Claude Marseille Ad E, Ariane Bisaillon and Anthony Cayer (Quebec); Robin Linley (Ontario); Darren Reed (Saskatchewan and Alberta); and Robin Reinertson (British Columbia), Blake, Cassels & Graydon LLP
Canada’s product liability litigation continues to be largely dominated by cases related to tobacco, automotive parts, pharmaceuticals, medical devices and agricultural products. Absent settlement, the battleground continues to shift towards merits assessments – summary judgments and trials – as cases certified in the past work their way though the system. The most notable developments of the past year have occurred in the province of Quebec, with two major product liability trial decisions being upheld by the Quebec Court of Appeal. In Ontario, the court has on a few occasions refused to certify product liability class actions, notwithstanding past experience in this area. In western Canada, several class proceedings in this area are working their way through the courts, and with British Columbia changing its class action regime to a national opt-out system, more such cases are expected in the west.
Two major decisions have been issued this year regarding product liability law in Quebec. In the first, Imperial Tobacco Canada ltée v Conseil québécois sur le tabac et la santé (2019 QCCA 358), the Court of Appeal reviewed a decision arising out of class actions brought against cigarette manufacturers in Quebec on behalf of smokers who developed cancer, emphysema or an addiction to nicotine. The Court upheld the judgment in first instance awarding class members a total, record-setting amount of nearly $7 billion plus interest, for a total of $15 billion, including $130 million in punitive damages.
The Court of Appeal undertook a detailed analysis of product liability law in Quebec, in an effort to settle several outstanding issues in the field. Importantly, the Court concluded that the provisions respecting product safety defects in the Civil Code of Quebec apply to a failure-to-warn claim brought by a product purchaser (with whom, by definition, a contract of sale was concluded), even though these provisions are part of the extracontractual regime of liability (akin to common law torts). The Court reasoned that a failure to warn occurs in the precontractual stage, such that the extracontractual regime of liability should apply. Under this regime, the plaintiff only needs to show that the product, having regard to all relevant circumstances, “does not afford the safety which a person is normally entitled to expect”, including by reason of failing to warn users of the risks it involves or the means to avoid them.
If the plaintiff proves that the product was subject to such a safety defect and that he or she suffered damage as a result, the manufacturer can only escape liability by proving that the plaintiff “knew or could have known of the defect, or could have foreseen the injury”, or that the manufacturer itself could not have known the existence of the safety defect “according to the state of knowledge at the time”, provided the manufacturer was not negligent in its duty to issue a warning upon becoming aware of it.
The decision includes a detailed discussion of the defendants’ burden of proof respecting their allegation that smokers “knew or could have known of the defect or could have foreseen the injury” related to cigarettes.
Barely two months later, the Quebec Court of Appeal issued a second landmark decision in a pharmaceutical failure-to-warn product liability class action. Brousseau v Laboratoires Abbott limitée (2019 QCCA 801) is the first such decision issued in Quebec following a trial on the merits (the only other such case was issued in Canada in 2012 – Andersen v St Jude Medical (2012 ONSC 3660, Ontario)). The plaintiffs in Brousseau claimed that severe neuropsychiatric side effects were related to the consumption of the drug Biaxin, a widely used antibiotic manufactured by Abbott, and that Abbott failed to warn users and health professionals of this risk. The Court upheld the decision of the Quebec Superior Court, dismissing the claim.
The Court accepted that the plaintiffs were credible and that they had suffered various neuropsychiatric adverse events after they had used the medication. However, the Court found, based on the defendant’s expert evidence, that these adverse events were not caused by the medication as no plausible biological mechanism could be identified in this regard (the medication could not penetrate the brain membrane and cause the alleged side effects). This suggests that, in the presence of credible, contrary expert evidence, anecdotal reports will not be sufficient to establish liability in the context of pharmaceutical product liability class actions. Furthermore, the manufacturer had diligently disclosed all adverse events associated with the use of the medication as they became known, even when causality had not been established. The Court confirmed that the learned intermediary rule applies in Quebec, allowing drug manufacturers to meet their duty to warn by informing medical professionals, rather than users, of the safety risks related to their products.
