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Létourneau c. JTI-MacDonald Corp.

2015 QCCS 2382

 

JR1353

 
SUPERIOR COURT

(Class Action Division)

CANADA

PROVINCE OF QUÉBEC

DISTRICT OF MONTREAL

N° :

500-06-000076-980

500-06-000070-983

DATE :  June 9, 2015

________________________________________________________________

PRESIDING:     THE HONORABLE BRIAN RIORDAN, J.S.C.

________________________________________________________________

No 500-06-000070-983

CÉCILIA LÉTOURNEAU

Plaintiff

v.

JTI-MACDONALD CORP. ("JTM")

and

IMPERIAL TOBACCO CANADA LIMITED. ("ITL")

and

ROTHMANS, BENSON & HEDGES INC. ("RBH")

Defendants (collectively: the "Companies")

AND

NO 500-06-000076-980

CONSEIL QUÉBÉCOIS SUR LE TABAC ET LA SANTÉ

and

JEAN-YVES BLAIS

Plaintiffs

v.

JTI-MACDONALD CORP.

and

IMPERIAL TOBACCO CANADA LIMITED.

and

ROTHMANS, BENSON & HEDGES INC.

Defendants

JUDGMENT CORRECTING CLERICAL ERRORS

IN PARAGRAPHS 1114 and 1209 through 1213

                                                                                    

INDEX

                     

                      SECTION

 

RÉSUMÉ DU JUGEMENT // SUMMARY OF JUDGMENT

 

 

I.          THE ACTIONS

 

A.       The Parties and the Common Questions

B.       The alleged bases of liability

C.       The Companies' view of the key issues

 

 

II.        IMPERIAL TOBACCO CANADA LTD.

 

A.       Did ITL manufacture and sell a product that was dangerous and harmful to the health of consumers?

 

B.       Did ITL know, or was it presumed to know, of the risks and dangers associated with the use of its products?

 

B.1    The Blais File

B.1.a  As of what date did ITL know?

B.1.b  As of what date did the public know?

B.1.b.1     The Experts' opinions: the Diseases and Dependence

B.1.b.2     The effect of the Warnings: the Diseases and Dependence

B.2    The Létourneau File

B.2.a  As of what date did ITL know?

B.2.b  As of what date did the public know?

 

C.       Did ITL knowingly put on the market a product that creates dependence and did it choose not to use the parts of the tobacco containing a level of nicotine sufficiently low that it would have had the effect of terminating the dependence of a large part of the smoking population?

 

C.1    Is tobacco a product that creates dependence of the sort to generate legal liability for the manufacturer?

C.2    Did ITL knowingly market a dependence-creating product?

C.3    Did ITL choose tobacco that contained higher levels of nicotine in order to keep its customers dependent?

 

D.       Did ITL trivialize or deny or employ a systematic policy of non-divulgation of such risks and dangers?

 

D.1    Credibility Issues

D.2    The obligation to inform

D.3    No duty to convince

D.4    What ITL said publicly about the risks and dangers

D.5    What ITL did not say about the risks and dangers

D.6    What ITL knew about what the public knew

D.7    Compensation

D.8    The Role of Lawyers

 

E.        Did ITL employ marketing strategies conveying false information about the characteristics of the items sold?

 

E.1     The Voluntary Codes

E.2     Light and Mild Descriptors

E.3     Did ITL market to under-age smokers?

E.4     Did ITL market to non-smokers?

E.5     Did the Class Members see the ads?

E.6     Conclusions with respect to Common Question E

 

F.        Did ITL conspire to maintain a common front in order to impede users of its products from learning of the inherent dangers of such use?

 

F.1     The 1962 Policy Statement

F.2     The Role of the CTMC

 

G.       Did ITL intentionally interfere with the right to life, personal security and inviolability of the class members?

 

G.1    Liability for damages under the Quebec Charter

G.2    Liability for damages under the Consumer Protection Act

G.2.a  The Irrebuttable Presumption of Prejudice

G.2.b  The alleged contravention under section 228 CPA

G.2.c  The alleged contravention under section 219 CPA

G.2.d  The alleged contravention under section 220(a) CPA

 

 

III.      JTI MACDONALD CORP.

 

A.       Did JTM manufacture and sell a product that was dangerous and harmful to the health of consumers?

 

B.       Did JTM know, or was it presumed to know, of the risks and dangers associated with the use of its products?

 

B.1    The Blais File

B.1.a  As of what date did JTM know?

B.1.b  As of what date did the public know?

B.1.b.1     The Experts' opinions: the Diseases and Dependence

B.1.b.2     The effect of the Warnings: the Diseases and Dependence

B.2    The Létourneau File

B.2.a  As of what date did JTM know?

B.2.b  As of what date did the public know?

 

C.       Did JTM knowingly put on the market a product that creates dependence and did it choose not to use the parts of the tobacco containing a level of nicotine sufficiently low that it would have had the effect of terminating the dependence of a large part of the smoking population?

 

D.       Did JTM trivialize or deny or employ a systematic policy of non-divulgation of such risks and dangers?

 

D.1    The obligation to inform

D.2    No duty to convince

D.3    What JTM said publicly about the risks and dangers

D.4    What JTM did not say about the risks and dangers

D.5    Compensation

 

E.        Did JTM employ marketing strategies conveying false information about the characteristics of the items sold?

 

F.        Did JTM conspire to maintain a common front in order to impede users of its products from learning of the inherent dangers of such use?

 

G.       Did JTM intentionally interfere with the right to life, personal security and inviolability of the class members?

 

 

IV.       ROTHMANS BENSON & HEDGES INC.

 

A.       Did RBH manufacture and sell a product that was dangerous and harmful to the health of consumers?

 

B.       Did RBH know, or was it presumed to know, of the risks and dangers associated with the use of its products?

 

B.1    The Blais File

B.1.a  As of what date did RBH know?

B.1.b  As of what date did the public know?

B.1.b.1     The Experts' opinions: the Diseases and Dependence

B.1.b.2     The effect of the Warnings: the Diseases and Dependence

B.2    The Létourneau File

B.2.a  As of what date did RBH know?

B.2.b  As of what date did the public know?

 

C.       Did RBH knowingly put on the market a product that creates dependence and did it choose not to use the parts of the tobacco containing a level of nicotine sufficiently low that it would have had the effect of terminating the dependence of a large part of the smoking population?

 

D.       Did RBH trivialize or deny or employ a systematic policy of non-divulgation of such risks and dangers?

 

D.1    The obligation to inform

D.2    No duty to convince

D.3    What RBH said publicly about the risks and dangers

D.4    What RBH did not say about the risks and dangers

D.5    Compensation

 

E.        Did RBH employ marketing strategies conveying false information about the characteristics of the items sold?

 

F.        Did RBH conspire to maintain a common front in order to impede users of its products from learning of the inherent dangers of such use?

 

G.       Did RBH intentionally interfere with the right to life, personal security and inviolability of the class members?

 

 

V.         SUMMARY OF FINDINGS OF FAULT.

 

 

VI.       CAUSATION

 

A.      Were the moral damages in the Blais File caused by the Diseases?

B.      Were the moral damages in the Létourneau File Caused by Dependence?

C.      Were the Diseases caused by smoking

C.1    The evidence of Drs. Desjardins and Guertin

C.2    Section 15 of the TRDA

C.3    Evidence for each member of the Class

C.4    The evidence of Dr. Siemiatycki

C.5    The use of relative risk

C.6    The Companies' experts

D.      Was the tobacco dependence caused by smoking

E.      Was the Blais Members' smoking caused by a fault of the Companies?

F.      Was the Létourneau Members' smoking caused by a fault of the Companies?

G.      The possibility of shared liability

 

 

VII.     PRESCRIPTION

 

A.      Article 2908 C.C.Q. and the definition of the Blais Class

B.      Fin de non recevoir

C.      Continuing and uninterrupted faults

D.      The Létourneau File

E.      The Blais File under the TRDA

E.1     Moral/Compensatory damages with the TRDA

E.2     Punitive damages with the TRDA - and without it

F.      If the TRDA does not apply

G.      Summary of the effects of prescription on shared liability

 

 

VIII.    MORAL DAMAGES - QUANTUM

 

A.      The Létourneau File

B.      The Blais File

B.1    Lung Cancer

B.1.a  The Size of the Sub-Classes

B.1.b  The Amount of Damages for the subclass

B.2    Cancer of the larynx, the oropharynx or the hypopharynx

B.2.a  The Size of the Sub-Classes

B.2.b  The Amount of Damages for the subclass

B.3    Emphysema

B.3.a  The Size of the Sub-Classes

B.3.b  The Amount of Damages for the subclass

B.4    Apportionment among the Companies

 

 

IX.       PUNITIVE DAMAGES - QUANTUM

 

A.      The criteria for assessing punitive damages

B.      Quantification Issues

C.      The Companies' patrimonial situation

D.      ITL's liability for punitive damages

E.      RBH's liability for punitive damages

F.      JTM's liability for punitive damageS

 

 

X.         DEPOSITS AND DISTRIBUTION PROCESS.

 

 

XI.       DECISIONS ON OBJECTIONS UNDER RESERVE AND CONFIDENTIALITY.

 

A.      The admissibility of Exhibit 1702R

B.      The admissibility of "R" Documents

C.      The confidentiality of certain internal documents

C.1    General Documents, including coding information

C.2    Financial Statements

C.3    Insurance Policies

D.      The relevance and confidentiality of the Interco Contracts

D.1    Objection as to relevance

D.2    Confidentiality of related evidence

 

 

XII.     INDIVIDUAL CLAIMS

 

 

XIII.    PROVISIONAL EXECUTION NOTWITHSTANDING APPEAL

 

 

XIV.     CONCLUDING REMARKS

 

 

ORDERS

 

SCHEDULE A -        GLOSSARY OF DEFINED TERMS

SCHEDULE B -        IMPORTANT DATES

SCHEDULE C -        NON-PARTY, NON-GOVERNMENT WITNESSES

SCHEDULE C.1 -     EXPERTS CALLED BY THE PLAINTIFFS

SCHEDULE D -       WITNESSES CONCERNING MATTERS RELATING TO ITL

SCHEDULE D.1 -     EXPERTS CALLED BY ITL

SCHEDULE E -        WITNESSES CONCERNING MATTERS RELATING TO JTM

SCHEDULE E.1 -     EXPERTS CALLED BY JTM

SCHEDULE F -        WITNESSES CONCERNING MATTERS RELATING TO RBH

SCHEDULE F.1 -     EXPERTS CALLED BY RBH

SCHEDULE G -       WITNESSES FROM THE GOVERNMENT OF CANADA

SCHEDULE h -       relevant legislation

SCHEDULE i -        extracts of the voluntary codes

SCHEDULE J -        PARAGRAPHS 2138-2145 OF THE PLAINTIFFS' NOTES

 

 

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RÉSUMÉ DU JUGEMENT

Les deux recours collectifs contre les compagnies canadiennes de cigarettes sont accueillis en partie.

Dans les deux dossiers, la réclamation pour dommages sur une base collective est limitée aux dommages moraux et punitifs.  Les deux groupes de demandeurs renoncent à leur possible droit à des réclamations individuelles pour dommages compensatoires, tels la perte de revenus.

Dans le dossier Blais, intenté au nom d'un groupe de personnes ayant été diagnostiquées d'un cancer du poumon ou de la gorge ou d'emphysème, le Tribunal déclare les défenderesses responsables et octroie des dommages moraux et punitifs.  Il statue qu'elles ont commis quatre fautes, soit en vertu du devoir général de ne pas causer un préjudice à d'autres, du devoir du manufacturier d'informer ses clients des risques et des dangers de ses produits, de la Charte des droits et libertés de la personne et de la Loi sur la protection du consommateur.

Dans le dossier Blais, le Tribunal octroie des dommages moraux au montant de 6 858 864 000 $ sur une base solidaire entre les défenderesses.  Puisque l'action débute en 1998, cette somme s'accroit à approximativement 15 500 000 000 $ avec les intérêts et l'indemnité additionnelle.  La responsabilité de chacune des défenderesses entre elles est comme suit:

ITL - 67%, RBH - 20% et JTM - 13%.

Puisqu'il est peu probable que les défenderesses puissent s'acquitter d'une telle somme d'un seul coup, le Tribunal exerce sa discrétion en ce qui concerne l'exécution du jugement.  Ainsi, il ordonne un dépôt total initial de 1 000 000 000 $ à être partagé entre les défenderesses selon leur pourcentage de responsabilité et réserve le droit des demandeurs de demander d'autres dépôts, si nécessaire.

Dans le dossier Létourneau, intenté au nom d'un groupe de personnes devenues dépendantes de la nicotine, le Tribunal trouve les défenderesses responsables sous les deux chefs de dommages en ce qui concerne les quatre mêmes fautes.  Malgré cette conclusion, le Tribunal refuse d'ordonner le paiement des dommages moraux puisque la preuve ne permet pas d'établir d'une façon suffisamment exacte le montant total des réclamations des membres.

Les fautes en vertu de la Charte québécoise et de la Loi sur la protection du consommateur permettent l'octroi de dommages punitifs.  Comme base pour l'évaluation de ces dommages, le Tribunal choisit le profit annuel avant impôts de chaque défenderesse.  Ce montant couvre les deux dossiers.  Considérant le comportement particulièrement inacceptable de ITL durant la période ainsi que celui de JTM, mais à un degré moindre, le Tribunal augmente les montants pour lesquels elles sont responsables au dessus du montant de base.  Pour l'ensemble, les dommages punitifs se chiffrent à 1 310 000 000 $, partagé entre les défenderesses comme suit:

ITL - 725 000 000 $, RBH - 460 000 000 $ et JTM - 125 000 000 $.

Il faut partager cette somme entre les deux dossiers.  Pour ce faire, le Tribunal tient compte de l'impact beaucoup plus grand des fautes des défenderesses relativement au groupe Blais comparé au groupe Létourneau.  Ainsi, il attribue 90% du total au groupe Blais et 10% au groupe Létourneau.

Cependant, compte tenu de l'importance des dommages moraux accordés dans Blais, le Tribunal limite les dommages punitifs dans ce dossier.  Ainsi, il condamne chaque défenderesse à une somme symbolique de 30 000 $.  Cela représente un dollar pour la mort de chaque Canadien causée par l'industrie du tabac chaque année, tel que constaté dans un jugement de la Cour suprême du Canada en 1995.

Il s'ensuit que pour le dossier Létourneau, la condamnation totale pour dommages punitifs se chiffre à 131 000 000 $, soit 10% de l'ensemble.  Le partage entre les défenderesses se fait comme suit:

ITL - 72 500 000 $, RBH - 46 000 000 $ et JTM - 12 500 000 $

Puisque le nombre de personnes dans le groupe Létourneau totalise près d'un million, cette somme ne représente que quelque 130 $ par membre.  De plus, compte tenu du fait que le Tribunal n'octroie pas de dommages moraux dans ce dossier, il refuse de procéder à la distribution d'un montant à chacun des membres pour le motif que cela serait impraticable ou trop onéreux.

Enfin, le Tribunal ordonne l'exécution provisoire nonobstant appel en ce qui concerne le dépôt initial de un milliard de dollars en guise de dommages moraux, plus tous les dommages punitifs accordés.  Les défenderesses devront déposer ces sommes en fiducie avec leurs procureurs respectifs dans les soixante jours de la date du présent jugement.  Le Tribunal statuera sur la manière de les débourser lors d'une audition subséquente.

 

SUMMARY OF THE JUDGMENT

The two class actions against the Canadian cigarette companies are maintained in part.

In both actions, the claim for common or collective damages was limited to moral damages and punitive damages, with both classes of plaintiffs renouncing their potential right to make individual claims for compensatory damages, such as loss of income. 

In the Blais File, taken in the name of a class of persons with lung cancer, throat cancer or emphysema, the Court finds the defendants liable for both moral and punitive damages.  It holds that they committed four separate faults, including under the general duty not to cause injury to another person, under the duty of a manufacturer to inform its customers of the risks and dangers of its products, under the Quebec Charter of Human Rights and Freedoms and under the Quebec Consumer Protection Act.

In Blais, the Court awards moral damages in the amount of $6,858,864,000 solidarily among the defendants.  Since this action was instituted in 1998, this sum translates to approximately $15,500,000,000 once interest and the additional indemnity are added.  The respective liability of the defendants among themselves is as follows: 

ITL - 67%, RBH - 20% and JTM - 13%.

Recognizing that it is unlikely that the defendants could pay that amount all at once, the Court exercises its discretion with respect to the execution of the judgment.  It thus orders an initial aggregate deposit of $1,000,000,000, divided among the defendants in accordance with their share of liability and reserves the plaintiffs' right to request further deposits, if necessary.

In the Létourneau File, taken in the name of persons who were dependent on nicotine, the Court finds the defendants liable for both heads of damage with respect to the same four faults.  In spite of such liability, the Court refuses to order the payment of moral damages because the evidence does not establish with sufficient accuracy the total amount of the claims of the members. 

The faults under the Quebec Charter and the Consumer Protection Act allow for the awarding of punitive damages.  The Court sets the base for their calculation at one year's before-tax profits of each defendant, this covering both files.  Taking into account the particularly unacceptable behaviour of ITL over the Class Period and, to a lesser extent, JTM, the Court increases the sums attributed to them above the base amount to arrive at an aggregate of $1,310,000,000, divided as follows:

ITL - $725,000,000, RBH - $460,000,000 and JTM - $125,000,000.

It is necessary to divide this amount between the two files.  For that, the Court takes account of the significantly higher impact of the defendants' faults on the Blais Class compared to Létourneau.  It thus attributes 90% of the total to Blais and 10% to the Létourneau Class. 

Nevertheless, in light of the size of the award for moral damages in Blais, the Court feels obliged to limit punitive damages there to the symbolic amount of $30,000 for each defendant.  This represents one dollar for each Canadian death the tobacco industry causes in Canada every year, as stated in a 1995 Supreme Court judgment.

In Létourneau, therefore, the aggregate award for punitive damages, at 10% of the total, is $131,000,000.  That will be divided among the defendants as follows:

ITL - $72,500,000, RBH - $46,000,000 and JTM - $12,500,000

Since there are nearly one million people in the Létourneau Class, this represents only about $130 for each member.  In light of that, and of the fact that there is no condemnation for moral damages in this file, the Court refuses distribution of an amount to each of the members on the ground that it is not possible or would be too expensive to do so. 

Finally, 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.  The Defendants must deposit these sums in trust with their respective attorneys within sixty days of the date of the judgment.  The Court will decide how those amounts are to be disbursed at a later hearing.

I.         THE ACTIONS

i.a.      the parties and the common questions

[1]               In the fall of 1998[1], two motions for authorization to institute a class action were served on the Companies as co-defendants, one naming Cécilia Létourneau as the class representative (file 06-000070-983: the "Létourneau File" or "Létourneau"[2]), and the other naming Jean-Yves Blais and the Conseil québécois sur le tabac et la santé as the representatives (file 06-000076-980: the "Blais File" or "Blais")[3].  They were joined for proof and hearing both at the authorization stage and on the merits.

[2]               The judgment of February 21, 2005 authorizing these actions (the "Authorization Judgment") defined the class members in each file (the "Class Members" or "Members").  After closing their evidence at trial, the Plaintiffs moved to modify those class descriptions in order that they correspond to the evidence actually adduced.  The Court authorized certain amendments and the class definitions as at the end of the trial were as follows:

For the Blais File

All persons residing in Quebec who satisfy the following criteria:

1)   To have smoked, before November 20, 1998, a minimum of 5 pack/years[4] of cigarettes made by the defendants (that is the equivalent of a minimum of 36,500 cigarettes, namely any combination of the number of cigarettes smoked per day multiplied by the number of days of consumption insofar as the total is equal or greater than 36,500 cigarettes).

For example, 5 pack/years equals:

20 cigarettes per day for 5 years (20 X 365 X 5 = 36,500) or

25 cigarettes per day for 4 years (25 X 365 X 4 = 36,500) or

10 cigarettes per day for 10 years (10 X 365 X 10 = 36,500) or

5 cigarettes per day for 20 years (5 X 365 x 20 = 36,500) or

50 cigarettes per day for 2 years (50 X 365 X 2 = 36,500);

2)   To have been diagnosed before March 12, 2012 with:

      a) Lung cancer or

      b) Cancer (squamous cell carcinoma) of the throat, that is to say of the larynx, the oropharynx or the hypopharynx or

      c) Emphysema.

The group also includes the heirs of the persons deceased after November 20, 1998 who satisfied the criteria mentioned herein.

Toutes les personnes résidant au Québec qui satisfont aux critères suivants:

1)    Avoir fumé, avant le 20 novembre 1998, au minimum 5 paquets/année de cigarettes fabriquées par les défenderesses (soit l'équivalent d'un minimum de 36 500 cigarettes, c'est-à-dire toute combinaison du nombre de cigarettes fumées par jour multiplié par le nombre de jours de consommation dans la mesure où le total est égal ou supérieur à 36 500 cigarettes).

Par exemple, 5 paquets/année égale:

20 cigarettes par jour pendant 5 ans (20 X 365 X 5 = 36 500) ou

25 cigarettes par jour pendant 4 ans (25 X 365 X 4 = 36 500) ou

10 cigarettes par jour pendant 10 ans (10 X 365 X 10 = 36 500) ou

5 cigarettes par jour pendant 20 ans (5 X 365 x 20 = 36 500) ou

50 cigarettes par jour pendant 2 ans (50 X 365 X 2 = 36 500);

2)    Avoir été diagnostiquées avant le 12 mars 2012 avec:

       a) Un cancer du poumon ou

       b) Un cancer (carcinome épidermoïde) de la gorge, à savoir du larynx, de l'oropharynx ou de l'hypopharynx ou

       c) de l'emphysème.

Le groupe comprend également les héritiers des personnes décédées après le 20 novembre 1998 qui satisfont aux critères décrits ci-haut.

For the Létourneau File[5]

All persons residing in Quebec who, as of September 30, 1998, were addicted to the nicotine contained in the cigarettes made by the defendants and who otherwise satisfy the following criteria:

 

1)       They started to smoke before September 30, 1994 by smoking the defendants’ cigarettes;

2)       They smoked the cigarettes made by the defendants on a daily basis on September 30, 1998, that is, at least one cigarette a day during the 30 days preceding that date; and

 

3)     They were still smoking the defendants’ cigarettes on February 21, 2005, or until their death, if it occurred before that date.

 

The group also includes the heirs of the members who satisfy the criteria described herein.

Toutes les personnes résidant au Québec qui, en date du 30 septembre 1998, étaient dépendantes à la nicotine contenue dans les cigarettes fabriquées par les défenderesses et qui satisfont par ailleurs aux trois critères suivants:

1)    Elles ont commencé à fumer avant le 30 septembre 1994 en fumant les cigarettes fabriquées par les défenderesses;

2)    Elles fumaient les cigarettes fabriquées par les défenderesses de façon quotidienne au 30 septembre 1998, soit au moins une cigarette par jour pendant les 30 jours précédant cette date; et

3)    Elles fumaient toujours les cigarettes fabriquées par les défenderesses en date du 21 février 2005, ou jusqu'à leur décès si celui-ci est survenu avant cette date.

Le groupe comprend également les héritiers des membres qui satisfont aux critères décrits ci-haut. 

[3]               The Authorization Judgment also set out the "eight principal questions of fact and law to be dealt with collectively" (the "Common Questions").  We set them out below, along with our unofficial English translation:[6]

A.  Did the Defendants manufacture, market and sell a product that was dangerous and harmful to the health of consumers?

 

 

B.  Did the Defendants know, or were they presumed to know of the risks and dangers associated with the use of their products?

 

 

C.  Did the Defendants knowingly put on the market a product that creates dependence and did they choose not to use the parts of the tobacco containing a level of nicotine sufficiently low that it would have had the effect of terminating the dependence of a large part of the smoking population?

 

D. Did the Defendants employ a systematic policy of non-divulgation of such risks and dangers?

 

 

E.  Did the Defendants trivialize or deny such risks and dangers?

 

F.  Did the Defendants employ marketing strategies conveying false information about the characteristics of the items sold? 

 

G. Did the Defendants conspire among themselves to maintain a common front in order to impede users of their products from learning of the inherent dangers of such use?

 

 

 

H. Did the Defendants intentionally interfere with the right to life, personal security and inviolability of the class members? 

A.  Les défenderesses ont-elles fabriqué, mis en marché, commercialisé un produit dangereux, nocif pour la santé des consommateurs?

 

B.  Les défenderesses avaient-elles connais-sance et étaient-elles présumées avoir connaissance des risques et des dangers associés à la consommation de leurs produits?

 

C.  Les défenderesses ont-elles sciemment mis sur le marché un produit qui crée une dépendance et ont-elles fait en sorte de ne pas utiliser les parties du tabac comportant un taux de nicotine tellement bas qu’il aurait pour effet de mettre fin à la dépendance d’une bonne partie des fumeurs?

 

D. Les défenderesses ont-elles mis en œuvre une politique systématique de non-divulgation de ces risques et de ces dangers?

 

E.  Les défenderesses ont-elles banalisé ou nié ces risques et ces dangers?

 

F.  Les défenderesses ont-elles mis sur pied des stratégies de marketing véhiculant de fausses informations sur les caractéristiques du bien vendu? 

 

G. Les défenderesses ont-elles conspiré entre elles pour maintenir un front commun visant à empêcher que les utilisateurs de leurs produits ne soient informés des dangers inhérents à leur consommation?

 

 

H. Les défenderesses ont-elles intention-nellement porté atteinte au droit à la vie, à la sécurité, à l’intégrité des membres du groupe? 

[4]               Our review of the Common Questions leads us to conclude that questions "D" and "E" are very similar and should probably be combined.  While "F" is not much different from them, the specific accent on marketing there justifies its being treated separately.  Therefore, marketing aspects will not be analyzed in the new combined question that will replace "D" and "E" and be stated as follows:

D. Did the Defendants trivialize or deny or employ a systematic policy of non-divulgation of such risks and dangers?

D. Les défenderesses ont-elles banalisé ou nié ou mis en œuvre une politique systématique de non-divulgation de ces risques et de ces dangers?

[5]               Accordingly, the Court will analyze seven principal questions of fact and law in these files: original questions A, B, C, new question D, and original questions F, G, H, which now become E, F and G (the "Common Questions")[7].  Moreover, as required in the Authorization Judgment, this analysis will cover the period from 1950 until the motions for authorization were served in 1998 (the "Class Period").

[6]               We should make it clear at the outset that a positive response to a Common Question does not automatically translate into a fault by a Company.  Other factors can come into play. 

[7]               A case in point is the first Common Question.  It is not really contested that, during the Class Period, the Companies manufactured, marketed and sold products that were dangerous and harmful to the health of consumers.  Before holding that to be a fault, however, we have to consider other issues, such as, when the Companies discovered that their products were dangerous, what steps they took to inform their customers of that and how informed were smokers from other sources.  Assessment of fault can only be done in light of all relevant aspects.

[8]               In interpreting the Common Questions, it is important to note that the word "product" is limited to machine-produced ("tailor-made") cigarettes and does not include any of the Companies' other products, such as cigars, pipe tobacco, loose or "roll-your-own" ("fine-cut") tobacco, chewing tobacco, cigarette substitutes, etc.  Nor does it include any issues relating to second-hand or environmental smoke.  Accordingly, unless otherwise noted, when this judgment speaks of the Companies' "products" or of "cigarettes", it is referring only to commercially-sold, tailor-made cigarettes produced by the Companies during the Class Period.

[9]               The conclusions of each action are similar, although the amounts claimed vary. 

[10]            In the Blais File, the claim for non-pecuniary (moral) damages cites loss of enjoyment of life, physical and moral pain and suffering, loss of life expectancy, troubles, worries and inconveniences arising after having been diagnosed with one of the diseases named in the class description (the "Diseases"). After amendment, it seeks an amount of $100,000 for each Member with lung cancer or throat cancer and $30,000 for those with emphysema. 

[11]            In the Létourneau file, the moral damages are described as an increased risk of contracting a fatal disease, reduced life expectancy, social reprobation, loss of self esteem and humiliation[8].  It seeks an amount of $5,000 for each Member under that head.

[12]            The amounts claimed for punitive damages were originally the same in both files: $5,000 a Member.  That claim was amended during final argument to seek a global award of between $2,000 and $3,000 a Member, which the Plaintiffs calculate would total approximately $3,000,000,000.

[13]            With respect to the manner of proceeding in the present judgment, the Court must examine the Common Questions separately for each of the Companies and each of the files.  Although there will inevitably be overlap of the factual and, in particular, the expert proof, during the Class Period the Companies were acting independently of and, indeed, in fierce competition with each other in most aspects of their business.  As a result, there must be separate conclusions for each of the Companies on each of the Common Questions in each file.

[14]            Organisationally, we provide a glossary of the defined terms in Schedule A to this judgment.  As well, we list in the schedules the witnesses according to the party to whom their testimony related.  For example, Schedule D identifies the witnesses called by any of the parties who testified concerning matters relating to ITL.  Witnesses from the Canadian Tobacco Manufacturers Council (the "CTMC") were initially called by the Plaintiffs and they are identified in Schedule C as "Non-Party, Non-Government Witnesses".  The schedules also list the experts called by each party and, finally, reproduce extracts of relevant external documents[9].

i.b.       the alleged bases of liability

[15]            We are in the collective or common phase of these class actions, as opposed to analyzing individual cases.  At this class-wide level, the Plaintiffs are claiming only moral (compensatory) and punitive (exemplary) damages. 

[16]            Moral damages are claimed under either of the Civil Codes in force during the Class Period, as well as under the Consumer Protection Act[10] (the "CPA") and under the Québec Charter of Human Rights and Freedoms[11] (the "Quebec Charter).  Faults committed prior to January 1, 1994 would be evaluated under the Civil Code of Lower Canada, including article 1053, while those committed as of that date would fall under the current Civil Code of Quebec, more specifically, under articles 1457 and 1468 and following[12].  In any event, the Plaintiffs see those differences as academic, since the test is essentially the same under both codes.

[17]            As for punitive damages, those are claimed under article 272 of the CPA and article 49 of the Quebec Charter.

[18]            The Plaintiffs argue that the rules of extracontractual (formerly delictual) liability apply here, and not contractual.  Besides the fact that the Class Members have no direct contractual relationship with the Companies, they are alleging a conspiracy to mislead consumers "at large", both of which would lead to extracontractual liability[13]

[19]            And even where a contract might exist, they point out that, as a general rule, the duty to inform arises before the contract is formed, thus excluding it from the contractual obligations coming later[14].  Here too, in their view, it makes no difference whether the regime be contractual or extracontractual, since the duty to inform is basically identical under both.

[20]            For their part, the Companies agreed that we are in the domain of extracontractual liability as opposed to contractual.

[21]            As for the liability of the Companies, the Plaintiffs not surprisingly take the position that all of the Common Questions should be answered in the affirmative and that an affirmative answer to a Common Question results in a civil fault by the Companies.  They liken cigarettes to a trap, given their addictive nature, a trap that results in the direst of consequences for the "unwarned" user.

[22]            In fact, the Plaintiffs charge the Companies with a fault far graver than failing to inform the public of the risks and dangers of cigarettes.  They allege that the Companies conspired to "disinform" the public and government officials of those dangers, i.e., as stated in their Notes[15], "to prevent knowledge of the nature and extent of the dangers inherent in (cigarettes) from being known and understood".  The allegation appears to target both efforts to misinform and those to keep people confused and uninformed.

