American Journal of Law & Medicine

The Role of Private Law in the Control of Risks Associated with Tobacco Smoking: The Canadian Experience

I. INTRODUCTION

Can private law litigation serve as a tool for advancing public health objectives? With this contentious and oft-asked question in mind, we tackle Canada's recent tobacco litigation. This Article first presents critical commentary regarding various lawsuits waged against Canadian cigarette manufacturers by citizens acting as individuals or as parties to class action lawsuits. We then turn to analyze how Canada's provincial governments rely on targeted legislation to facilitate private law recourses for recouping the healthcare costs of treating tobacco-related diseases. We address challenges to the constitutionality of this type of legislation, as well as attempts by manufacturers to transfer responsibility to the federal government.

Canadian litigation in this field is nothing like that of the United States with regards to both the volume and variety of its individual and class action litigation claims. This is also true with regard to the stage of advancement of governmental claims in Canada. Nevertheless, particularities of the Canadian context may provide interesting contrast with the situation in the United States. First, the Canadian healthcare system is essentially publicly funded (1)--a very special context which must be taken into account when reflecting on government claims. Second, Canada has two legal traditions: French-inspired civil law in the province of Quebec, and common law, inspired by the British tradition, in the rest of the country. (2) The duality of the Canadian private law tradition raises the question of whether clashes exist between civil law and common law approaches to litigating tobacco claims. Finally, constitutional challenges in Canada call for particular attention to the special situation of Quebec, where relationships are governed by the quasi-constitutional Quebec Charter of Rights and Freedoms, a unique document with no equivalent in other Canadian provinces. (3) Other particularities of the Canadian context should be kept in mind when reflecting on Canadian litigation strategies. Chief among these is that, although Canada is not a very litigious society, and individual claims are likely to remain few in number, (4) there is a growing tendency of Canadian courts, particularly the Supreme Court, to take on the role of developing and imposing its own social policy perspectives. (5) Finally, with respect to political context, the tobacco industry does not have the hold on Canadian politics that it might have in the United States. (6)

II. INDIVIDUAL AND CLASS ACTIONS CLAIMS

Claims brought by members of the public, individually or in the form of class action lawsuits, are relatively recent in Canada. Neither have they been as numerous as in the United States, (7) nor have they been entirely successful. These patterns raise questions as to whether these suits are capable of providing victims of tobacco-related injuries with adequate compensation and of serving as deterrent mechanisms for manufacturers. Questions as to the efficiency of private law in this regard are further fed by the fact that damage awards in Canada, including those for exemplary damages, tend to be much lower than those in the United States, and that awards for non-pecuniary damages have been capped at the equivalent of $100,000 1978 Canadian dollars (C$) (now approximately C$322,000 with inflation). (8) Furthermore, Canadian common law has, as of yet, refused to impose strict liability in tort for injury caused by products. Product liability thus falls under the purview of the law of negligence. An exception to this rule is the province of Quebec, which, since 1994, provides in its Civil Code for strict liability in favor of third parties for injuries caused by any type of product. (9)

A. INDIVIDUAL CLAIMS

Very few individual claims have been waged in Canada; (10) by 1990, only one case had been filed. (11) In all filed cases, plaintiffs have faced great challenges in convincing courts to award compensation. Particular difficulties have arisen concerning plaintiffs' knowledge of the dangers of smoking, causal assessment, and the impact dependency has on decision-making processes.

In civil suits brought by individual smokers attempting to recover from tobacco companies damages for health consequences allegedly caused by smoking, courts pay careful attention to smokers' behavior and their awareness of the dangers of tobacco use before or during the course of their smoking habits. This is particularly true where plaintiffs allege cigarette manufacturers have breached a duty to warn of risks and dangers. (12) Smokers' knowledge may have arisen from information in public media or warning labels affixed (often statutorily) to tobacco packaging. If the consumer is already aware of the dangers of cigarette smoking through warnings on packages or information conveyed by the media, one may indeed argue that his injury results from acceptance of the risks of smoking rather than the manufacturer's failure to warn. (13) This argument is also used when arguing the absence of negligence (14) or of causation.

