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Quebec Class Action [Canada] [May 27, 2015]

Two class action lawsuits were filed in Canada in 1998 against major tobacco companies; the cases were later combined. One class (Blais) involved Quebec residents with lung cancer, throat cancer, or emphysema. The other class (Letourneau) involved Quebec residents addicted to nicotine. After a lengthy trial, the court found that the tobacco companies caused injury, failed to inform customers of the risks and dangers of its products, and violated Quebec law.

In the Blais case, the court awarded moral damages (e.g., for pain and suffering) of $15.5 billion, to be paid jointly by the three tobacco companies. In the Letourneau case, although the court found that the tobacco companies were at fault, it did not award moral damages because there was not enough evidence to determine the total amount of the class members’ claims. In both cases the court awarded punitive damages, which it calculated based on one year of before-tax profits for each tobacco company. In Blais, the court reduced this award to the symbolic amount of $30,000 for each defendant, representing one dollar for each death the tobacco industry causes in Canada each year. In Letourneau, the court awarded punitive damages of $131 million. The tobacco companies must make an initial deposit on the judgment of $1 billion while the appeal is pending.

United States v. Philip Morris USA [United States] [November 27, 2012]

In 1999, the United States filed a lawsuit in the U.S. District Court for the District of Columbia against the major cigarette manufacturers and related trade organizations alleging that defendants, while acting as an enterprise, fraudulently misled American consumers for decades about the risks and dangers of cigarette smoking and exposure to secondhand smoke in violation of the Racketeer Influenced Corrupt Organizations Act (RICO). In 2006, the court found that defendants violated RICO and that there was a reasonable likelihood that defendants would continue to violate RICO in the future. On appeal, the district court’s findings were upheld, in part, vacated, in part, and remanded, in part, to the district court. After the U.S. Supreme Court declined to hear appeals from both sides in the case in June 2010, the district court began to implement the 2006 final order.

This opinion by the District Court specifies language the tobacco companies must publish to correct previous false and misleading conduct by the tobacco companies.  The court announces five subject headings each with specific corrective statements. After describing the required language the court provides a detailed legal analysis of the First Amendment grounds supporting the requirements.  The court then dismisses other alternative challenges brought by the tobacco companies.

Naya Bans Sarv Vyapar Assoc. v. India [India] [November 09, 2012]

In this judgment of the Delhi High Court, an association of tobacco wholesalers challenged certain provisions of the Cigarettes and Other Tobacco Products Act 2003 (COTPA) which banned the selling of tobacco products within a 100 yard radius of any educational institution.  The wholesalers sought an exclusion of their wholesale trade from the law, arguing that the intent of the law was to reduce retail sale and their business would not be a danger to young people buying tobacco.  While highlighting the public health need for COTPA, the court dismissed the petition, holding that the sale of tobacco products, whether in wholesale or in retail, near the educational institution has the potential of attracting the students so both type of tobacco sellers should be equally restricted.  In addition to dismissing the petition, the court also imposed costs of 20,000 rupees each on the petitioners to be paid to the central and state governments for anti-tobacco initiatives.

Engle v. Liggett Group, Inc. [United States] [December 01, 2006]

In 1994, a class-action suit was brought in Florida against most U.S. tobacco companies on the basis of numerous tort claims seeking compensatory and punitive damages for injuries caused by smoking.  After lengthy trial and appellate proceedings, the Supreme Court of Florida was asked to review a judgment by the intermediate appellate court which reversed a $145 billion punitive damages award for the class and a $12.7 million compensatory award for the three individual class representatives.  The court disapproved of the reasoning that the punitive damage award was barred by the earlier settlement agreement entered into by the State of Florida with the tobacco industry, and instead vacated the award because it was excessive as a matter of law.  The court upheld two of the three compensatory awards but found the third was barred by the statute of limitations.  The court further held that while much of the findings of the trial phase could stand, the remaining issues were highly individualized and required an order de-certifying the class.  The court thus remanded the case and required individuals to pursue separate claims for compensation.

