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CANADIAN REFLECTIONS ON THE TOBACCO WARS: SOME UNINTENDED CONSEQUE5NCES OF MASS TORT LITIGATION

  • Jeff Berryman

Abstract

During the 1990s many Commonwealth legislatures enacted ‘class action’ or ‘representative proceedings’ legislation.1 The main justification for these initiatives was to increase access to justice for claimants particularly where the injury was widespread but the harm suffered by any particular individual was small. Much of this legislation built on developments in the United States, which had developed a sizable jurisprudence in the area. ‘Mass torts’, those defined as having a large impact engaging multiple claimants, have often formed the cause of action in US class actions. A review of the website ‘Big Class Actions‘,2 which lists over one hundred current suits in the United States, is instructive on how the class action industry has grown in that country.

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1 For example in Australia, see NSW Supreme Court Rules 1970–Sect 8.13; Victoria, Supreme Court (General Civil Procedure) Rules 1996–Sect 18.02; and the Federal Court Rules—Order 6 Rule 13. In England see CPR 19.6 on representative parties and the new rule on group litigation, rule 19.10. In Canada see in Ontario the Class Proceedings Act SO 1992, c 6; and in British Columbia the Class Proceedings Act RSBC 1996 c 50. And Markin, K ‘Class Action suits explode into “national phenomenon’” Globe & Mail 19 July 2003, A7.

2 This is just one of a number of sites dedicated to listing current class action suits in the United States <http://www.bigclassaction.com/alphabetical.html>.

3 Mixed Results from Recent United States Tobacco Litigation’ (2002) 10 Tort L Rev 94.

4 See Rabin, RA Sociolegal History of the Tobacco Tort Litigation’ (1992) 44 Stanford L Rev 853;Smith, SCounterblasts to Tobacco, Five Decades of North American Tobacco Litigation’ (2002) 14 Windsor Rev of Legal and Social Issues 1;Vandall, FThe Legal Theory and the Visionaries that Lead to the Proposed $368.5 Billion Tobacco Settlement’ (1998) 27 Southwestern UL Rev 473.

5 Section 402A Restatement, Second of Torts. However, the commentary to the section also made it obvious that strict liability would only apply where the product was in a defective condition and unreasonably dangerous to the user. The commentary specifically included the comment that‘ [g]ood tobacco is not unreasonably dangerous merely because the effects of smoking may be harmful; but tobacco containing something like marijuana may be unreasonably dangerous.’

6 Although contributory negligence is at odds with strict liability, its adoption into the latter field was seen as a way of reconciling the risk allocation model of strict liability with the moral imperative of taking responsibility for one's own actions.

7 For a concise summary of these practices see Mosesso, SUp in Smoke: How the Proximate Cause Battle Extinguished the Tobacco War’ (2000) 76 Notre Dame L Rev 257.

8 See Rabin, RThe Tobacco Litigation: A Tentative Assessment’ (2001) 51 De Paul L Rev 331.

9 See Milner, BHuge Damages Could Snuff Out Big TobaccoGlobe & Mail—Report on Business 7 Apr 2003, B2.

10 For a useful discussion of these competing theories in the context of tobacco torts see Calnan, ADistributive and Corrective Justice Issues in Contemporary Tobacco Litigation’ (1998) 27 Southwestern UL Rev 577.

11 In particular see Waddams, SProducts Liability (4th ednTorontoCars well 2002), at 231,and , ALinden Canadian Tort Law (7th edn TorontoButterworths 2001), at 599.See also Linden, W, ‘The Potential for a Tort Action Against Tobacco Manufacturers in Canada’ (1987) 6 Advocates' Soc J 25.

12 Spasic Estate v Imperial Tobacco Ltd (1998), 42 OR (3d) 391.

13 Caputo v Imperial Tobacco Ltd (1997), 34 OR (3d) 314.

14 See Waddams above n 11, at 48. The measure of social utility is difficult in respect of tobacco. On the one hand there are the obvious health harms associated with the product. On the other are the obvious feelings of ‘pleasure’ and ability to engage socially that smokers enjoy from the product, as demonstrated in consumer demand. See Evans, MProducts Liability in Ontario: Is the Tobacco Industry in Trouble?’ (1998) 8 Windsor Rev of Legal and Social Issues 115.