The use of this type of argument can extend to instances where an individual truly may not have been aware of the dangers of smoking but should have been, due to the plethora of publicly available information concerning the harms of tobacco. In the very interesting small-claims case of Letourneau v. Imperial Tobacco, (15) the plaintiff sought a C$300 reimbursement for nicotine patches, arguing that the defendant manufacturer had breached an obligation to warn of the dangers of dependency. (16) There, the court extended the argument against recovery in finding that, while the smoker did not have specific knowledge of the health risks posed by smoking when she picked up the habit in 1964, she should, the court believed, have been aware of these risks. Consequently, the absence of disclosure did not constitute a "faute" (negligence). (17) The court held that although the plaintiff in question had been unaware that smoking posed health risks when she started smoking in 1964, she was also a well-informed individual working as a teacher--hence in a well-informed and "intellectually open" milieu--and enjoyed access to a variety of studies and reports about the consequences of smoking. (18) It also stressed that the population in general was aware that smoking is bad for one's health and that stopping smoking can be difficult. (19) Referring particularly to the 1964 U.S. Surgeon General's Report Smoking and Health (20) the court wrote, "[Translation] We must recognize that, for a long while, it has generally been known to the population that cigarette use can damage health." (21) The court added that individual smokers have an obligation to inform themselves of risks: "[Translation] The consumer, informed by such notices about health risks related to cigarette use, must inform himself and obtain advice on the particular implication the noxious effects have for him. The manufacturer has the obligation to inform but not to advise." (22) Even though dependency risks were not widely referred to at the time the plaintiff started smoking, the court emphasized the well-known and widely discussed acknowledgment of the difficulty of stopping smoking. (23) The court added that the manufacturer had no obligation to disclose such difficulties, and noted that the only advice that could have been given in the circumstances was that the intensive and prolonged use of tobacco can create a "forte habitude" (strong habit) and make quitting difficult. (24) The court, however, considered this to be a known effect not only of tobacco use, but also an effect associated with many other pleasing activities practiced intensely over a long period of time!. (25)

Another difficulty arises where evidence shows that even if the manufacturer had provided information on the dangers associated with smoking, the smoker's behavior would probably have been the same. For instance, in dicta, the court in the Letourneau case found absence of causation because the plaintiff had continued to smoke once she became aware of these dangers and the risk of dependency through cigarette package warnings, her doctor's advice, and information in public circulation. (26) No mention is made, however, of how the dependency she had already acquired might have affected this "decision." (27) Indeed, dependency has been recognized as a factor limiting smokers' abilities to make health-positive decisions. (28) Even the tobacco industry has, as of late, used the addictive nature of smoking as a defense against liability claims brought by smokers in the United States and Canada. (29) Since knowledge that tobacco products may be addictive is widespread, the industry has claimed individuals are aware of the risks they take when they begin smoking, and must therefore be held personally responsible for their decisions to do so. (30) Such an argument does not, however, address concerns about individuals who began using tobacco products before information about their addictive nature had become common knowledge--in such circumstances the negation of libre arbitre (free will) has arguably already taken place.

Thus, although Canadian lawsuits brought by individuals have been few in number, they illustrate the numerous barriers plaintiffs face. Many of these difficulties revolve around the knowledge possessed by the consumer and affect either the existence of a duty on the part of the manufacturer (in the common law), the existence of fault (in the civil law), or assumption-of-risk defenses and causation-based defenses (both systems). Using class actions as a vehicle for imposing duties on tobacco manufacturers has also proved difficult in Canada.

B. CLASS ACTION LAWSUITS

Like the United States, Canada has witnessed frequent difficulties in class certification over the last several decades. (31) Defendants have argued, sometimes with success, that the existence of common issues is jeopardized when assessing causation requires analysis of plaintiffs' individual circumstances. (32) For instance, difficulties arise where it is unclear whether the plaintiff's injury results from consumption of the defendants' products, or where the court must scrutinize either the degree of knowledge each member had with regards to consumption-associated risks or individual reliance on alleged fraud or misrepresentation. (33)