United States v. Philip Morris USA [United States] [August 17, 2006]

In 1999, the United States filed a lawsuit against the major cigarette manufacturers and related trade organizations alleging that defendants fraudulently misled American consumers for decades about the risks and dangers of cigarette smoking and exposure to secondhand smoke in violation of the Racketeer Influenced Corrupt Organizations Act (RICO). In 2006, the court found that defendants violated RICO and that there was a reasonable likelihood that defendants would continue to violate RICO in the future. On appeal, the district court’s findings were upheld, in part, vacated, in part, and remanded, in part, to the district court. After the U.S. Supreme Court declined to hear appeals from both sides in the case in June 2010, the district court began to implement the 2006 final order.

To prevent and restrain future RICO violations, the court provided several forms of injunctive relief including enjoining defendants from (1) committing further acts of racketeering relating to the manufacturing, marketing, promotion, health consequences or sale of cigarettes; (2) making further false, misleading or deceptive statements or representations about cigarettes; and (3) conveying  or using any express or implied health message or health descriptor for any cigarette brand including the terms “light” or “low tar.” The court also required defendants to make court-approved corrective statements about the adverse health effects of smoking, the addictiveness of smoking and nicotine, the lack of any significant health benefit from smoking so-called “low tar” cigarettes, defendants’ manipulation of cigarette design to optimize nicotine delivery, and the adverse health effects of tobacco smoke exposure.  The court required additional transparency measures of defendants including that defendants provide the government with access to disaggregated data on the marketing of cigarettes for ten years and continue to make public their internal corporate documents produced in U.S.-based smoking and health litigation for 15 years. Last, the court disbanded several tobacco industry trade or research associations.  

American Legacy Foundation v. Lorillard Tobacco [United States] [July 17, 2006]

In this decision of the Supreme Court of Delaware, Lorillard Tobacco challenged the advertising of the American Legacy Foundation as a violation of the 1998 Master Settlement Agreement (MSA) between 46 states Attorney Generals and the nation’s largest tobacco companies.  The terms of the MSA created and funded Legacy to advocate against smoking and tobacco use, but also included limitations on how Legacy could advocate.  One of the limitations was that Legacy could not participate in "vilification" or "personal attacks" of the tobacco companies or their executives.  Among its advocacy efforts, Legacy developed an advertising campaign called “The Truth” (http://www.thetruth.com/) which created advertisements targeted at catching the attention of young people.  Lorillard challenged the ads as a violation of the MSA, claiming they vilified and personally attacked the company and its employees.   Agreeing with the Chancery Court, the Supreme Court held the advertisements did not meet the legal standard of vilification or personal attacks.  While expressly excluding the dictionary citations offered by the parties, the Court looked at the use of the words in prior case law to determine their legal meaning.  The Court found vilification to indicate strong negativity above disparagement and personal attacks to require specific individual targeting.  Applying these definitions to the challenged advertisements the Court agreed with the summary judgment of the trial court and dismissed Lorillard’s contract claim.

Ruma Kaushik v. Union of India [India] [June 07, 2006]

A public interest lawsuit was filed against the Government of India seeking the issuance of pictorial health warnings on tobacco products, as required by India's omnibus tobacco control law. The court ordered the government to either submit the prototypes of specific warnings or to appear before the court indicating why it should not initiate contempt of court proceedings against the government based on the lengthy delay in developing the warning labels. Subsequent to the decision, the government issued a notification providing for health warnings.

Brambles Australia Ltd v British American Tobacco Australia Services Ltd; Re Mowbray (No 8) [Australia] [May 30, 2006]

Mr Mowbray died from lung cancer in January 2002. His wife sued Brambles, his former employer, alleging that it had negligently exposed him to asbestos fibres in the course of his work. Brambles consented to judgment being entered against it but then sought contribution from British American Tobacco Australia Services, whose cigarettes Mr Mowbray had also smoked. Brambles alleged that BATAS knew that its products were addictive and physically harmful and concealed its own research and investigations into these matters. Further, BATAS, incompatibly with its own knowledge, made public statements that denied or called into question evidence that tobacco was addictive and harmful. In particular, Brambles alleged that pursuant to the so-called "Document Retention Policies", BATAS: intentionally destroyed prejudicial documents with the purpose of placing those documents beyond the reach of litigants; placed prejudicial documents in the hands of third parties, again to keep them out of reach of litigants; placed prejudicial documents in the hands of lawyers under cover of spurious requests for legal advice to facilitate privilege claims; and falsely asserted an innocent "housekeeping" explanation for destroying prejudicial documents.