15 Hollis v Dow Coming Corp [1995] 4 SCR 634 at 653 per La Forest J (failure to warn about the dangers of breast implants).

16 Battaglia v Imperial Tobacco [2001] OJ No. 5541.

17 Cipollone v Liggett Group Inc 505 US 504 (1992).

18 Tobacco Act SC 1997 c 13 s 16.

19 Sindell v Abbott Laboratories 26 Cal 3d 588 (1980).

20 [1990] 2 SCR 311.

21 Waddams above n 11, at 71.

22 Linden above n 11, at 470.

23 Above n 4.

24 Cupp, RA Morality Play's Third Act: Revisiting Addiction, Fraud and Consumer Choice in ‘Third Wave’ Tobacco Litigation’ (1998) 46 U Kansas L Rev 465.

25 See Galake v O'Donnell [1994] 1 SCR 670.

26 2003 West Law 21180319 (Fla App 3rd Dist). The tendency to award large punitive damagev awards in the United States is itself under scrutiny by its highest court. The United States Supreme Court, acting pursuant to the due process provisions of the US Constitution (14th Amendment), has provided guideposts to assist in appellate review and in issuing instructions to juries on quantification. State Farm Mutual Automobile Ins Co v Campbell, 123 S Ct 1513 (2003), and BMW of North America, Inc v Gore 517 US 559 (1996).

27 The accumulated Federal Government debt stands at approximately $500 billion. See 2003 budget statements at <http://www.fin.gc.ca/budget03/bp/bpa7e.htm>.

28 [2002] 1 SCR 595.

29 The reason for rejecting a classificatory schema is not altogether clear. The Court states that such an approach had been rejected in its earlier decision of Vorvis v Insurance Corporation of British Columbia [1989] 1 SCR 1085. However, that case simply rejected the narrow classification system adopted by the English House of Lords in Rookes v Barnard [1964] AC 1129, and not the concept of a classificatory system per se.

30 Andrews v Grand and Toy Alberta Ltd [1978] 2 SCR 229, Thorton v Board of School Trustees (Prince George) [1978] 2 SCR 267, and Teno v Arnold [1978] 2 SCR 287.

31 ter Neuzen v Korn [1995] 3 SCR 674, at 722.

32 This fear is ever present in Canadian law. Recently, caps on non-pecuniary damages resulting from auto insurance claims have been argued as an effective way to control skyrocketing auto insurance in some parts of the country.

33 See Cassels, JRemedies: The Law of Damages (TorontoIrwin Law 2000), at 163.

34 Caputo above n 13. An earlier case, Perron v RJR Macdonald Inc (1990), 66 DLR (4th) 132 (BC) had been filed in 1990 although it had been summarily dismissed because of an expiration of a limitation period.

35 SO 1992, c 6.

36 Similar legislation exists in British Columbia RSBC 1996, c 50.

37 Western Canadian Shopping Centres Inc v Button [2001] 2 SCR 534, and Hollick v Toronto (City) [2001] 3 SCR 158.

38 In Hollick ibid, the Supreme Court of Canada said that the legislation had to be given a [generous] interpretation.

39 Defined in the Act to be (a) common but not necessarily identical issues of fact, or (b) common but not necessarily identical issues of law that arise from common but not necessarily identical facts.

40 Section 6 of the Act specifically states that a court should not refuse certification simply on the ground that relief claimed includes a claim for damages that would require individual assessment after determination of the common issues.