Sparkes v. Imperial Tobacco Canada Ltd. exemplifies the difficulties Canadian plaintiffs have faced in seeing their class action proceedings certified. In this case, certification was denied at first instance and on appeal because of problems with establishing common issues and the broadness of the class. (34) Cigarette purchasers and smokers from Newfoundland and Labrador commenced a class action for unfair trade practices. (35) They argued that the defendant's description of tobacco products as "light" or "mild" was part of a deliberate misinformation campaign intended to mislead and deceive the public into thinking that use of such products involved fewer harmful impacts than smoking "regular" cigarettes. (36) The plaintiff alleged that the defendants committed numerous unfair practices in violation of the Trade Practices Act (TPA). (37) Mainly, certification was denied because the plaintiff had failed to establish the essential condition that he suffered damages as a result of a supplier's unfair practices. (38) The trial division of the Newfoundland and Labrador Supreme Court also refused to accept his alternative submissions. (39) These included a claim of action by virtue of statutory breaches committed by the defendants (namely section 7 of the Trade Practices Act or section 20 of the Tobacco Act (40)) and the argument that, in this context, purchase of a product tainted by false advertising is in and of itself a form of injury. (41) For the court, accepting the first argument would be equivalent to creating a nominate tort of breach of statute. The Supreme Court of Canada had already rejected this approach in Saskatchewan Wheat Pool, a decision in which the highest court ruled that the consequences for breach of statute should be dealt with under the law of negligence, which requires proof of damages. (42) More interesting for our purposes are dicta (43) stating that, even if the cause of action had been established, the class action still would not have been certified because, absent allegations of individual reliance, the question of whether defendants engaged in unfair trade practices is not susceptible to being answered as a common issue. (44) This requirement would make the proposed class over-inclusive and inordinately broad. Thus, a class action suit was deemed procedurally inappropriate.

Similar complexities led to the denial of certification of a class action lawsuit in Caputo v. Imperial Tobacco Ltd. (45) When this action commenced in 1995, certification was sought for a class of at least 2.4 million people, including all residents of the province of Ontario---living or deceased--who had ever smoked cigarettes manufactured, marketed, or sold by the defendants. (46) Several causes of action were alleged, including negligence, strict liability, product liability, breach of the duty to inform, deceit, negligent misrepresentation, breach of implied warranty, conspiracy, and unfair business practices. (47) Judge Winkler criticized the action as being an amalgam of potential class proceedings rendering impossible the description of a single class sharing substantial common issues. (48) He wrote, "The plaintiffs have melded a number of potential classes into a single proceeding. The result is an ambitious action that vastly overarches and which, consequently, is void of the essential element of commonality necessary to obtain certification...." (49) More precisely, the court believed that there were numerous and significant individual issues pertinent to the issue of liability and damages that would have to be determined. (50) Thus, a class action proceeding was again deemed procedurally inappropriate since inquiry into each individual class member would be necessary to ascertain liability and damages. (51) To do so sequentially, the court estimated, would require 1000 years of litigation. (52)

The existence of complex individual causal questions is what led to the denial of certification in Ragoonanan v. Imperial Tobacco Canada Ltd., a class action commenced in January 2000. (53) In that case, plaintiffs alleged that the defendants had breached duties to design and manufacture cigarettes with a lower ignition propensity ("fire safe" cigarettes), to phase out conventional cigarettes, and to replace the same with fire safe cigarettes. (54) Judge Cullity's refusal of certification, confirmed on appeal, was notably based on the need for each class member to prove that fire was caused by breach of duty, in other words that a fire would not have occurred if the ignition source had been a fire safe cigarette. (55) He noted that the concept of a fire safe cigarette is relative, and that even so-called fire safe cigarettes could cause fires. (56) This meant it would be necessary to determine, for each class member, whether a fire would have occurred in the particular circumstances if the cigarette in question had been fire safe. (57) He believed the plaintiffs had not produced a satisfactory litigation plan for dealing with this difficulty. (58)

In Knight v. Imperial Tobacco Canada Ltd., (59) by framing the action differently, plaintiffs succeeded in obtaining certification of a claim by purchasers of defendant's light or mild brand cigarettes. (60) The action was based on alleged deceptive marketing of these cigarettes under several provisions of the TPA and Business Practices and Consumer Protection Act (BPCPA). (61) The plaintiffs' claim, however, was not for injury to health, but for pure economic loss. (62) Specifically, plaintiffs claimed the fair market price of the product would have been different but for the alleged deceptive conduct. (63) Class members thus sought recovery for having paid too much for these products. (64) The defendants, of course, pleaded there was no common issue because of the need to assess causation and reliance. (65) However the court accepted the plaintiff's argument that causation under the alleged provisions could be proven by means other than demonstrating individual reliance. (66) Proposed alternative means of proving causation included the tendering of economic and statistical evidence demonstrating that the entire marketplace was distorted by the deceptive practice and that all class members paid too much for a product that did not truthfully exist. …

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