In this case, Brambles had applied for orders that BATAS provide further and better discovery. In support of its application Brambles adduced evidence from Frederick Gulson, the Company Secretary and in-house solicitor to BATAS between October 1989 to December 1990, about BATAS's "Document Retention Policies", including by tendering transcripts of evidence Mr Gulson gave in United States of America v Phillip Morris USA Inc. Judge Curtis had earlier excluded excerpts of Mr Gulson's evidence as being the subject of lawyer/client privilege. However, Brambles now argued that those passages should be admitted into evidence on the basis of the "fraud exception" (s125 of the Evidence Act).

Judge Curtis found that, on the present state of the evidence, BATAS in 1985 drafted or adopted the Document Retention Policy for the purposes of a fraud within the meaning of s125 of the Evidence Act. Further, based on the evidence presented by Brambles, it had sufficiently discharged the onus of demonstrating, prima facie, that it could make good its allegations. Judge Curtis therefore made most of the orders for further and better discovery as requested by Brambles.

Liggett Group Inc., et al. v. Engle [United States] [May 21, 2003]

In 1994, a class-action suit was brought in Florida against most U.S. tobacco companies on the basis of numerous tort claims seeking compensatory and punitive damages for injuries caused by smoking.  After lengthy proceedings, a $145 billion punitive damages award for the class and a $12.7 million compensatory award for the three individual class representatives were given by the trial court.  This is the District Court of Appeal’s review and reversal of that award. 

The appellate court held the class was improperly certified as a class because the plaintiffs lacked the necessary preponderance of commonality between their claims. Additionally, the court held because of important differences in the claims, the class action procedure was not the superior procedure.  The court reversed the punitive award, holding that it was excessive as a matter of state and federal law; it was a result of improper inflammatory arguments by plaintiffs’ counsel; and it was barred by the State of Florida’s settlement with the tobacco industry regarding similar litigation.  The court failed to analyze the compensatory awards but reversed the entire decision and remanded it to be de-certified, forcing all plaintiffs to address their claims individually.

McCabe v. British American Tobacco Australia Services Limited [Australia] [March 22, 2002]

The plaintiff, seriously ill with lung cancer, starting smoking the defendant's tobacco products at the age of 12. She alleged that BAT breached its duty of care to her by, amongst other things, failing to take steps to reduce or eliminate the risk of addiction in its tobacco products and by ignoring or publicly disparaging research results which indicated the health risks of cigarettes. The plaintiff brought an application to strike out the defence on the basis that BAT and its predecessor companies had destroyed relevant documents which rendered it impossible for the plaintiff to have a fair trial; BAT had misled the Court and the plaintiff as to the true situation concerning discoverable documents; and BAT had failed to comply with an order for discovery.

The trial judge found that in 1985 a "Document Retention Policy" had been created in anticipation that litigation would be brought against BAT's predecessor, WD & HO Wills, with respect to smoking and health issues. The primary purpose of that policy was to ensure the destruction of material which would be harmful to the defence of litigation. Further, words were inserted into the "Document Retention Policy" to assert innocent intention and to disguise the true purpose of the policy. The trial judge found that in 1990, after BAT took over the company, the policy was reviewed out of concern that litigation in Australia might lead to discovery of research reports that would be harmful to BATCO worldwide. BAT was subsequently provided with legal advice from the law firm Clayton Utz that it should destroy any damaging documents which were not in the public domain. Further, all sensitive documents should be held "off shore", or by other bodies and organisations, so that they could not be said to be under the possession, custody or power of BAT and therefore not discoverable. BAT complied with this policy. Subsequently, following the discontinuance of a tort case against it in 1998 (the Cremorna litigation), BAT destroyed thousands of documents which had been discovered as relevant in those proceedings, including a database and CD-ROM on which 30,000 documents had been imaged. The trial judge concluded that BAT intended by destroying documents that any plaintiff would be prejudiced in the conduct of their action and would be denied a fair trial.

The trial judge further concluded that the process of discovery was subverted by BAT and its solicitor, Clayton Utz, with the deliberate intention of denying a fair trial to the plaintiff, and that their strategy had been successful in doing so. The defence was therefore struck out and judgment entered for the plaintiff, with damages to be assessed.

Damages were subsequently assessed for the plaintiff in the sum of $700,000. However, this decision was overturned in the Court of Appeal: British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197.

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