Foreign firms still part of B.C. tobacco lawsuit
A Canadian appeals court refused yesterday to exclude foreign tobacco companies from a provincial lawsuit to recover millions in costs for treating smoking-related diseases.
The parent firms of Canadian cigarette makers argued they could not be sued by British Columbia because they did not directly sell tobacco products in the province or have operations there. It is the first Canadian jurisdiction to seek financial damages for the health costs of smoking, and the lawsuit is modelled on cases filed by U.S. states against the tobacco industry in the 1990s.
The B.C. Court of Appeals said the issue was not where the companies were based, and it upheld a lower court ruling there was sufficient connection between the foreign firms and their Canadian units to keep them in the suit.
"Although particular defendants may not have been present in British Columbia, the activities alleged against the joint breach defendants are wrongs situated in British Columbia and the harm that resulted was situated in British Columbia," the court said.
Foreign defendants include BAT Industries PLC, British American Tobacco Investments Ltd., R.J. Reynolds Tobacco Co., R.J. Reynolds Tobacco International Inc., Philip Morris Inc., Philip Morris International, Carreras Rothmans Ltd., Rothmans International Research Division, Ryesekks PLC.
The courts have upheld the constitutionality of the B.C. law that authorized the lawsuit. The suit alleged the tobacco industry knowingly mislead consumers about the dangers of smoking.
The industry has denied wrong-doing, and accused the government of being hypocritical for suing over a product that was legal to sell and generated tax revenue.
The Canadian provinces of Manitoba, Newfoundland and Labrador, New Brunswick and Nova Scotia have adopted similar laws. Ontario said this year it was considering a possible lawsuit.
British Columbia has not specified the damages it is seeking, but officials estimated when the suit was filed in 1998 that $5-billion was being spent nationally each year on tobacco-related illness.
