Another Kick at the Can for Imperial Tobacco?

When we last left our story, a group of large tobacco companies were left reeling from the Supreme Court of Canada (“SCC”) decision in British Columbia v. Imperial Tobacco Canada Ltd., 2005 SCC 49 [Imperial Tobbaco] . This judgment upheld the constitutional validity of British Columbia legislation that allowed the provincial government to directly institute a claim against tobacco manufacturers to recover the costs of health care incurred by the government in treating individuals whose illnesses had been caused by exposure to their products. In particular, the SCC rejected Big Tobacco’s claims that the Tobacco Damages and Health Care Costs Recovery Act, SBC 2000, c 30, was unconstitutional because its fell outside of the territorial jurisdiction of the provincial legislature or that it violated the principles of judicial independence or rule of law.

However, several of the tobacco companies, composed of non-Canadian manufacturers who were served ex juris with the action by the B.C. government, brought applications to set aside service on the basis that the B.C. court does not have jurisdiction, that it should exercise its discretion to decline jurisdiction, or that the legislation is constitutionally inapplicable. These applications were dismissed, both by the trial judge and the Court of Appeal. A decision by the SCC on the applications for leave to appeal is expected later today. I will provide an update when this occurs.

[Note: Imperial Tobacco, from which the initial proceedings takes its name, is not amongst these applicants; my title refers to the case name and not the company]

The grounds for the tobacco companies’ applications appear to all be variations of the jurisdiction issue already canvassed by the SCC in its earlier Imperial Tobacco decision. While there are some differences between the “pith and substance” test for the legislative jurisdiction issue and the “real and substantial connection” test in determining court jurisdiction, in this case, the analysis for the latter appears closely related to the assessment made by the SCC with regard to extraterritoriality in the first Imperial Tobacco proceeding. This is particularly so because the SCC had conducted this analysis by closely examining the cause of action created by the legislation and its relationship with B.C.’s provincial jurisdiction. Similarly, the claim that the legislation is constitutionally inapplicable may be distinct from the claim that it is consitutionally invalid but it would appear difficult for the ex juris defendants to argue that the legislation should be interpreted so as to be inapplicable to extra-jurisdictional matters when the SCC has essentially concluded that the legislation which allows for an action against these defendants was not extra-jurisdictional.

Even if the application for leave is granted, I would be very suprised if the ex juris defendants’ applications can succeed given the SCC’s position on extraterritoriality of the legislation in its earlier decision less than two years ago.

It has been over six years since the main action against the tobacco companies was commenced by the Province of British Columbia and thus far, the case has accumulated numerous actions, applications and appeals, and this has only been on the preliminary issues of consitutionality and jurisdiction. The question is: when will the main action be decided so that it can make its own inevitable trek up to the SCC?

[UPDATE: The SCC has dismissed each of the tobacco manufacturers’ applications for leave to appeal with costs. This was part of a wholesale dismissal of 22 applications for leave to appeal released today.]