41 84 F 3d 734 (5th Cir 1996). In Castano the Federal Court refused to uphold the class certification on the grounds that the class, potentially 40 million in number, required individual assessment of damages and determination of contributory fault. There is an emerging trend to allow ‘national’ law suits by Ontario courts encouraged by the Supreme Court of Canada's decisions on choice of forum—requiring a real and substantial connection to the jurisdiction—and to reciprocal enforcement of judgments—requiring courts to give full faith and credit to other provincial judgments. Morguard Investments Ltd v De Savoye [1990] 3 SCR 1077, Tolofson v Jensen [1994] 3 SCR 1022.

42 [2001] 3 SCR 184.

43 Gagne v Silcorp Ltd (1998), 41 OR (3d) 417.

44 This no cost rule only applies after certification of the action as a class proceeding. Up to that time the putative representative claimant is at risk.

45 See Eizenga, M, Peerless, M, Wright, C, and Callaghan, JClass Actions Law and Practice (MarkhamButterworths 1999 and updates), at ch 12.

46 Above n 12.

47 Above n 13.

48 The motion for certification was heard before Winkler J on 12 Jan 2004 who gave his decision on 5 Feb 2004 (‘Ontario Court throws out class action against Big Tobacco’ Globe & Mail 6 Feb 2004). One other case, Ragoonanan Estate v Imperial Tobacco Canada Ltd (2000), 51 OR (3d) 603, involves the certification of a class for an action based on a failure to produce fire safe cigarettes. The case commenced in 1998. Several motions ensued seeking to strike out the pleadings. These succeeded for two defendants but failed in the case of the third. It would appear that this case is still waiting trial.

49 SBC 1997 c 41.

50 JTI-Macdonald Corp v British Columbia (Attorney General) (2000), 184 DLR (4th) 335 (SCBC).

51 SBC 2000, c 30.

52 British Columbia v Imperial Tobacco Canada Ltd. [2003] BCJ No 1309 (5 June 2003) (SCBC).

53 Attorney General of Canada v RJ. Reynolds Tobacco Holdings Inc 268 F 3d 103 (USCA 2d Cir 2001).

54 The decision in the Ontario case was based on reasoning in a suit brought by Guatemala—In Re Tobacco Government Health Care Costs Litigation 83 F Supp 2d 125 (DDC, 1999). See also Schmitz, C ‘US Judge tosses Ontario tobacco suit at preliminary stage’ The Lawyers Weekly vol 20 no 15, 25 Aug 2000. The Canadian Federal Government has since launched a new lawsuit in Ontario to recover alleged illicit profits made from smuggling cigarettes across the US border and avoiding payable tax duties. (‘Ottawa back in court against tobacco firms’ Globe & Mail 14 Aug 2003). Ontario has been urged to follow suit (‘Ontario urged to sue tobacco companies’ Globe & Mail 19 Jan 2004).

55 RJR-Macdonald v Canada (A.G)1994’ 1 SCR 311, and discussed in Berryman, JThe Law of Equitable Remedies (TorontoIrwin Law 2000), at 48. It is ironic that the Supreme Court of Canada did not issue a stay of enforcement of the impugned legislation at the interlocutory stage but ultimately found the legislation unconstitutional.

56 Section 1 of the Charter allows what would otherwise constitute a violation of a Charter right to be upheld if it can be shown that the impaired right is ‘demonstrably justified in a free and democratic society’. In essence the court is required to balance the objective behind the impairment of Charter-enshrined values and to determine whether the legislature has chosen a path of minimal impairment to attain an important legislative objective.

57 RJR-Macdonald v Canada (A.G) [1995] 3 SCR 199.

58 SC 1997, c 13.

59 JTI-Macdonald v Canada (Attorney General) [2002] QJ No 5550 (13 Dec 2002), (2002), 102 CRR(2d) 189.

60 Resolution of the Fifty-Sixth World Health Assembly WHA56.1 (21 May 2003). For the text and negotiation proceedings see World Health Organization web site at <http://www.who.int/gb/fctc>.

61 For US figures see Morbidity and Mortality Weekly Reports of the Centre for Disease Control and Prevention <http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5129a3.htmftabl>. For youth smoking see <http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5119al.htmftabl>. For Canada see Health Canada <http://www.hc-sc.gc.ca/hecs-sesc/tobacco/research/ctums/ 2002/01.html>. These reports confirm the overall impression that rates of smoking are lower in Canada in all categories.

