Tobacco growers consider lawsuit

Wednesday, March 4, 2009

© AgMedia Inc.

by GEOFF DALE

Many of Ontario’s tobacco growers are considering suing the companies that have traditionally been their biggest customers

More than 750 producers have completed and returned contact information forms distributed at a Feb. 23 meeting in Delhi by the Windsor-based law firm Sutts, Strosberg LLP. 

The Ontario Flue-Cured Tobacco Growers’ Marketing Board hired the firm to investigate the possibility of legal proceedings that could include a class action on behalf of growers and producers for compensation.

At issue is the difference manufacturers pay for tobacco intended for export and domestic markets. The firm is exploring allegations the manufacturers bought tobacco at export prices in the province, exported it and then assisted in returning the finished product to Canada.

The action stems from guilty pleas on July 31, 2008 by both Imperial Tobacco Canada Ltd. and Rothman’s Benson & Hedges to a single count of violating the federal Excise Act “by aiding persons to sell or be in possession of tobacco products manufactured in Canada that were not packaged and were not stamped in conformity with the Excise Act and its amendments and the Ministerial regulations.”

Werner Keller, a representative of the firm, says growers who produced tobacco anytime during 1985-1996 could be potential class members. He confirms more than 750 forms have been returned to the board’s office and anticipates the number will grow. “At the meeting (attended by about 2,000 people), I did not hear a single farmer expressing reluctance about a possible suit, so there is support within this community.”

Otterville producer Gary Godelie, a former chair of the board, declines to say whether he has signed the form but notes farmers have “good grounds” to move forward with the action. “If they (the manufacturers) plead guilty to the charges, obviously we (growers) got screwed,” he says. “No doubt these actions hurt us big time so this is something we need to pursue.

Alvin Lindsay of Aylmer says he probably will fill out the form because it’s only intended for information purposes. The forms ask for contact data including the farm owner’s name, farm numbers (for quota), growing years, email address, phone number, fax number and mailing address.

Would he commit further to the action?

“I don’t really have much to say about it,” he says. “I’m not on the board so I don’t get all the information. Most of the time all I get is hearsay. At the meeting certainly a lot of producers think it is the right thing to do.”

Keller says the process could take months or even years. Preparing a statement of claim outlining the allegations is the first step. A judge will then hear a motion and decide if a class action suit is in order and who the class members will be. Once a notice is published, producers have the option of either remaining or opting out of the action.

Spokespeople with Imperial Tobacco Canada Ltd. and Rothman’s Benson & Hedges could not be reached. BF