[23]            The Plaintiffs see such behaviour as being so egregious and against public order that it should create a fin de non recevoir[16] against any attempt by the Companies to defend against these actions, including on the ground of prescription[17].

[24]            For similar reasons, the Plaintiffs seek a reversal of the burden of proof.  They argue that the onus should shift to the Companies to prove that Class Members, in spite of being properly warned, would have voluntarily chosen to begin smoking or would have voluntarily continued smoking once addicted[18].

[25]            On the question of the Consumer Protection Act, the Plaintiffs argue that the Companies committed the prohibited practices set out in sections 219, 220(a) and 228, the last of which attracting special attention as a type of "legislative enactment of the duty to inform"[19]:

228. No merchant, manufacturer or advertiser may fail to mention an important fact in any representation made to a consumer.

[26]            They argue that the Companies' disinformation campaign is a clear case of failing to mention an important fact, i.e., that any use of the product harms the consumer's health.  They add that the Companies failed to mention these important facts over the entire Class Period, including after the entry into force of the Quebec Charter and the relevant sections of the CPA.

[27]            The Plaintiffs note that a court may award punitive damages irrespective of whether compensatory damages are granted[20].  They argue that the CPA introduces considerations for awarding punitive damages in addition to those set out in article 1621 of the Civil Code, since "the public order nature of its Title II provisions means that a court can award punitive damages to prevent not only intentional, malicious, or vexatious behaviour, but also ignorant, careless, or seriously negligent conduct".[21] 

[28]            The Plaintiffs see this as establishing a lower threshold of wrongful behaviour for the granting of punitive damages than under section 49 of the Quebec Charter, where proof of intentionality is required.

[29]            As for the Quebec Charter, the Plaintiffs argue that the Companies intentionally violated the Class Members' right to life, personal inviolability[22], personal freedom and dignity under articles 1 and 4.  This would allow them to claim compensatory damages under the first paragraph of article 49 and punitive damages under the second paragraph. 

[30]            If the claims relating to the right to life and personal inviolability are easily understood, it is helpful to explain the others.  For the claim with respect to personal freedom, the Plaintiffs find its source in the addictive nature of tobacco smoke that frustrates a person's right to be able to control important decisions affecting his life. 

[31]            As for the violation of the Class Members' dignity, the Plaintiffs summarize that argument as follows in their Notes:

191.  A manufacturer mindful of a fellow human being’s dignity does not sell them a product that will trap them in an addiction and lead to development of serious health problems or death.  Such a manufacturer does not design, sell, and market a useless, toxic product and then hide the true nature of that product.  The Defendants committed these acts and omissions over decades.  The Defendants thus deliberately committed an egregious and troubling violation of the Plaintiffs’ right to dignity.

[32]            Of the criteria for assessing the amount of punitive damages set out in article 1621 of the Civil Code, the Plaintiffs put particular emphasis on the gravity of the debtor's fault.  This position is supported by the Supreme Court in the Time decision, who categorized it as "undoubtedly the most important factor"[23].

[33]            Along those lines, the Plaintiffs made extensive proof and argument that the Companies marketed their cigarettes to under-age smokers and to non-smokers.  We consider those arguments in section II.E of this judgment.

i.C.       the companies' view of the key issues

[34]            The Companies, for their part, were consistent in emphasizing the evidentiary burden on the Plaintiffs.  In its Notes, JTM identifies the key issues as being:

16.             The first issue in these cases is whether JTIM can be said to have engaged in wrongful conduct at all, given that class members are entitled to take risks and that they knew or could have known about the health risks associated with smoking.

17.          Secondly, the issue is whether this Court can conclude that JTIM committed any fault, given that throughout the class period it behaved in conformity with the strict regulatory regime put in place by responsible and knowledgeable public health authorities.

18.          Thirdly, to the extent that JTIM has committed any fault, the issue is whether that fault can engage its liability.  Unless Plaintiffs show that it led each class member to make the decision to smoke or continue smoking when he/she would not otherwise have made that choice, and that it was the resulting "wrongful smoking", attributable to the fault of JTIM, that was the physical cause of each member’s disease (sic).  Without such proof, collective recovery is simply not possible or justified in these cases.

16. (sic) Finally, with respect to punitive damages, the key issue (apart from the fact that they are prescribed) is whether a party that has conformed with public policy, including by warning consumers since 1972 of the risks of smoking in accordance with the wording prescribed by the government, can be said to have intentionally sought to harm class members that have made the choice to smoke, especially in the absence of any evidence from any class member that anything that JTIM is alleged to have done had any impact whatsoever on him or her.

[35]            The Companies also underline - seemingly on dozens of occasions - that the absence of testimony of class members in these files represents an insurmountable obstacle to proving the essential elements of fault, damages and causation for each Member.  The class action regime, they remind the Court, does not relieve the Plaintiffs of the obligation of proving these three elements in the normal fashion, as the case law consistently states.  As well, the Companies point out that the case law clearly requires that those elements be proven for each member of the class and the Plaintiffs' choice not to call any Members as witnesses should lead the Court to make an adverse inference against them in that regard.

[36]            As mentioned, since each Company's conduct was, at least in part, unique to it and different from that of the others, we must deal with the Common Questions on a Company-by-Company basis.

II.      IMPERIAL TOBACCO CANADA LTD.[24]

[37]            Given that ITL was the largest of the Companies during the Class Period, the Court will analyze the case against it first. 

[38]            The corporate history of ITL is quite complicated, with the broad lines of it being set out in Exhibit 20000.  Through predecessor companies, ITL has done business in Canada since 1912.  In 2000, two years after the end of the Class Period, it was amalgamated with Imasco Limited (and other companies) under the ITL name, with British American Tobacco Inc. ("BAT"), a British corporation, becoming its sole shareholder. 

[39]            Both directly and through companies over which it had at least de facto control, BAT was very much present in ITL's corporate picture during the Class Period, with its level of control of ITL's voting shares ranging between 40% and 58% (Exhibit 20000.1).  As a result, the Court allowed evidence relating to BAT's possible influence over ITL during the Class Period.

[40]            We now turn to the first Common Questions as it relates to ITL.

ii.a.    did itl manufacture, market and sell a product that was dangerous and harmful to the health of consumers?

[41]            What is a "dangerous" product?  One is tempted to say that it would be a product that is harmful to the health of consumers, but that would make the second part of this question redundant.  In light of the other Common Questions, we shall take it that "harmful to the health of consumers" means that it would cause either the Diseases in the Blais Class or tobacco dependence in the Létourneau Class.  The latter holding requires us to determine if tobacco dependence is dangerous and harmful to the health of consumers, a question we answer affirmatively further on in the present judgment[25].

[42]            In its Notes, ITL sums up its position on this question as follows:

292.  The evidence overwhelmingly supports the testimony of ITL and BAT scientists who told the Court that, throughout the Class Period, they and their colleagues engaged in a massive research effort, in the face of an enormous series of challenges and made good faith efforts to reduce the risks of smoking (and continue to do so).

293. The work carried on in the R&D department of ITL was professional and driven by ethical considerations.  In particular, Dr. Porter could name no avenues of work that were worth pursuing in the search for a less hazardous cigarette but which were not pursued by ITL or the larger BAT group.

294. Acting in good faith and in accordance with the state of the art at all relevant times, ITL took steps to reduce the hazards associated with its cigarettes. Contrary to what Plaintiffs might suggest, the mere fact that smoking continues to pose a (known) risk to consumers due to the inherent make-up of cigarettes simply does not give rise to a de facto "dangerous product" or "defective product" claim.

[43]            Also, in response to a request from the Court as to when each Company first admitted that smoking caused a Disease, ITL pointed out that, early on in the Class Period, its scientists adopted the working hypothesis that there is a relationship between smoking and disease. 

[44]            Whatever the merits of these arguments, they contain clear admissions that ITL manufactured, marketed and sold products that were dangerous and harmful to the health of consumers.

[45]            This is confirmed by the testimony of ITL's current president, Marie Polet.  At trial, she made the following statements:

On June 4, 2012:

 

Q121:  A -   Well, BAT has acknowledged for many, many years that smoking is a cause of serious disease.  So, absolutely, I believe that that's something that I agree with.

 

Q158:  A-   The company I have worked for, for those years, and that's BAT, yes.  So I can't speak to Imperial Tobacco specifically but I can tell you that I've always recalled BAT saying that there was a risk associated to smoking and accepting that risk.

 

Q251:  A-   I think we have a duty to work on trying to reduce the harm of the products we sell; I believe we are responsible for that.

 

Q302:  A-   What I believe is that smoking can cause a number of serious and, in some cases, fatal diseases.  And those diseases that I see here are commonly referred to as these diseases (referring to a list of diseases) that smoking can cause.

 

Q339:  A-   … It was very clear at that point in time, and I believe it was very clear many years before, decades before actually, and I can only speak to my own environment, and that was Europe, that smoking was a ... you know, represented a health risk.  It was very clear and it had been very clear in my view for many years before I joined (in 1978).

 

Q811:  A-   I think, as I... I think I said that earlier, as a company selling a product which can cause serious disease, it is our responsibility to work and to do as much as we can to try and develop ways and means to reduce the harm of those products.  So I believe that that's the company's position at this point in time.

 

On June 5, 2012:

 

Q334:  A-   I would say that none of them (ITL's brands) is safe.  I don't think any tobacco product in any form could qualify under the definition of "safe."

[46]            Although she added a number of qualifiers at other points, for example, that smoking is a general cause of lung cancer but it cannot be identified as the specific cause in any individual case, Mme. Polet's candid statements provide further admissions to the effect that ITL did manufacture, market and sell a product that was dangerous and harmful to the health of consumers during the Class Period.

[47]            In fact, none of the Companies today denies that smoking is a cause of disease in some people, although each steadfastly denies any general statement that it is the major cause of any disease, including lung cancer.

[48]            The real questions, therefore, become not whether the Companies sold a dangerous and harmful product but, rather, when did each of them learn, or should have learned, that its products were dangerous and harmful and what obligations did each have to its customers as a result.  These points are covered in the other Common Questions.

[49]            Also examined in the other Common Questions is the Companies' argument that it is not a fault to sell a dangerous product, provided it does not contain a safety defect.  A safety defect is described in article 1469 of the Civil Code as being a situation where the product "does not afford the safety which a person is normally entitled to expect, particularly by reason of a defect in the design or manufacture of the thing, poor preservation or presentation of the thing, or the lack of sufficient indications as to the risks and dangers it involves or as to safety precautions".

[50]            The Plaintiffs, on the other hand, argue that the special rules set out in articles 1469 and 1473 shift the burden of proof on this point to the Companies.  While confirming this position, article 1473 creates two possible defences, whereby the manufacturer must prove:

a.      that the victim knew or could have known of the defect or

b.     that the manufacturer could not have known of it at the time the product was manufactured or sold[26].

[51]            We must examine both possible defences.  The formulation of the second Common Question makes it appropriate to undertake that analysis immediately, though we are fully cognizant that we have not as yet been made any finding of fault by the Companies. 

ii.b.     did itl know, or was it presumed to know of the risks and dangers associated with the use of its products?

[52]            The pertinence of this question flows from the two articles of the Civil Code mentioned above.  Article 1469 indicates that a safety defect in a product occurs where it does not afford the safety which a person is normally entitled to expect, including by reason of a lack of sufficient indications as to the risks and dangers it involves.  Nevertheless, even where a safety defect exists, the second paragraph of article 1473 would exculpate the manufacturer if he proves either that the plaintiff knew of it or that he, the manufacturer, could not have known of it at the time and that he acted diligently once he learned of it.

[53]            Exactly what are the risks and dangers associated with the use of cigarettes for the purposes of this Common Question?  The class descriptions answer that.  The increased likelihood of contracting one of the Diseases is a risk or danger associated with smoking, as admitted by Mme. Polet.  The same can be said for the likelihood of becoming dependent on cigarettes in light of the fact that they increase the probability of contracting one of the Diseases.[27]

[54]            As for knowledge of the risks and dangers relating to the Diseases and dependence, the evidence indicates that both scientific and public recognition of the risks and dangers of dependence came later than for the Diseases.  For example, it was not until his 1988 report that the US Surgeon General clearly identified the dependence-creating dangers of nicotine use, whereas he pointed out the health risks of tobacco smoke as early as 1964.  As well, warnings on the cigarette packs began in 1972, but did not mention dependence or addiction until 1994. 

ii.b.1 the blais file

ii.b.1.a       As of what date did itl know of the risks and dangers?

[55]            In April and May 1958, three BAT scientists made an omnibus tour of the United States, with a stop in Montreal, for the purpose, inter alia, of seeking information on "the extent to which it is accepted that cigarette smoke 'causes' lung cancer".  Their ten-page report on the visit (Exhibit 1398) portrays an essentially unanimous consensus among the specialists interviewed to the effect that smoking causes lung cancer:

CAUSATION OF LUNG CANCER

With one exception (H.S.N. Greene) the individuals with whom we met believed that smoking causes lung cancer if by "causation" we mean any chain of events that leads eventually to lung cancer and which involves smoking as an indispensable link.  In the USA only Berkson, apparently, is now prepared to doubt the statistical evidence and his reasoning is nowhere thought to be sound[28].

CONCLUSIONS

1. Although there remains some doubt as to the proportion of the total lung cancer mortality which can fairly be attributed to smoking, scientific opinion in USA does not now seriously doubt that the statistical correlation is real and reflects a cause and effect relationship[29].

[56]            Given the close intercorporate and political collaboration between the tobacco industries in the US and Canada by the beginning of the Class Period[30], the state of knowledge in this regard was essentially the same in both countries, as well as in England, where BAT was headquartered.  Nevertheless, except for one short-lived blip on the radar screen by Rothmans in 1958, which the Court examines in a later chapter, no one in the Canadian tobacco industry was saying anything publicly about the health risks of smoking outside of corporate walls.  In fact, at ITL's instigation, it and the other Companies started moving towards a "Policy of Silence" about smoking and health issues as of 1962.[31]

[57]            Within the industry's walls, however, certain individuals in ITL and BAT were finding it increasingly difficult to hold their tongue.  Not surprisingly, the ones most recalcitrant in the face of this wall of silence were the scientists.[32]

[58]            Prominent among them was BAT's chief scientist, Dr. S.J. Green, now deceased.  In a July 1972 internal memo entitled "THE ASSOCIATION OF SMOKING AND DISEASE" (Exhibit 1395), Dr. Green goes very far indeed in advocating full disclosure.  The force of his text is such that it is appropriate to cite, exceptionally, a large portion of it:

I believe it will not be possible indefinitely to maintain the rather hollow "we are not doctors" stance and that, in due course, we shall have to come up in public with a more positive approach towards cigarette safety.  In my view, it would be best to be in a position to say in public what was believed in private, i.e., to have consistent responsible policies across the board.

The basic assumptions on which our policy should be built must be recognized and challenged or accepted.  A preliminary list of assumptions is suggested:

1)   The association of cigarette smoking and some diseases is factual.

6)   The tobacco smoking habit is reinforced or dependent upon the psycho-pharmacological effects mainly of nicotine.

Is it still right to say that we will not make or imply health claims?  In such a system of statutory control, can we completely abdicate from making judgments on our products in this context and confine ourselves to presenting choices to the consumer?  In a league table position should we take advantage of a system of measurement or reporting in a way which could lead to misinforming our consumers?

… we must ensure that our consumers have a choice between genuine alternatives and are sufficiently informed to exercise their choice effectively.

In my view, the establishment of league tables does not mean that the cigarette companies can contract out of responsibility for their products: league tables should be regarded only as a partial specification.  We should not allow them to lead us to abdicate from making our own judgments.  "We are not doctors", in my view may, through flattery, lead to short term peace with the medical establishment but will not fool the public for long.

To inform the consumer, i.e., to offer him an effective choice, health implications will have to be stated by government or industry or both and within the broader areas.  Companies may well have to bring home the health implication at the least for different classes of their products.

Meanwhile, we should also study how we could inform the public directly.

[59]            Dr. Green's already-heretical position actually hardened over time, as we shall see below.

[60]            On this side of the Atlantic, a questioning of the conscience was also taking place.  This is seen in a March 1977 memo (Exhibit 125) from Robert Gibb, head of ITL's Research and Development Department, commenting on an ITL position paper on smoking and health (Exhibit 125A) and a related document entitled "An Explanation" (Exhibit 125B).  Both documents had been prepared by ITL's Marketing Department.  He wrote:

The days when the tobacco industry can argue with the doctors that the indictment is only based on statistics are long gone.  I think we would be foolish to try to use "research" to combat what you term "false health claims" (item 7).  Contrary to what you say, the industry has challenged the position of governments (e.g. Judy La Marsh hearings) with expert witnesses, and lost.

The scientific "debate" nowadays is not whether smoking is a causative factor for certain diseases, but how it acts and what may be the harmful constituents in smoke.   (emphasis in the original)

[61]            Around the same time, Mr. Gibb distributed to ITL's upper management two papers by Dr. Green, the second of which echoed a similar concern and noted how the "domination by legal consideration … puts the industry in a peculiar position with respect to product safety discussions, safety evaluations, collaborative research " (Exhibit 29, at PDF 8):

               CIGARETTE SMOKING AND CAUSAL RELATIONSHIPS

The public position of tobacco companies with respect to causal explanations of the association of cigarette smoking and diseases is dominated by legal considerations.  In the ultimate companies wish to be able to dispute that a particular product was the cause of injury to a particular person.  By repudiation of a causal role for cigarette smoking in general they hope to avoid liability in particular cases.  This domination by legal consideration thus leads the industry into a public rejection in total of any causal relationship between smoking and disease and puts the industry in a peculiar position with respect to product safety discussions, safety evaluations, collaborative research etc.  Companies are actively seeking to make products acceptable as safer while denying strenuously the need to do so.  To many the industry appears intransigent and irresponsible.  The problem of causality has been inflated to enormous proportions.  The industry has retreated behind impossible demands for "scientific proof" whereas' such proof has never been required as a basis for action in the legal and political fields.  Indeed if the doctrine were widely adopted the results would be disastrous.  I believe that with a better understanding of the nature of causality it is plain that while epidemiological evidence does indicate a cause for concern and action it cannot form a basis on which to claim damage for injury to a specific individual.

[62]            Dr. Green's frank assessment of the industry's contradictory and conflicted position, and its domination by legal considerations, did not, however, totally blind him to the need to be sensitive to such issues, as reflected in his March 10, 1977 letter to Mr. Gibb commenting on the ITL position paper (Exhibit 125D):

… and I think your paper would be a useful basis (for discussion) to start from.  Of course, it may be suggested that it is better in some countries to have no such paper - "it's better not to know" and certainly not to put it in writing.

[63]            Or perhaps Dr. Green was just being discreetly sarcastic, for his days at BAT were numbered.

[64]            By April 1980, he "was no longer associated with BAT" (See Exhibit 31B).  In fact, he was so "not" associated that he agreed to give a very forthright interview to a British television programme dealing with smoking and health issues.  Here is the content of an April 1980 telex from Richard Marcotullio of RJRUS to Guy-Paul Massicotte, in-house legal counsel to RJRM in Montreal, on that topic (Exhibit 31B), another document meriting exceptionally long citation:

Panorama TV program included following comments from Dr. S.J. Green, former BAT director of research and development:

1.   He regards industry’s position on causation as naïve, i.e. "to say evidence is statistical and cannot prove anything is a nonsense".  He stated that nearly all evidence these days is statistical but believes that experiments can be and have been carried out that show that smoking is a very serious causal factor as far as the smoking population is concerned.

2.   In response to a question as to whether he believes that cigarette smoking to be (sic) harmful he said he is quite sure it can and does cause harm.  Specifically he said "I am quite sure it is a major factor in lung cancer in our society. In my opinion, if we could get a decrease in the prevalence of smoking we would get a decrease in the incidence of lung cancer".

In addition, an anonymous quotation supposedly prepared by industry scientific advisors in 1972 was stated as follows:

"I believe it will not be possible to maintain indefinitely the rather hollow 'we are not doctors' and I think in due course we will have to come up in public with a rather more positive approach towards cigarette safety.  In my view it would be best to be in the position to say in public what we believe in private."

Dr. Green referred briefly to Icosi on the program and described it as representing the industry in the EEC.  FYI, BAT’s response has been that Dr. Green is no longer associated with BAT and his views therefore are those of a private individual.  Further BAT reiterated the position that causation is a continuing controversy in scientific circles and that scientists are by no means unanimous in their views regarding smoking and health issues.

As with previous telexes, please share the above information with whom you feel should be kept up to date.

[65]            Robert Gibb, too, appears to have remained consistent in his scepticism of the wisdom and propriety of criticizing epidemiological/statistical research.  Four years after his 1977 memo on ITL's position paper, he made the following comments in a 1981 letter concerning BAT's proposed Handbook on Smoking and Health (Exhibit 20, at PDF 2):

The early part of the booklet casts doubt on epidemiological evidence and says there is no scientific proof.  Later on epidemiology is used as evidence that filtered low tar cigarettes are beneficial.  You can't have it both ways.  I would think most health authorities consider well conducted epidemiology to be "scientific", in fact the only kind of "science" that can be brought to bear on diseases that are multi-factored origin, whose mechanisms are not understood, and take many years to develop.  The credibility of scientists who still challenge the epidemiology is not high, and their views are ignored.

[66]            Gibb was the head of ITL's science team and, to his credit, he refused to toe the party line on the "scientific controversy".  On the other hand, his company, to its great discredit, not only failed to embrace the same honesty, but, worse still, pushed in the opposite direction[33]. 

[67]            Getting back to the question at hand, to determine the starting date of ITL's knowledge of the dangers of its products one need only note that, over the Class Period, ITL adopted as its working hypothesis that smoking caused disease[34].  The research efforts of its fleet of scientists, which at times numbered over 70 people in Montreal alone[35], were at all relevant times premised on that hypothesis.  It follows that, since the company was going to great lengths to eradicate the dangers, it had to know of them.

[68]            Speaking of research, it should not be overlooked that one of the main research projects of the Companies, dating back even to before the Class Period, was the development of filters.  Their function is to filter out the tar from the smoke, and it is from the tar, as it was famously reported by an eminent British researcher, that people die.[36] 

[69]            Then there is the expert evidence offered by the three Companies as to the date at which the public should be held to have known about the risks and dangers[37].  Messrs. Duch, Flaherty and Lacoursière put that date as falling between 1954 (for Duch) and the mid-1960s (for Flaherty).

[70]            Although to a large degree the Court rejects the evidence of Messrs. Flaherty and Lacoursière, as explained later, there is no reason not to take account of such an admission as it reflects on the Companies' knowledge[38].  It is merely common sense to say that, advised by scientists and affiliated companies on the subject[39], the Companies level of knowledge of their products far outpaced that of the general public both in substance and in time[40].  These experts' evidence leads us to conclude that the Companies had full knowledge of the risks and dangers of smoking by the beginning of the Class Period.

[71]            The Court acknowledges that little in the preceding refers directly to the Diseases of the Blais Class.  For the most part, Dr. Greene and Mr. Gibb speak of "disease" in a generic way and the historians are no more specific.  Nevertheless, we do not see this as an obstacle to arriving at a conclusion with regard to ITL's knowledge with respect to the Diseases.  No one can reasonably doubt that the average tobacco company executive at the time would have included lung cancer, throat cancer and emphysema among the diseases likely caused by smoking.

[72]            Thus, the Court concludes that at all times during the Class Period ITL knew of the risks and dangers of its products causing one of the Diseases. 

[73]            This conclusion not only answers the second Common Question in the affirmative with respect to ITL, but it also eliminates the second of the possible defences offered by article 1473.  Hence, to the extent that ITL is found to have committed the fault of selling a product with a safety defect, its only defence would be to prove that the Members knew or could have known of it or could have foreseen the injury[41].  We shall deal with that aspect next.

ii.b.1.b       As of what date did the public know?

[74]            Although the knowledge of the public is not directly the subject of Common Question Two, it makes sense to consider it now, during the discussion of the defences offered by article 1473[42].  In that light, the proof offers two main avenues for assessing this factor: the expert reports of historians and the effect of the warnings placed on cigarette packages as of 1972 (the "Warnings")[43]

ii.b.1.b.1    the experts' opinions: the diseases and dependence

[75]            The Companies filed three expert reports attempting to establish the date that the risks and dangers of smoking became "common knowledge" among the public.  ITL filed the report of David Flaherty (Exhibit 20063), while JTM offered the opinion of Raymond Duch (Exhibit 40062.1) and shared with RBH the report of Jacques Lacoursière (Exhibit 30028.1)[44].  The Plaintiffs offered the historian, Robert Proctor, as an expert and he also testified on this issue. 

[76]            Mr. Christian Bourque, an expert in surveys and marketing research, testified for the Plaintiffs with respect to the information contained in, and the motivation behind, the marketing surveys conducted for the Companies.  Although some of what he said touched on this issue, his evidence is not conducive to determining a cut-off date for the question at hand.  In light of that, the Court will not consider the evidence of Professor Claire Durand in this context, since her mandate was essentially to criticize Mr. Bourque's work.

[77]            The following table summarizes the historical experts' opinions as to the dates at which the public attained common knowledge of the danger to health and the risk of developing tobacco dependence:

EXPERT

KNOWLEDGE OF DANGER

TO HEALTH

KNOWLEDGE OF THE RISK OF ADDICTION OR "STRONG HABIT" OR "DIFFICULT TO QUIT"

David Flaherty[45]

mid-1960s

mid-1950s

Jacques Lacoursière[46]

late 1950s

late 1950s

Raymond Duch[47]

between 1954 and 1963

1979 to 1986

Robert Proctor[48]

the 1970s

after 1988

[78]            Professor Flaherty was commissioned by ITL to answer two questions:

·        At what point in time, if ever, did awareness of the health risks of smoking, and the link between smoking and cancer in particular, become part of the "common knowledge" of Quebecers?

·        At what point in time, if ever, did awareness of the fact that smoking was "hard to quit", "habit forming" or "addictive", become part of the "common knowledge" of Quebecers?

[79]            On the first question, he concludes that "Awareness of the causal relationship between smoking and cancer and other health risks was almost inescapable, and as such became common knowledge among the population of Quebec by the mid-1960s" (Exhibit 20063, at page 3)

[80]            He defines "common knowledge" as "a state of generally acknowledged awareness of some fact among members of a group" (at page 5), adding that a vast majority of the group must be aware of the fact in question in order for it to be common knowledge.  He also cautions that common knowledge can be either ahead of or behind the state of scientific knowledge, i.e., that scientific proof of the fact can come either before or after it has become part of common knowledge.

[81]            At the request of JTM and RBH, Jacques Lacoursière produced an exhaustive report chronicling the evolution of public knowledge (la connaissance populaire) of Quebec residents of the risks associated with smoking, including the risk of dependence (Exhibit 30028.1).  He analyzed the print and broadcast media and government publications in Quebec over the Class Period.  This was essentially a duplication of the work of Professor Flaherty, although, having dismissed Professor Lacoursière as "an amateur historian", Professor Flaherty would presumably not agree that it was of the same level of scholarship.

[82]            Professor Lacoursière sees awareness of the dangers of smoking among the general public arriving even earlier than Professor Flaherty.  Interestingly, he is of the opinion that knowledge with respect to the risk of tobacco dependence was acquired essentially at the same time as that for danger to health, while Professor Flaherty felt it came even earlier, and before knowledge related to disease.  Professors Duch and Proctor, on the other hand, agreed that knowledge of dependence came much later than for danger to health.  This reflects what the public health authorities were saying, as seen in the twenty-four-year gap between the two in the US Surgeon General Reports: 1964 versus 1988.

[83]            Professor Lacoursière opined that during the 1950s it was very unlikely (très peu probable) that a person would not have been made aware (n'ait pas eu connaissance) of the health dangers of smoking regularly and the risk of dependence attached to it.[49]  By the end of the next decade, 1960-69, his view firmed up to a point where ignorance of the danger in both cases was a near impossibility:

278.  I can affirm, in my role as historian, that it was nearly impossible for a person not to know of the dangers to health of regular smoking and the dependence that it can cause.  (the Court's translation)[50]

[84]            Not surprisingly, his opinion on the degree of awareness of the dangers of smoking and of possible dependence extant at the end of the following decades solidify to the point of it being "impossible" ("il est devenu impossible") not to know by the end of the 1970s (at page 69), and incontrovertible ("incontestable") up to the end of the Class Period (at pages 90 and 104).

[85]            Both Professors Flaherty and Lacoursière based their opinions exclusively on publicly-circulated documents, such as newspapers, magazines, television and radio shows, school books and the like.  Neither included the Companies' internal documents in their analysis, arguing persuasively that the public could not have been influenced by such items, since they were never circulated publicly. 

[86]            We can accept that logic, but they were much less persuasive in their justification for omitting to consider any of the voluminous marketing material circulated by the Companies over the Class Period.  Both of them completely ignored the Companies' numerous advertisements appearing in the same newspapers and magazines from which they extracted articles and airing on the same television and radio stations that especially Professor Lacoursière referred to.  As well, they took no note of billboards, signs, posters, sponsorships and the like on the level of public awareness of the dangers of smoking and of dependence. 

[87]            Professor Lacoursière attempted to justify this omission on his lack of expertise in evaluating the effect of advertising on the public.  In cross-examination, however, he admitted that advertising can have an effect on public knowledge, noting that the ads were quite attractive, "to say the least".[51]  This indicates that advertising material is something that should be considered in assessing common knowledge/connaissance populaire.  It also indicates that Professor Lacoursière's report is incomplete, since it omits elements that have a real impact on his conclusions.

[88]            As for Professor Flaherty, he brushed off this omission by saying that he initially intended to include an analysis of marketing material but, after long discussions with lawyers for ITL, who, he insisted, imposed no restrictions on him, he concluded that this type of communication really didn't have much of an impact on common knowledge. 

[89]            Professor Flaherty was remarkably stubborn on the point but seemed eventually to concede that there might be some influence, not, however, enough to bother with.  This is a surprising position indeed, one that not only flies in the face of common sense, but also contradicts a view he supported several years earlier. 

[90]            In 1988, he sent to ITL what he described as a periodic report relating to research that was not specific to the present files (Exhibit 1561).  There, in a section entitled "Remaining Research Activities", he wrote:

8.  We have not done any explicit research on cigarette advertising, although we are aware from U. S. materials of significant episodes in advertising.  My intuitive sense is that advertising is a component of any person's information environment and that it would be unwise not to think about the health claims that have been made about smoking since the 1910s, especially in terms of preparation for litigation.

[91]            His "intuitive sense" that advertising is a component of any person's information environment is, as we note above, only common sense.  The sole explanation he offered for the metamorphosis of his reasoning by the time he wrote his report for our files came in cross examination on May 23, 2013.  There, he stated that: "I decided, early on, that the probative effect of the information content of advertising for Canadian cigarettes that I saw was not contributing anything beyond name rank and serial number to the smoking and health debate". 

[92]            It is difficult to reconcile that view with his statement at page 5 of his report that "The only category of material that I have intentionally not reviewed is tobacco advertising, since it is outside the scope of my area of expertise to opine on the impact of the messages inherent in such advertising".  He should make up his mind.  Did he ignore tobacco advertising because it is not important, or was it because it is outside of his expertise?  If the latter, why did he not see it the same way in 1988?

