Tobacco firms win partial legal victory in Canada

December 08, 2009: 06:42 PM ET

VANCOUVER, British Columbia (Reuters) - Tobacco makers being sued in Canada over the health risks of smoking won a partial victory Tuesday in their efforts to have the Canadian government share in the potential liability.
A divided British Columbia Court of Appeals panel overturned part of a lower court's ruling that the federal government could not be drawn in as a defendant in two cases over the health costs associated with smoking and the promotion of "light" cigarettes.
The court in two related cases said the government may have to share in any possible liability related to Agriculture Canada's role in the development of strains of tobacco used to make "light" and "mild" cigarettes.
The first case involves British Columbia's attempt to collect damages from several cigarette makers and their international parents for the cost of treating smoking-related diseases.
The second case is a class-action by smokers against Imperial Tobacco, who allege they were mislead into believing that cigarettes labeled "mild" or "light" were safer to smoke than regular cigarettes.
The tobacco industry argues that government should share in any responsibility for damages because they were "partners" in the sale of tobacco by keeping it legal and collecting tax revenue from it.
"The B.C. decision will demonstrate that the government of Canada has known about the risks associated with smoking for decades and that it instigated and promoted the development and sale of lower-tar tobacco products." Imperial Tobacco's vice-president, Donald McCarty, said in a statement.
The rulings, which divided the panel 3 to 2 in both cases, allowed portions of the industry's appeal. The dissenting justices would have rejected the entire appeal.
Several of Canada provinces have sued the industry for billions in damages, but the British Columbia case was the first filed and is being used as the lead case in the courts.
In addition to British American Tobacco's Imperial Tobacco Canada Ltd, the cases involve Rothmans Benson & Hedges Inc, a unit of Philip Morris International and Rothmans Inc, and JTI-Macdonald Corp, owned by Japan Tobacco Inc , but which is itself not named as a defendant. (Reporting by Allan Dowd; editing by Rob Wilson)