Canadian court orders tobacco companies to immediately set aside $1 billion for class-action suit

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This story comes out of Quebec. The Quebec Court of Appeal has ordered two tobacco companies — Imperial Tobacco and Rothmans Benson & Hedges — to basically not pussyfoot around and immediately set aside $1 billion Canadian for plaintiffs in a massive class-action lawsuit.

I wrote about this several months ago. These two tobacco companies, plus a third company — JTI Macdonald — lost a $15 billion class-action lawsuit in June for misleading marketing, and for lying about  and covering up the health effects of their cigarettes. The case could benefit up to 1 million Quebec smokers who could cash in on the class-action litigation.  It is by far the biggest court victory against tobacco companies in Canada.

That decision is being appealed as expected. However, in the meantime, the Quebec court ordered two of the three companies to set up a $1 billion fund to immediately start paying out installments to some of the plaintiffs. This prevents the companies from putting off — possibly for several years —  making these class-action payments.

From a CBC News article:

“It is not acceptable that appellants merely say that they have no funds to satisfy the judgment or an order to furnish security and continue to distribute earnings because that is ‘business as usual,'” Court of Appeal Justice Mark Schrager said in his ruling.

“I do not question appellants’ right to appeal but neither can I stand idly by while appellants pursue an appeal which will benefit them if they win but which will not operate to their detriment if they lose.”

From the same article. The tobacco companies are not happy about the ruling. Boo hoo. In a released statement about the court decision:

“Imperial Tobacco Canada … does not believe it should have to secure a payment before all appeals are exhausted and a final judgment is rendered. Imperial Tobacco Canada continues to disagree with the overall judgment rendered by the Superior Court of Quebec. It is unjustified to hold legal manufacturers responsible for the personal choices of adult consumers and it will continue to defend that position as its appeals proceed before the courts.”

Just out of curiosity, I looked into who really owns Imperial Tobacco of Canada, Rothmans Benson & Hedges and JTI Macdonald, because I know there’s really only a handful of major tobacco companies in the whole world.

Sure enough, I was right. Imperial Tobacco is a subsidiary of British America Tobacco, the No. 2 tobacco company in the world. Rothmans Benson & Hedges is a subsidiary of Philip Morris, the No. 1 tobacco company in the world, and JTI Macdonald is part of Japan Tobacco, which bought out many of the RJ Reynolds brands such as Camel outside of the U.S. and is the No. 3 tobacco company in the world. I swear, it comes down to a handful of worldwide companies, it really does.

 

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