[93]            As well, it seems inconsistent, to say the least, that these experts should be so chary to opine on the effect of newspaper and magazine ads on people's perception when they have absolutely no hesitation with respect to the effect of articles and editorial cartoons in the very same newspapers and magazines in which those ads appeared.  They seem to have been tracing their opinions with a scalpel in order to justify sidestepping such an obviously important factor.  In doing so, they not only deprive the Court of potentially valuable assistance in its quest to ascertain one of the key facts in the case, but they also seriously damage their credibility.

[94]            As if this were not enough, there is another obstacle to accepting these opinions.  These are historians who purport to opine on how the publication of certain information in the general media translates into knowledge of and/or belief in that information.  Neither one professed to have any expertise in psychology or human behaviour, yet their opinions invade both these areas. 

[95]            Professor Flaherty talks of "common knowledge", but all either he or Professor Lacoursière is showing is the level of media attention given to the issue.  That is not knowledge.  That is exposure.  On that basis, how can they opine on anything more than surveying what was published and publicly available?  It is more in the field of the survey expertise of Professor Duch where one can see indices of common knowledge.

[96]            For all these reasons, the Court cannot give any credence to the reports of Professors Flaherty and Lacoursière, other than for the purpose of showing part, and only part, of the information about smoking available to the public - and to the Companies - over the Class Period.

[97]            Turning to Dr. Proctor, he does not opine as to the date of knowledge by the public in his report (Exhibit 1238), his mandate being to comment on the reports of Professors Flaherty, Lacoursière and Perrins.  At trial, however, he was questioned by the Court as to the likely date at which the average American knew or reasonably should have known that the smoking of cigarettes causes lung cancer, larynx cancer, throat cancer or emphysema.

[98]            Having first replied that it was during the 1970s and 1980s, he later seemed to favour the 1970s, saying that "The surveys show that, by the seventies (70s), more than half of people answered yes when asked that question.  And I view that … as most Americans."[52]  The question was as to the date of knowledge, not belief, to the extent that that makes a difference.  He also answered on the basis of surveys, which, in our view, is the appropriate measure in this context.

[99]            With respect to dependence, he testified that the American public's knowledge was not "extremely common" until after the 1988 Surgeon General's Report[53].

[100]         It is true that he was opining as to Americans and not Canadians, but there appears to be a high degree of similarity in the levels of awareness about tobacco in the two countries.  This is echoed by one of JTM's expert, Dr. Perrins, who states that: "An examination of the understanding that the Federal Government and the public health and medical communities had of the smoking and health issue and its practice, in Canada, should take into account the histories of similar developments in both the United States and the United Kingdom".[54] 

[101]         Accordingly, the Court has no hesitation in deducing certain tendencies relevant to the Canadian and Quebec cases from proof adduced with respect to the US and UK situations, including those about the level of public awareness.  That said, we might well find some minor differences owing to specific events occurring in one or the other of those countries.

[102]         As for Professor Duch, his mandate was "to review the published public opinion data and provide my opinion on the awareness of the Quebec (and Canada) population from 1950 to 1998 of the health risks associated with smoking and of the public's view that smoking can be difficult to quit"[55].  His conclusions, as stated at page 5 of his report, are:

1:  The Quebec population's awareness of the reports linking smoking with lung cancer or other health risks:

•   By at least 1963 there was an exceptionally high level of awareness, 88 percent, among the Quebec population of reports or information that smoking may cause lung cancer or have other harmful effects.

•   Even before then, in 1954, 82 percent of the Quebec population was aware of reports that smoking may cause lung cancer.

2. The population's awareness of the risk of smoking being "habit forming" or being an "addiction":

•   Since the first relevant survey identified in 1979, over 80 percent of the population indicated that smoking is a habit and 84 percent reported it is very hard to stop smoking (in 1979).  By 1986 the majority of the population considered smoking to be an "addiction".

[103]         On the Diseases, the conclusion that smoking "may cause cancer or other harmful effects" does not satisfy the Court.  The minimum acceptable level of awareness should be much higher than that, for example, "is likely" or "is highly likely".  The Companies have the burden of proof on this ground of defence, as stated in article 1473.  In addition, we are in the context of a dangerous product and it is logical to seek a higher assurance of awareness[56].  This is reflected in the cautionary note that Professor Duch adds in paragraphs 53 through 57 of his report concerning the complexities of measuring such questions.

[104]         Consequently, his date of 1963 seems unrealistic as the date by which the public acquired sufficient knowledge about smoking and the Diseases, i.e., knowledge sufficient to trigger the defence offered by article 1473.  Whatever the effect of Minister LaMarsh's conference held in that year, the evidence points to a much later date. 

[105]         In 1963, the Canadian government had not even started its efforts at educating the public and was, in fact, still educating itself on many of the key aspects of the question.  It wasn't until 1968 that Health Canada first published the tar and nicotine levels for Canadian cigarette brands through the League Tables and it was a year later that the House of Commons mandated Dr. Isabelle to study tobacco advertising, a study that by necessity spilled over into general issues of smoking and health.

[106]         Upon further review, and after reasonable adjustments, the Court sees a fair amount of compatibility between the opinions of Professors Proctor and Duch. 

[107]         On dependence, there is, in fact, very little difference.  Professor Proctor talks of "after 1988" and Professor Duch focuses on a range between 1979 and 1986, the latter year being the one by which "the majority of the population considered smoking to be an "addiction".  The Companies, on the other hand, see the arrival of the 1994 Warning on addiction as the watershed event for this awareness, as discussed below.

[108]         As for the Diseases, if one adds ten or fifteen years to Dr. Duch's 1963 figure in order to move from "may cause" to "is highly likely", one arrives at a date that is consistent with Dr. Proctor's "the seventies".

[109]         We shall see how this reasoning is affected by our analysis of the Warnings.

ii.b.1.b.2    the effect of the warnings: the diseases and dependence

[110]         The first Warnings appeared on Canadian cigarette packages in 1972[57].  Starting out in what we would today consider to be almost laughably timid fashion, they evolved over the Class Period.  The following table shows that evolution.

YEAR

INITIATOR

TEXT

1972

The Companies - under threat of legislation (Exh. 40005D)

Warning: the Department of National Health and Welfare advises that danger to health increases with amount smoked

1975

The Companies - under threat of legislation (Exh. 40005G)

Warning: Health and Welfare Canada advises that danger to health increases with amount smoked - avoid inhaling

1988

The Parliament of Canada - Bill C-51, the "TPCA",[58] at subsection 9(1)(a)[59] and in section 11 of the regulations

·       Smoking reduces life expectancy[60]

·       Smoking is the major cause of lung cancer

·       Smoking is a major cause of heart disease

·       Smoking during pregnancy can harm the baby

1994

Modifications to the TPCA regulations (Exh. 40003E)

·       Cigarettes are addictive

·       Tobacco smoke can harm your children

·       Cigarettes cause fatal lung disease

·       Cigarettes cause cancer

·       Cigarettes cause stroke and heart disease

·       Smoking during pregnancy can harm your baby

·       Smoking can kill you

·       Tobacco smoke causes fatal lung disease in non smokers

1995 to end of Class Period[61]

The Companies - under threat of legislation, since the TPCA had been struck down by the Supreme Court in 1995 (Exh. 4005O)

·       Health Canada advises that cigarettes are addictive

·       Health Canada advises that tobacco smoke can harm your children

·       Health Canada advises that cigarettes cause fatal lung disease

·       Health Canada advises that cigarettes cause cancer

·       Health Canada advises that cigarettes cause stroke and heart disease

·       Health Canada advises that smoking during pregnancy can harm your baby

·       Health Canada advises that smoking can kill you

·       Health Canada advises that tobacco smoke causes fatal lung disease in non smokers

[111]         The effect of the various iterations of the Warnings must be analyzed in light of the atmosphere and attitudes prevailing at the time each of them appeared.  Professor Viscusi, an expert for the Companies, advised the Court that the novelty of the first Warnings in 1972 would likely have caused the public to take greater notice of them than would normally be the case.  He added, however, that their effect would soon have become essentially negligible, especially because they were simply repeating things that the public already knew. 

[112]         In the same vein, Professor Young, another of the Companies' experts, disparaged pack warnings as a means of informing consumers about a product's safety defects.

[113]         That said, the Warnings are the most frequent, direct, and graphic communications that smokers receive about cigarettes.  We cannot accept that they have absolutely no effect and, in this regard, we are simply following the Companies' lead. 

[114]         They attribute such importance to the Warnings that they submit that, as of the appearance of the Warning about addiction in 1994, no Canadian smoker can have been unaware of the dependence-creating properties of cigarettes.  They go so far as to identify September 12, 1994, the date that the regulation creating that Warning came into effect, as the very day on which prescription started to run for the Létourneau Class.  This shows great respect, indeed, for the impact of the Warnings, even if the Court would not go so far in that respect.

[115]         As for the contents of the Warnings, we have noted how they became more and more specific over the Class Period.  The question remains as to when they became specific enough, i.e., at what point can it be said that, other things being equal, the Warnings caused the Members to know of the safety defect for the purposes of article 1473.

[116]         It is important to note that the test for that level of knowledge is affected by the type of product in question.  Where it is a toxic one, i.e., dangerous for the physical well-being of the consumer, that test is more stringent[62].  This higher standard thus applies to both files here.

[117]         With respect to the Diseases, despite its novelty in 1972, the statement that "Danger to health increases with amount smoked", as well intentioned as it might have been, is unlikely to have struck fear into the heart of the average smoker.  In the same vein, the remarkably naïve admonition to avoid inhaling that was added in 1975 must have inspired either a hearty chuckle or a cynical shake of the head in most smokers, for, as President Obama is said to have responded in a different context: "Inhaling is the whole point".

[118]         It appears that during the 1980s, in the absence of a legislative basis for imposing them[63], the Warnings' message dragged behind the public's knowledge.  Once the powers under the TPCA were exercised in 1988, however, the Warnings started having some bite. 

[119]         Cancer is mentioned for the first time in the 1988 Warnings, although only lung cancer.  We note that the other Diseases are not specified but, as with the Companies' executives, no one can reasonably doubt that the average smoker at the time would have included lung cancer, throat cancer and emphysema among the diseases likely caused by smoking. 

[120]         Getting back to the date of sufficient knowledge of the risk of contracting one of the Diseases, our analysis of the experts' reports leads us to conclude that adequate public knowledge would have been acquired well before the 1988 change to the Warnings.  We favour the end of the 1970s. 

[121]         Consequently, the Court holds that the public knew or should have known of the risks and dangers of contracting a Disease from smoking as of January 1, 1980, which we shall sometimes term the "knowledge date".  It follows that the Companies' fault with respect to a possible safety defect by way of a lack of sufficient indications as to the risks and dangers of smoking ceased as of that date in the Blais File

[122]         As for the Létourneau File, the public's knowledge came later.  The Warnings were completely silent about dependence until 1994, while the US Surgeon General took until 1988 to adopt a firm stand on it.  For their part, Professors Proctor and Duch point to the 1980s.  Then there is the Companies' position favouring the adoption of the new Warning on addiction of September 1994. 

[123]         The Court notes that, as with the Diseases, there is a reasonable level of compatibility within the evidence of Professors Duch and Proctor, which also reflects the contents of the Warnings. 

[124]         To start, of Professor Duch's range of dates, i.e., 1979 and 1986, his view is that, by the latter, only "the majority of the population considered smoking to be an 'addiction'".  A majority is not sufficient on this point.  The "vast majority" is more along the lines that the experts, and the Court, favour. 

[125]         To reach that level would require a number of additional years.  That being so, however, the intense publicity on the issue of dependence around the beginning of the 1990s was such that knowledge on the topic was being acquired rapidly.  One need only consider the 1988 Surgeon General Report and the 1994 addiction Warning.  These are key factors, but not dispositive.

[126]         Although Canadians paid much attention to the Surgeon General Reports, the Court sees the new Warning on addiction as confirmation that the Quebec public did not have sufficient knowledge before its appearance.  This is indirectly supported by statements made by the CTMC in its lobbying to avoid such a warning in 1988.  It argued that "Calling cigarettes "addictive" trivializes the serious drug problems faced by our society, but more importantly (t)he term "addiction" lacks precise medical or scientific meaning[64].

[127]         That the Companies recognize the new Warning's importance is telling, but the Court puts more importance on the fact that Health Canada did not choose to issue a Warning on dependence before it did.  If the government, with all its resources, was not sufficiently concerned about the risk of tobacco dependence to require a warning about it, then we must assume that the average person was even less concerned.

[128]         That said, even something as visible as a pack warning does not have its full effect overnight. 

[129]         The addiction Warning was one of eight new Warnings and they only started to appear on September 12, 1994.  It would have taken some time for that one message to circulate widely enough to have sufficient force.  The impact of decades of silence and mixed messages is not halted on a dime.  The Titanic could not stop at a red light. 

[130]         The Court estimates that it would have taken one to two years for the new addiction Warning to have sufficient effect among the public, which we shall arbitrate to about 18 months, i.e., March 1, 1996.  We sometimes refer to this as the "knowledge date" for the Létourneau Class.

[131]         There is support for this date in one of the Plaintiffs' exhibits, a survey entitled "Canadians' Attitudes toward Issues Related to Tobacco Use and Control"[65].  It was conducted in February and March 1996 by Environics Research Group Limited for "a coalition" of the Heart and Stroke Foundation of Canada, The Canadian Cancer Society and the Lung Foundation.  Although this is a "2M" exhibit, meaning that the veracity of its contents is not established, Professor Duch cites it at two places in his report for the Companies[66].  This should have led to the "2M" being removed and the veracity, along with the document's genuineness, being accepted.

[132]         The Environics survey sampled 1260 Canadians, of which some 512 were from Quebec.  When they were asked to name, without prompting, the health hazards of smoking, "only two percent mention the fundamental hazard of tobacco use which is addiction"[67]

[133]         Since the Létourneau Class's knowledge date about the risks and dangers of becoming tobacco dependent from smoking is March 1, 1996, it follows that the Companies' fault with respect to a possible safety defect by way of a lack of sufficient indications as to the risks and dangers of smoking ceased as of that date in the Létourneau File

ii.b.2 the létourneau file

[134]         Despite scooping ourselves with respect to this file in the previous paragraph, there remain aspects still to be examined in Létourneau, particularly since concern over tobacco dependence developed differently from concern over the Diseases.  Nevertheless, much of what we say concerning the Blais File is also relevant to Létourneau and we shall not repeat that.

ii.b.2.a       As of what date did itl know?

[135]         Early in the Class Period, ITL executives were openly discussing "the addictiveness of smoking".[68]  In October 1976, Michel Descôteaux, then Manager of Public Relations and later Director of Public Affairs[69], prepared a report for ITL's Vice President of Marketing, Anthony Kalhok, proposing new policies and strategies for dealing with the increasing criticism the company was encountering over its products[70].  In it, he says the following on the subject of dependence:

A word about addiction.  For some reason, tobacco adversaries have not, as yet, paid too much attention to the addictiveness of smoking.  This could become a very serious issue if someone attacked us on this front.  We all know how difficult it is to quit smoking and I think we could be very vulnerable to such criticism.

I think we should study this subject in depth, with a view towards developing products that would provide the same satisfaction as today's cigarette without "enslaving" consumers.[71]                                                                                 (emphasis in the original)

[136]         Today, Mr. Descôteaux tries to brush off the contents of this report as the product of youthful excess, pointing out that he was only 29 years old at the time.  That might well be the case, but that is not the point.  This document shows that the risk of creating tobacco dependence was known, accepted and openly discussed within ITL by 1976.  They all knew how difficult it was to quit smoking, to the point of "enslaving" their customers.

[137]         Indeed, some four years earlier, Dr. Green of BAT had characterized as a basic assumption that "The tobacco smoking habit is reinforced or dependent upon the psycho-pharmacological effects mainly of nicotine", as we noted above[72].  The basis for that assumption must have been present for many years, given that ITL's expert, Professor Flaherty, feels that it was common knowledge among the public since the mid-1950s that smoking was difficult to quit, and that by that time "the only significant discussion in the news media on this point concerned whether smoking constituted an addiction, or whether it was a mere habit"[73]

[138]         If the public knew of the risk of dependence by the 1950s, the Court feels safe in concluding that ITL knew of it at least by the beginning of the Class Period.  We so conclude.

ii.b.2.b       As of what date did the public know?

[139]         As explained above, the Court holds that the public knew or should have known of the risks and dangers of becoming tobacco dependent from smoking as of March 1, 1996 and that the Companies' fault with respect to a possible safety defect ceased as of that date in the Létourneau File

[140]         Let us be clear on the effect of the above findings.  The cessation of possible fault with respect to the safety defects of cigarettes has no impact on the Companies' possible faults under other provisions, i.e., the general rule of article 1457 of the Civil Code, the Quebec Charter or the Consumer Protection Act.  There, a party's knowledge is less relevant, an element we consider in section II.G.1 and .2 of the present judgment.

[141]         In any event, the Companies' objectionable conduct continued after those dates.  Moreover, the reasons for this cessation of fault had nothing to do with anything they did.  In fact, the opposite is actually the case.  Both by their inaction and by their support of the scientific controversy, whereby the dangers of smoking were characterized as being inconclusive and requiring further research, the Companies actually impeded and delayed the public's acquisition of knowledge. 

[142]         Thus, the Members' knowledge does not arrest the Companies' faults under these other provisions.  Since the Companies took no steps to correct their faulty conduct, their faults continued throughout the Class Period.  This, however, does not mean that the other conditions of civil liability would have been met, as they must be in order for liability to exist.  As well, a Member's decision to start to smoke, or perhaps to continue to smoke, after he "knew or could have known" of the risks and dangers could be considered to be a contributory fault, a subject we analyze in a later section of the present judgment.

ii.c.     did itl knowingly put on the market a product that creates dependence and did it choose not to use the parts of the tobacco containing a level of nicotine sufficiently low that it would have had the effect of terminating the dependence of a large part of the smoking population?

[143]         Common Question C is actually two distinct questions:

·       Did ITL knowingly market a dependence-creating product?

and

·       Did ITL choose tobacco that contained higher levels of nicotine in order to keep its customers dependent?

[144]         Looming above the debate, however, is a preliminary question: Is tobacco a product that creates dependence of the sort to generate legal liability for the manufacturer?  Before starting the analysis with that question, certain introductory comments are appropriate.

[145]         The evidence on the issue of dependence is essentially industry wide, in the sense that most of the relevant facts cannot be sifted out on a Company-by-Company basis.  The expert opinions here do not differentiate among the Companies, and the issue of the choice of tobacco leaves ends up depending almost entirely on what Canada and its two ministries were doing rather than on the actions of any one of the Companies.  As a result, our analysis and conclusions will not be Company specific, but will apply in identical fashion to all three of them.

[146]         Vocabulary took on excessive proportions in the discussion on dependence.  The meaning of the term "addiction" in the context of tobacco and smoking evolved over the Class Period, eventually getting toned down to become, for all intents and purposes, synonymous with "dependence".  The Oxford Dictionary of English reflects this, as seen by the use of the word "dependent" in its definition of "addiction": "physically and mentally dependent on a particular substance".

[147]         It is of note that, since 1988, the Surgeon General of the United States has abandoned earlier appellations and now applies the term "addiction" exclusively.  That position is far from unanimous, however. 

[148]         In its flagship diagnostic manual, the DSM[74], the American Psychiatric Association has never recommended a diagnosis termed as "addiction", this according to Dr. Dominique Bourget, one of the Companies' experts.  She filed the latest DSM into the Court record (DSM-5: Exhibit 40499) and testified that the DSM is extensively used in Canada.  With the publication of DSM-5 in 2013, "dependence", the term of choice in previous DSM iterations, was abandoned in favour of "disorder".  Thus, the cigarette addiction of the Surgeon General is now the "tobacco use disorder" of the APA. 

[149]         In spite of this terminological turbulence, the Court sees little significance to the specific word used.  What is important is the reality that, for the great majority of people, smoking will be difficult to stop because of the pharmacological effect of nicotine on the brain.  That which we call a rose by any other name would still have thorns.

[150]         In that light, the Court will simply follow the lead of Common Question C and, unless the context requires otherwise, opt for the term "dependence" or "tobacco dependence".

ii.c.1     is tobacco a product that creates dependence of the sort that can generate legal liability for the manufacturer?

[151]         The Plaintiffs take this as a given, but the Companies went to great lengths to contest the point.  They called two experts in support of a view that seems to say that nicotine is no more dependence creating than many other socially acceptable activities, such as eating chocolate, drinking coffee or shopping. 

[152]         Plaintiff's expert, Dr. Juan Carlos Negrete, is a medical doctor and psychiatrist specializing in the treatment of and research on addiction.  He has some 45 years of clinical experience in psychiatry, along with a teaching position in the Department of Psychiatry of McGill University since 1967.  Currently, he is serving as a senior consultant in the Addictions Unit of the Montreal General Hospital, a service that he founded in 1980, and as "Honorary Staff" at the Centre for Addictions and Mental Health in Toronto. 

[153]         Although concentrating on alcohol dependence during much of his career, he indicates at the end of his 71-page CV that he has been acting as the "Seminar Leader for the McGill Post-Graduate Course in Psychiatry: Tobacco dependence" since March 2013.  He explains that he has offered this seminar for several years but that since 2013 it has been focused solely on tobacco dependence. 

[154]         He testified that there is often "co-morbidity" present in an addicted person, so that, for example, alcohol addiction is generally accompanied by tobacco dependence.  As a result, he often deals with both addictions in the same patient.  That said, in cross examination he stated that he has treated several hundred patients for tobacco dependence only[75].  He readily admits that it is possible to quit smoking and recognizes that a majority of Canadian smokers have succeeded in doing that, but generally with great difficulty[76].

[155]         The Companies produced two experts who disputed Dr. Negrete's opinions: Professor John B. Davies (Exhibit 21060), professor emeritus of psychology at Strathclyde University in Glasgow, Scotland and Director of the Centre for Applied Social Psychology, and Dr. Dominique Bourget (Exhibit 40497), a clinical psychiatrist at the Royal Ottawa Mental Health Centre and associate professor at the University of Ottawa.

[156]         The Court accepted Professor Davies as an expert in "applied psychology, psychometrics, drug use and addiction".  During his career, although he has worked almost exclusively in the area of drug addiction, he sees "commonalities" between drug use and cigarette use. 

[157]         No friend of the tobacco industry, this was his first experience in a tobacco trial.  He explained that he agreed to testify here "because there is an overemphasis on a deterministic pharmacological model of drug misuse which is frequently challenged in academic debates, and I have a number of friends who are violently opposed to the pharmacological determinist model.  […] and I thought it was high time that somebody... - I don't want to sound self-congratulatory -... I thought it was time somebody stood up and put the opposite point of view.  And having had this point of view since nineteen ninety-two (1992), it started to occur to me that it was probably my job to do it."[77] 

[158]         He admitted that he is not a qualified pharmacologist, but declared "having some knowledge of how the basic addictive process, whatever that means, comes about, in the way that different drugs bind to different receptor sites so as to affect the dopamine cycle, and those kinds of things."  He thus feels that he could have "an intelligent conversation" with a qualified pharmacologist.[78] 

[159]         That is likely so, but the Court notes that his principal objective, one might go so far as to say his "mission", is to challenge the pharmacological model of drug misuse in favour of a socio-environmental approach.  We would feel more assured were the critic a specialist in the area he was criticizing.  That, however, is not all that makes us uncomfortable with his evidence.

[160]         Although testifying as an expert in addiction, he was adamant to the point of obstinacy that the use of terms such as "addiction" and "dependence" must be avoided at all costs in order to assist substance abusers to change their behaviour.  His theory is that such terms disparage people with a substance abuse problem and discourage them from trying to correct it.  Given his fervour over that, cross examination was all but impossible.  There was constant quibbling over vocabulary and searching for terms that he could agree to consider. 

[161]         Moreover, his almost total dismissal of the pharmacological effects of nicotine on the brain is not supported by the experts in the field.  He implicitly recognized this when, after much painful cross examination, he admitted that nicotine does, in fact, have a pharmacological effect on the brain.  He stated that nicotine binds to receptors in the brain, thus causing "brain changes". 

[162]         Such changes do not mean that the brain is damaged, in his view, because they are not permanent[79].  He cited a study (Exhibit 21060.22) showing that the brains of people who quit smoking "return to normal" after twelve weeks[80].  That this indicates that the smoker's brain was, therefore, not "normal" while he was smoking seems not to have been considered by him.

[163]         Professor Davies is very much a man on a crusade, too much so for the purposes of the Court.  He has a theory about drug misuse and he defends it with vehemence.  That might be laudable in certain quarters, but is inappropriate and counter productive for an expert witness.  It smothers the objectivity so necessary in such a role and blinds him to the possible merits of other points of view.  As a result, it robs the opinion of much of its usefulness.  That is the fate of Professor Davies' evidence in this trial.

[164]         As for Dr. Bourget, she was recognized by the Court as "an expert in the diagnosis and treatment of mental disorders, including tobacco-use disorder, and in the evaluation of mental capacity".  In hindsight, despite her extensive experience testifying in criminal matters, we have serious doubts as to her qualifications in the areas of interest in this trial.  Her frank responses to questions about her tobacco-related credentials reinforce that doubt:

45Q- Doctor, among your patients, are there any for whom you are only treating for tobacco use disorder?

A-   No. (Transcript of January 22, 2014, at page 18)

 

244Q-Aside from that, did you do any research on addiction prior to receiving your mandate, ever, to any extent?

A-   Well, I did read on this topic.  I was certainly familiar with the diagnosing of it.  I was also familiar with, you know, dealing with people who had all sorts of substance abuse and monitoring them for their substance abuse, as was mentioned earlier.  So, yes, before that time, I did have experience in that field. (Transcript of January 22, 2014, at pages 65-66)

 

253Q-Did you have any research projects […] that were interested ... involved in the field of addiction?

A-   No, as I said earlier, my experience is clinical.  I did not conduct any research, nor participated, to my knowledge, in specific research studies concerning substance use.  I have been involved in research certainly throughout my career, as you could see from my CV, in the area... mostly in the psychopharmacological area, and that is reflected in my CV, but not specific to addiction or substance abuse. (Transcript of January 22, 2014, at page 67)

[165]         The Court's lack of enthusiasm for her evidence can only be heightened by her reply to the final question of the examination in chief:

656Q- … if I wanted to quit smoking, would I come to you or...?

A- Not if you just have a smoking problem.  (Transcript of January 22, 2014, at page 200)

[166]         As with Professor Davies' opinion, the Court finds Dr. Bourget's evidence to be of little use.  We shall nevertheless refer to both opinions where appropriate.

[167]         Getting back to Dr. Negrete, in his two reports (Exhibits 1470.1 and 1470.2), he opines on the dependence-creating process of cigarette smoking and the effect of tobacco dependence on individuals and their personal lives.  He provides his view on what criteria indicate that a smoker is dependent on tobacco, being essentially behavioural factors.  Professor Davies and Dr. Bourget did none of that.  As usual with the Companies' experts, they were content to criticize the opinions of the Plaintiffs' experts while voicing little or no opinion on the main question. 

[168]         One justification for this omission was Dr. Bourget's argument that the diagnosis of dependence cannot be assessed on a population-wide basis, but must necessarily include a direct examination of each individual.  This leads to the conclusion, in her view, that dependence is not something that can be considered in a class action because it cannot be treated at a "collective" level.  With due respect, in saying this she was overstepping the bounds of an expert by purporting to opine on a legal matter.

[169]         This said, Dr. Negrete did agree that, before diagnosing tobacco dependence in any one person, he would always examine that person.  Nevertheless, he did not see this as being relevant to the question in point.  He had no hesitation in opining as to a set of diagnostic criteria that would indicate a state of tobacco dependence within a population for epidemiological/statistical purposes.  We note below that the American Psychiatric Association shares his view in the DSM-5 (Exhibit 40499).

[170]         Although it was Dr. Bourget who filed the DSM-5 into the record, she failed to approach the question from the angle espoused there, insisting on a clinical view as opposed to a population-wide one.  Her argument requiring a personal examination of each Class Member fits in with the Companies' master strategy of attempting to exclude from collective recovery any sort of compensatory damages, because they are always felt on a personal level.  The Court rejects this argument in a later section of the present judgment.

[171]         The question here is whether tobacco creates a dependence of the sort to generate legal liability for the Companies and, for the reasons explained above, the Court prefers the evidence of Dr. Negrete in this regard. 

[172]         In his second report (Exh 1470.2, at page 2), he describes the effects of tobacco dependence.  The most serious impact he identifies is the increased risk of "morbidité" and premature death[81].  He also cites a lower quality of life, both with respect to physical and social aspects, as one of the major problems[82].  Finally, he states that the mere fact of being dependent on tobacco is, itself, the principal burden caused by smoking, since dependence implies a loss of freedom of action and an existence chained to the need to smoke - even when one would prefer not to[83].

[173]         True, he used the word "slave" and the expressions "loss of freedom of action" and "maladie du cerveau", which the Companies translated as "disease of the brain" and "brain disease".  Professor Davies and Dr. Bourget devoted much of their reports and testimony to proclaiming their fundamental disagreement with such strong language.  The gist of their argument was that nicotine in no way destroys one's decision-making faculties and that, since more Canadians have quit smoking than are actually smoking now, one's freedom of action is clearly not lost.

[174]         They used semantics as a way of side-stepping the real issue of identifying the harm that smoking causes to people who are dependent on tobacco.  Dr. Negrete did address this issue, albeit with occasionally dramatic language.  For example, his term "loss of freedom of action" really comes down to meaning that implementing the decision to quit smoking (as opposed simply to making the decision) is harder than it would otherwise be were tobacco and nicotine not dependence creating.  This equates to a diminution of one's abilities, though not a total loss, the interpretation given to his words by the Companies' experts.

[175]         As for the terms "disease of the brain" and "brain disease", those are the Companies' translations and, as is often the case with translations, they might not be a totally accurate reflection of what is meant by Dr. Negrete's French term: "maladie du cerveau".  It could also be translated as a sickness of the brain.  We have seen that even Professor Davies admits that nicotine causes brain changes.  Might those changes be seen as a sickness?[84]

[176]         Whatever the case, Dr. Negrete did not deny that there are other forces that also contribute to the difficulty of quitting, such as the social, sensory and genetic factors so fundamental to the theories of Professor Davies.  This said, he chose to put much more emphasis on the pharmacological impact than did the other two experts.  Unlike Professor Davies, he is a medical doctor and, unlike Dr. Bourget, he has significant experience in the area of tobacco dependence, including as seminar leader of the post-graduate course in psychiatry at the McGill University Medical School.  This impresses the Court.

[177]         For their part, the Companies do not deny that "Smoking can be a difficult behaviour to quit", but insist that it is "not an impossible one".[85]  They seem to see it as a state of benevolent dependence, one that can be conquered by ordinary will power, as witnessed by the impressive quitting rates among Canadian smokers, including those in Quebec, but to a slightly lesser degree.  And the figures do impress.  In 2005, there were more than twice as many ex-smokers in Canada than current smokers[86].

[178]         They and their experts see the real obstacle to quitting not so much in their product as in a lack of sufficient motivation, commitment and will power by smokers to implement their decision to quit.  Since many smokers eventually succeed, in the Companies' eyes those who fail have only themselves to blame.

