Canadian Court Rules Against Tobacco Cos.

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Canadian Court Rules Against Tobacco Cos.

VANCOUVER, British Columbia -- A Canadian appeals court ruled against the exclusion of foreign tobacco companies from a provincial lawsuit that seeks millions to cover the costs of smoking-related illnesses, Reuters reported.

Tobacco companies -- Imperial Tobacco Canada and British American Tobacco Investments Ltd.; R.J. Reynolds Tobacco Co. and R.J. Reynolds Tobacco International Inc.; Phillip Morris Inc. and Philip Morris International; and Rothmans Benson & Hedges Inc., a unit of Altria Group; among others -- had argued that they could not be sued by the province because they didn't directly sell products there or have operations in the province.

The British Columbia Court of Appeals, however, said the issue was not whether the parent companies operated or sold products there. It upheld a lower court ruling stating that there is sufficient connection between the foreign firms and the Canadian units to include them in the suits.

"Although particular defendants may not have been present in British Columbia, the activities alleged against the joint breach defendants are wrongs situated in British Columbia and the harm that resulted was situated in British Columbia," the court stated.

British Columbia is the first Canadian province to seek financial damages due to the costs of smoking, and its case follows U.S. cases that states filed against tobacco companies in the 90s. The suit says the tobacco companies have knowingly deceived consumers on the dangers of smoking. The province has not reported the amount of money it is seeking, but officials stated that when the lawsuit was filed in 1998, C$5 billion was being spent per year to treat tobacco related illnesses, Reuters said.

In response, the industry has denied any wrong-doing and has accused the government of being hypocritical since it is suing over a legal product that generates tax revenue.