62 See, eg, in Ontario the Municipal Act SO 2001, c 25, s 115 that empowers a municipality to make by-laws prohibiting or regulating smoking in public places including taxis. At least some form of tobacco control by-laws governs 63 per cent of the Canadian population. See Health Canada <http://www.hc-sc.gc.ca/hecs-sesc/tobacco/pdf/by_laws2001.pdf>.

63 See, eg, in Ontario the Smoking in the Workplace Act RSO 1990 c S 13.

64 BC Reg 296/97, s 4. 81.

65 In the US see the Report of the Surgeon General titled Reducing Tobacco Use (2000) ch 6. In Ontario see The Ontario Tobacco Research Unit—Research Update May 2002 ‘Smoking and the Price of Cigarettes in Ontario’ <http://www.camh.net/otru/>.

66 For a comparison in tobacco pricing between Canada and the United States, see the map of the Smoking and Health Action Foundation, Ottawa at <http://www.nsra-adnf.ca/DOCUMENTS/ PDFs/taxmap24aprilO3.pdf>

67 Bill C 38 An Act to Amend the Contraventions Act and The Controlled Drugs and Substances Act. 37th Parliament, 2nd session, first reading 27 May 2003. The Bill died on the order paper when Parliament was prorogued. The new government has promised to reintroduce the bill in the new session.

68 Seniors are the fastest growing population group in Canada. By 2021 the senior population is expected to reach 6.7 million and 9.2 million by 2041, when one in four Canadians will be in that group

69 Health Canada reports that since 1991 smoking-related deaths in Western Canada haveincreased on average by 20 per cent and in Ontario by 8 per cent annually. The rise in the death rate amongst women is even more alarming (77 per cent between 1985 and 1996) which Health Canada attributes to the increase rise in smoking by women in the 1960s. This trend line is expected to continue to rise until 2005, and possibly beyond. See Health Canada ‘Deaths in Canada due to smoking’ at <http://www.hc-sc.gc.ca/english/media/releases/1999/ 9907ebk6.htm>.

70 The economic costs associated with smoking compared to revenues obtained from smokers are a contentious issue. In one study undertaken by the Canadian Centre on Substance Abuse (The Cost of Substance Abuses in Canada 1992), the cost of smoking in Canada was put at $9.3 billion dollars, while the tax revenues from tobacco sales by all governments was put at $5.6 billion. Over 50 per cent of the costs associated with smoking arise from lost productivity from poorer work records and premature death of smokers. Smokers' lobbyists argue that these costs should not be taken into account and that the premature death of smokers actually saves health care expenditures over the long run.

71 Continental Divide: The Values and Institutions of the United States and Canada (New York Routledge 1990).

72 American Exceptionalism: A Double-Edged Sword (New York Norton 1996).

73 Above n 71, at 26 and 212. See also the discussion by Bogart, WACourts and Country: The Limits of Litigation and the Social and Political Life of Canada (TorontoOUP 1996), at 10.

74 Ibid, at 92.

75 Section 91 Constitution Act 1867, laying out the legislative authority of the Parliament of Canada.

76 American Declaration of Independence 1776.

77 Above n 71, at 102 and 225.

78 Fire and Ice: The United States, Canada and the Myth of Converging Values (Toronto Penguin Canada 2003).

79 Section 33 Canadian Charter of Rights and Freedoms.

80 Section 1 Canadian Charter of Rights and Freedoms.

81 Guia, N de, Cohen, J, Ashley, M, Pederson, L, et al. ‘Support for Tobacco Control Policies: How congruent are the attitudes of legislators and the public?’ (2003) 93 Canadian Journal of Public Health no 1, at 36. Contrast the results in a survey of three states in the United States where legislators are less inclined to legislate tobacco controls, particularly if they are from tobacco states or Republicans. A Goldstein, J Cohen, B Flynn, N Gottlieb, et al ‘State Legislators’ Attitudes and Voting Intentions toward Tobacco Control Legislation' (1987) 87 American Journal of Public Health, no 7, at 1197.