[179]         Will power certainly plays a role, but that is not the point here.  Nicotine affects the brain in a way that makes continued exposure to it strongly preferable to ceasing that exposure.  In other words, although it can vary from individual to individual, nicotine creates dependence.  That is the point.

[180]         Admitting that quitting smoking was one of the most practised pastimes of the latter half of the Class Period, and that many people succeeded, one still has to wonder why, if tobacco dependence is as benevolent as the Companies would have us believe, the American Psychiatric Association devotes so much space to the issue in its manual for diagnosing psychiatric disorders.  The DSM-5 (Exhibit 40499) devotes some six pages to Tobacco Use Disorder and Tobacco Withdrawal.  They shine a light directly on the issue at hand, meriting an exceptionally long citation:

CONCERNING TOBACCO USE DISORDER

Diagnostic Criteria

A problematic pattern of tobacco use leading to clinically significant impairment or distress, as manifested by at least two of the following, occurring within a 12-month period: (followed by a description of 11 symptoms).  (Page 571 - 159 pdf)

Tobacco use disorder is common among individuals who use cigarettes and smokeless tobacco daily and is uncommon among individuals who do not use tobacco daily or who use nicotine medications. […]  Cessation of tobacco use can produce a well-defined withdrawal syndrome.  Many individuals with tobacco use disorder use tobacco to relieve or to avoid withdrawal symptoms (e.g., after being in a situation where use is restricted).  Many individuals who use tobacco have tobacco-related physical symptoms or diseases and continue to smoke.  The large majority report craving when they do not smoke for several hours.  (page 572 - 160 pdf) (The Court's emphasis throughout)

Smoking within 30 minutes of waking, smoking daily, smoking more cigarettes per day, and waking at night to smoke are associated with tobacco use disorder.  (page 573 - 161 pdf)

CONCERNING TOBACCO WITHDRAWAL

Diagnostic Criteria

A. Daily use of tobacco for at least several weeks.

B. Abrupt cessation of tobacco use, or reduction in the amount of tobacco used, followed within 24 hours by four (or more) of the following signs or symptoms:

1. Irritability, frustration, or anger.

2. Anxiety.

3. Difficulty concentrating.

4. Increased appetite.

5. Restlessness.

6. Depressed mood.

7. Insomnia.

C. The signs or symptoms in Criterion B cause clinically significant distress or impairment in social, occupational, or other important areas of functioning(Page 575 - 163 pdf)

Diagnostic Features

Withdrawal symptoms impair the ability to stop tobacco use.  The symptoms after abstinence from tobacco are in large part due to nicotine deprivation.  Symptoms are much more intense among individuals who smoke cigarettes or use smokeless tobacco than among those who use nicotine medications.  This difference in symptom intensity is likely due to the more rapid onset and higher levels of nicotine with cigarette smoking.  Tobacco withdrawal is common among daily tobacco users who stop or reduce but can also occur among nondaily users.  Typically, heart rate decreases by 5-12 beats per minute in the first few days after stopping smoking, and weight increases an average of 4-7 lb (2-3 kg) over the first year after stopping smoking.  Tobacco withdrawal can produce clinically significant mood changes and functional impairment.  (Page 575 - 163 pdf)

Associated Features Supporting Diagnosis

Craving for sweet or sugary foods and impaired performance on tasks requiring vigilance are associated with tobacco withdrawal.  Abstinence can increase constipation, coughing, dizziness, dreaming/nightmares, nausea, and sore throat.  Smoking increases the metabolism of many medications used to treat mental disorders; thus, cessation of smoking can increase the blood levels of these medications, and this can produce clinically significant outcomes.  This effect appears to be due not to nicotine but rather to other compounds in tobacco.  (Page 575 - 163 pdf)

Prevalence

Approximately 50% of tobacco users who quit for 2 or more days will have symptoms that meet criteria for tobacco withdrawal.  The most commonly endorsed signs and symptoms are anxiety, irritability, and difficulty concentrating.  The least commonly endorsed symptoms are depression and insomnia.  (Page 576 -164 pdf)

Development and Course

Tobacco withdrawal usually begins within 24 hours of stopping or cutting down on tobacco use, peaks at 2-3 days after abstinence, and lasts 2-3 weeks.  Tobacco withdrawal symptoms can occur among adolescent tobacco users, even prior to daily tobacco use.  Prolonged symptoms beyond 1 month are uncommon.  (Page 576 - 164 pdf)

Functional Consequences of Tobacco Withdrawal

Abstinence from cigarettes can cause clinically significant distress.  Withdrawal impairs the ability to stop or control tobacco use.  Whether tobacco withdrawal can prompt a new mental disorder or recurrence of a mental disorder is debatable, but if this occurs, it would be in a small minority of tobacco users.  (page 576 - 164 pdf)

[181]         It is not insignificant that the APA believes that about half of the people who attempt to quit smoking for two or more days will experience at least four of the symptoms of tobacco withdrawal, and that withdrawal symptoms will last two to three weeks.  It stands to reason that many other "quitters" will experience one, two or three of those symptoms and no expert came to deny that. 

[182]         Thus, the DMS-5 supports Professor Davies' admission that smoking can be a difficult behavior to quit, as well as his assertion that quitting is not impossible.  More to the point, by detailing the obstacles likely to confront a smoker who wishes to stop, it underlines the high degree of nicotine dependence that is generally, but not always, created by smoking and the challenge posed by trying to quit.  

[183]         Dependence on any substance, to any degree, would be degrading for any reasonable person.  It attacks one's personal freedom and dignity[87].  When that substance is a toxic one, moreover, that dependence threatens a person's right to life and personal inviolability.  The Court has no hesitation in concluding that such a dependence is one that can generate legal liability for the Companies. 

[184]         To the extent that the Companies knew during any phase of the Class Period of the dependence-creating properties of their products, they had an obligation to inform their customers accordingly.  The failure to do so in those circumstances would constitute a civil fault, one that has the potential of justifying punitive damages under both the Québec Charter and the Consumer Protection Act. 

ii.c.2     did itl knowingly market a dependence-creating product?

[185]         We have previously held that ITL knew throughout the Class Period that smoking caused tobacco dependence.  As well, there is no doubt that the Companies never warned their consumers of the risks and dangers of dependence.  They admit never providing any health-related information of any sort, with only the 1958 gaffe by Rothmans as the exception[88].  They plead that the public was receiving sufficient information from other sources: by the schools, parents, doctors and the Warnings.

[186]         We cite above extracts from Mr. Descôteaux's 1976 memo to Mr. Kalhok (Exhibit 11), which underscores the fact that "the addictiveness of smoking" was still below the radar even of tobacco adversaries.  Hence, ITL knew not only that its products were dependence creating but also knew that through a good portion of the Class Period the anti-smoking movement, much less the general public, was not focusing on that danger. 

[187]         In light of the above, no more need be said on this question.  ITL did knowingly market a dependence-creating product, and still does, for that matter.  As with the previous Common Questions, whether or not this constitutes a fault depends on additional elements, ones that are examined below.

ii.c.3     did itl choose tobacco that contained higher levels of nicotine in order to keep its customers dependent?

[188]         To answer this, it is necessary to examine the role and effect of the research done at Canada's Delhi Research Station ("Delhi") in Delhi, Ontario starting in the late 1960s[89]As described in a 1976 newspaper interview by Dr. Frank Marks, Delhi's Director General at the time, Delhi's role was to "(help) growers to produce the best crop possible for the most economic input expenditures to maintain a good net profit - and in addition - the type of tobacco most acceptable from a health viewpoint and for consumer acceptance"[90].

[189]         One of the principal projects undertaken at Delhi was the creation of new strains of tobacco containing higher nicotine than previous strains ("Delhi Tobacco")[91].  This project was successful to the point that by 1983 essentially all the tobacco used in commercial cigarettes in Canada was Delhi Tobacco (Exhibit 20235).  This was due in part, no doubt, to pressure by Canada on the Companies to buy their tobacco from Canadian farmers. [92]

[190]         The Plaintiffs allege that the Companies controlled the research priorities at Delhi to the point of being able to dictate what type of projects would be carried out.  Thus, they see the work done to develop higher-nicotine tobacco as a plot to assist the Companies in their quest to ensure and increase tobacco dependence among the populace

[191]         With respect, neither the documentary evidence nor the testimony at trial bear that out.

[192]         Dr. Marks testified directly on this point:

196Q-Did the cigarette manufacturing companies ask Delhi to design and develop the higher nicotine strains?

A- No, they did not.

197Q-Where did the idea come from?

A- Part of the LHC Program and knowing... us knowing that the filtration process was going to be taking out a certain amount of the tar and, also, nicotine at the same time.  So that was the impetus for going to a higher... higher nicotine type tobacco, so that when they did filter out tar, there would still be enough nicotine left for the smoker to get some satisfaction from it.[93]

[193]         This explanation is consistent with the flow of evidence about Canada's approach to reducing the impact of smoking on Canadians' health in the 1970s and 1980s: "If you can't quit smoking, then smoke lower tar cigarettes". 

[194]         Rather than pointing to the Companies, the proof indicates that Canada was the main supporter of higher nicotine tobacco in its campaign to develop a less hazardous cigarette, i.e., one with a higher nicotine/tar ratio.[94]  Health Canada assumed that by increasing the amount of nicotine inhaled "per puff", smokers could satisfy their nicotine needs with less smoking.  It saw this as a way of developing a "less hazardous" cigarette, and even hoped to use the Companies' advertising as a means of promoting such products.[95]

[195]         The problem was that the levels of tar and nicotine in tobacco follow each other.  A reduction of, say, 20% in the tar will generally result in about a 20% reduction in the nicotine, which can leave the smoker "unsatisfied".  Canada saw higher nicotine tobaccos as a way to preserve a sufficient level of nicotine after reducing the tar.  In fact, this appears to have been something of a worldwide movement[96]

[196]         It is true that the Companies favoured this approach, but there is no indication that they were the ones driving the Delhi bus in this direction[97].  In fact, it could be argued that higher nicotine cigarettes would permit a smoker to satisfy his nicotine needs with fewer cigarettes a day, thus reducing cigarette sales. 

[197]         On another point, the Plaintiffs argue at paragraph 585 of their Notes that "ITL had the ability to create a non addictive cigarette but instead chose to work to maintain or increase the addictive nature of its cigarettes".  The submission is that the Companies did this in order to hook their customers on nicotine to the greatest extent possible so as to protect their market.  Here again, the evidence fails to substantiate the allegation.

[198]         Although it is technically possible to produce a non-addictive cigarette[98], the evidence was unanimous in confirming that consumers would never choose it over a regular cigarette

[199]         Nicotine-free cigarettes were tested by several companies and consumer reaction confirmed their lack of commercial acceptance.  They tasted bad and gave no "satisfaction".  Even neutral government employees working at Delhi confirmed that.  Furthermore, no evidence was adduced that such a cigarette would have any less tar than a regular cigarette. 

[200]         In light of the above, the present question loses its relevance.  Accepting that they did choose tobacco with higher levels of nicotine, the Companies were in a very practical way forced to do so by Health Canada.  Moreover, in the context of the time, far from being a nefarious gesture, this could actually be seen as a positive one with respect to smokers' health. 

[201]         Thus, by using tobacco containing higher levels of nicotine, ITL was neither attempting to keep its customers dependent nor committing a fault.  This finding does not, however, negate possible faults with respect to the obligation to inform smokers of the dependence-creating properties of tobacco of which it was aware.

ii.d.    did itl trivialize or deny or employ a systematic policy of non-divulgation of such risks and dangers?

[202]         Since Common Question "E" deals with marketing activities, the Court will limit its analysis in the present chapter to ITL's actions outside of the marketing field.  This covers two rather broad areas: what ITL said publicly about the risks and dangers of smoking and what it did not say.

[203]         In order to weigh these factors, it is necessary to understand what the Companies should have been saying.  This requires a review of the nature and degree of the obligations on them to divulge what they knew, taking into account that the standards in force might have varied over the term of the Class Period.  We shall thus consider the "obligation to inform"[99].

[204]         Thereafter, we shall consider what the public knew, or could have known, about the dangers of smoking.  It is also relevant to examine what ITL knew, or at least thought it knew, about what the public knew, for a party's obligation to inform can vary in accordance with the degree to which information is lacking.  This analysis will apply to both files unless otherwise indicated.

[205]         Before going there, however, we must, unfortunately, make several comments concerning the credibility of certain witnesses.

ii.d.1 credibility issues

[206]         The Court could not help but have an uneasy feeling about parts of the testimony of many of the witnesses who had been associated with ITL during the Class Period, particularly those who occupied high-level positions in management.  Listening to them, one would conclude that there was very little concern within the company over the smoking and health debate raging in society at the time. 

[207]         Witness after witness indicated that issues such as whether smoking caused lung cancer or whether possible legal liability loomed over the company because of the toxicity of its products or whether the company should do more to warn about the dangers of smoking were almost never discussed at any level, not even over the water cooler.  It went to the point of having ITL's in-house counsel, a member of the high-level Management Committee, confirm that he did not "specifically recall" if in that committee there had ever even been a discussion about the risks of smoking or whether smoking was dangerous to the health of consumers[100].

[208]         How can that be?  It is not as if these people were not aware of the maelstrom over health issues raging at the company's door.  They should have been obsessed with it and its potentially disastrous consequences for the company's future prosperity - and even its continued existence.  But one takes from their testimony that it was basically a non-issue within the marketing department and the Management Committee.

[209]         If that is so, how can one explain ITL's embracing corporate policies and goals designed to respond to such health concerns, as it says it did?  The company adopted as its working hypothesis that smoking caused disease, and it devoted a significant portion of its research budget to developing ways and means to reduce health risks, such as filters, special papers, ventilation, low tar and nicotine cigarettes and, through "Project Day", a "safer cigarette"?

[210]         Make no mistake.  There can be no question here of managerial incompetence.  These are impressive men, each having decades of relevant experience in high positions in major corporations, including ITL.  There must be another explanation. 

[211]         Might it be that the corporate policy at the time not to comment publicly on smoking and health issues carried over even to discussing them internally?  This would be consistent with the BAT group's sensitivity towards "legal considerations".[101]

[212]         One example of that sensitivity was provided by Jean-Louis Mercier, a former president of ITL.  He testified that BAT's lawyers frowned on ITL performing scientific research to verify the health risks of smoking because that might be portrayed in lawsuits as an admission that it knew or suspected that such risks were present.  Another example comes from BAT's head of research, Dr. Green, who confided to ITL's head of research in a 1977 memo that " … it may be suggested that it is better in some countries to have no such (position) paper - "it's better not to know" and certainly not to put it in writing"[102]

[213]         It simply does not stand to reason that, at the time they were getting legal advice going to the extent of limiting the type of research that ITL's large and well-staffed R&D department should perform, company executives were not discussing the hot topic of smoking and health. 

[214]         Either way, it goes against the Company.  If false, it undermines the credibility and good faith of these witnesses.  If true, it demonstrates both a calculated effort to rig the game and inexcusable insouciance.  In any case, it is an element to consider in the context of punitive damages.

ii.d.2 THE OBLIGATION TO INFORM

[215]         Prior to 1994, the Civil Code dealt with this obligation under article 1053, the omnibus civil fault rule.  The "new" Civil Code of 1994 approaches it in two similar but distinct ways, maintaining the general civil fault rule in article 1457 and specifying the manufacturer's duty in article 1468 and following.  While the latter are new provisions of law, they are essentially codifications of the previous rules applicable in the area.

[216]         Article 1457 is the cornerstone of civil liability in our law.  It reads:

1457.  Every person has a duty to abide by the rules of conduct which lie upon him, according to the circumstances, usage or law, so as not to cause injury to another.

 

Where he is endowed with reason and fails in this duty, he is responsible for any injury he causes to another person by such fault and is liable to reparation for the injury, whether it be bodily, moral or material in nature.

[…]

1457.  Toute personne a le devoir de respecter les règles de conduite qui, suivant les circonstances, les usages ou la loi, s’imposent à elle, de manière à ne pas causer de préjudice à autrui.

Elle est, lorsqu’elle est douée de raison et qu’elle manque à ce devoir, responsable du préjudice qu’elle cause par cette faute à autrui et tenue de réparer ce préjudice, qu’il soit corporel, moral ou matériel.

[…]

[217]         The Plaintiffs allege that the Companies failed to abide by the rules of conduct that every reasonable person should follow according to the circumstances, usage or law by the mere act of urging the public to use a thing that the Companies knew to be dangerous.  Subsidiarily, they argue that it would still be a fault under this article by doing that without warning of the danger.

[218]         The Court sees a fault under article 1457 as being separate and apart from that of failing to respect the specific duty of the manufacturer with respect to safety defects, as set out in article 1468 and following.  The latter obligation focuses on ensuring that a potential user has sufficient information or warning to be adequately advised of the risks he incurs by using a product, thereby permitting him to make an educated decision as to whether and how he will use it.  The relevant articles read as follows:

1468. The manufacturer of a movable property is liable to reparation for injury caused to a third person by reason of a safety defect in the thing, even if it is incorporated with or placed in an immovable for the service or operation of the immovable. […]

 

1468.    Le fabricant d'un bien meuble, même si ce bien est incorporé à un immeuble ou y est placé pour le service ou l'exploitation de celui-ci, est tenu de réparer le préjudice causé à un tiers par le défaut de sécurité du bien. […]

1469.  A thing has a safety defect where, having regard to all the circumstances, it does not afford the safety which a person is normally entitled to expect, particularly by reason of a defect in the design or manufacture of the thing, poor preservation or presentation of the thing, or the lack of sufficient indications as to the risks and dangers it involves or as to safety precautions.

1469.     Il y a défaut de sécurité du bien lorsque, compte tenu de toutes les circonstances, le bien n'offre pas la sécurité à laquelle on est normalement en droit de s'attendre, notamment en raison d'un vice de conception ou de fabrication du bien, d'une mauvaise conservation ou présentation du bien ou, encore, de l'absence d'indications suffisantes quant aux risques et dangers qu'il comporte ou quant aux moyens de s'en prémunir.

 

1473.  The manufacturer, distributor or supplier of a movable property is not liable to reparation for injury caused by a safety defect in the property if he proves that the victim knew or could have known of the defect, or could have foreseen the injury.

 

Nor is he liable to reparation if he proves that, according to the state of knowledge at the time that he manufactured, distributed or supplied the property, the existence of the defect could not have been known, and that he was not neglectful of his duty to provide information when he became aware of the defect.

 

1473.  Le fabricant, distributeur ou fournisseur d'un bien meuble n'est pas tenu de réparer le préjudice causé par le défaut de sécurité de ce bien s'il prouve que la victime connaissait ou était en mesure de connaître le défaut du bien, ou qu'elle pouvait prévoir le préjudice.

 

Il n'est pas tenu, non plus, de réparer le préjudice s'il prouve que le défaut ne pouvait être connu, compte tenu de l'état des connaissances, au moment où il a fabriqué, distribué ou fourni le bien et qu'il n'a pas été négligent dans son devoir d'information lorsqu'il a eu connaissance de l'existence de ce défaut.

[219]         When discussing the ambit of this obligation in our law, Quebec authors have taken inspiration from at least two common law judgments: Dow Corning Corporation v. Hollis[103], a British Columbia case ("Hollis"), and Lambert v. Lastoplex Chemicals Co. Limited[104], an Ontario case ("Lambert").  Baudouin cites these two Supreme Court of Canada decisions on a number of points[105].  Hence, the issue of a manufacturer's duty to warn is one where the two legal systems coexisting in Canada see the world in a similar way, and for which we see no obstacle to looking to common law decisions for inspiration.

[220]         The Quebec jurisprudence on this question appears to have started with the exploding-gun case of Ross v. Dunstall ("Ross") in 1921[106].  Its ground-breaking holding was that a manufacturer of a defective product could have extracontractual (then known as "delictual") liability towards a person that did not contract directly with it. 

[221]         The Plaintiffs advance that it also stands for the proposition that the mere marketing of a dangerous product constitutes an extracontractual fault against which there can be no defence.  They cite Baudouin in support:

2-346 - Observations - Cette reconnaissance (de l’existence d’un lien de droit direct entre l’acheteur et le fabricant) établissait, en filigrane, une distinction importante entre le produit dangereux, impliqué en l’espèce, et le produit simplement défectueux, la mise en marché d’un produit dangereux étant considérée comme une faute extracontractuelle.[107] (The Court's emphasis)

[222]         The Court does not read either the Ross judgment or the citation from Baudouin in the same way as do the Plaintiffs.  In Ross, it appears never to have crossed Mignault J.'s mind that the marketing of a dangerous product could constitute an automatic fault in and of itself.  The closest that he comes to that is when he writes:

[…] but where as here there is hidden danger not existing in similar articles and no warning is given as to the manner to safely use a machine, it would appear contrary to the established principles of civil responsibility to refuse any recourse to the purchaser.  Subject to what I have said, I do not intend to go beyond the circumstances of the present case in laying down a rule of liability, for each case must be disposed of according to the circumstances disclosed by the evidence.[108]

[223]         In light of that, far from asserting that the sale of a dangerous product will always be a fault, the statement in Baudouin appears to be limited to underlining the possible extracontractual nature of marketing a dangerous product without a proper warning[109], as opposed to its being strictly contractual.  That is the only rule of liability that Mignault J. appears to have been laying down in Ross.[110]

[224]         Building on the sand-based foundation of the above argument, the Plaintiffs venture into the area of "risk-utility" theory.  They argue that, "absent a clear and valid legislative exclusion of the rules of civil liability, every manufacturer must respect its duties under civil law to not produce and market a useless, dangerous product, and repair any injury caused by its failure to do so".[111]  Implicit in this statement is the assumption not only that cigarettes are dangerous, but that they are also useless and, moreover, that there exists a principle of civil law forbidding the production and marketing of useless products that are dangerous.

[225]         Although the Companies now admit that cigarettes are dangerous, the proof does not unconditionally support their uselessness.  Even the Plaintiffs' expert on dependence, Dr. Negrete, admits that nicotine has certain beneficial aspects, for example, in aiding concentration and relaxation[112]

[226]         In any event, the Court finds no support in the case law and doctrine for a principle of civil law similar to the one that the Plaintiffs wish to invoke.  In Quebec, the first paragraph of article 1473 makes it possible to avoid liability for a dangerous product, even one of questionable use or social value, by providing sufficient warning to its users.  The rule is similar in the common law[113].

[227]         Our review of the case law and doctrine applicable in Quebec leads us to the following conclusions as to the scope of a manufacturer's duty to warn in the context of article 1468 and following:

a.     The duty to warn "serves to correct the knowledge imbalance between manufacturers and consumers by alerting consumers to any dangers and allowing them to make informed decisions concerning the safe use of the product"[114];

b.     A manufacturer knows or is presumed to know the risks and dangers created by its product, as well as any manufacturing defects from which it may suffer;[115]

c.      The manufacturer is presumed to know more about the risks of using its products than is the consumer;[116]

d.     The consumer relies on the manufacturer for information about safety defects;[117]

e.     It is not enough for a manufacturer to respect regulations governing information in the case of a dangerous product;[118]

f.      The intensity of the duty to inform varies according to the circumstances, the nature of the product and the level of knowledge of the purchaser and the degree of danger in a product's use; the graver the danger the higher the duty to inform;[119]

g.     Manufacturers of products to be ingested or consumed in the human body have a higher duty to inform;[120]

h.     Where the ordinary use of a product brings a risk of danger, a general warning is not sufficient; the warning must be sufficiently detailed to give the consumer a full indication of each of the specific dangers arising from the use of the product;[121]

i.       The manufacturer's knowledge that its product has caused bodily damage in other cases triggers the principle of precaution whereby it should warn of that possibility;[122]

j.      The obligation to inform includes the duty not to give false information; in this area, both acts and omissions may amount to fault; and[123]

k.     The obligation to inform includes the duty to provide instructions as to how to use the product so as to avoid or minimize risk.[124]

[228]         Professor Jobin sums it up nicely:

Il faut enfin souligner l'étendue, variable, de l'obligation d'avertir d'un danger inhérent. À juste titre, la jurisprudence exige que, plus le risque est grave et inusité, plus l'avertissement doit être explicite, détaillé et vigoureux.  D'ailleurs, dans un grand nombre de cas, il ne suffit pas au fabricant d'indiquer le danger dans la conservation ou l'utilisation du produit: en effet, il est implicite dans la jurisprudence qu'il doit aussi, très souvent, indiquer à l'utilisateur comment se prémunir du danger, voire comment réduire les conséquences d'une blessure quand elle survient.[125]

ii.d.3 no duty to convince

[229]         Since the present analysis applies to all three Companies, the Court will consider now two connected arguments raised by JTM.  The first is that "the source of the awareness and, in particular, whether it came from the manufacturer, is legally irrelevant.  What matters is that consumers are apprised of the risks, not how they became so."[126] 

[230]         In the second[127], it contests the Plaintiffs' assertion that "If a manufacturer becomes aware that, despite the information available to consumers, they do not fully understand their products' risks, this should be a signal to this manufacturer that it has not appropriately discharged its duty to inform."[128]  In this regard, JTM argues that the duty to warn is not equivalent to a duty to convince. 

[231]         On the question of the source of the awareness, the test under article 1473 is whether the consumer knew or could have known of the safety defect, as opposed to whether the manufacturer had taken any positive steps to inform.  That confirms JTM's position, but does not paint the full picture.

[232]         Where the manufacturer knows that the information provided is neither complete nor sufficient with respect to the nature and degree of probable danger[129], the duty has not been met.  That is the case here.  We earlier held that the Companies were aware throughout the Class Period of the risks and dangers of their products, both as to the Diseases and to dependence.  They thus knew that those risks and dangers far surpassed what either Canada, through educational initiatives, or they themselves, through the pack warnings, were communicating to the public.  That represents a grievous fault in light of the toxicity of the product.

[233]         Much of this also applies to JTM's second argument opposing the imposition of a duty to convince.  Again, the test is, in general: "knew or could have known", but the bar is higher for a dangerous product.  Turning that test around, in these circumstances it seems appropriate to ask whether the Companies knew or could have known if the public was being sufficiently warned.  The answer is that the Companies very well knew that they were not. 

[234]         Putting aside specialized, scientific studies to which the public would not normally have access, the information available during much of the Class Period was quite general and unsophisticated.  We include in that the pre-1988 Warnings. 

[235]         It is telling, for example, that Health Canada did not see the need to impose starker Warnings until 1988.  This indicates that the government could not have been fully aware of the exact nature and extent of the dangers of smoking, otherwise we must presume that they would have acted sooner.  This was apparent to the Companies, a fact that they essentially admit in a June 1977 RJRM memo drafted by Derrick Crawford. 

[236]         Reporting on a meeting between Health Canada and, inter alia, the Companies to discuss the project for a less hazardous cigarette, Mr. Crawford mocked the technical abilities of Health Canada in several areas and noted that "they were actually looking to us for help and guidance as to where they should go next"[130].  In his concluding paragraph, he underlines the government's shortcomings and lack of understanding:

7. One had to leave this meeting with a sense of frustration — so much time spent and so little achieved.  On the other hand it leaves one with a degree of optimism for the future as far as the industry is concerned.  They are in a state of chaos and are uncertain where to turn next from a scientific point of view.  They want to be seen to be doing the right thing, and to keep their Dept. in the forefront of the Smoking & Health issue.  However it appears they simply do not have the funds to tackle the problem in a proper scientific manner.  Our continuing dialogue can continue for a long time, as they feel meetings such as these are beneficial.  Pressure must be off shorter butt lengths for a considerable time[131]

[237]         If the Companies knew that Health Canada was in a state of confusion, they had to assume that the public was even less up to speed.  Farther on, we look at what ITL knew about what the public knew and conclude that its regular market surveys would have led it to believe that much of the public was in the dark about smoking and health realities.  This should have guided ITL's assessment of whether it had met its duty to inform.  It did not.

[238]         Rather than taking the initiative in helping the government through the learning process, the Companies' strategy was to hold Canada back as long as possible in order to continue the status quoSmoking prevalence was still growing in Canada through much of this period[132] and the Companies were reaping huge profits.  It was in their financial interest to see that continue as long as possible. 

[239]         By choosing not to inform either the public health authorities or the public directly of what they knew, the Companies chose profits over the health of their customers.  Whatever else can be said about that choice, it is clear that it represent a fault of the most egregious nature and one that must be considered in the context of punitive damages.

[240]         So far in this section, the Court has focused on the manufacturer's obligation to inform under article 1468 and following but, under article 1457, a reasonable person in the Companies' position also has a duty to warn. 

[241]         In a very technical but nonetheless relevant sense, the limits and bounds of that duty are not identical to those governing the duty of a manufacturer of a dangerous product.  This flows from the "knew or could have known" defence created by article 1473. 

[242]         Under that, a manufacturer's faulty act ceases to be faulty once the consumer knows, even where the manufacturer continues the same behaviour.  In our view, that is not the case under article 1457.  The consumer's knowledge would not cause the fault, per se, to cease.  True, that knowledge could lead to a fault on his part, but that is a different issue, one that we explore further on.

ii.d.4 what itl said publicly about the risks and dangers

[243]         In its Notes, ITL dismisses Plaintiffs' arguments, and the evidence, or lack thereof, on which they are based:

574.  Accordingly, Plaintiffs are left with a handful of statements by individuals from a 50-year period which they characterize as being "public statements" made on ITL’s behalf.  On their face, however, these statements were clearly not widely disseminated, and were not intended to "trivialize" smoking risks.  What is more, these statements have to be contextualized by the fact that the company had long since acknowledged the risks, and had included warnings on their packs and advertisements since the early 1970s.  No isolated statement made in a discrete forum could possibly even rise to the level of a footnote in the context of these background communications.

575.  Finally, and perhaps most fundamentally, this Court has not heard a single Class Member come forward to say that he/she heard any of the allegedly "trivializing" statements, let alone relied upon any of them.

[244]         Before considering the impact of ITL's declarations, let us look at what was being said.

[245]         In the early part of the Class Period, ITL did not hesitate to voice doubt about the link between tobacco and disease.  A 1970 interview accorded by Paul Paré, then president of ITL, to Jack Wasserman, a Vancouver radio host[133], is typical of the message ITL was still delivering at that time.  There, Mr. Paré makes light of the scientific evidence linking tobacco to serious disease and advances the argument so often made by Canadian tobacco executives that more research must be done by "real" scientists before being able to make any statement on the risks of smoking. 

[246]         Although this event did not have any direct effect in Quebec, it typifies the "scientific controversy" message that the Company and the CTMC were extolling throughout much of the Class Period and it is useful to reproduce a large part of it.

(J. Wasserman)  … All through your speech in Vancouver you have suggested that it's just a propaganda campaign against the tobacco industry, and it really ain't true that I'm liable to get lung cancer, that I'm liable to get emphysema, if I keep on smoking.

(P. Paré)  Well, I don't think that we have said that you're liable to get nothing if you smoke a great deal.  And I don't think that we have tried to point the finger at being entirely a propaganda activity.  I think, what we have said, that the finger of suspicion is pointed at the industry.

(J.W.)  Yes

(P.P.)  And the industry has, on that account, a responsibility to respond to it.  The interesting feature is, there isn't a single person in the medical profession or any federal or provincial bureau that's been able to identify anything that suggests that there's a connection between smoking and any disease.

