Top court to rule on tobacco liability

Fri Jul 29, 2011 7:33am EDT
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OTTAWA (Reuters) - Canada's Supreme Court will decide on Friday whether the federal government should be partly liable for damages, possibly amounting to many billions of dollars, stemming from lawsuits against tobacco firms.

The tobacco industry -- facing suits from several provinces seeking to recoup healthcare costs -- says that, if it loses, the government should pay at least part of the damages because Ottawa allowed and regulated the use of tobacco.

The court is scheduled to deliver its ruling at 9:45 Eastern (1345 GMT).

Ottawa is fighting a decision by an appeals court in the province of British Columbia, which ruled in 2009 that the federal government should be a co-defendant and therefore share in any liability awarded by the province's courts.

British Columbia is suing R.J. Reynolds Tobacco Co, Japan Tobacco's JTI-Macdonald unit, Rothmans Benson & Hedges Inc, which is partly owned by Philip Morris, and Imperial Tobacco Canada Ltd, a unit of British American Tobacco.

Several of Canada's 10 provinces have sued or say they will sue the tobacco industry but British Columbia filed first and Canadian courts are using it as the lead case.

British Columbia declined to say how much money it was seeking in damages. Ontario, Canada's most populous province, launched a suit against the companies in 2009 seeking C$50 billion ($53 billion).

The Supreme Court will also rule in a separate but similar case in which Imperial Tobacco wants Ottawa to be liable for any damages awarded against it in suits alleging the company wrongly marketed some tobacco products as "mild" or "light".

(The main case is Attorney General of Canada v. Her Majesty the Queen in Right of British Columbia et al, case no 33563   Continued...

<p>A woman takes a photo of a display showing new warning labels for cigarette packages following a news conference in Ottawa December 30, 2010. REUTERS/Chris Wattie</p>