The Ontario government has won an important victory in a $50-billion lawsuit against tobacco manufacturers after the Ontario Court of Appeal refused to let international parent companies out of the court battle.
The province is seeking damages dating back several decades in relation to medical treatment costs for lung cancer patients.
“This is an important preliminary defeat for the tobacco industry for several reasons, including because the parent companies have a greater capacity to pay damages,” said Rob Cunningham, senior policy analyst for the Canadian Cancer Society. Ontario’s lawsuit alleges that the tobacco companies withheld information about the dangers of smoking from the government and the public and blithely marketed tobacco products to youths knowing it could affect their health.
In a preliminary courtroom skirmish, six of the defendant companies argued that the Ontario court does not have jurisdiction to make or enforce an order against them resulting from litigation.
They also argued that the statement of claim issued against them is too vague.
However, Ontario Court of Appeal justices David Doherty, Janet Simmons and Robert Blair disagreed.
“In short, this is not a case where the statement of claim contains nothing more than a series of bald allegations devoid of any factual foundation,” they said on Thursday.
The companies had argued that any connection between them and the alleged wrongs committed in Ontario is too tenuous and that the claim does not specify which of them is alleged to be responsible for particular acts.
However, the appellate judges affirmed that there is a “good, arguable case” that the parent companies were involved in a conspiracy with one another as well as their Canadian subsidiaries to conceal the harm of smoking and to market their product as relatively harmless.
“We are satisfied that the pleadings, in combination with the affidavit evidence filed by the parties, adequately establish a cause of action known to law with a sufficient connection to Ontario,” they added.
Courts in British Columbia and New Brunswick have come to a similar conclusion in lawsuits launched against tobacco manufacturers there.
Mr. Cunningham said all 10 provinces, the Northwest Territories and Nunavut have adopted legislation that would facilitate the recovery of medicare costs through litigation against the tobacco industry.
Nine provinces have filed lawsuits, he said, but none have yet gone to trial.
“For decades, the foreign parent tobacco companies directed subsidiary companies in Canada and around the world to publicly deny the health effects of smoking, to oppose stronger package warnings and to engage in a massive cover-up with deadly consequences,” Mr. Cunningham said.
He said the parent companies of tobacco giants such as Philip Morris and British American Tobacco are in a better position to pay the $50-billion in damages sought by the Ontario government than their Canadian subsidiaries.
“It is essential that this case get to trial as soon as possible,” Mr. Cunningham said. “The tobacco industry cannot delay the inevitable forever.
“This case is not merely about just compensation for health care costs. The case is also about health, and reforming industry behaviour so that what occurred in the past will not occur in the future. The lawsuit seeks compensation, justice, truth and health.”