(J.W.)  Do you mean that the world famous scientists and medical men that make these connections, using statistical evidence, are just a bunch of needless worry warts?

(P.P.)  No, but I think that one would have to question the world famous scientists.  I think I could demonstrate to you that there are more world famous scientists who have actually conducted a good deal of activity on the … on those areas of research which, we think, are probably more fruitful, for they would talk about the kind of things that speak of generic differences, or behavioural differences, or stress differences, the kind of thing that may have some meaning. What is the virtue of having a statistical association reiterated, year after year after year, without adding a single new bit of information and….

(J.W.)  You said the responsibility of the industry was to answer the charges.

(P.P.)  M'hm

(J.W.)  Is it not the responsibility of the industry to go find out if the charges are correct and to deal with them because, if the charges are correct - and God knows there are enough charges - you are selling poison?

(P.P.)  Well, I think the industry has done everything so far, within its competence to do.  We have invested, as an industry (inaudible), scores of millions of dollars trying to demonstrate what it is that causes this phenomenon of a statistical association.

(P.P.)  … I think that I can turn around and tell you about men, any number of them, we could have brought fifty (50) famous people who ...

(J.W.)  You quote … you quote a number of them.

(P.P.)  Just … yes, and that particular top guy is given there as a reference to what Professor Cellier (?), Dr. Cellier has said. But any number of these scientists are much larger in the context of their reputation than what people generally think about the tobacco industry, and basically not, in any way, subservient to us.  Indeed they’ve made it very clear, this is something they believe strongly in because … And I suspect, if you had a chance to see most doctors privately, you would find that they would say that this particular thing has been blown up out of proportion.

(P.P.)  … But it would be difficult to rely - certainly I wouldn’t try and rely - on any tar and nicotine relationship as between filters and non-filters, because tar and nicotine themselves have not been able to be shown to be dangerous to anything.

(J.W.)  They injected it into rats and there was a higher incidence of a certain kind of cancer.

(P.P.)  No, there wasn't.  This is one of the curious things about it.  They have tried, when I say ''they'', I mean the medical fraternity as a whole, have tried to induce cancer for thirty (30) years by the use of extraordinary dosages of the by-products of smoke, which are identified as tar and nicotine.  It’s never been able to be achieved.  Now they have applied, or did apply, in a couple of experiments on mouse, on mice rather, doses of tar on their backs, and were able to develop certain skin cancers on the early experiments.  Now even the doctors will confess that this is meaningless, for you can do the same thing with tomato ketchup or orange juice, or anything if you want to apply it…

(J.W.)  Have they done tests showing that, in fact … suggesting that tomato ketchup has caused skin cancer in mice?

(P.P.)  Oh yes, indeed, lots of different products that have been used in this way have been able to develop a skin cancer.

(P.P.)  … I think that the human system is exposed to these things in cycles, and it tends to develop a resistance to them.  Now, just to put it in a perspective.  At the turn of the century, when lung cancer was first identified, the average age of the incidence of lung cancer was in the forties (40’s).  Now lung cancer today is a disease (inaudible) of the old.  The average incidence of lung cancer is over sixty (60).  And projecting the pattern, in ten (10) years, it will be over seventy (70).

(P.P.)  … What I think a scientist would say, a real scientist would say, is that this kind of a statistical association creates a pretty important hypothesis, and one that deserves some pure research.  You then will have to decide, well, what is the area of the research, for you can’t look at a particular contributing factor in isolation.  Obviously, even in this case, they’re talking about the possibility of two (2) factors; it may very well be there are ten (10) factors, and it’s possible - I suppose - that smoking be one of them, but there is no evidence to support that view…

(P.P.)  … I think, what you find, and this is I think an interesting thing, in a general context, here you say, or we have had it said constantly that the morbidity rate is associated …, the morbidity rate of cigarette smokers is going to be something like eight (8) or nine (9) years less than somebody else.  And I think the fact of the matter is, all these evils of smoking that are charged with visiting upon consumers (sic), tends to be, in my view at least, questioning the fact that, here we are as Canadians, living healthier and longer lives than we’ve ever lived, smokers or non-smokers alike.  And, you know, you can go back over the years and find people three hundred (300) years ago saying that tobacco is going to kill everybody going to kill everybody.

(P.P.)  Is having smaller babies a bad thing, do you know?  I think there was a study done in Winnipeg by a doctor which demonstrated that smaller babies was probably a good thing; the baby has a better chance to live and lives a health … has a better chance to grow normally.

[247]         Even to its own employees, ITL was denying the existence of a scientifically-endorsed link between cigarette smoking and disease and trivializing the evidence to that effect.  As would be expected, the company's internal corporate newsletter, The Leaflet, painted a most favourable portrait of smoking[134].

[248]         In the June 1969 edition of the Leaflet[135], ITL published a "Special Report on Smoking and Health".  It highlighted Mr. Paré's comments before the Isabelle Committee of the House of Commons studying the effects of smoking on health[136].  The following are extracts from its front page:

Mr. Paré pointed out that in the last 15 years no clinical or experimental evidence has been found to support the statistical association of smoking with various diseases.  In fact, considerable evidence to the contrary has been found and many scientist and medical people were now prepared to say so publicly.

There is an emerging feeling among many people that smoking isn’t really the awful sin it has been made out to be, Mr. Paré said.  He attributed this to the fact that the tobacco industry has recently been able to counter the arguments of the anti-smoking advocates with the testimony of reputable scientists.  More has been leaned about tobacco in the last five years, he said, and as a result the industry feels more confident of its position.

Highlights of (the industry's) brief

·         There is no proof that tobacco smoking causes human disease.

·         Statistical associations, on which many of the claims against smoking are based, have many failings and do not show causation.

·         Attacks on tobacco and its users - for health and other reasons - are not new.  They have been recurring for centuries.

·         The tobacco industry has diligently sought answer to the unresolved health questions.

·         Although there is no proof of any health significance in the levels of so-called "tar" and nicotine in the smoke of cigarettes, the industry has responded to the demands of some of its consumers by producing brands that deliver less "tar" and nicotine.

·         The industry has acted with restraint in challenging the extreme, biased, and unproved charges that cigarettes are responsible for all kinds of ailments.

[249]         It is important to note that Mr. Paré's comments before the Isabelle Committee and the extracts of the 120-page brief reproduced in The Leaflet were all submitted on behalf of the Ad Hoc Committee of the Canadian Tobacco Industry, later to become the CTMC.  Paré was the Chairman of that organisation at the time.  As such, he and the brief were speaking for all the members of the Canadian tobacco industry and the extracts cited above must therefore be taken as having been endorsed by each of the Companies.

[250]         By the time of Mr. Paré's testimony before the Isabelle Committee in 1969, the Companies had long known of the risks and dangers of smoking and yet they wilfully and knowingly denied those risks and trivialized the evidence showing the dangers associated with their products.

[251]         The campaign continued.  In a written reply to the question: "How can you reconcile your leadership in an industry whose product is indicted as a health hazard?" posed by the Financial Post in November 1970, Mr. Paré, speaking for ITL, writes:

However, no proof has been found that tobacco smoking causes human disease. The results of the scientific research and investigation indicate that tobacco, especially the cigarette, has been unfairly made a scapegoat in recent times for nearly every ill that can affect mankind.

In the indictment against smoking other factors such as environmental pollution, genetic factors and occupational exposures have not been adequately assessed. Attempts have been made to build up statistics to claim that smokers suffer more illnesses and loss of working days, but there is no valid experimental evidence to support this claim.[137]

[252]         This reflects the standard mantra of the industry at the time, the "scientific controversy" by which the harmful effects of smoking on health were not exactly denied but, rather, were characterized as being complicated, multi-dimensional and, especially, inconclusive, requiring much further research.  It insinuated into the equation the idea that genetic predisposition and "environmental factors", such as air pollution and occupational exposures, could be the real causes of disease among smokers. 

[253]         Seven years after the correspondence with the Financial Post, the message had not changed.  In a December 1976 document entitled "Smoking and Health: The Position of Imperial Tobacco", we see the following statement:

6.   I.T.L. is in agreement with serious-thinking consumers, whether they choose to smoke or not, who view the smoking and health question as being inconclusive, as requiring continuing research and corrective measures as definitive findings are established.[138]

[254]         In fairness, ITL did permit certain research papers produced by it or on its behalf to be published in scientific journals, some of which were peer reviewed.  In particular, some of Dr. Bilimoria's work in collaboration with McGill University was published[139].  This, however, does not impress the Court with respect to the obligation to warn the consumer. 

[255]         Such papers were inaccessible to the average public, both because of their limited circulation and of the technical nature of their content.  Moreover, the fact that the general scientific community might have been informed of certain research results does not satisfy ITL's obligation to inform.  Except in limited circumstances, as under the learned intermediary doctrine, the duty to warn cannot be delegated.  As the Ontario Court of Appeal states in Buchan:

I think it axiomatic that a drug manufacturer who seeks to rely on the intervention of prescribing physicians under the learned intermediary doctrine to except itself from the general common law duty to warn consumers directly must actually warn prescribing physicians.  The duty, in my opinion, is one that cannot be delegated.[140]

[256]         On the other hand, the role played by Health Canada with respect to smoking and health issues might fit into the learned intermediary definition.  In that regard, however, the Companies would have had to show that they actually warned Health Canada of all the risks and dangers that they knew of.  As shown elsewhere in the present judgment, they failed to do that.

[257]         Getting back to what ITL and the other Companies were telling the public, the CTMC continued the same message after Mr. Paré's departure.  In a 1979 letter to the Editorial Page Editor of the Montreal Star newspaper[141], Jacques Larivière, the CTMC's head of communications and public relations, responded to an editorial by sending two documents, accompanied by the following comments on the second one:

The second document, "Smoking and Health 1964-1979 The Continuing Controversy"[142] was produced by the Tobacco Institute in Washington in an attempt to inject some rational thinking into the debate and to replace the emotionalism with fact.

[258]         The Tobacco Institute is the US tobacco industry's trade association and the document defends "the continuing smoking and health controversy" where "there are statistical relationships and several working hypotheses, but no definitive and final answers" and "scientists have not proven that cigarette smoke or any of the thousands of its constituents as found in cigarette smoke cause human disease.[143]

[259]         In the opinion of Professor Perrins, one of the Companies' experts, only "outliers" were denying the relationship between smoking and disease after 1969.  He defined outliers as persons who defend a position that the vast majority of the community rejected.[144]  The Tobacco Institute document that the CTMC turned to "to inject some rational thinking into the debate and to replace the emotionalism with fact" was published ten years after Dr. Perrins' outlier date.  It contradicted what the Companies knew to be the truth and it was sent to a newspaper, as were other similar communications at the time. 

[260]         The Companies argue that these types of statements had little or no play with the public and could not have caused anyone to smoke.  They also point out that not a single Member came forward to testify that any of the Companies' statements in favour of their products caused him to start or to continue to smoke. 

[261]         The latter statement is true and it is one that the Companies raise time and again against the Plaintiffs' case on a number of issues, starting well before the opening of the trial.  It is also one that never inspired great sympathy from the Court, and our lack of enthusiasm remains unabated. 

[262]         We have repeatedly held that, in class actions of this nature, the usefulness of individual testimony is inversely proportional to the number of people in the class.  As we shall see, the number of people in the Classes here varies from 100,000 to 1,000,000.  These proportions render individual testimony useless, a viewed shared by the Court of Appeal[145].  They also render hollow the Companies' cry for an unfavourable inference resulting from the absence of Members' testimony.

[263]         In any event, the Court is of the view that the Plaintiffs are entitled to a presumption[146] that the Companies' statements (outside of marketing efforts, which are analyzed further on) were generally seen by the public and did lead to cigarette smoking. 

[264]         As Professor Flaherty's time lines show, the Companies' statements were widely reported in newspapers and magazines read in Quebec[147].  The Companies rely on this evidence to show that the general public was aware of the negative publicity about smoking through newspaper and magazine articles, but the knife cuts both ways.  Although fewer and fewer with time, articles reporting the Companies' stance appeared in the same publications.  One must presume that they would also have been seen by the general public. 

[265]         As well, the effect of the gradual reduction of these statements after the Companies decided to abstain from making any public statements about health, as discussed in the following chapter, is mitigated by the reality that, during the Class Period, the Companies never rescinded these statements.  In fact, as late as the end of 1994 ITL was still defending the existence of the same "scientific controversy" that Mr. Paré had been preaching decades earlier[148].  As noted by Professor Flaherty, ITL's own expert:

November/December 1994 issue of The Leaflet, an Imperial Tobacco publication for employees and their families, had an article entitled ― Clearing the Air: Smoking and Health, The Scientific Controversy" which contained this excerpt: "The facts are that researchers have been studying the effects of tobacco on health for more than 40 years now, but are still unable to provide undisputed scientific proof that smoking causes lung cancer, lung disease and heart disease ... The fact is nobody knows yet how diseases such as cancer and heart disease start, or what factors affect the way they develop.  We do not know whether or not smoking could cause these diseases because we do not understand the disease process".[149]

[266]         True, this article was directed principally at its own employees, presumably hundreds or even thousands of them, but it highlights the degree to which ITL's posture and message had not changed even 25 years after the first date when only outliers were denying causality, or at least the existence of a relationship between smoking and disease[150].

[267]         On the other hand, many of the Companies' statements were technically accurate.  Science has not, even today, been able to identify the actual physiological path that smoking follows in causing the Diseases.  That, however, is neither a defence nor any sort of moral justification for denying the link.  As noted in our review of the manufacturer's obligation to inform, its knowledge that its product has caused bodily damage in other cases triggers the principle of precaution whereby it should warn of that possibility.[151]

[268]         Thus, one can only wonder whether the people making such comments were remarkably naïve, wilfully blind, dishonest or so used to the industry's mantra that they actually came around to believe it.  Their linguistic and intellectual pirouettes were elegant and malevolent at the same time.  They were also brutally negligent. 

[269]         ITL and the other Companies, through the CTMC and directly[152], committed egregious faults as a result of their knowingly false and incomplete public statements about the risks and dangers of smoking.

[270]         As a final note on the subject, ITL and the other Companies argue that their customers were getting all the information they needed through other sources, especially the Warnings.  Although these do form part of what the Companies were saying publicly, for reasons alluded to above[153] and developed more fully in the next section, it is more logical to deal with the Warnings in the context of what the Companies were not saying publicly.

ii.d.5 what itl did not say publicly about the risks and dangers

[271]         Throughout much of the Class Period, the Companies adhered to a strict policy of silence on questions of smoking and health[154].  They justify their decision in this regard on three accounts: the Warnings gave notice enough, no one would believe anything they said anyway and, in any event, it was up to the public health authorities to do that and they did not want to contradict the message Health Canada was sending. 

[272]         The history of the implementation of the Warnings, even after the enactment of the TPCA, shows constant haggling between Canada and the Companies, initially, as to whether pack warnings were even necessary, and then, as to whether they should be attributed to Health Canada, and finally, as to the messages they would communicate.  The Companies resisted the Warnings at all stage and attempted, and generally succeeded, in watering them down.

[273]         A good example of this is seen as late as August 1988 in the CTMC's comments to Health Canada on the proposed Warnings under the TPCA.  Lobbying against a Warning on addiction, its president wrote the following to a Health Canada representative:

Particularly in the absence of clear government sponsorship of the proposed messages, we have serious difficulty with the specific language of the health messages contained in your July 29th proposals. We do not accept the accuracy of their content.

With or without attribution, we are particularly opposed to an "addiction" warning.  Calling cigarettes "addictive" trivializes the serious drug problems faced by our society, but more importantly. (sic)  The term "addiction" lacks precise medical or scientific meaning. (Exhibit 694, at page 10 PDF)

[274]         The Warning on addiction was not introduced for another six years, presumably at least in part as a result of the CTMC's interventions.

[275]         Be that as it may, the Companies maintain that the Warnings, whether voluntary or imposed, satisfied in every aspect their obligations to inform the customer of the inherent risks in using their products.  In fact, they read subsection 9(2) of the TPCA as a type of injunction blocking them from saying anything more, particularly when coupled with the ban on advertising in effect as of 1988.  That provision reads:

9(2) No distributor shall sell or offer for sale a tobacco product if the package in which it is contained displays any writing other than the name, brand name and any trade marks of the tobacco product, the messages[155] and list referred to in subsection (1), the label required by the Consumer Packaging and Labelling Act and the stamp and information required by sections 203 and 204 of the Excise Act.

[276]         Plaintiffs disagree.  They correctly point out that subsection 9(3) of the TPCA rules out that argument:

9(3) This section does not affect any obligation of a distributor, at common law or under any Act of Parliament or of a provincial legislature, to warn purchasers of tobacco products of the health effects of those products".

[277]         This should have been notice enough to the Companies that the public health authorities were clearly not trying to occupy the field with respect to warning the public.  On the other hand, it is, of course, true that the Companies should not say or do anything that would contradict Health Canada's message, but that posed no obstacle to acting properly.

[278]         The "restrictions" on the Companies' statements to the public are every bit as present today as they were during the Class Period, nevertheless, for at least the last ten years each Company has been warning the public of the dangers of smoking on its website[156].  If the kinds of statements they are making today are legal and proper, their contention that during the fifty previous years the tobacco laws - or their respect for the role of public health authorities - foreclosed them from doing more than printing the Warnings on their packages is feeble to the point of offending reason.  It also leads to the conclusion that during the Class Period the Companies shirked their duty to warn in a most high-handed and intentional fashion.

[279]         For these reasons, the argument that it was up to the public health authorities to inform the public of the dangers of smoking, to the exclusion of the Companies, is rejected.

[280]         On the point about whether anyone would believe any smoking warning they might have tried to deliver, there is a flaw in their logic.  Although it is probably true that no one would believe anything positive the Companies said about smoking, that is not necessarily the case when it comes to delivering a negative message.  It is not unreasonable to think that, had the manufacturer of the product readily and clearly admitted the health risks associated with its use, as the Companies sort of do now, people might well have taken notice.  But is that even relevant?

[281]         The obligation imposed on the manufacturer is not a conditional one.  It is not to warn the consumer "provided that it is reasonable to expect that the consumer will believe the warning".  That would be nonsensical and impossible to enforce. 

[282]         If the manufacturer knows of the safety defect, then, in order to avoid liability under that head, it must show that the consumer also knows.  On the other hand, under the general rule of article 1457, there is a positive duty to act, as discussed earlier.

[283]         The argument that they would not have been believed had they tried to do more is rejected.

[284]         Getting back to the obligation to inform, the Warnings appear to be not so much a demonstration of the Companies saying publicly what they knew but, rather, just the opposite.

[285]         We have already held that the Companies knew of the risks and dangers of using their products at least from the beginning of the Class Period.  We have also noted that the pre-TPCA Warnings conveyed essentially none of that knowledge.  In fact, even in the 1998 document where ITL claims to have first admitted that smoking causes lung cancer, it fails to drive the message home:

What about smoking and disease?

Statistical research indicates that smoking is a risk factor which increases a person's chances of getting lung cancer, emphysema, and heart disease.  Clear messages about risks are printed on all packs of cigarettes, and public health authorities advise against choosing to smoke.[157]

[286]         Once again, the points are accurate, but one gets the distinct impression that ITL is trying to disassociate itself from them, as if it is something of an unpleasant business to have to say this.

[287]         Throughout essentially all of the Class Period, the Warnings were incomplete and insufficient to the knowledge of the Companies and, worse still, they actively lobbied to keep them that way.  This is a most serious fault where the product in question is a toxic one, like cigarettes.  It also has a direct effect on the assessment of punitive damages. 

[288]         It follows that, if there is fault for tolerating knowingly inadequate Warnings, there is an arguably more serious fault during the 22 years of the Class Period when there were no Warnings at all.  The Companies adduced evidence that in this earlier time it was less customary to warn in consumer matters than it is today.  So be it.  Nonetheless, knowingly exposing people to the type of dangers that the Companies knew cigarettes represented without any precaution signals being sent is beyond irresponsible at any time of the Class Period.  It is also intentionally negligent.

[289]         There is more to say on the subject of pack warnings.  The Companies called two experts: Dr. Stephen Young and Dr. William "Kip" Viscusi to assist the Court on aspects of this topic.

[290]         Dr. Young, a consultant on safety communications at Applied Safety & Ergonomics, Inc. in Ann Arbor, Michigan, was qualified by the Court as an expert in the theory, design and implementation of consumer product warnings and safety communications.  The Companies asked him to answer three questions "from the perspective of an expert in the theory, design and implementation of product warnings":

·         Was it reasonable that Defendants did not provide consumers with product warnings regarding the health risks of smoking prior to the Department of National Health and Welfare warning that was adopted in 1972?

·         Was it reasonable that Defendants did not include additional/different information in their warnings such as:

a detailed list of all diseases potentially caused by smoking,

statistical information about the probabilities of various health consequences associated with smoking, and/or

a detailed list of known or suspected carcinogens in cigarette smoke?

·         Would the adoption of an earlier warning or the provision of additional/different warning information likely have had a significant effect on smoking initiation and/or quitting rates in Quebec?[158]

[291]         He answered all three in the Companies' favour, summarizing his opinion in the following terms:

Yes, my conclusions was that... are that it was reasonable that Defendants did not provide health warnings, product warnings, regarding the health risks of smoking prior to nineteen seventy-two (1972); that it was reasonable they did not provide additional or different information on health warnings, including a detailed list of all diseases potentially caused by smoking, statistical information about the probability of various health consequences, or detailed lists of known and suspected carcinogens.

 

And then, finally, that the adoption of earlier warning, or one with additional or different information, would not likely have had a significant effect on smoking initiation or quitting rates in Quebec.[159]

[292]         Smoking is a public health risk, in his view, and public health risks should be, and generally are, controlled by the public health authorities as far as warning, education and risk management are concerned.  He views the proper role of printed warnings on product packaging as being "instructional" with regard to how to use the product properly, not "informational" with regard to the possible dangers of the product.  

[293]         If that is the case, then the Companies' position that the Warnings provided sufficient information is impaled on its own sword.

[294]         In performing his mandate, his first related to tobacco products, Dr. Young saw no need to consider any internal company documentation or, for that matter, public company documentation, such as advertising material and public pronouncements.  He approached his work "entirely from a warnings perspective, and from warnings theory"[160]

[295]         We note that his use of the term "warnings" relates specifically and solely to on-package warnings.  He was not engaged to address the overall obligation to warn.  There is a danger that these two issues could be confused.  The latter is much broader than the former, as seen in this exchange before the Court:

459Q-I'm not talking about warning, I'm talking about telling the public one way or the other.

 

A-   Well, my opinions really only relate to what a reasonable manufacturer would do with regard to warnings.  So other communications and so forth would be the judgment of others, as far as whether or not they're appropriate.[161]

[296]         Thus, Dr. Young was not mandated to, nor did he, make any effort to analyze the actual degree to which the Quebec public - or the Canadian public health authorities for that matter - were ignorant of the risks and dangers of smoking at various times over the Class Period.  He was not provided any of the available evidence on the internal documents of the Companies dealing with things like their marketing, advertising and public relations campaigns and the long history of their negotiations with Health Canada about the Warnings, as well as their assessment of general consumer awareness of the risks related to smoking.

[297]         By restricting himself to theoretical questions, as he was hired to do, he saw no need to examine the level of the Companies' own knowledge of the public health risks of smoking, or the extent to which they were sharing that knowledge with their customers and with the government.  Of equal importance, Dr. Young was unable to evaluate the degree to which the Companies, based on their own knowledge, realized that the government of Canada might be underestimating and thus under-reporting the risks of smoking during the first four decades of the Class Period.

[298]         Pressed on the latter point in cross-examination, he did not hesitate to admit that the Companies had a duty to ensure that the public health authorities were properly informed of what the Companies knew about the risks of smoking:

455Q-Okay.  So let's take the nineteen sixties (1960s).  If the tobacco manufacturer knew that cigarettes caused lung cancer, there was no need for them to warn the public about that; that's your opinion?

 

A-   The reasons that manufacturers still would not provide warnings about residual risk would still apply.  So what I would expect them to do at that point, if the Government or public health officials did not know, would be, rather than provide that as the source of a message on an on-product label, I would expect them to go to public health officials and identify what needs to be done in response to that.  And the Government could decide to deal with it in terms of a warning, or they could decide to deal with that through other means.

 

456Q-Okay.  So you would expect that the manufacturer go to the Government and tell them everything that they knew about the risk of tobacco smoke, on a regular basis, a continuous basis; correct?

 

A-   I would expect them to convey material information that they had about the risk to public health authorities.[162]                                                        (The Court's emphasis)

[299]         Dr. Young's opinions, although probably correct within the confines of his terms of engagement, are of limited use to the Court.  As was the case with most of the other experts called by the Companies, he was given neither the necessary background information nor the leeway to step outside the strict bounds of his mandate.

[300]         Except for pack warnings, his theoretical analysis seems to assume a communications vacuum between the Companies and their customers and the government.  He admits that, not being an advertising expert, "I haven't even looked into the role that that (advertising) played overall".[163]  Later, he adds the following clarification:

I've really only focused on the issue related to warnings, and the necessity of having consistency in warning messages between public health officials and the manufacturer.  And I have not addressed issues related to advertising or other types of communications that may have been in play at any given point in time.  And since I don't know how those other types of communications would... the extent to which they'd be seen, the influence they might have on people, I can't really comment on that, apart to say from... that any warning information provided by the manufacturer should be consistent with government policy regarding smoking health risks.[164]

[301]         By his omitting to consider the undeniable effects of the very professional advertisements and public relations campaigns that the Companies were putting forth during much of the Class Period, and admitting that he was not competent to do so, Dr. Young's evidence loses most of its usefulness for the Court.  And even on the subject of pack warnings, there are gaps left unfilled. 

[302]         For example, he does not deal with the attitudes and actions of the Companies with respect to the conception and implementation of the Warnings, both at the initial stage of non-legislated implementation and throughout the evolution of the programme.  Dr. Young was not informed by his clients of that part of the story, nor was he provided internal company documentation relating to it.  He felt no need to query further because, as he was often forced to say, it was not material to his mandate. 

[303]         This subject is, however, very much material to the Court's mandate, as it could have a role not only with respect to the present Common Question, but also in the context of punitive damages.  Hence, it is unfortunate that it was not seen fit to allow this expert "in the design and implementation of consumer product warnings and safety communications" to assist the Court on aspects of the design and implementation of the Warnings.

[304]         In summary, Dr. Young's evidence was so restricted by the terms of his mandate that it was not responsive to the questions at hand.  Its overall effect is more that of a red herring, distracting attention away from the real issues and directing it towards secondary ones that, although of some marginal relevance, tend to muddy the analysis of the primary ones.  That said, certain of the points he made are enlightening and useful and it is possible that we could refer to some of them at the appropriate time.

[305]         Dr. Viscusi, a law and economics professor at Vanderbilt University, was accepted by the Court as an expert on how people make decisions in risky and uncertain situations and as to the role and sufficiency of information, including warnings to consumers, when making the decision to smoke.  In his report (Exhibit 40494), he described his mandate as addressing two subjects:

·     the theory of warnings and health risk information provision in situations of risk and uncertainty and the characteristics relevant to the consumer choice process in these situations and

·     the sufficiency of the publicly available information in Canada over time regarding the health risks of cigarette smoking, viewed from the standpoint of fostering rational decision making by the individual consumer.

[306]         He reports the following three conclusions:

     The data demonstrate that there has been sufficient information in Canada for decades for consumers to make rational smoking decisions given the state of scientific knowledge about smoking risks. 

     Consumers have had adequate information - both concerning particular diseases or particular incidence rates or constituents of smoke - to assist them in making rational smoking decisions. 

     The public and smokers generally overestimate the serious risks of smoking including the overall smoking mortality risk, life expectancy loss, and the risk of lung cancer.  Younger age groups overestimate the risks more than older age groups.  These overall results for the population generally and for younger age groups, which are borne out in survey evidence since the 1980s, also can safely be generalized to the 1970s and perhaps earlier as well.

[307]         He opined that one must consider all the information available in order to assess the impact of a warning and that advertising, including lifestyle advertising, is part of the "information environment"[165].  In spite of that, he does not examine the effect of advertising in his analysis because he does not view it as providing credible information about risk[166].

[308]         His first two conclusions relating to Canadian consumer awareness of the dangers of smoking are nothing more than a recital of Dr. Duch's opinion and of Professor Flaherty's report[167].  He did not even look at the studies Dr. Duch used, but was content to rely on the summary of the results.  Moreover, his use of Dr. Duch's report relates to matters that appear not to fall within his areas of competence.  This part of his opinion is, thus, useless to the Court. 

[309]         His third conclusion seems to boil down to saying that the Warnings were not necessary because people tend to overreact to health concerns of the nature of those publicized for cigarettes.  That was not contradicted and the Court accepts it.  Its relevance, on the other hand, is not clear, except, as with Dr. Young's opinion, to undermine the Companies' reliance on the Warnings as an adequate source of information for the public.

[310]         From the Plaintiffs' perspective, of course, the Companies should have done much more, even after 1988.  They would seek the equivalent of self-flagellation in a public place, i.e., that the Companies should have sounded every siren to alert the general public that anyone who smokes will almost certainly succumb to a horrid and painful death after years of suffering from lung cancer or throat cancer or larynx cancer or emphysema, or any of a number of other horrible and dehumanizing diseases.

[311]         The Court is not exaggerating.  In their Notes, the Plaintiffs propose a series of "adequate warnings" of the type that the Companies should have put on the packs in order to inform the consumer[168].  Two of the Court's favourites are:

·          This product is useless apart from relieving the addiction it creates; and

·          This product is deadly.  It contains many toxic and carcinogenic constituents and poisons every organ in the human body.  It will kill half of those who do not succeed in quitting.

[312]         Without going quite that far, the Companies should have done much more than they did in warning of the dangers.  Today, through their websites and other current communications channels, they move in the direction of raising the alarm.  Nothing was stopping them from doing that at any moment of the Class Period using the means available at the time.  RBH took the step in 1958[169].  Other than that, however, the Companies chose to do nothing. 

[313]         Is this equivalent to trivializing or denying or employing a systematic policy of non-divulgation of the risks and dangers?  Silence can trivialize and, indirectly, deny, but that is not the important question.  The real question is to determine whether the Companies met their duty to warn.  The Companies' self-imposed silence leads to only one possible answer there: they did not.

[314]         Remaining in the context of what ITL did not say publicly about the risks and dangers of smoking, let us examine if its perception of the public's level of knowledge should flavour our assessment of its behaviour.

ii.d.6 WHAT ITL KNEW ABOUT WHAT THE PUBLIC KNEW

[315]         As mentioned earlier, in the context of the duty to inform, the Plaintiffs felt it important to spotlight the Companies' knowledge of what the public knew or believed about the dangers of smoking.  In this regard, they filed two expert reports by Mr. Christian Bourque (Exhibits 1380 and 1380.2), an executive vice-president at Léger Marketing in Montreal and recognized by the Court as an expert on surveys and marketing research.