82 Adams, M notes that Canadians mirror European attitudes towards government and willingness to pay for public services. In contrast, Americans, who already pay the lowest taxes of the developed world, register an increasing hesitancy to have more government, or to pay more taxes. Above n 78 at 58.

83 Apart from topping the majority of opinion polls as the issue that most Canadians are concerned with and want governments to attended to, most Canadians are fearful of adopting an American-style health care system that reportedly leaves 40 million citizens without any health insurance coverage. For current health policy debates and public opinion poll results see the Centre for Research and Information on Canada website at <http://www.cric.ca/en_html/ guide/health/health.html>.

84 Atiyah, PTort Law and the Alternatives: Some Anglo—American Comparisons’ [1987] Duke L J 1002, at 1044. See also Howells, GTobacco Litigation in the US—Its Impact in the United Kingdom’ (1998) 22 Southern Illinois ULJ 693.

85 The appropriate role of tort law underlines this question. If corrective justice is the rationale then distributive justice is obviously an anathema.

86 In the Canadian survey on the cost of smoking to the economy, close to two-thirds of the costs are attributed to lost productivity and shortened life spans. Above n 70. The overlap with workers' compensation programmes, and causation issues, make the assessment of lost productivity extremely problematic. In addition, civil pecuniary damages for personal injury will be considerably reduced where the claimant's life expectancy is shortened by the injurious act. Inessence, the claimant will only recover lost income after making a deduction for living and care expenses, because those expenditures will no longer be incurred. Actuarially speaking, the claimant will be dead. Where the smoker has died as a result of the tobacco harm, and the claimants are the deceased smoker's dependents, damages are further curtailed. Dependents are entitled to recover for their proven financial dependency, but are not entitled to punitive or nonpecuniary damages. See Cassels above n 33, at 167.

87 Capehart, TTrends in the Cigarette Industry After the Master Settlement Agreementreport of the United States Department of Agriculture, Oct 2001.

88 Bogart, WAConsequences: The Impact of Law and its Complexity (TorontoUniversity of Toronto Press 2002), at 202.

89 Dewees, D, Duff, D, and Trebilcock, MExploring the Domain of Accident Law: Taking the Facts Seriously (New YorkOUP 1996).The authors' review of the empirical material confirms Ausness's, R theoretical conclusions in the area of tobacco torts. See ‘Compensation for Smoking—Related Injuries: An Alternative to Strict Liability in Tort’ (1990) 36 Wayne L Rev 1086.

90 Ibid, at 412, and see also similar conclusions with respect to tobacco torts by R Ausness ‘Product Category Liability: A Critical Analysis’ (1997) 24 Northern Kentucky L Rev 423.

91 See Linden, A, above n 11, at 14.

92 Bogart, WA, above n 73 at 78. Bogart basis his claim on the work of Garth, BPower and Legal Artifice: The Federal Class Action’ (1992) 26 Law and Society Rev 237 who suggested, after studying the impact of class action suits in the US Federal Courts, that the social reforming claims were grossly overstated.

93 Above n 11, at 22.

94 Harlow, CPublic Law and Popular Justice’ (2002) 65 MLR 1, argues that the ready access to public interest groups through representative and group litigation in the sphere of public law threatens to blur the distinction between political and legal processes, and in turn, compromise the values of judicial independence, rationality and finality.

95 In re Simon II Litigation 211 FRD 86 (EDNY, 2002) certifying punitive damages as a common issue.

* Professor, Faculty of Law, University of Windsor, Canada. I wish to thank Jennifer Lalonde, my Research Assistant who was supported by a grant from the Ontario Law Foundation, for her assistance in preparing this paper. This paper grew out of remarks prepared for the South Eastern American Law Schools Conference ‘Roundtable Discussion on the Future of Mass Tort Litigation: The Repercussions of the Tobacco Litigation’ (Florida, July 2003).

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