Tobacco Giants Granted Another Stay Extension After Class Action Lawsuit Ruling

Tobacco companies JTI-Macdonald Corp., Rothmans, Benson & Hedges, and Imperial Tobacco Canada Ltd. will reportedly have until March of 2021 before they will have to face class action lawsuit settlement negotiations over smoking-related health care costs.

According to the National Post, the tobacco companies lost a pivotal appeal in a major class action lawsuit alleging the companies knew their products caused health problems. The appeal validated a 2015 Quebec Superior Court order requiring the companies to pay current and former smokers residing in the province.

Historic Class Action Lawsuit Costs Big Tobacco Billions

According to a Reuters report at the time, the judgment would cost tobacco companies $17 billion. The class action lawsuit was reportedly the first of its kind in Canada. The judgment would award damages to approximately 100,000 Quebec smokers and ex-smokers.

The class action lawsuit alleged that big tobacco companies knew since the 1950s that smoking caused health problems, but hid that information from the public. The class action reportedly began as two Quebec lawsuits filed in 1998. They were consolidated into a class action in 2005. The trial began in 2012 and ended in 2014.

Class Action Lawsuit on Hold as Tobacco Companies Negotiate Bankruptcy

The historic class action lawsuit judgment was put on hold as three of the tobacco companies named in the lawsuit faced bankruptcy. According to the Regina Leader-Post, the tobacco companies, JTI-Macdonald Corp., Rothmans, Benson & Hedges, and Imperial Tobacco Canada Ltd, asked for a stay in the litigation so they could negotiate with their creditors.

The Leader-Post reports that the stay has since been extended several times, most recently to March 31, 2021, but that all parties appear to be in agreement. Lawyers representing the plaintiffs stressed the need for tobacco companies to change their way of doing business, however.

“What is most important about any potential settlement is its final content. It is essential that any potential settlement contain substantial long-term funding for tobacco control initiatives, as well as effective policy measures to reduce tobacco use,” one lawyer said in an email to Leader-Post reporters. “The tobacco industry should not be able to carry on business as usual.”

Lawyers told the National Post that, though they consented to the extension, there is still “urgency” to reach a settlement on behalf of Quebec smokers and ex-smokers, many of whom face health issues.

“People are continuing to die at an alarming rate,” one lawyer noted to National Post reporters.

CBC News reports that the big tobacco class action lawsuit has been going on for nearly two decades at this point and not all are satisfied with the reported extension of the stay. A representative for the Canadian Cancer Society told National-Post reporters that he was concerned about the secrecy of the mediation process.

“What are the measures there to prevent the tobacco industry in the future from repeating the wrongful behaviour of the past?” noted the representative to reporters. “There needs to be effective mechanisms to prevent the wrongful activities of tobacco companies that have been very damaging for public health. And so that’s essential as part of any settlement agreement.”

The Quebec Council on Tobacco and Health also objected to the stay, telling CBC News reporters that the continued delays are a “denial of justice.”

“We weren’t surprised that they made a legal move,” an advisor for the Council told reporters. “What surprised us a lot was that they didn’t inform us about it in advance. They made this request in Ontario, even though the main judgment against them was in Quebec. It was done late on a Friday afternoon, in private, without the other parties involved in these proceedings. That’s what surprised us.”

According to CBC News, if the tobacco companies are under bankruptcy protection, they may not be obligated to pay Class Members.

Big Tobacco Turns to Vaping

Tobacco companies are reportedly changing their business practices – by investing billions into vaping, according to a Reuters report. Tobacco companies say that converting vaping liquids into vapor clouds to be inhaled using an e-cigarette is less harmful than traditional cigarettes, but critics say that this “vaping” comes with its own risks and that vaping companies have been targeting youth.

Global News Wire reports that a rise in youth vaping rates in Canada directly correlates with tobacco company’s investment in vaping in the country. Reportedly, vape companies have relied on aggressive advertising to youth, along with candy and fruit-flavored vaping products that pack a very high nicotine punch. According to anti-tobacco advocacy organizations, vape products are often sold in all-ages locations, such as convenience stores and gas stations, making them easily accessible to youth.

What do you think about the big tobacco companies being granted another stay, putting class action lawsuit settlement negotiations over smoking-related health care costs on hold again? Tell us your thoughts in the comment section below! 

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