[316]         The Companies attempted to counter Mr. Bourque's evidence through the testimony of two experts of their own: Professor Raymond Duch, recognized by the Court as an expert in the design of surveys, the implementation of surveys, the collection of secondary survey data and the analysis of data generated from survey research, and Professor Claire Durand, an expert in surveys, survey methods and advanced quantitative analysis

[317]         In his principal report (the "Bourque Report"), Mr. Bourque stated his mandate to be:

·          To determine the Companies' knowledge from time to time of the perceptions or knowledge of consumers concerning certain risks and dangers related to the consumption of tobacco products

·          To identify the apparent objectives of the surveys, i.e., to determine the information relating to certain risks and dangers related to the consumption of tobacco products that the Companies sought to obtain, as well as the reasons for the Companies' commissioning these surveys.[170]

[318]         In spite of the broad wording of the first item, it is important to clarify that he was not asked to review published survey reports.  His scope was limited to the internal survey data available to the Companies, especially ITL's two monthly consumer surveys: the Monthly Monitor and the Continuous Market Assessment ("CMA", together: the "Internal Surveys")[171].  He also considered a less-frequently-published report entitled The Canadian Tobacco Market at a Glance, which appears to cover industry-wide questions, as opposed to primarily ITL issues.

[319]         Apparently exceeding the limits of his mandate, he attempts to draw conclusions from the Internal Surveys about the public's general knowledge of the dangers of smoking.  For example, he sees the data on the level of agreement with the survey statement "smoking is dangerous for anyone" as an indication that smokers' knowledge of the dangers of smoking was far below universal, especially early in the Class Period.  Mr. Bourque draws that conclusion from The Canadian Tobacco Market at a Glance of December 1991, which shows the following results [172]:

Years 1971 to 1990               71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91

Dangerous for anyone (%)      48 59 56 63 64 67 71 72 72 74 75 76 76 77 77 79 77 77 79 80 79

[320]         As shown below, the CMAs for the same question during that period give a slightly different result, one which Mr. Bourque could not explain from the documents available to him[173].  That said, although the figures are slightly higher in 1972, 1974 and 1983, the differences are small enough so as not to affect the analysis the Court carries out below:

Year                                             1972    1974   1978   1979   1980   1983   1989

Smoking is dangerous for anyone (%)   62       65      71      72      74      78      79[174]

[321]         Transposing these results onto actual public knowledge is not necessarily advisable.  They contrast sharply with published survey data cited by Professor Duch, which indicates much higher levels of consciousness at earlier dates.  In fact, both he and Professor Durand were vociferous in their criticisms of the quality of the questions and the methodology followed in the Internal Surveys.  They insisted that neither was in conformity with accepted survey methodology and practice and the results cannot be relied upon for the purpose of evaluating the general public's knowledge of anything. 

[322]         As for Mr. Bourque, it was not part of his mandate to defend the scientific integrity of the Internal Surveys, nor did he try.  His task was to analyze their contents.

[323]         Given that, in light of the uncontradicted testimony of Professors Duch and Durand, the Court accepts their advice to exclude the Internal Surveys as a source of reliable information as to the actual knowledge of the general public on the issues dealt with therein.  Moreover, it is clear from their design and implementation that that was not the purpose these surveys were meant to serve, as discussed below. 

[324]         Accordingly, the Court will not rely on the first part of the Bourque Report for the purpose of ascertaining the actual level of public knowledge of the dangers of smoking.  Given this conclusion, it is not necessary to analyze the generally ill-focused criticisms by Professors Duch and Durand of Mr. Bourque's analysis of the data[175].

[325]         This does not mean, however, that the first part of the Bourque Report serves no useful purpose to the Court.  That the Internal Surveys do not meet the highest standards of survey methodology does not render them irrelevant.  They cast light on a very relevant issue: what ITL perceived and believed, accurately or not, about the public's knowledge of the dangers of smoking.  In this area, the Court is convinced that ITL had confidence in the Internal Surveys

[326]         It is true that Mr. Ed Ricard, a marketing manager, stated that ITL used the CMAs more to understand trends over time than to provide an accurate snapshot at any one point.  Nevertheless, when called by the Plaintiffs in May and August 2012, he gave no indication that ITL did not believe that snapshot.  In fact, the opposite is the case, as we note below.

[327]         When called back by ITL in October 2013, after the testimony of Professors Duch and Durand, he parroted their criticisms of the Internal Surveys.  He declared that the CMAs were not representative of the total Canadian population and pointed out that the figures reported in Exhibit 988B, a 1982 CMA report, were "quota samples" of urban Canadian smokers only, as opposed to samples of all Canadians. 

[328]         Mr. Ricard's 2013 comments, reflecting, as they do, those of Professors Duch and Durand, appear to be correct, but they do not cohabitate well with his 2012 testimony.  At that time, he expressed much more confidence in the CMAs.  The transcript of May 14, 2012 shows the following exchange at page 49:

33Q- After this study was made, is there a reason why you didn't check with your customers if they were ... or verify the awareness of health risks with your customers?

 

A-   Mr. Justice, it was... I don't know why we would not have spent more time specifically on that question, it was... First of all, I would have to say, just from my own personal assessment, certainly during the time I was there, based on the level of belief that we were measuring in the marketplace through the CMA, we felt that people knew and were aware of the rest.  And so, from my own personal point of view, I didn't see any need to measure it, because we felt people were aware.                                                         (The Court's emphasis)

[329]         This is clear proof that, whatever their defects in terms of survey methodology, the CMAs were seen by ITL's management as providing accurate insight into what smokers were thinking[176].  They thus reflect ITL's knowledge about the smoking public's knowledge, or ignorance, of the dangers of smoking.  This is relevant in the context of the duty to inform and to our analysis of the second part of the Bourque report.

[330]         The Plaintiffs argue that the Companies had to ascertain the public's level of knowledge of the dangers of smoking in order to fulfill their duty to inform.  To that end, they asked Mr. Bourque to opine on the apparent objectives of the Internal Surveys. 

[331]         He states that the Companies' objective was not to measure the level of smokers' knowledge on an ongoing basis in order to inform them of the risks and dangers of smoking but, rather, to see if the information circulating in that regard might pose a threat to the market or affect smokers' perceptions.[177]  He saw the objectives of the Internal Surveys as relating almost exclusively to marketing and production planning.[178]

[332]         This is not surprising.  It coincides with what ITL's representatives consistently stated.  No one ever asserted that the role of the Internal Surveys was to measure customers' knowledge of the dangers of smoking.  So be it, but that does not erase the Internal Surveys' message to ITL.

[333]         From the figures out of The Canadian Tobacco Market at a Glance reproduced in the table above, ITL would have concluded that from 52% (in 1971) to 21% (in 1989) of smokers did not feel that smoking was dangerous for anyone.  The CMAs over that period reflect the same level of ignorance.  They also show that it was not until 1982 that the percentage of respondents who felt that smoking was dangerous for anyone surpassed 75%.  This is the level of awareness that ITL's expert, Professor Flaherty, opined is required for something to be "common knowledge"[179].

[334]         It is true that the technical credibility of that data might be suspect in the eyes of an expert 30, 40 or 50 years later, but we must view this through ITL's eyes at the time.  Mr. Ricard was there, and he confirmed that ITL believed the data and relied on it for important business decisions. 

[335]         ITL's argument that its customers were already fully informed of the risks and dangers of smoking through the media, school programmes, the medical community, family pressure and, as of 1972, the Warnings loses most of its speed after hitting up against this wall of evidence.  Moreover, the Internal Surveys also made ITL aware that the Warnings were far from being major attitude changers on this point.

[336]         As seen in the tables above, the degree of sensitivity of smokers increased only gradually after the introduction of the Warnings in 1972.  In fact, it dropped from 59% to 56% the following year.  After that, it rose only about one percent a year through 1991.  Thus, as far as ITL knew, the Warnings were not the panacea it is now claiming them to be.

[337]         Yet ITL stuck to the industry's policy of silence and made no attempt to warn what it knew to be an unsophisticated public.  The Plaintiffs argue that this is a gross breach of the duty to inform of safety defects and demonstrates not just ITL's insouciance on that, but also its wilful intent to "disinform" smokers.  The Court agrees. 

[338]         Here again, ITL's attitude and behaviour portray a calculated willingness to put its customers' well-being, health and lives at risk for the purpose of maximizing profits.  There is no question that this violates the principles established in the Civil Code, both with respect to contractual and to general human relations.  It also goes much further than that. 

[339]         It aggravates the Company's faults and pushes its actions so far outside the standards of acceptable behaviour that one could not be blamed for branding them as immoral.  Moreover, as seen below in our analysis of the other Companies, they, too, are guilty of similar acts, although to a lesser degree.  This is a factor to be considered in our assessment of punitive damages.

ii.d.7 compensation

[340]         In the context of the present files, compensation is a process of "oversmoking" by which smokers who switch to a lower-yield brand of cigarette, i.e., lower tar and nicotine, modify their smoking behaviour in order to obtain levels of tar, and especially nicotine, closer to what they were getting from their previous brand[180].  It is generally thought to be an unconscious adjustment[181] made by "switchers" who do not get as much nicotine from their new lower-tar cigarette, since a reduction in the latter will result in a corresponding reduction in the former[182].

[341]         In his expert's report, Dr. Michael Dixon for ITL spoke of compensation in the following terms:

Many researchers claim compensation is based on the theory that smokers seek to maintain an individually determined nicotine level and that those who switch from a higher to a lower yield cigarette will smoke more intensively to compensate.  The term "compensation", as related to cigarette smoking, only applies to those smokers who switch from one cigarette to another that has a different standard tar and nicotine yield to their original cigarette.  Compensation can best be described by using the following hypothetical example.

 

If a smoker switches from a product with a machine derived nicotine rating of 1 mg to one with a 0.5 mg rating and as a consequence of the switch halves his intake of nicotine, then this would be described as zero (or no) compensation.  If a smoker following the switch did not reduce his/her intake of nicotine, then this would represent full, complete or 100% compensation.  Partial (or incomplete) compensation would be deemed to have occurred if the reduction in intake was between the zero and full compensation levels.[183] 

[342]         Compensation can occur through a number of techniques, such as:

·        Increased number of cigarettes smoked per day,

·        Increased number of puffs per cigarette, resulting in smoking the cigarette "lower down", i.e., closer to the filter,

·        More frequent puffs,

·        Increased volume of smoke per puff: Dr. Dixon's choice as the most often used technique for compensation,

·        Increased depth of inhalation per puff,

·        Increased length of time holding the smoke in and

·        Blocking of filter-tip ventilation holes by the fingers or lips.[184]

[343]         Smoking machines do not compensate.  It follows that machine-measured delivery of tar and nicotine, although allowing one to distinguish the relative strength of one brand compared to another, will not generally reflect the actual amount of tar and nicotine ingested by a smoker.  In the same vein, since people's smoking habits and manners, including their degree of compensation, vary individually, the amount of tar and nicotine derived by any one smoker will be different from that of his neighbour.

[344]         One cannot examine compensation without first examining the evolution of cigarette design during the Class Period.

[345]         Very summarily, with the ostensible goal of reducing smokers' intake of tar, the Companies modified certain design features of their cigarettes during the 1960s, 70s and 80s.  Filters became almost universal during this time, to which were often added ventilation holes in the cigarette paper to bring in air to dilute the smoke.  More porous cigarette paper, expanded tobacco and reconstituted tobacco were also used to the same end.  There is no need to delve into the details of these for present purposes.

[346]         It is sufficient to note that these design features resulted in cigarettes whose tar and nicotine delivery, as measured by a smoking machine, were lower than before.  These "lower-yield" products were labelled with descriptors, such as "light" or "mild"[185].  They had less tar, as measured by smoking machines, but they also had less nicotine, flavour and "impact".  Enter compensation.

[347]         People who switch to a "lighter" brand of cigarette can - and generally do - compensate, at least initially.  As a result of compensation, although they might well ingest less of the toxic components of smoke than with their previous brand, they still receive significantly more than would be expected from a linear application of the machine-measured reduction of tar content.

[348]         Dr. Dixon opined that, although compensation occurred in many if not most cases, it was temporary and, even then, only partial: about half[186].  Thus, a smoker who changed to a cigarette showing a smoking-machine-measured reduction of tar and nicotine of 30% would only have reduced them by about 15% because of compensation.  Rather than ingesting 70% of the previous amounts, the smoker would be taking in about 85%. 

[349]         Thus, lower-yield cigarettes end up having what could be called a "hidden delivery" of tar and nicotine.  Replying to a question from the Court in this area, Dr. Dixon responded as follows:

910Q-Okay.  All right.  And I'm thinking of the effect of compensation on the smoker, and my question to you is, is full compensation a danger that should be associated with the use of low-yield cigarettes?

 

A-   Sorry, is it a danger?

 

911Q-Is it a danger?  Is there a risk or danger associated with the use of low-yield cigarettes?

 

A-   I don't think there's any more risk or danger in their use than there is with the high-yield cigarettes.  If full compensation was the norm, then there would be no point in having the low-tar cigarettes, because there would be no benefit in terms of exposure reduction and, therefore, one would not expect to see any benefit in terms of the health risk reduction.

But if it's partial compensation, then you are seeing a reduction in exposure which, hopefully, would be reflected ultimately in a risk reduction for certain diseases.

 

17 912Q-But it wouldn't eliminate the risk.

 

18 A-   It certainly wouldn't eliminate the risk, no. 

 

913Q-It wouldn't eliminate the danger, smoking a low-yield...

 

21 A-   Oh, of course.  No no.

 

22 914Q-... even smoking a lower-yield cigarette?

 

23 A-   No.  I mean, a lower yield cigarette is dangerous, but maybe not quite as dangerous as a high-yield cigarette.[187]

[350]         The arguments that compensation is generally partial and temporary, i.e., that after a while the switcher stops compensating, seem logical and the Court is convinced that the Companies believed that to be the case.  Nevertheless, even with only partial and temporary compensation, there is still a hidden delivery.

[351]         Given all this, should compensation or its hidden delivery be considered a safety defect in reduced tar and nicotine cigarettes and did ITL know, or was it presumed to know, of that risk or danger?  If so, it would have had a duty to warn consumers about it, unless another defence applies.

[352]         ITL does not deny that it was aware from very early in the Class Period that compensation occurred.[188]  In fact, the proof shows that it was the Companies, either individually or through the CTMC, that warned Health Canada of the likelihood of this essentially from the beginning, as seen from the following paragraph in RBH's Notes:

664.  Defendants themselves advised the federal government that compensation would occur and negate at least some of the potential benefit of lower tar cigarettes for some smokers.  Indeed, on May 20, 1971 the CTMC met with members of Agriculture Canada and National Health and Welfare’s Interdepartmental Committee on Less Hazardous Smoking.  At the meeting, in response to the Interdepartmental Committee’s request for reduced nicotine levels, the CTMC warned the Interdepartmental Committee of compensation issues, including a tendency among smokers to "change smoking patterns to obtain a minimum daily level of nicotine when they switched to low nicotine brands at that this could increase the total intake of tar and gases."[189]

[353]         In spite of its awareness, Health Canada embraced reduced tar and nicotine and put forth the message that, if you can't stop smoking, at least switch to a lower tar and nicotine cigarette. 

[354]         We are not saying that Canada was wrong in going in that direction.  It reflects the knowledge and beliefs of the time, and its principal message: "STOP SMOKING", was incontestably well founded.  On the other hand, Health Canada certainly appears to have been occupying the field with respect to information about reduced-delivery products. 

[355]         Once they had warned Health Canada of the situation regarding compensation, it is difficult to fault the Companies for not intervening more aggressively on that subject.  To do so would have undermined the government's initiatives and possibly caused confusion in the mind of the consumer.  Perhaps more importantly, at the time it was genuinely thought that reduced delivery products were less harmful to smokers, even with compensation. 

[356]         The defence set out in the second paragraph of article 1473 gives harbour to the Companies on this point and we find no fault on their part for not doing more than they did with respect to warning of the dangers associated with compensation.

ii.d.8 the role of lawyers

[357]         The Plaintiffs made much of the fact that over the Class Period ITL seemed to seek prior approval from lawyers for almost every corporate decision regarding smoking and health.  Its policies and practices relating to document retention/destruction, in particular, were scrutinized and implemented by lawyers, generally outside counsel, including those representing BAT and its US subsidiary, Brown and Williamson.

[358]         There is nothing wrong with a large corporation "checking with the lawyers" within its decision-making process, especially for a tobacco company during the years when society was falling out of love with the cigarette.  In fact, not to take this precaution in that atmosphere could have been outright negligent in certain cases.  That said, there are, of course, limits as to how much a law firm should do for its client.

[359]         In that vein, the Plaintiffs argue that ITL and its outside counsel crossed over the line on the question of the destruction of scientific research reports held in ITL's archives in the early 1990s.  Some background information is necessary.

[360]         In a 1985 "file note"[190], J.K. Wells, an in-house attorney for Brown & Williamson, advocated purging the company's scientific files of "deadwood", a term he used seven times in a two-page document.  This smacked of overkill and seemed curiously out of the ordinary, all the more so in light of his admonition not to make "any notes, memo or lists" of the discarded "deadwood".  Antennae twitch.

[361]         Two years later, BAT lawyers expressed concern about certain aspects of the BAT group's internal documents, including research reports and research conference minutes[191].  Then, in a November 1989 memo[192], the same Mr. Wells presented a "synopsis of arguments that it is crucial to avoid the production of scientific witnesses and documents at this time, even if production were to occur in the indefinite future".  Writing with reference to the trial of the constitutional challenge to the TPCA before the Quebec Superior Court, he identified the following points:

·          The documents will be difficult for company witnesses to explain and could allow plaintiffs to argue that scientists in the company accepted causation and addiction;

·          Company witnesses will not be prepared in order to explain the documents adequately and preserve credibility of management's statements on smoking and health and to deal with "sharp cross examination on smoking and health questions certain to be suggested by government experts"[193];

·          The company's Canadian lawyers are unprepared to deal with the science or the language of the documents or to prepare or defend witnesses adequately or to cross examine opposing experts.

[362]         Mr. Wells went on to express concern over documents from Canada and remarks that "the Canadian case is in an especially disadvantageous posture for document production.  The government is likely to go directly to the heart of the Canadian and BATCo research documents most difficult to explain".

[363]         About that time, BAT was attempting to repatriate to Southampton, England all copies of all research documents emanating from its laboratories there.  They seemed to have concerns similar to those expressed by Brown & Williamson, in that, as explained by its former external counsel, John Meltzer, "(BAT) was concerned that those documents may be produced in litigation, or in other situations, where there wouldn't be an opportunity to put those documents in their proper context or to explain the language that was used in them by the authors of the documents"[194].

[364]         To BAT's consternation, and that does not appear to be an exaggeration, ITL was not cooperating with the repatriation.  ITL's head of research and development, Dr. Patrick Dunn, was furious with the command to send all BAT-generated research reports back to England, particularly since ITL had contributed to the cost of most of those and had contractual rights to them.  Negotiations ensued between the two companies.

[365]         Enter Ogilvy Renault.  ITL's in-house attorney, Roger Ackman, testified that he hired the Montreal law firm of Ogilvy Renault to assist him in the matter.  After negotiation, it was agreed that, following the repatriation to Southampton, BAT would fax back to ITL any research report that ITL scientists wished to consult.  That decided, in the summer of 1992 lawyers at Ogilvy Renault supervised the destruction of some 100 research reports in ITL's possession[195].

[366]         Mtre. Ackman, whose memory was either hot or cold depending on the question's potential to harm ITL[196], made the following statements concerning his engagement of an outside law firm in this context:

396Q-Can you give us any reason why Imperial would involve outside counsel, or counsel of any kind, to destroy research documents in its possession?

 

A-   I hired the Ogilvy Renault firm, Simon Potter, to help me in this exercise.

 

397Q-Which exercise?

 

A-   The destruction of the documents.  And he did most of the negotiations for us.

 

398Q-But what negotiations?

 

A-   With BAT.

 

399Q-Negotiations for what?

 

A-   You just said, the destruction of documents.

 

400Q-There was a negotiation of an agreement between...

 

A-   I have no idea whether there was a negotiation; I wasn't part of that discussion.  It was a long time ago, sir.

 

401Q-So you hired Simon Potter?

 

A-   Yes, sir.

 

402Q-To destroy the documents?

 

A-   I did not hire him... to meet with BAT and settle a matter.

 

403Q-Settling a matter implies that there is a matter; what was the matter?

 

A-   I have no idea other than what I just said.

 

404Q-Did Simon Potter ever give you reason to believe that he had expertise in research documents, did he have any science background?

 

A-   I don't know that, sir.[197]

[367]         Much time was spent on this issue in the trial, but it interests us principally in relation to its possible effect on punitive damages.  As such, its essence is contained in two questions:

·          Was it ITL's intention to use the destruction of the documents as a means to avoid filing them in trials?

·          Was it ITL's intention in engaging outside counsel for that exercise to use that as a means to object to filing the documents based on professional secrecy[198]?

[368]         On the first point, it appears that this clearly was the intention, since that is exactly what ITL did in a damage action before an Ontario court.  Lyndon Barnes, a partner in the law firm of Osler in Toronto who worked on ITL matters for many years, testified before us as follows:

A-   I would think... probably the first case that we did an affidavit was in a case called Spasic in Ontario.

 

83Q- So did you produce the documents in that case that were destroyed in this letter?  That were destroyed as identified in this letter of Simon Potter's (sic) of June nineteen fifty-two (1952)... h'm, nineteen ninety-two (1992)?[199]

 

A-   I think it would have been hard to produce documents that had been destroyed.

 

84Q- It would have been very hard.

 

A-   Yes.

 

85Q- So that's when you found out that the documents didn't exist?

 

A-   Well, no.  The original documents did exist, they were at BAT.

 

86Q- So did you produce the original BAT documents in that case?

 

A-   No, they weren't in our control and possession.

 

87Q- They weren't in your control or in your possession.

 

A-   No.

 

88Q- And therefore, they were not produced?

 

A-   No, they weren't.[200]

[369]         There is thus no doubt that ITL used the destruction as a way to avoid producing the documents, based on the assertion that they were not in its control or possession.  One could query as to whether, under Ontario law, the arrangement with BAT to provide copies by fax meant that the documents were, in fact, in ITL's control, but that is not necessary.  There is enough for us to conclude that ITL's actions in this regard constitute an unacceptable, bad-faith and possibly illegal act designed to frustrate the legal process.

[370]         As for the second question, there is no evidence that ITL has ever raised the objection based on professional secrecy.  That, however, does not speak to ITL's intentions when Mtre. Ackman decided to hire lawyers to shred the research reports.  That is what is relevant here.

[371]         In addition to his testimony cited above on this topic at question 396 in the transcript, Mtre. Ackman, who, we remind the reader, was ITL's top person in the matter of the destruction of these research reports and who personally engaged Ogilvy Renault, provided the following "clarification":

391Q-Which leads me to my next question; can you give us any reason why lawyers were involved in the destruction of research documents?

 

A-   I don't have an answer for that, sir.  I can't give you the specific reason, or any reason.  Unless the companies agreed between themselves ... that agreement between the companies was done, that's the way it was done. [201]

[372]         It is more than surprising that his recollection was so, let us say, "vague" on such a major issue, one on which he recalled many other much less important details.  Later in that transcript, at page 203, he states that he hired Ogilvy Renault because "I wanted the best legal advice I could get".  That was crystal clear to him, but as to why he needed such good legal advice in order to destroy research documents, he could not give specific reasons, or any reason.

[373]         Mtre. Ackman's testimony cannot but leave one suspicious about ITL's motives in hiring outside attorneys to destroy documents from its research archives.  Mtre. Barnes testified that Mtre. Meltzer came from England shortly before with three lists ranking the documents to be returned or destroyed.  Although Mtre. Meltzer refused to answer many questions about the lists on the grounds of professional secrecy, all agreed that these lists existed. 

[374]         Given that, what special expertise of any sort was required to pack up the documents on the lists and ship them to BAT, much less legal expertise?  Yet, instead of shipping them across the Atlantic, ITL shipped them across town.  There they were held, and later destroyed, by lawyers. 

[375]         The litigation-based objectives of ITL in ridding itself of these documents lead inexorably to a litigation-based conclusion as to the motive for using outside lawyers to carry out the deed: ITL was attempting to shield this activity behind professional secrecy. 

[376]         If there could have been another plausible reason, none come to mind and, more importantly, none were offered by ITL.  In fact, Mtre. Ackman, the person in charge of the exercise, and who was "concerned with the potential impact that those documents would have were they produced (in court)", as Mr. Metzer stated[202], could not suggest any other explanation. 

[377]         As a result, the Court is compelled to draw an adverse inference with respect to ITL's motives behind this incident.  It was up to ITL to rebut this inference, yet the evidence it adduced had nothing but the opposite effect.  We therefore find that it was ITL's intention to use the lawyers' involvement in order to hide its actions behind a false veil of professional secrecy.  

[378]         This constitutes an unacceptable, bad-faith and possibly illegal act designed to frustrate the legal process.  This finding will play its part in our assessment of punitive damages.

ii.e.     did itl employ marketing strategies conveying false information about the characteristics of the items sold?

[379]         The Oxford Dictionary of English defines marketing as "the action or business of promoting and selling products or services, including market research and advertising".  Thus, the Companies' marketing activities can be divided into two main areas: market research, including surveys of various kinds, and advertising, in all its forms.  We have already said much about the Companies' market research, so here we shall focus on their advertising and sponsorship activities, which seems to be the intent of the question in any event.

[380]         The Plaintiffs see tobacco advertising during the Class Period as being pervasive, persuasive and fundamentally false and misleading.  They explain their position in their Notes as follows:

695. Tobacco promotion is inherently injurious to the consumer.  The problem is the nature of the product: a useless, addictive and deadly device.  It's a fault to advertise it.  It's a greater fault to market it as a desirable product.

696. It's an even greater fault to market it as a desirable product to children, who cannot be expected to have the capacity to filter out tobacco advertising from information they otherwise receive as credible and informative.  The vast majority of class members became addicted while they were children.  Defendants claimed that they never targeted these members when they were children, and that the only goal of their marketing was to influence their brand choice after they were over 18 and after their decision to smoke had been established (i.e. once they were addicted).

697. The defendants used other aspects of marketing to convey false information about their products.  They packaged them in colours and designs intended to undermine health concerns.  They branded them with names - like "light", "smooth" and "mild" that implied a health benefit.  They designed their cigarettes with features - like filters and ventilation - which changed to users' experience (sic) in ways that made smokers think these were safer products.

[381]         ITL is not of the same view.  Its Notes speak of the company's marketing strategies during the Class Period in the following words:

724. In summary, there is no evidence that ITL employed marketing strategies which conveyed “false information about the characteristics of the items sold”.  Indeed, the claims asserted by Plaintiffs in support of this common question - even if they could be established on the evidence (which they cannot) - do not amount to conveyance of “false information” about cigarettes.  Really, Plaintiffs’ complaint is that ITL promoted cigarettes in a positive light, and committed a fault in so doing.  This position has no foundation in law.

725. The fact of the matter is that ITL’s marketing of its products were at all times regulated (either by the Voluntary Codes or by legislation), were in compliance with applicable advertising standards, and contained not a single misrepresentation as to the product characteristics of cigarettes.  Indeed, ITL’s marketing never made any representations about the “safety” of its products, other than the express warnings that were included on all print advertising as of 1975.

726. Moreover, there is absolutely no evidence in the record - from Class Members or otherwise - to substantiate Plaintiffs’ bald assertions that ITL’s marketing somehow misled or confused Class Members.

[382]         Since it was not saying anything at all about smoking and health other than what was in the Warnings, ITL wonders how it could have conveyed false information about that.  And putting that aside, what proof is there that what they did say in their advertising until it was banned in 1988 affected any person's decision to start or continue smoking?

[383]         The Plaintiffs' proof on this topic was made through their expert, Dr. Richard Pollay.  For the most part, the conclusions in his report (Exhibit 1381) neither surprise the Court nor particularly condemn the Companies' advertising practices.  The following partial extracts are examples:

18.1   Advertising and promotion are selling tools - Firms spend on advertising in the belief that this will increase sales and profits over what they would be in the absence of advertising.

18.3   Advertising is carefully managed and well financed.

18.4   Ads are carefully calibrated - Some ads appeal to the young but are careful not to appear too young.

18.5   Cigarette ads are not informative - Consumers learn next to nothing about the tobacco, the filters, the health risks, etc.

18.6   Health information is totally absent - The only health information that is ever contained is just the minimum that has mandated in law (sic).

18.8   Creating "Friendly Familiarity" - Repeated exposure (to brand names and logos) would give these a "friendly familiarity" such that their risks would be under estimated.

18.9   Brand Imagery - With good advertising some brands are made to seem young, or male, or adventuresome, or "intelligent" or sophisticated, or part of the good life.

18.13 Ads designed to recruit new smokers - Strategies toward this include making brands seem "independent", "self-reliant", "adventuresome", risk-taking, etc.

[384]         These are hardly troubling indictments.  For the most part, they say little more than what the Companies already admit: they were not using their advertising dollars to warn consumers about the risks and dangers of smoking.  As for portraying smoking in a positive light, we hold further on that advertising a legal product within the regulatory limits imposed by government is not a fault, even if it is directed at adult non-smokers[203].

[385]         This said, in addition to his conclusions with respect to marketing to youth, which we consider below, the strongest accusations Professor Pollay makes are in the two following conclusions:

18.11 Ads designed to reassure and retain conflicted smokers - The ads for many brands seek to reassure smokers with health anxieties or to off-set their guilt for continuing to smoke. … Strategies toward this end include making brands seem "intelligent" or "sophisticated".

18.12 Ads designed to mislead.  The advertising executions for many brands were explicitly conceived and designed to reassure smokers with respect to health risks.  In so doing, since no cigarettes marketed were indeed safe, these ads were designed to mislead consumers with respect to their safety and healthfulness.  It is also my opinion that when deployed they would indeed have a tendency to mislead.

[386]         These accusations merit analysis. 

[387]         Concerning paragraph 18.11, a perusal of Professor Pollay's report indicates that this point centers on low-tar brands of cigarettes, for example in his paragraphs 6.6, 14.4 and 14.5.  In the section of this judgment examining Delhi Tobacco[204], we conclude that Health Canada was the main advocate of reduced-delivery products in conjunction with its "if you can't stop smoking, at least switch to a lower tar and nicotine cigarette" campaign.[205]  We also note that the Companies were under pressure to cooperate with that by producing low-tar brands. 

[388]         Under such circumstances, it was simply normal business practice to research the market for such brands.  If that research showed that some smokers switched as a way of easing their guilt or anxiety about smoking, it would be normal to use that knowledge in developing advertising for them.  The Court sees no fault in that.

[389]         As for paragraph 18.12, Professor Pollay's analysis of ads that might have been misleading does not focus on ones that were misleading with respect to smoking and health so much as ones that could have misled with respect to certain attributes of a cigarette brand.  His long study in his chapter 10 of the "less irritating" claims for Player's Première is a good example of that.  He does not connect that situation to health issues.

[390]         It is not the Court's mandate to evaluate the general accuracy of the Companies' ads or their degree of compliance with advertising norms and guidelines.  To be relevant here, the misleading content of ads must be with respect to smoking and health. 

[391]         In that regard, Professor Pollay concentrates on the issue of "light" and "mild" descriptors.  The Court will deal with that below.

