Canada's federal government can appeal court rulings which included Ottawa in lawsuits launched in the province of British Columbia against tobacco firms, the Supreme Court announced Thursday.
The top court did not give any reasons for its decision.
The British Columbia appeal court ruled last December that the federal government should be a third-party defendant, meaning it may have to share in any liability awarded by the province's courts.
British Columbia is seeking billions of dollars in health care costs from the tobacco industry in a case that is due to go to trial in September 2011.
The firms targeted are: 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 .
The tobacco industry argued that government should share in any responsibility for damages because they were partners in the sale of tobacco by keeping it legal and collecting tax revenue from it.
Rob Cunningham of the Canadian Cancer Society welcomed the ruling and said Ottawa should not serve as the insurance company for the tobacco firms.
"The tobacco industry should be held fully liable for the wrongs it has done," he told Reuters. "The history of the tobacco industry is that they have always tried to blame someone else."
Several of Canada's provinces have sued the industry for billions in damages, but the British Columbia case - based on legal action by U.S. states -- was filed first and Canadian courts are using it as the lead case.
The second British Columbia case is a class action by smokers against Imperial Tobacco Canada Ltd. The claimants allege they were misled into believing cigarettes labelled mild or light were safer to smoke.