Another key conclusion is that the Quebec Consumer Protection Act does not apply to the sale of prescription drugs, as it involves the intervention of professionals (the prescribing physician and the pharmacist), and thus does not constitute a contract between a consumer and a “merchant” subject to the CPA. As a result, plaintiffs in pharmaceutical product liability class actions in Quebec cannot rely on the generous provisions of the CPA favouring consumers, including an absolute presumption that the manufacturer was aware of the defects at issue, no matter what the relevant state of knowledge was at the time.
In the past year, the Ontario Superior Court of Justice has denied certification in several product liability class actions, which runs counter to past trends. In each case the plaintiff failed to establish a common issue or failed to establish that a class proceeding was the preferable procedure for advancing the class members’ claims. While perhaps not indicative of a broader trend away from past experience in Ontario product liability cases, these recent cases do demonstrate that the courts in Ontario continue to actively assess the appropriateness of certification in each case. Certainly, product liability cases are not the “quintessential” cases for class certification that plaintiffs’ counsel routinely claim.
In Price v H Lundbeck A/S (2018 ONSC 4333), a case concerning an alleged failure to warn regarding the teratogenic risks (congenital malformations) associated with the use of an antidepressant medication, the Court denied certification of the proposed class action on the basis that the plaintiff had failed to satisfy three of the five criteria for certification, including the common issue, preferable procedure and representative plaintiff criteria. The Court found that the proposed duty-to-warn issue was not a common one, because the scope of the defendant’s duty to warn varied considerably across the multiple congenital malformation risks alleged and the differing degrees of gravity of those risks. The Court also found that, given the wide range and variety of congenital malformation risks alleged, a class proceeding was not a preferable procedure to advance the class members’ claims, as numerous individual issues, including complex issues of individual causality, would remain to be determined after a common issues trial.
Similarly, the Court recently dismissed a certification motion in Richardson v Samsung (2018 ONSC 6130), a proposed product liability class action involving allegedly defective mobile phones with a risk of fire or explosion. In denying certification, the Court held that the plaintiff had failed to plead certain elements of his negligent misrepresentation claim; that the need for individual inquiries regarding alleged data loss on the part of the class would overwhelm any benefits gained by a class action process; and that the defendant’s established alternative consumer compensation programme was a preferable procedure for resolving the class issues, not a class action.
Finally, the Court similarly denied certification in Kuiper v Cook (Canada) Inc (2018 ONSC 6487), a case involving an implantable filter device intended for use in surgery to capture embolism moving to the heart and lungs. In denying certification, the Court focused on the fact that the plaintiffs had failed to identify a specific design feature that they said was negligently designed, or to establish on the evidentiary standard of “some basis in fact” that the proposed common issue around design negligence actually existed. A similar conclusion was also reached by the Court with respect to allegations of failure to warn, with the Court finding that on the evidence the plaintiffs had failed to show some basis in fact for the proposed common issue.
In Saskatchewan, Alberta and British Columbia, product liability cases are mainly brought as class actions under the applicable statutes in each jurisdiction. While there have not been any major developments in the case law, the British Columbia and Saskatchewan courts are readily certifying product liability class actions, and there are also several active cases in Alberta.
In the past year and a half, there have been several product liability class proceedings certified in Saskatchewan in the areas of pharmaceutical and automotive/manufacturing. By way of example, in Evans v General Motors of Canada Co (2019 SKQB 98), the proposed class action pleaded breach of common law and statutory duties relating to alleged manufacturing defects in the “Cruze” automobile, resulting in economic losses to members of the proposed class. The Court certified the action, finding that the statutory requirements had been met. In addition, in Saskatchewan there are several ongoing product liability class actions in other areas such as hardware, child furniture and products, agricultural chemicals and electronics.
In Alberta, product liability class proceedings also follow the same themes: automotive/manufacturing, pharma and medical/surgical device class proceedings are all at various stages of the litigation process, although no major court decisions have issued recently.
In British Columbia, the extant class proceedings focus on price-fixing, antitrust and consumer protection claims. There are, however, proposed class action cases regarding automotive/manufacturing, pharmaceuticals, medical devices and consumer products proceeding through the courts. It is anticipated that more class actions will be filed and pursued in British Columbia, as the province’s Class Proceedings Act was amended in October 2018 to permit national opt-out classes, making it even more appealing to plaintiffs’ counsel, with its “no costs” regime for class actions.