[392]         But first, one cannot examine marketing in this industry without considering the history of the restrictions imposed on the Companies' marketing activities through their own initiatives: the Voluntary Codes.

ii.e.1 THE VOLUNTARY CODES

[393]         The Plaintiffs see the Voluntary Codes as a gimmick that the Companies adopted principally with the goal of staving off more stringent measures by the Canadian government.  As they say in their Notes:

698.  Peculiar to the world of cigarette marketing was the adoption by the defendants of their own set of rules to validate their marketing actions.  As will be shown later, the Code was a ruse to prevent consumers from receiving genuine protection in the form of government regulation.  But it was also a public relations deceit: the defendants never had the intention to follow most of its rules, nor did they follow them.

[394]         Starting in 1972[206], the Companies agreed among themselves to the first of a series of four "Cigarette and Cigarette Tobacco Advertising and Promotion Codes", with the participation and approval of the Canadian Government (the "Voluntary Codes" or the "Codes")[207].  The first rule of the first Voluntary Code excluded cigarette advertising on radio and television, and that code imposed several other restrictions on advertising.  Those limitations changed little over the next 16 years. 

[395]         In 1988 the Government passed the TPCA, which for the first time imposed a total ban on the advertising of tobacco products in Canada by section 4(1): "No person shall advertise any tobacco product offered for sale in Canada".  JTM and ITL successfully challenged that law and the relevant parts of it, including section 4(1), were ruled unconstitutional in 1995. 

[396]         Two years later the government passed the Tobacco Act[208], containing what could be considered a softening of the prohibition, although it is doubtful that the Companies take much comfort from it.  Section 22(1), remains in force today and reads as follows:

22.(1)  Subject to this section, no person shall promote a tobacco product by means of an advertisement that depicts, in whole or in part, a tobacco product, its package or a brand element of one or that evokes a tobacco product or a brand element.[209]

 

22.(1)  Il est interdit, sous réserve des autres dispositions du présent article, de faire la promotion d’un produit du tabac par des annonces qui représentent tout ou partie d’un produit du tabac, de l’emballage de celui-ci ou d’un élément de marque d’un produit du tabac, ou qui évoquent le produit du tabac ou un élément de marque d’un produit du tabac.

[397]         Despite Canada's legislative initiatives as of 1988, it appears that the Codes remained in force throughout the Class Period, with modifications being made at least twice, once in 1975 and again in 1984.  As well, they covered more than strictly advertising.  It is noteworthy that they were the vehicle through which the Warnings were introduced, and modified at least once.  Concerning advertising practices, they embraced, in particular, the following concepts[210]:

·          no cigarette advertising on radio and television;

·          no sponsorship of sports or other popular events;

·          cigarette advertising will be solely to increase individual brand shares (as opposed to growing the overall market);

·          cigarette advertising shall be addressed to "adults 18 years of age and over";

·          cigarette advertising shall not make or imply health-related statements, nor claims relating to romance, prominence, success or personal advancement;

·          cigarette advertising shall not use athletes or entertainment celebrities;

·          models used in cigarette advertising must be at least 25 years of age.

[398]         The Companies' witnesses assured the Court that they scrupulously complied with the Codes and the evidence, in fact, turns up very few contraventions.  Moreover, on the rare occasion when a Company did stray from the agreed-upon course, the others were quick to call it to order, since it was perceived that any delinquency in this regard could lead to an unfair advantage over one's competitors.

[399]         In any event, this is not the forum to police the Companies' compliance with the Voluntary Codes.  The Court's concern here is limited to the conveyance of false information about the characteristics of cigarettes with respect to smoking and health.  We see nothing in the Codes that does that.

[400]         There could be some truth, however, in the Plaintiffs' charge that the Codes were nothing more than "a ruse to prevent consumers from receiving genuine protection in the form of government regulation".  The Companies certainly viewed the Codes as a means to avoid legislation in the area.

[401]         On the other hand, the government understood that and tried to use it to the advantage of the Canadian public.  Marc Lalonde, Minister of Health from 1972 to 1977, testified that he used the threat of legislation as a means of getting the Companies to publish Warnings that delivered the message that Canada thought was in the public interest[211].  

[402]         Although Canada had its eyes open when negotiating the Codes, it cannot be denied that the Companies were attempting to divulge through them as little as possible about the dangers of their products.  It is probable that part of their overall strategy of silence included making concessions in order to avoid being obliged to say more.  Those concessions form the nucleus of the Voluntary Codes.

[403]         As such, we find that the Companies did not commit a fault by creating and adhering to the Voluntary Codes.

ii.e.2 "light and mild" descriptors

[404]         The Plaintiffs argue that the Companies championed the use of descriptors, such as "light", "mild", "low tar, low nicotine", etc., in association with reduced-delivery cigarettes[212] as a marketing strategy to mislead smokers into thinking that those products were safer than ones that delivered more tar.

[405]         It might surprise to learn that such terms as "light" and "mild" had no defined meaning within the industry and were not based on any absolute scale of delivery.  The concepts were very much brand-family specific.  All they indicated was that the "light" version of a brand delivered less machine-measured tar and nicotine than the "parent product" within that brand family.  In other words, Player's Lights delivered less tar and nicotine than Player's Regulars and nothing more. 

[406]         As such, everything depended on the tar and nicotine contents of the parent product within that brand family.  In fact, a "light" version of a very strong brand often delivered more tar and nicotine than the "regular" version of a less strong brand, whether of the same Company or of one of the other Companies.[213]

[407]         The use of these descriptors within brand names affected smokers' choice of products.  Fairly quickly, smokers came to rely on them more than on the tar, nicotine and carbon monoxide rankings printed on the packs.  The Plaintiffs see fault in the fact that the Companies used them without explaining them and never warned smokers that reduced-delivery cigarettes were still dangerous to health.  They fault the Companies as well for "colour coding" their packs: using lighter pack colours to suggest milder products[214].

[408]         In his report, Professor Pollay states:

9.2   Perceptions are Key.  Because there are no standards or conventions to the use of the terminology describing cigarettes in Canada, consumers are confused and this makes consumer "strength perceptions" at variance with, and more important than, actual tar deliveries.

[409]         He opines that ITL knew that the use of the term "lights" might be misleading.  He bases this on the fact that BAT had a 1982 document stating that "There are those who say that either low tar is no safer or, in fact, low tar is more dangerous".  BAT expressed fear that wide publication of this type of opinion could undermine "the credibility of low tar cigarettes".[215]

[410]         Early on, Canada opposed the use of the terms "light" and "mild".  Health Minister Lalonde testified that the Ministry found the terms to be confusing.  A May 1977 letter from Dr. A.B. Morrison of Health Canada to Mr. Paré, representing the CTMC, presents a concise summary of the issue:

May I suggest that the Council (the CTMC) review its position on the use of such terminology on packages and in advertising so that we may discuss it along with other matters in our forthcoming meeting.  Notwithstanding the fact that there are no standards for determining the appropriateness of the terms "mild" or "light" from a public health point of view, these would appear to be inappropriate when applied to cigarettes having tar and nicotine levels exceeding 12 milligrams of tar and 0.9 milligrams of nicotine.  We do not think that the appearance of tar and nicotine levels on packages or in advertisements for cigarettes which are marketed as "light" and "mild" overcomes the risk that consumers will associate these terms with a lower degree of hazard.  Inevitably, I believe, some people will come to the conclusion that cigarettes with quite high tar and nicotine levels are among the more desirable from a health point of view.[216]

[411]         It appears that Canada would have preferred calling reduced-delivery products something along the lines of "low tar cigarettes".[217]  It is not immediately obvious that this would have been less misleading.  Though they might have been lower in tar than other products within their brand family, these products were not generally low in tar in an absolute sense and they still brought risk and danger to those who smoked them.

[412]         There seems to have been a fair degree of confusion among all concerned as to how to market reduced-delivery products to the consumer.  Accepting that, the Court does not see any convincing evidence that the use of the descriptors "light" or "mild", in the context of the times, was any more misleading than any other accurate terms would have been, short of adding a warning containing all the relevant information that the Companies knew about their products.

[413]         As such, we do not find a fault in the Companies' use of those descriptors. 

II.E.3 did itl market to under-age smokers

[414]         The Plaintiffs made much of what they allege to be a clear policy by the Companies of marketing to underage youth, i.e., to persons under the "legal smoking age" in Québec as it was legislated from time to time ("Young Teens")[218].  That age moved from 16 years to 18 years in 1993.[219]

[415]         Two of the conclusions in Professor Pollay's report (Exhibit 1381) refer specifically to youth marketing:

18.4   Ads are carefully calibrated. Guided by research and experience ads are carefully crafted. For examples, some ads appeal to the young, but are careful not seem too young; some ads portray enviable lifestyles, but rely on those which consumers aspire to and believe to be attainable; some ads show people associated with athletic activities, but are careful to show them in a moment of repose, lest the ad invoke associations of breathlessness.

18.13 Ads designed to recruit new smokers.  The marketing and advertising strategies of Canadian firms were conceived to attract viewers to start smoking.  This was done primarily by associating some brands of cigarettes with lifestyle activities attractive to youth, and to associate these brands with brand images resonant with the psychological needs and interests of youth.  Strategies toward this end made brands seem "independent", "self-reliant", "adventuresome," "risk-taking," etc.

[416]         Professor Pollay accurately notes that the "younger segment" of the population is one that was of particular interest for all the Companies.  He cites a number of internal documents attesting to that, including the following extracts from 1989 memos, the first from ITL and the second from RJRUS:

I.T.L. has always focused its efforts on new smokers believing that early perceptions tend to stay with them throughout their lives.  I.T.L. clearly dominates the young adult market today and stands to prosper as these smokers age and as it maintains its highly favorable youthful preference.

The younger segment represents the most critical source of business to maintain volume and grow share in a declining market. They're recent smokers and show a greater propensity to switch than the older segment. Export has shown an ability to attract this younger group since 1987 to present.[220]

[417]         There are many documents in which the Companies underline the importance of the "young market" or the "younger segment", without specifying what that group encompasses.  Several documents do, however, show that it can extend below the legal smoking age.  For example, Dr. Pollay cites a 1997 RBH memo discussing "Critical Success Factors" that states: "Although the key 15-19 age group is a must for RBH, there are other bigger volume groups that we cannot ignore".[221]

[418]         ITL denies ever targeting Young Teens and indicates that to do so would be neither appropriate nor tolerable (Notes, para. 614).  Nevertheless, they query the legal relevance of the issue in the following terms (Notes, para. 611):

However, as a preliminary matter, the legal significance of such an allegation is not plainly evident. [   ] There is no free-standing civil claim for “under-age marketing”.  No fault can be established on such a practice alone, and thus no liability can be imposed.  [   ]  Rather, they apparently urge this Court to find that “youth marketing” is both a fault and an injury - in and of itself - without any legal or factual basis for advancing such a position.

[419]         The evidence is not convincing in support of the allegation of wilful marketing to Young Teens.  There were some questionable instances, such as sponsorships of rock concerts and extreme sports but, in general, the Court is not convinced that the Companies focused their advertising on Young Teens to a degree sufficient to generate civil fault.

[420]         This said, the evidence is strong in showing that, in spite of pious words[222] and industry marketing codes[223] to the contrary, some of the Companies' advertising might have borne a sheen that could appeal to people marginally less than 18 years of age[224].  That, however, cannot be an actionable fault, given that the federal and provincial legislation in force allowed the sale of cigarettes to anyone 16 years of age or older until 1993 and that from 1988 to 1995 the Companies were not advertising at all.

[421]         It is true that the Companies sought to understand the consumption practices of Young Teens in studies such as RJRM's Youth Target Study in 1987 and ITL's Plus/Minus projects and its Youth Tracking Studies.  In fact, the 1988 version of the latter looked into "the lifestyles and value systems of young men and women in the 13 to 24 age range"[225].  As well, a number of the Companies' marketing-related documents and surveys include age groups down to 15-year-olds[226]

[422]         The Companies explain that this was to coincide with Statistics Canada's age brackets, which appears to be both accurate and reasonable.  They also explain that, in the face of the reality that many young people under the legal purchasing age did nonetheless smoke[227], they needed to have an idea of the incidence in that age group in order to plan production amounts, as they did with all other age groups.  This is not, in itself, a fault.

[423]         There is also the fact that, as discussed above, the Voluntary Codes stipulated that "Cigarette advertising shall be addressed to adults 18 years of age and over".  None of the Companies would permit a competitor to gain an advantage by breaking the rules imposed by the Codes and the inter-company policing in that regard was most attentive, as was the surveillance done by groups like the Non-Smokers Rights Association[228]

[424]         This said, it is one thing to measure smoking habits among an age group and another to target them with advertising.  Here, the proof does not support a finding that ITL, or the other Companies, were guilty of such targeting.

[425]         Let us be clear.  Were there adequate proof that the Companies did, in fact, target Young Teens with their advertising, the Court would have found that to be a civil fault.  If it is illegal to sell them cigarettes, by necessary extension, it must be, if not exactly illegal, then certainly faulty - dare one say immoral - to encourage them to light up[229].

ii.e.4 did itl market to non-smokers

[426]         Dr. David Soberman was called by the Companies as an expert witness in the area of marketing[230].  His task was to advise whether JTM's advertising over the Class Period had the goal of inducing youth or non-smokers to start smoking, and whether that advertising had the intention or effect of misleading smokers about the risks of smoking.

[427]         On "starting" generally, he states at page 2 of his report (Exhibit 40560) that there is no suggestion that JTM designed marketing to target adult non-smokers and that there is "no support for the premise that JTIM's marketing had any impact on decisions made by people in Quebec to start smoking when they would not otherwise have done so".  He attributes "no statistically significant role" to tobacco marketing in the decision to start smoking: "the evidence is consistent with the expected role of marketing in a mature market".

[428]         His sees the exclusive role of advertising in a mature market, like the one for cigarettes, as being to assist a company in "stealing" market share from competitors, as well as in maintaining its own market share.  This is reflected in the Voluntary Codes' provision to the effect that advertising should be "directed solely to the increase of cigarette brand share"[231].

[429]         He refused to believe that attractive cigarette ads, even though they might have the primary goal of increasing market share, would also likely have the effect of attracting non-smokers - of all ages - to start smoking.  He reasons at page 3 that "Tobacco marketing is unlikely to be relevant to, and is therefore likely largely to be ignored by, non-smokers (unless they have an independent, pre-existing interest in the product category)".

[430]         After reviewing much of JTM's advertising planning and execution during the Class Period for which there was documentation, i.e., after RJRUS's acquisition of the company, he opines at page 4 that he does "not believe that it was either the intention or the effect of JTIM's marketing to mislead smokers about the risks of smoking, to offer them false reassurance, or to encourage those who were considering quitting not to do so". 

[431]         The Court cannot accept Dr. Soberman's view, although much of what he says, in the way he phrases it, is surely true.  It is simply too unbelievable to accept that the highly-researched, professionally-produced and singularly-attractive advertising used by JTM under RJRUS, and by the other Companies, neither was intended, even secondarily, to have, nor in fact had, any effect whatsoever on non-smokers' perceptions of the desirability of smoking, of the risks of smoking or of the social acceptability of smoking.  The same can be said of the effect on smokers' perceptions, including those related to the idea of quitting smoking.

[432]         His testimony boils down to saying that, where a company finds itself in a "mature market", it loses all interest in attracting any new purchaser for its products, including people who did not use any similar product before.  This flies so furiously in the face of common sense and normal business practice that, with respect, we must reject it.

[433]         Hence, the Court finds that, perhaps only secondarily, the Companies' targeted adult non-smokers with their advertising.  So be it, but where is the fault in that?  Not only did the law allow the sale of cigarettes to anyone of a certain age, but also the Companies respected the government-imposed limits on the advertising of those products. 

[434]         There is no claim based on the violation of those limits or, for that matter, on the violation of any of the Voluntary Codes in force from time to time.  Consequently, we do not see how the advertising of a legal product within the regulatory limits imposed by government constitutes a fault in the circumstances of these cases. 

[435]         This is not to say that the Companies' marketing of their products could not lead to a fault.  The potential for that comes not so much from the fact of the marketing as from the make-up of it.  For a toxic product, the issue centers on what information was, or was not, provided through that marketing, or otherwise.  That aspect is examined elsewhere in this judgment, for example, in section II.D.

ii.e.5 did the class members see the ads?

[436]         The Companies insist that the Plaintiffs must prove that each and every Member of both Classes saw misleading ads that would have caused him or her to start or to continue smoking.  Like a tree falling in an abandoned forest, can advertising that a plaintiff does not hear make any noise?  Or cause any damage?

[437]         In view of the meagre findings of fault on this Common Question, it is not necessary to go into great detail as to why we reject the Companies' arguments on this point.  Summarily, let us say that we would simply follow the same logic the Companies' historians espoused: there were so many newspaper and magazine articles about the dangers of smoking that people could not have avoided seeing them.  For the same reason, it seems obvious that people could not have avoided seeing the Companies' ads appearing alongside those articles in the very same newspapers and magazines.

ii.e.6 conclusions with respect to common question e

[438]         We find no fault on the Companies' part with respect to conveying false information about the characteristics of their products.  It is true that the Companies' ads were not informative about smoking and health questions, but that, in itself, is not necessarily a fault and, in any event, it is not the fault proposed in Common Question E.

ii.f.     did itl conspire to maintain a common front in order to impede users of its products from learning of the inherent dangers of such use?

[439]         The relevance of this question is not so much in determining fault as in finding the criteria to justify a solidary (joint and several) condemnation among the Companies under article 1480 of the Civil Code.[232] 

[440]         As to the facts, if there was a "common front" among the Companies, it seems logical to assume that the CTMC, the successor to the Ad Hoc Committee, would have served as the principal vehicle for it.  We shall thus analyze the role of the CTMC in some detail but, before going there, let us examine an event that took place even before the creation of the Ad Hoc Committee in 1963 that, in hindsight, appears to have been the genesis of inter-Company collaboration in Canada:  the "Policy Statement".

II.f.1 the 1962 Policy statement

[441]         In October 1962 the presidents of all eight (at the time) Canadian tobacco products companies signed a document entitled the "Policy Statement by Canadian Tobacco Manufacturers on the Question of Tar, Nicotine and Other Tobacco Constituents That May Have Similar Connotations" (Exhibits 154, 40005A).  Among the signatories were ITL, Rothmans of Pall Mall Canada Limited, Benson & Hedges (Canada) Ltd. and Macdonald Tobacco Inc.

[442]         The Policy Statement followed closely on the heels of the publication by the Royal College of Physicians in Great Britain of its report on Smoking and Health in 1962 (Exhibit 545).  The Royal College's analysis concluded that:

41.  The strong statistical association between smoking, especially of cigarettes, and lung cancer is most simply explained on a causal basis.  This is supported by compatible, though not conclusive, laboratory and pathological evidence …[233]

[443]         Reflecting the heightened awareness of a potential causal link between smoking and disease, two companies, Benson & Hedges and Rothman, who were not yet merged, started advertising certain of their brands with reference to their relatively lower levels of tar compared with other companies' products.  This appears to have been the fuse that ignited the move by ITL's president, Edward Wood, to embark on the Policy Statement initiative.

[444]         For its part, the "Policy Statement" is a one-paragraph undertaking, with a five-point preamble and a six-point appendix.  It reads as follows:

We, the undersigned, (company name) conceive it to be in the public interest to agree to refrain from the use, direct or implied, of the words tar, nicotine or other smoke constituents that may have similar connotations, in any and all advertising material or any package, document or other communication that is designed for public use or information.[234]

[445]         The reason behind such a policy is ostensibly set out in the preamble to the document, particularly at item 5 thereof.  The preamble reads:

1.   Whereas there has been wide publicity given to studies and reports indicating an association between smoking and lung cancer;

2.   Whereas the conclusions reached in these studies and reports are based essentially on statistical data;

3.   Whereas no cause-and-effect relationship has been found through clinical or laboratory studies;

4.   Whereas research on an international basis is being continued on an intensified scale to determine the true facts about smoking;

5.   Whereas any claim, reference or use in any manner in advertising of data pertaining to tar, nicotine or other smoke constituents that may have similar connotations may be misleading to the consumer and therefore contrary to the public interest;

[446]         The primary concern expressed there refers to misleading the consumer and acting contrary to the public interest.  That, however, do not appear to be the dominant motivator of Mr. Wood.  In his letter urging the presidents of the other companies to adopt the proposed policy (Exhibit 154A), he seems much more preoccupied with avoiding both the suggestion that the industry knew there was a connection between smoking and hazards to health as well as the spectre of government intervention:

There is no doubt in my mind that we as manufacturers contribute to the public apprehension and confusion by reference to tar and nicotine in our advertising.  If our desire is to reassure the smoker, there is the real danger of misleading him into believing that we as manufacturers know that certain levels of tar and nicotine remove the alleged hazard of smoking.  In so doing I believe we are performing a disservice to the smoker and to ourselves for we are assisting in the creation of a climate of fear that is contrary to the public interest and, incidentally, damaging to the entire industry.

Moreover, I am quite clearly of the conviction that to permit tar and nicotine and the public apprehension associated with it to become an area of competitive advertising will, in due course, compel government authority to take a firm stand on this matter.  In the hope that we as leaders of our industry can prevent such intervention by agreeing to take the necessary steps to keep our own house in order, I have drafted and attach to this letter a statement of policy to which I would urge your agreement.

[447]         The Appendix to the Policy Statement opens with the question: "If asked by the press or other media to comment on specific 'Health Attacks' on the industry what is the action to be taken?".[235]  Its contents are also relevant to the issue of collusion among the Companies in that, as the sixth point specifies, these documents "form the common basis for comments at the present time".  The Appendix reads as follows:

1.  Individual companies are completely free to comment on the general subject of smoking and health, as their knowledge dictates and as prudence indicates, when asked by responsible outside sources.  Volunteering or stimulating comment will be avoided.

2.  Any comments will deliberately avoid the association of a brand or a group of brands with health benefits.

3.  Any comments will deliberately avoid the promotion of health benefits of types of tobacco products (i.e. pipe tobacco or cigars) as compared to cigarettes, or vice versa.

4.  Information on smoke constituents of a particular brand or a group of brands will not be given.

5.  Some consideration will be given to Canadian comments as they relate to the smoking and health problem in the English-speaking world and elsewhere.

6.  The attached Memorandum on Smoking and Health will form the common basis for comments at the present time.

[448]         The Policy Statement was renewed in October 1977, although not in the exact form as in the original.  Appearing to confirm the Plaintiffs' assertion that this was a "secret agreement", the Companies specified that the agreement was binding on them but it would not become part of the Voluntary Codes[236].

[449]         Thus, it appears to be incontrovertible that, by adhering to the Policy Statement, these companies colluded among themselves in order to impede the public from learning of health-related information about smoking, a collusion that continued for many decades thereafter.  They thereby jointly participated in a wrongful act that resulted in an injury, which is a criterion for solidary liability under article 1480 of the Civil Code.

[450]         The preamble to the Policy Statement also provides a preview of the industry's mantra for the coming decades: studies and reports based on statistical data do not provide proof of any cause-and-effect relationship between smoking and disease - only clinical or laboratory studies can credibly furnish such proof.  In fact, even when the CTMC began to admit that smoking "caused certain health risks" in the late 1980s[237], it and the Companies continued to sow doubt by insisting that science had never identified the physiological link between smoking and disease.

II.f.2 the role of the ctmc

[451]         The Ad Hoc Committee appears to have been created at a meeting of the Canadian tobacco industry held at the Royal Montreal Golf Club in August of 1963.  The purpose of the meeting was to prepare the industry's representations to the conference on smoking and health convened by Health and Welfare Canada for November of that year: the LaMarsh Conference. 

[452]         The US public relations firm, Hill & Knowlton, attended and counselled the Companies, as it had already been doing for years in the United States.  In fact, the same representative, Carl Thompson, also attended the now-infamous meeting at the Plaza Hotel in 1953 where the scientific-controversy strategy was created by the US tobacco presidents[238].

[453]         At the LaMarsh Conference, several executives of Canadian tobacco companies, mostly from ITL, presented the position of the Canadian tobacco industry on the question of the link between smoking and disease.  As opposed to the Policy Statement, which was not announced in the media, in making these presentations the industry was publicly acting with one voice[239].

[454]         As appears from the press release issued by the Ad Hoc Committee on November 25, 1963 (Exhibit 551A), its spokesperson, John Keith, the president of ITL, toed the industry line and preached the scientific controversy and the lack of hard scientific proof of causation.  Here is the summary of the committee's presentation, as reported in that press release:

Any causal relationship of smoking to these diseases is a disputed and open question, according to the Industry which cited the findings of scores of medical scientist throughout the world.  Among the points made were:

-   Exaggerated charges against smoking are frequently repeated but remain unproved.

-   Knowledge of lung cancer is scanty.

-   Statistical studies on smoking and disease are of questionable validity.

-   Many environmental factors affect lung cancer incidence and mortality.

-   Chemical and biological experiments have completely failed to support an association between smoking and lung cancer.

-   Examination of smokers' lungs after death from causes other than lung cancer usually reveals no evidence of pre-cancerous conditions.

[455]         In light of the Companies' numerous objections as to the relevance of the situations in the US and UK, it is ironic to note that both the trade associations and the Companies regularly sought out the assistance and expertise of US and British tobacco industry representatives and consultants in preparing the Canadian industry's position, inter alia, for presentation to government inquiries.  A good example of this is seen in a 1964 memo by Leo Laporte of ITL:

In the preparation of the pertinent scientific information, we will undoubtedly use the services of Carl Thompson of Hill & Knowlton, Inc., New York.  H & K were largely responsible for the preparation of our brief on scientific perspectives presented on behalf of the Canadian Tobacco Industry to the Conference on Smoking and Health of the Department of National Health and Welfare in 1963.  We will also seek whatever information and guidance we can obtain from the Council for Tobacco Research in New York, as well as from our friends in the U.S. and, if necessary, the U.K.[240]

[456]         Some five years later, in front of the Isabelle Committee of the House of Commons, the Companies once again acted in unison through the Ad Hoc Committee, with regular assistance from US industry representatives.  There the Ad Hoc Committee, this time through the mouthpiece of ITL's then president, Paul Paré, continued the same message that the industry had been voicing for several years, as seen in a press release issued the day of Paré's testimony:

In a fully-documented brief to the Standing Parliamentary Committee on Health, Welfare and Social Affairs, the Industry made these points:

1 - There is no scientific proof that smoking causes human disease;

2 - Statistics selected to support anti-smoking health charges are subject to many criticisms and, in any case, cannot show a causal relationship.

3 - Numerous other factors, including environmental and occupational exposures, are suspect and being studied in relation to diseases allegedly linked with smoking;

4 - "Significant beneficial effects of smoking," as recognized by the US Surgeon General's report, are usually overlooked and should be given consideration.

5 - Measures being proposed for control of tobacco and its advertising and marketing are not warranted, would have serious adverse effects, and would create dangerous precedents for the Canadian economy and public.[241]

[457]         Some of these types of statements, carefully worded as they are, are technically true when taken on a point-by-point basis.  For example, it is accurate to say that other factors are suspected as causes of certain smoking-associated diseases and that science had not, and still has not, explained the specific causal mechanism between smoking and disease.  On the other hand, some of them are only partly true or, on the whole, patently false.

[458]         It is the overall look and feel of the message, however, that most violates the Companies' obligation to inform consumers of the true nature of their products.  By attempting to lull the public into a sense of non-urgency about the health risks, this type of presentation, for there were many others, is both misleading and dangerous to people's well-being. 

[459]         Strong evidence existed at the time to support a causal link between cigarettes and disease and it was irresponsible for the Canadian tobacco industry to attempt to disguise that Sword of Damocles.  By working together to this end, the Companies conspired to impede the public from learning of the inherent dangers of smoking and thereby committed a fault, a fault separate and apart from - and more serious than - that of failing to inform.

[460]         As for the Isabelle Committee, in spite of the industry's polished representations, it issued a report (Exhibit 40347.11) advocating recommendations that read like a list of the Companies' worst nightmares, at least for the time.  Yet Dr. Isabelle and the other members did nothing much more than consider evidence easily available to anyone wishing to consider the question.  In applying that evidence, their common sense approach to the risks of smoking - and the conclusions to which this so obviously led - defy rebuttal even over forty years later:

However, it is perhaps best to consider the relationship between cigarette smoking and disease in its simplest terms - the fact that cigarette smokers have an increased overall death rate.  This observation, made in various studies in different parts of the world, depends only on counting deaths, is completely independent of diagnosis and, thereby, any argument about improved diagnostic skills and errors or changes in reporting and classification of deaths between various places and times.  It is only necessary to compare the numbers of deaths among smokers and non-smokers.[242]

 

[…]

 

These findings would appear to be sufficient, from a public health viewpoint, to decide that cigarette smoking is a serious hazard to health and should be actively discouraged.  They are, nevertheless, buttressed by the fact that the increased death rates of cigarette smokers are largely due to diseases of the respiratory and circulatory systems which are the systems that are intimately exposed to cigarette smoke or its components.  Also, death rates from lung cancer, chronic bronchitis and emphysema and coronary heart disease increase with the number of cigarettes smoked and decrease when smoking is discontinued, thus indicating a dose-response relationship[243].

[461]         One cannot but be amazed that the truly brilliant minds running the Companies at the time were apparently unable, even when grouping their wisdom and intelligence together within the CTMC, to work out such a straightforward syllogism.  In fact, it mocks reason to think that they did not.

[462]         Nevertheless, the publication of that report in December 1969 renewed and refined the message of the LaMarsh Conference of some six years earlier.  In addition, it contained pages of recommendations and proposed legislation to assist in moving towards, if not a solution, then at least a lessening of the problem that was causing the sickness and death of thousands of Canadians every year.

[463]         The reaction of the Canadian tobacco industry, through the CTMC[244], was to continue its efforts not only to hide the truth from the public but, as well, to delay and water down to the maximum extent possible the measures that Canada wished to implement to warn consumers of the dangers of smoking.  The Plaintiffs' Notes cite the following example of Canada's frustration with the industry's attitude some ten years after the Isabelle Report:

1171. Another two years hence, in November of 1979, the deputy minister in turn informed the Minister that their "experience with CTMC is that its members do no more than they have to, to carry out voluntary compliance" and that for the department the "essential question is whether to continue with the present frustratingly slow and only marginally effective slow process of negotiation and voluntary compliance with the CTMC or whether to take a more aggressive stance and introduce legislation".[245]

[464]         In a January 1975 memo discussing a research proposal from an outside scientist to the CTMC Technical Committee, Mr. Crawford of RJRM states: "I stressed that we are following the same attitude here as in the U.S. - namely that the link between smoking and lung cancer has not been proven"[246].  This shows not only that the Companies, through the CTMC, were still sticking to their position at the time, but also that they were marching in step with the US industry's strategy.

[465]         The CTMC also spearheaded the industry's rearguard campaign on the question of addiction.  The keystone document on that issue was the 1988 Surgeon General report entitled "Nicotine Addiction".  The Companies knew that this US document would receive broad publicity in Canada and that they had to deal with it. 

[466]         Rather than embracing its findings, the industry, centralizing its attack through the CTMC, chose to make every effort to undermine its impact.  The May 16, 1988 memo to member companies capsulizing the CTMC's media strategy with respect to the report (Exhibit 487) merits citation in full:

It has been agreed that the CTMC (either Neville or LaRiviere) will handle any media queries on the S-G' s Report on Nicotine Addiction.

 

The comments fall into three broad categories:

 

1-  The report flies in the face of common sense -

 

- Thousands of Canadians and millions of people all over the world stop smoking each year without assistance from the medical community.

- How can you describe someone who lights up a cigarette only after dinner as an "addict"?

