Tobacco companies ordered to pay $15B in damages

Three tobacco companies have been ordered to pay $15 billion in damages after losing a historic court case.

Judge Brian Riordan on Monday ruled in favour of two groups representing Quebec smokers, ordering Imperial Tobacco, Rothmans Benson & Hedges and JTI-MacDonald to pay for punitive and moral damages.

"It's a big day for victims of tobacco, who have been waiting for about 17 years for this decision. It was a long process — but arrived at the destination and it's a big victory," said Mario Bujold, executive director of the Quebec Council on Tobacco and Health.

• 3 tobacco companies in $27B lawsuit begin their defence
• $27B tobacco lawsuit headed for Quebec court
• Tobacco lawyers attack expert witness before testimony in Quebec

The legal proceedings began in March 2012, 13 years after two class-action lawsuits were initiated by groups comprising about one million people. The lawsuits, which sought $27 billion in damages, were heard together in what was touted as the biggest civil case in Canadian history. 

One suit, known as the Blais File, involves individuals who became seriously ill from smoking. The other, the Létourneau File, was launched by a group whose members say they are unable to quit smoking.

The groups alleged the companies:

• Failed to properly warn their customers about the dangers of smoking.
• Underestimated evidence relating to the harmful effects of tobacco.
• Engaged in unscrupulous marketing.
• Destroyed documents.

Payment distribution

The plaintiffs with cancer who began smoking before January 1976 will get $100,000 each. Those who first lit up after that date are entitled to $90,000.

Those with emphysema will receive $30,000 in moral damages if they began smoking before Jan. 1, 1976, and $24,000 if they started smoking after that date.

For the almost one million Quebec smokers who were unable to quit, the breakdown comes out to about $130 per person.

"I am so relieved with what has happened," Lise Blais, whose husband Jean-Yves Blais initiated one of the lawsuits, told a crowd at a news conference. 

"Did you stop to think what a cigarette is? It destroys you — your health is totally destroyed," she said, holding up two photos of her late husband, who died in the summer of 2012 from lung cancer at the age of 68.

"He would be very happy. He is a winner. He likes to win — the same as I do," Blais said. "Seventeen years is long, but I had my hope that we were going to win — and we did," Blais said.

Bruce Johnston, a lawyer for the plaintiffs, said tobacco companies "lied for 50 years."

"They lied to everyone … but they didn't just lie. They colluded to lie," he said. 

Tobacco companies will appeal

JTI-Macdonald Corp. issued a statement minutes after the 4 p.m. ET ruling came down, saying it will appeal the judgment.

"The company strongly believes that the evidence presented at trial does not justify the court's conclusions," the statement said.

"Since the 1950s, Canadians have had a very high awareness of the health risks of smoking. That awareness has been reinforced by the health warnings printed on every legal cigarette package for more than 40 years."

Imperial Tobacco Canada said it was extremely disappointed and will also challenge the ruling.

"Today's judgment ignores the reality that both adult consumers and governments have known about the risks associated with smoking for decades, and seeks to relieve adult consumers of any responsibility for their actions," said Tamara Gitto, vice-president of Imperial Tobacco Canada.

"We believe there are strong grounds for appeal and we will continue to defend our rights as a legal company."

Gitto said a Gallup poll in 1963 confirmed that 96 per cent of Canadians were aware that smoking may cause lung cancer.

"Even though the judge expressly found that the public knew of the material risks associated with smoking for decades, he nonetheless holds Imperial Tobacco Canada and the two other tobacco manufacturers responsible."

Rothmans Benson & Hedges also announced it will appeal the Quebec Superior Court's decision.

In spite of an appeal, the judgment says that $1 billion must be paid out.

"The Court orders the provisional execution of the judgment notwithstanding appeal with respect to the initial deposit of one billion dollars of moral damages, plus all punitive damages awarded," said the 276-page ruling.