec.

The Quebec Court of Appeal upheld a lower court decision with minor changes, according to a ruling released Friday.

The smokers sought damages for addiction and smoking-related diseases, arguing they were never warned of the risks of smoking.

The judgment involves class-action suits that were consolidated against the Canadian subsidiaries of British American Tobacco, Philip Morris International and Japan Tobacco International, known respectively as Imperial Tobacco Canada Ltd.; Rothmans, Benson & Hedges Inc. (RBH); and JTI-Macdonald Corp.

JTI-Macdonald said in a statement it “fundamentally disagrees” with the court’s judgment and that Canadians “have had a very high awareness of the health risks of smoking.”

RBH said in a statement that it will try to appeal the decision to the Supreme Court of Canada. JTI-Macdonald said it would consider that option.

“The risks associated to tobacco use have been known in Canada for decades. Consumers were aware and that’s why we think we shouldn’t be held responsible,” said Eric Gagnon, the head of corporate and regulatory affairs for Imperial Tobacco. “Today’s judgment is disappointing.”

Ben Stevens, British American Tobacco finance director, told analysts on Thursday that the Canadian cases would likely take years to play out in the courts.

While big tobacco companies in the United States have faced lawsuits for decades, the Quebec class action marked the first time tobacco companies went to trial in a civil suit in Canada.

“This is a complete and resounding defeat for the tobacco industry,” said Rob Cunningham, a senior policy analyst for the Ottawa-based Canadian Cancer Society. The industry “has engaged in decades of wrongful behavior resulting in vast suffering, disease and death.”

The judgment comes as Big Tobacco firms are pouring billions into vaping devices that deliver nicotine through vapor they say is less harmful than smoke, and as smoking rates fall in many countries.

The two Quebec suits, called the Letourneau and Blais cases, were filed in 1998 and certified as class actions in 2005. They were consolidated into one before the 2012 start of trial proceedings, which ended in 2014.