- The word addiction has been overextended in the non-scientific world: some people are "addicted" to soap operas, to chocolate and to quote Saturday's Montreal Gazette, "to love".

 

2-  The S-G's Report is another example of how the smoking issue has been politicized.  This is another transparent attempt to make smoking socially unacceptable by warming up some old chestnuts.  We don't think the S-G is adding to his credibility by trading on the public confusion between words like "habit" and "dependence" and "addiction".·

 

3-  The S-G's Report also trivializes the very serious illegal drug problem in North America. It is (ir)responsible to suggest that to use tobacco is the same as to use Crack? (sic)

[467]         This posture was continued in the CTMC's reaction to the passage of the Tobacco Products Control Act later in 1988.  In a letter to Health Canada in August, it vigorously opposed adding a pack warning concerning addiction, stating that "(c)alling cigarettes 'addictive' trivializes the serious drug problems faced by our society, but more importantly, the term 'addiction' lacks precise medical or scientific meaning"[247].

[468]         In August 1989, the Royal Society of Canada issued its report mandated by Health Canada entitled: "Tobacco, Nicotine, and Addiction".[248]  The Smokers' Freedom Society had commissioned Dr. Dollard Cormier, professor emeritus and Head of the Research Laboratory on Alcohol and Drug Abuse at the Université de Montréal, to write a critique of the report.[249] 

[469]         The SFS was a close ally, the Plaintiffs would say a puppet, of the tobacco industry and the CTMC circulated Professor Cormier's report widely, especially to members of the Canadian government and the opposition.  This critique served as a foundation for the CTMC's aggressive campaign against adding a Warning about tobacco dependence.  Its approach is reflected in an April 1990 letter from the CTMC president to Health Canada:

Suffice it to say here that we regard the Royal Society report as a political document, not a credible scientific review, and we look upon any attempt to brand six million Canadians who choose to smoke as 'addicts' as insulting and irresponsible.

While we do not and would not support any health message on this subject, we would note that the proposed message on addiction misstates and exaggerates even the Royal Society panel conclusion […][250].

[470]         Concerning the issue of whether or not to attribute the Warnings to Health Canada, the CTMC's attitude on behalf of the Companies is summarized in its 1986 letter to Minister Epp:

More specifically, we do not agree that your proposed health warnings are "scientifically correct" as stated in Appendix I to your letter of October 9, 1986.  Such a proposal not only amounts to asking us to condemn our own product, but also would require us to accept responsibility for statements the accuracy of which we simply do not accept.  Any admission, express or implied, that the tobacco manufacturers condone the health warnings would be inconsistent with our position.[251]

[471]         On the subject of sponsoring research, the Plaintiffs criticize the CTMC for funding scientific "outliers" who dared question the long-accepted position that smoking caused disease and dependence.  What is wrong with that?  Some of the greatest discoveries in science have come from people who were considered "outliers" and "crackpots" because of their willingness to challenge the scientific establishment.  That is not, in itself, a fault.

[472]         Nor do we see it necessarily as a fault for a company not to fund research to further and refine current scientific understanding of a question.  That is its prerogative.  On the other hand, depending on the circumstances, a line can be crossed that turns such a practice into a fault.

[473]         The circumstances here, according to the Plaintiffs, is that the Companies were publicly calling for additional objective research and yet were funding research that was anything but objective.  The Court is uncomfortable in accepting such a proposition without a comprehensive analysis of all the research funded by the Companies, an exercise that goes beyond our capabilities and for which no expert's report was filed.

[474]         As a result, we do not see Company or CTMC-sponsored research as playing a critical role in a finding of fault in the present affair.  Where fault can be found, however, is in the failure or, worse, the cynical refusal to take account of contemporaneous, accepted scientific knowledge about the dangers of the Companies' products and to inform consumers accordingly.

[475]         On the basis of the preceding and, in particular, the clear and uncontested role of the CTMC in advancing the Companies' unanimous positions trivializing or denying the risks and dangers of smoking[252], we hold that the Companies indeed did conspire to maintain a common front in order to impede users of their products from learning of the inherent dangers of such use.  A solidary condemnation in compensatory damages is appropriate.

ii.g.     did itl intentionally interfere with the right to life, personal security and inviolability of the class members?

[476]         This Common Question mirrors the language of the second paragraph of section 49 of the Quebec Charter and is a call for an award of punitive damages under that statute.  This, however, does not cover the Plaintiffs' full argument for punitive damages, since they claim them also under the Consumer Protection Act

[477]         Although the CPA portion of their actions is not technically part of Common Question G, it makes sense to examine all phases of the punitive damages issue at the same time.  We shall, therefore, analyze the claim under the CPA in the present chapter.

[478]         In order to do that under both statutes, it is first necessary to determine if the Companies would be liable for compensatory damages under them.  It is therefore logical within the present analysis of punitive damages to consider that question also.

II.g.1   liability for damages under the quebec charter

[479]         This Common Question is based on sections 1 and 49 of the Quebec Charter.  They read:

1.   Every human being has a right to life, and to personal security, inviolability and freedom.

49. Any unlawful interference with any right or freedom recognized by this Charter entitles the victim to obtain the cessation of such interference and compensation for the moral or material prejudice resulting therefrom.

In case of unlawful and intentional interference (with a right or freedom recognized by the Charter), the tribunal may, in addition, condemn the person guilty of it to punitive damages.

[480]         In this context, the Quebec Charter does not target the intentionality of defendant's conduct so much as the intentionality of the consequences of that conduct.  The defendant must be shown to have intended that his acts result in a violation of one of plaintiff's Quebec Charter rights.  As the Supreme Court stated in the Hôpital St-Ferdinand decision:

Consequently, there will be unlawful and intentional interference within the meaning of the second paragraph of s. 49 of the Charter when the person who commits the unlawful interference has a state of mind that implies a desire or intent to cause the consequences of his or her wrongful conduct, or when that person acts with full knowledge of the immediate and natural or at least extremely probable consequences that his or her conduct will cause.[253]

[481]         Thus, this question must be examined in two phases: Did the Companies' actions constitute an unlawful interference with the right to life, security and integrity of the Members and, if so, was that interference intentional?  A positive response to the first opens the door to compensatory damages whether or not intentionality is proven.

[482]         To start, the Court held above that the Companies manufactured, marketed and sold a product that was dangerous and harmful to the health of the Members.  As noted, that is not, in itself, a fault or, by extension, an unlawful interference.  That would depend both on the information in the users' possession about the dangers inherent to smoking and on the efforts of the Companies to warn their customers about the risk of the Diseases or of dependence, which would include efforts to "disinform" them.

[483]         We have held that the Companies failed under both tests, and this, for much of the Class Period.  With respect to the Blais Class, we held that the Companies fault in failing to warn about the safety defects in their products ceased as of January 1, 1980, but that their general fault under article 1457 continued throughout the Class Period.  In Létourneau, the fault for safety defects ceased to have effect as of March 1, 1996, while the general fault also continued for the duration of the Class Period.

[484]         Given the consequences of these faults on smokers' health and well-being, this constitutes an unlawful interference with the right to life, security and integrity of the Members over the time that they lasted.  Compensatory damages are therefore warranted under the Quebec Charter.

[485]         On the second question, we found that the Companies not only knowingly withheld critical information from their customers, but also lulled them into a sense of non-urgency about the dangers.  That unacceptable behaviour does not necessarily mean that they malevolently desired that their customers fall victim to the Diseases or to tobacco dependence.  They were undoubtedly just trying to maximize profits.  In fact, the Companies, especially ITL, were spending significant sums trying to develop a cigarette that was less harmful to their customers. 

[486]         Pending that Eureka moment, however, they remained silent about the dangers to which they knew they were exposing the public yet voluble about the scientific uncertainty of any such dangers.  In doing so, each of them acted "with full knowledge of the immediate and natural or at least extremely probable consequences that (its) conduct will cause".[254]  That constitutes intentionality for the purposes of section 49 of the Quebec Charter.

[487]         Common Question G is therefore answered in the affirmative.  Punitive damages are warranted under the Quebec Charter. 

[488]         We look in detail at the criteria for assessing punitive damages in Chapter IX of the present judgment.  At that time we also consider the fact that the Quebec Charter was not in force during the entire Class Period, having come into force only on June 28, 1976.

II.g.2 liability for damages under the consumer protection act

[489]         Section 272, in fine, of the CPA creates the possibility for an award of extracontractual and punitive damages[255].  The full provision reads:

272.  If the merchant or the manufacturer fails to fulfil an obligation imposed on him by this Act, by the regulations or by a voluntary undertaking made under section 314 or whose application has been extended by an order under section 315.1, the consumer may demand, as the case may be, subject to the other recourses provided by this Act,

272.  Si le commerçant ou le fabricant manque à une obligation que lui impose la présente loi, un règlement ou un engagement volontaire souscrit en vertu de l'article 314 ou dont l'application a été étendue par un décret pris en vertu de l'article 315.1, le consommateur, sous réserve des autres recours prévus par la présente loi, peut demander, selon le cas:

 

(a)  the specific performance of the obligation;

        (a)  l'exécution de l'obligation;

 

(b)  the authorization to execute it at the merchant’s or manufacturer’s expense;

        (b)  l'autorisation de la faire exécuter aux               frais du commerçant ou du                     fabricant;

(c)  that his obligations be reduced;

        (c)  la réduction de son obligation;

(d)  that the contract be rescinded;

        (d)  la résiliation du contrat;

(e)  that the contract be set aside; or

        (e)  la résolution du contrat; ou

(f)   that the contract be annulled.

        (f)  la nullité du contrat,

without prejudice to his claim in damages, in all cases. He may also claim punitive damages.

sans préjudice de sa demande en dommages-intérêts dans tous les cas. Il peut également demander des dommages-intérêts punitifs.

[490]         In claiming those damages, the Plaintiffs allege that the Companies contravened three provisions of the CPA:

·          failing to mention an important fact in any representation made to a consumer, in contravention of section 228;

·          making false or misleading representations to a consumer, in contravention of section 219; and

·          ascribing certain special advantages to cigarettes, in contravention of section 220(a).

[491]         As a preliminary question, there are five conditions to meet in order for the CPA to apply.  They are:

a.   A contract must be entered into;

b.   One of the parties to the contract must be a "consumer";

c.   One of the parties must be a "merchant";

d.   The "merchant" must be acting in the course of his or her business; and

e.   The contract must be for goods or services.[256]

[492]         Although in these files the "merchants" involved in the contracts with the Members are not the Companies, that is not an obstacle.  The Supreme Court cast that argument aside in Time when it stated that

To be clear, this means that a consumer must have entered into a contractual relationship with a merchant or a manufacturer to be able to exercise the recourse provided for in s. 272 C.P.A. against the person who engaged in the prohibited practice.[257]  (the Court's emphasis)

[493]         Thus, the initial hurdle to a claim damages under the CPA is vaulted.  The Companies, however, see several others.

ii.G.2.a       the irrebuttable presumption of prejudice

[494]         In Time, the Supreme Court supports the existence of an absolute or irrebuttable presumption of prejudice under section 272 once four threshold conditions are met.  In the Plaintiffs' view, those conditions are met here and the Companies are without defence to a claim for compensatory damages.

[495]         The four conditions are:

a.   that the merchant or manufacturer failed to fulfil one of the obligations imposed by Title II of the Act;

b.   that the consumer saw the representation that constituted a prohibited practice;

c.   that the consumer’s seeing that representation resulted in the formation, amendment or performance of a consumer contract, and

d.   that a sufficient nexus existed between the content of the representation and the goods or services covered by the contract, meaning that that the prohibited practice must be one that was capable of influencing a consumer’s behaviour with respect to the formation, amendment or performance of the contract.[258]

[496]         These conditions represent the cornerstones of an action in damages under the CPA.  One might wonder as to what more is needed once they are met; in other words, of what use is a presumption of prejudice once these four elements are proven?  The Supreme Court had this to say on the subject:

[123]  We greatly prefer the position taken by Fish J.A. in Turgeon[259], namely that a prohibited practice does not create a presumption that a merchant has committed fraud but in itself constitutes fraud within the meaning of art. 1401 C.C.Q. (para. 48).  […]  In our opinion, the use of a prohibited practice can give rise to an absolute presumption of prejudice.  As a result, a consumer does not have to prove fraud and its consequences on the basis of the ordinary rules of the civil law for the contractual remedies provided for in s. 272 C.P.A. to be available.  As well, a merchant or manufacturer who is sued cannot raise a defence based on "fraud that has been uncovered and is not prejudicial".[260] (Emphasis in the original)

[497]         It thus appears that the only practical effect of this presumption is to ease the consumer's burden of proof concerning fraud: "the consumer does not have to prove that the merchant intended to mislead, as would be required in a civil law fraud case."[261] 

[498]         The Companies contest the establishment of an irrebuttable presumption of any use to the Plaintiffs here.  They argue that such a presumption can apply only with respect to the contractual remedies set out in sub-sections "a" through "f" of section 272, and not to a claim in damages and punitive damages mentioned in the final paragraph of the section.  In its Notes, RBH explains as follows:

1255.  Under the CPA, a plaintiff must prove fault, causation, and prejudice in order to succeed on a claim.  As discussed earlier in Section I.C.2., at paras. 207-209, proving the four elements set forth in Richard v. Time Inc. leads to a presumption of prejudice sufficient to support an award of the contractual remedies provided in CPA Section 272(a) - (f).  But those are not the remedies sought here.  To recover compensatory damages, Plaintiffs must prove that their injuries were the result of the CPA violation, and to recover punitive damages, Plaintiffs must also prove some need for deterrence.

[499]         The Supreme Court's language in Time appears at first sight to support RBH's contention limiting the effect of the presumption to the contractual remedies enumerated.  For example, in paragraph 123 the court specifies "the contractual remedies provided for in s. 272 C.P.A.", and in the last sentence of paragraph 124 one reads: "This presumption thus enables the consumer to demand, in the manner described above, one of the contractual remedies provided for in s. 272 C.P.A."  So be it, but, to the extent that such a presumption has any relevance to these cases, it is not obvious why such a restriction should exist.

[500]         Where a presumption of prejudice is established, why should its benefit to the consumer be limited to only some of the sanctions mentioned in article 272?  This seems to go against "the spirit of the Act", something the Supreme Court is clearly desirous of preserving and advancing[262].  We see no justification for excluding extracontractual remedies from the ambit of the presumption, not to mention contractual remedies other than those enumerated in subsections "a" through "f", should any exist. 

[501]         Time is a case between the two contracting parties and, in it, the Supreme Court decided only what needed to be decided.  In doing so, it did not rule out a broad application of the presumption. 

[502]         In fact, such a broad application is supported in several places in the decision.  In paragraph 113, admittedly after it has spoken of a consumer obtaining "one of the contractual remedies provided for in s. 272 CPA", the Supreme Court goes on to cite the Quebec Court of Appeal in Beauchamp[263] to the effect that "(t)he legislature has adopted an absolute presumption that a failure by the merchant or manufacturer to fulfil any of these obligations causes prejudice to the consumer, and it has provided the consumer with the range of recourses set out in s. 272".

[503]         There is also its statement at the end of paragraph 123 in Time that "The severity of the sanctions provided for in s. 272 C.P.A. is not variable: the irrebuttable presumption of prejudice can apply to all violations of the obligations imposed by the Act."  As we have noted above, the obligations imposed by the Act include extracontractual ones, for example, where the merchant is not the person who engaged in the prohibited practice.

[504]         This tendency is carried through in paragraph 128 of Time:

According to the interpretation proposed by Fish J.A. in Turgeon, a consumer to whom the irrebuttable presumption of prejudice applies has also succeeded in proving the fault of the merchant or manufacturer for the purposes of s. 272 C.P.A.  The court can thus award the consumer damages to compensate for any prejudice resulting from that extracontractual fault.

[505]         As for punitive damages, they would seem, again at first sight, to be excluded, given that the presumption is one of prejudice, and prejudice is not directly relevant to this type of damages.  That, however, is misleading.  As noted, the presumption's true effect is with respect to the merchant's fraudulent intentions: "the consumer does not have to prove that the merchant intended to mislead, as would be required in a civil law fraud case.[264]

[506]         We noted earlier that section 49 of the Quebec Charter targets the intentionality of the consequences of faulty conduct and not of the conduct itself.  We also noted that "intention" in that context refers to "a state of mind that implies a desire or intent to cause the consequences of his or her wrongful conduct".[265]  To the extent that an analogy can be made between the two statures, a merchant's intention to mislead a consumer, i.e., to commit a fraud, meets that test.  The irrebuttable presumption thus touches on issues relevant to punitive damages and can assist the consumer in a claim for those. 

[507]         Consequently, to the extent that it is necessary to decide this case, the Court holds that the irrebuttable presumption of prejudice, where it applies, assists with respect to all the types of damages mentioned in section 272 of the CPA.  In harmony with that, we shall model our analysis of the alleged violations under the CPA around the four-part test for establishing this presumption.

[508]         Before turning to that analysis, we note that one of the Companies' principal arguments against the award of any sort of damages under the CPA is that the Members lack sufficient interest.  ITL puts it this way in its Notes:

134.  ITL submits that the requirement to demonstrate “legal interest” is an insurmountable hurdle for Plaintiffs to overcome in relation to the positive representations or advertisements that are alleged to be at issue in these proceedings.  Plaintiffs simply assert that the legal interest requirement is satisfied because “the class members have all purchased cigarettes”.  And yet they make no attempt whatsoever to demonstrate that there is any temporal connection, however loose, between the purchase of cigarettes by particular class members and the existence of any misleading representation in the market at any particular time.  In fact, there is no evidence at all that any class member read or saw any particular representations.

[509]         Since the structure of the analysis we conduct below of the alleged contraventions, based on the four conditions precedent to the irrebuttable presumption, considers the Companies' concerns over the Members' interest, no more need be said about that at this point.

ii.G.2.b       the alleged contravention under section 228 cpa

[510]         Section 228 reads as follows:

228. No merchant, manufacturer or advertiser may fail to mention an important fact in any representation made to a consumer.

[511]         The Plaintiffs sum up their position on this allegation in their Notes, which specifies that this argument applies to both Classes:

153. The evidence further reveals that the Defendants never voluntarily provided any information on the dangers inherent in the use of their products because they had adopted a joint strategy to deny these important facts.  This systematic, intentional omission violates article 228 CPA.  As a systematic failure to communicate, this violation reaches every member in both classes and extends in time from the entry into force of the CPA until the class period ends.

[512]         In sections II.D.5 and 6 of the present judgment, we hold that the Companies were indeed guilty of withholding critical health-related information about cigarettes from the public, i.e., important facts.  Since a "representation" includes an omission[266], the Companies failed to fulfil the obligation imposed on them by section 228 of Title II of the CPA.  We also hold that their failure to warn lasted throughout the Class Period, including some twenty years while the relevant portions of the CPA were in force.

[513]         On the question of whether the Members saw the representations, the Companies insist that the Plaintiffs must prove that every member of both classes saw them.  Whether or not that is true, an omission to inform must be approached from a different angle, since, by definition, no one can see something that is not there.  Every member of society was thus subjected to the omission to mention these important facts.  Hence, the condition is met, even according to the Companies' standard.

[514]         The question of whether the Members' "seeing" the representation resulted in the formation of the contract to purchase cigarettes is similar to the one examined in sections VI.E and F of the present judgment in the context of causation.  There we hold, based on a presumption of fact, that the Companies' faults were one of the factors that caused the Members to smoke and that this presumption was not rebutted by the Companies.  A similar presumption and rebuttal process apply here.

[515]         Based on the reasoning in the above-mentioned sections, the Court accepts as a presumption of fact that the absence of full information about the risks and dangers of smoking was sufficiently important to consumers that it resulted in their purchasing cigarettes.  Since there is no proof to the contrary, the third condition is met.

[516]         The final condition is also met.  The Companies' omission to pass on such critical, life-changing information about the dangers of smoking was incontestably capable of influencing a consumer's behaviour with respect to the decision to purchase cigarettes.  It need not be shown that no one would have smoked had the Companies been forthcoming.  It suffices to find that proper knowledge was capable of influencing a person's decision to begin or continue to smoke.  How could that not be the case?

[517]         Consequently, there is a contravention of section 228 CPA here and the Members may claim moral and punitive damages pursuant to section 272 CPA, subject to the other holdings in the present judgment.

ii.G.2.c       the alleged contravention under section 219 cpa

[518]         Section 219 reads as follows:

219. No merchant, manufacturer or advertiser may, by any means whatever, make false or misleading representations to a consumer.

[519]         Section 218 is also relevant for these purposes.  It reads:

218. To determine whether or not a representation constitutes a prohibited practice, the general impression it gives, and, as the case may be, the literal meaning of the terms used therein must be taken into account.

[520]         With respect to the general impression mentioned there, it is "the impression of a commercial representation on a credulous and inexperienced consumer".[267]

[521]         The Plaintiffs argue at paragraph 154 of their Notes that "Throughout the class period, (the Companies) contrived and executed an elaborate strategy that used affirmations, behaviour, and omissions to deny the true nature of their toxic, useless product or mislead consumers about these important facts".  In paragraph 155, they add:

155. Throughout the class period, the Defendants not only failed to inform consumers but also used every form of public interaction available to them to deny the harms and extent of risk associated with cigarette consumption.  In the rare circumstances where they acknowledged that cigarettes could be dangerous or harmful, the Defendants trivialized those harms and the intensity of the risk.  They further falsely represented cigarettes as providing smokers with benefits when they knew that were selling a pharmacological trap.

[522]         For reasons that are not clear, the Plaintiffs do not focus on marketing activities under this section of the CPA, reserving that for their arguments under section 220(a).  In our view, that discussion should occur in the present section, and we shall proceed accordingly.

[523]         The extent of the Companies' representations to consumers during the part of the Class Period when this provision was in force was to advertise their products between 1980 and 1988, as well as between 1995 and 1998, and to print Warnings on the packages.  This was the period of their Policy of Silence, so they were making no direct comments about smoking and health.

[524]         In section II.E.6 of the present judgment, we found no fault on the Companies' part with respect to conveying false information about the characteristics of their products.  That is relevant to this question but, in light of sections 216 and 218, it is not conclusive.  A different test is called for under the CPA. 

[525]         In similar fashion, our rulings in section II.B.1 that the Companies' faults with respect to the obligation to inform about safety defects ceased as of January 1980 for the Blais File and March 1996 for the Létourneau File is not relevant to the CPA-based claims.  Under the CPA, the consumer's knowledge of faulty representations does not exculpate the merchant. 

[526]         As stated in Turgeon, the CPA is "a statute of public order whose purpose is to restore the contractual [balance] between merchants and their customers".[268]  Its method is to sanction unacceptable behaviour on the part of merchants, regardless of the effect on the consumer[269].  Hence, the defence of consumer knowledge open to a manufacturer under article 1473 of the Civil Code is not available.

[527]         Even though the Companies' ads did not convey false information, since they conveyed essentially no information, under the CPA the question is whether their representations would have given a false or misleading impression to a credulous and inexperienced consumer.  For that, it would not be necessary for them to go so far as to say that smoking was a good thing.  The test is whether the general impression is true to reality[270].  It would be enough if they suggested that it was not harmful to health.

[528]         ITL and RBH plead a lack of proof, coupled with a complaint about overly general allegations and lack of interest.  JTM argues in its Notes as follows:

215. As will be demonstrated below, there is nothing misleading or inappropriate with lifestyle advertising.  The methods used by JTIM for its marketing were legitimate and similar to those used by other companies in other areas.  JTIM’s advertisements did not make any implicit or explicit health claims, and there is no evidence whatsoever that any class member was misled by any of JTIM’s advertisements.

[529]         JTM cites a 2010 Court of Appeal decision dealing with the purchase of a motor home that supports the position that banal generalities in advertising do not constitute false or misleading representations.[271]  Although not directly on point, that reasoning is relevant here.

[530]         The Companies' argument about overly general allegations is well founded.  The Plaintiffs point to few if any specific incidents in support of their argument.  Their reference to paragraph 18.12 of Professor Pollay's report does them little good.  We have already concluded that it is unconvincing on this question.

[531]         The Plaintiffs accuse the Companies of using "labelling and lifestyle advertising to create a 'friendly familiarity' with (the Companies') product in order to falsely convince consumers that cigarette smoking was consistent with a healthy, successful lifestyle"[272], without explaining how they see that process working.  In the absence of further explanation, the Court does not see the evidence as supporting this general statement.

[532]         All this seemingly leads to a conclusion that the Companies did not violate section 219.  The problem is that none of it looks directly at the evidence in the record, i.e., the typical ads used by the Companies since 1980.  It is by viewing them - through the eyes of a credulous and inexperienced consumer - that the Court can assess whether there is a contravention of this provision.

[533]         It should not be controversial to assert that every single cigarette ad since 1980 for every single brand of the Companies' products attempted to portray those cigarettes in a favourable light.  That does not necessarily mean that they all suggested that smoking was not harmful to health. 

[534]         A good example of a "neutral" ad is Exhibit 40480.  It simply shows the packages of the three sub-brands of Macdonald Select cigarettes, with a short message aimed at "those who select their pleasures with care".  There are other ads of this sort and none of them constitute violations of section 219 CPA.  They, however, are the exception.

[535]         As a general rule, the ads contain a theme and sub-message of elegance, adventure, independence, romance or sport.  As well, they use attractive, healthy-looking models and healthy-looking environments, as seen in the following exhibits:

·          Exhibit 1381.9 - Macdonald Select ad of 1983 showing an elegantly-dressed couple apparently about to kiss;

·          Exhibit 1040B - Export A 1997 ad portraying extreme skiing

·                   Exhibit 1040C - Export A 1997 ad portraying mountain biking

·          Exhibit 1381.33 - Belvedere 1988 ad showing young adults on a beach

·                   Exhibit 152 - two Player's Light 1979 ads[273] portraying horseback riding and canoeing in the Rockies

·          Exhibit 1532.4 - Belvedere 1984 ad from CROC magazine showing a tanned couple on the beach

·          Exhibit 243A - Vantage 1980 ad from The Gazette, text only, explaining how Vantage delivers taste but "cuts down substantially on what you may not want"

·          Exhibit 40436 - two Export A 1980 ads showing loggers and truckers

·          Exhibit 40479 - two Export A 1982 ads showing a mountain lake and a man on top of a mountain

·          Exhibit 573C - Export A 1983 ad portraying a windsurfer

·          Exhibit 771A - Player's Light 1987 ad seeming to portray a windsurfer in Junior Hockey Magazine

·          Exhibit 771B - Export A 1985 ad in Junior Hockey Magazine portraying alpine skiing and Viscount 1985 vaunting it as the mildest cigarette

[536]         From the viewpoint of a "credulous and inexperienced" consumer, ads such as these would give the general impression that, at the very least, smoking is not harmful to health.  In this manner, the Companies failed to fulfil one of the obligations imposed by Title II of the CPA.

[537]         As for each and every Member of both Classes seeing the infringing representations, we dealt with this issue in an earlier section.  The Companies admit that all Members would have seen newspaper and magazine articles warning of the dangers of smoking.  Since the ads appeared, inter alia, in the same media, it is reasonable to conclude that all Members would have seen them, as well.

[538]         We come to the third condition: that seeing the representation resulted in the Members' purchasing of cigarettes.  In their proof, the Companies consistently emphasized that the purpose of their advertising was to win market share away from their competitors.  To that end, they spent millions of dollars annually on marketing tools and advertising.  Moreover, the Court saw the result of such marketing efforts, particularly through the success of ITL at the expense of MTI in the 1970s and 80s.

[539]         This is sufficient proof to establish the probability that the Companies' ads induced consumers to buy their respective products.  The third condition is met.

[540]         The same evidence and reasoning shows that the final condition: that the prohibited practice was capable of influencing a consumer's behaviour with respect to the decision to purchase cigarettes, is also met.

[541]         As a result, there is a contravention of section 219 CPA here.  The Members may claim moral and punitive damages pursuant to section 272 CPA, subject to the other holdings in the present judgment.

ii.G.2.d       the alleged contravention under section 220(a) cpa

[542]         Section 220(a) reads as follows:

220. No merchant, manufacturer or advertiser may, falsely, by any means whatever,

(a) ascribe certain special advantages to goods or services;

[543]         Concerning this section, the Plaintiffs allege that the Companies' faults were in falsely ascribing a healthy, successful lifestyle to cigarette smoking and, especially, in marketing "light and mild" cigarettes as a healthier alternative to regular cigarettes, while knowing all along that this was not true.  The Plaintiffs describe this assertion as follows in their Notes:

158. Finally, each Defendant clearly violated article 220 a) of the CPA by deliberately employing a variety of marketing techniques to falsely ascribe a healthy, successful lifestyle to cigarette consumption.  They notably consistently marketed “light and mild” cigarettes as a healthier alternative to their “regular” cigarettes.  The Defendants knew all along that the attribution of this advantage was absolutely false.

[544]         We reject the Plaintiffs' arguments under section 220(a).  In addition to the fact that we have already dismissed their claims relating to light and mild cigarettes, we simply do not see how mere lifestyle advertising, to the extent it was used, constitutes the act of falsely ascribing special advantages to cigarettes.  The special advantages referred to there go beyond the "banal generalities" conveyed in lifestyle advertising.

III.      JTI MACDONALD CORP.[274]

[545]         JTM was acquired by Japan Tobacco Inc. of Tokyo from R.J. Reynolds Tobacco Inc. of Winston-Salem, North Carolina ("RJRUS") in 1999.  RJRUS had owned the company since 1974, when it purchased it from the Stewart family of Montreal.  The company, then known as Macdonald Tobacco Inc., had been in business in Quebec for many years prior to the opening of the Class Period.

iii.a.   did jtm manufacture, market and sell a product that was dangerous and harmful to the health of consumers?

[546]         As mentioned earlier, none of the Companies today denies that smoking can cause disease in some people, although each steadfastly denies any general statement that it is the major cause of any disease, including lung cancer. 

[547]         In section II.A, we explain our interpretation of what is a "dangerous" product.  We conclude that a product that is "harmful to the health of consumers" means that it would cause either the Diseases in the Blais Class or tobacco dependence in the Létourneau Class.  We also conclude in section II.C that tobacco dependence is dangerous and harmful to the health of consumers.  These rulings apply to all three Companies.

[548]         In its Notes, JTM sums up its position on this Common Question as follows:

369. JTIM admits that cigarettes can cause numerous diseases, including the class diseases at issue in Blais.  However, class members were at all material times throughout the class period aware of serious health risks associated with smoking, including the fact that it can be difficult for some to quit.

370. JTIM admits that cigarettes may be “addictive” in accordance with the common usage of that term.  There was, however, no consensus in the public health community as to whether smoking should be labelled an “addiction” until at the earliest 1989.  Indeed, the various editions of the most authoritative diagnostic manual, the DSM-V, have rejected the use of that term.

[549]         In response to a request from the Court as to when each Company first admitted that smoking caused a Disease, JTM stated that during the Class Period it never denied that smoking could be risky for some people and could be habit forming.  Nor did it deny that there was a "statistical association" between smoking and certain diseases, but it did not accept that this constituted "cause".[275]

[550]         It added in the same series of admissions that "(i)n 2000, in a public statement before a Senate Committee, Mr. Poirier acknowledged the serious incremental risks to health from smoking and that different combination of risks can cause cancer, expressly