Law Times • sepTember 7, 2009
FOCUS Defence lawyers see hope in Vioxx case Rulings fuel plaintiffs' bar in class actions
BY JULIUS MELNITZER For Law Times
eters of class actions is more than an understatement. In particu- lar, their relentless advocacy of the "waiver of tort" doctrine has gone a long way to shaping the future of Canada's product liabil- ity class action landscape. Waiver of tort is an unjust enrichment concept that re- quires defendants to give up revenues garnered from de- fective products. This relieves plaintiffs of the need to prove individual damages, which so far has been the biggest obstacle to certification. The doctrine also allows the creation of class- es composed of, or including, people who may not even have suffered losses. Ontario's judges have been enthusiastic in embracing the concept as a possible indepen- dent cause of action for the pur- pose of certification. At least three significant prod- uct liability cases — Heward v. Eli Lilly & Co., Peter v. Medtronic Inc., and LeFrancois v. Guidant Corp. — have followed on the doctrine's initial acceptance in 2004 by an Ontario court in Ser- han (Estate) v. Johnson & Johnson. Elsewhere in Canada, judicial re- action has been mixed.
T "The policy question behind
waiver of tort is whether there ought to be a civil remedy where there are no damages," says Caro- line Zayid of McCarthy Tétrault LLP's Toronto office. "If you think that dealing
with wrongdoing is the prov- ince of regulators, not having a remedy won't offend you. But if you believe that class actions are there to right the wrongs of the world, the absence of a remedy would be terribly frustrating. It's true that in many settlements where there are no damages, there are worthy distributions to charitable causes, but I'm not convinced that's what a civil law- suit is supposed to be about." It's important to remember,
however, the waiver of tort is- sue has not been resolved ex- cept for certification purposes. An impending trial date in Serhan, however, suggests clari- fication is coming. Meanwhile, the uncertainty has done little to dampen the plaintiff bar's enthusiasm for the doctrine. "Waiver of tort is now the
standard pleading in every new claim or complaint that's filed in the pharma and medical de- vice area," says Glenn Zakaib of Toronto's Cassels Brock & Blackwell LLP.
o say the plaintiffs' bar has been ingenious in broadening the param-
Plaintiffs' lawyers are also encouraged by the erosion of the "pre-emption" doctrine that has found favour in the United States. The doctrine holds that medical device and other manufacturers that comply with federal standards for their products cannot be sued on a com- mon law or state law basis for faulty design or deficient standards of care.
While the doctrine has been a common and fre- quently successful argument for defendants, Won Kim of Toronto's Kim Orr says the U.S. Supreme Court's Octo- ber 2008 ruling in Wyeth v. Levine that pre-emption did not apply to a case based on failure to provide an adequate warning on a drug label greatly undermines its scope. As well, the Obama administration has made it clear that federal pre- emption will now be the excep- tion rather than the rule. "As pre-emption erodes,
you'll see more product liability cases in the U.S., and that means there will be more in Canada because there will be greater op- portunity for cross-border col- laboration between counsel," he says. But there's always the chance Canadian courts will go their own way on the issue. "There are cases coming up
in Quebec and Ontario where argument will be made in rela- tion to the federal government occupying the field, which is effectively a form of pre-emp- tion for us," says Zakaib. Indeed, life is tough for de- fence counsel on product liabil- ity cases these days. "Given the current state of
the law, there's no way you're going to avoid certification on a products liability case, and you'll likely end up settling with large numbers attached to the settlement," says John Campion of Fasken Martineau DuMoulin LLP.
Campion should know. He, with colleagues Paul Martin and Sarah Armstrong, represents the defendants in Lambert v. Guidant Corp., the largest pace- maker class action in Canada. "Guidant is 12 times the size of the other heart device cases," says Kim, who, with colleagues James Orr, James Newland, and Megan McPhee, represents the class. "It is by far the largest in terms of number of devices, val- ue of the case, and complexity of the issues."
The case is staggering in its scope, involving some 80 devices. "We'll have to deal with
'As pre-emption erodes, you'll see more product liability cases in the U.S., and that means there will be more in Canada,' says Won Kim.
them from their conception and design through their status to- day," says Campion. "The trial could easily take five years, con- sidering the particulars of the negligence pleading and the fact that the case involves 100 mil- lion documents at least." Still, Ontario Superior Court
Justice Maurice Cullity cer- tified the case, although he clearly regarded it as a high- water mark for certification. He reached his conclusion without the benefit of waiver of tort, upon which the plain- tiffs did not have to rely as they alleged actual damage to members of the class. If there's a bright light for defence counsel in product liability cases, however, it may lie in the Saskatchewan Court of Appeal's decision in Wuttunee v. Merck Frosst Canada Ltd., which shocked observers by overturning the certification in a multi-juris- dictional class action involv- ing the painkiller Vioxx. "Vioxx is the first pharma case in Canada where certifi- cation has been denied," says Zakaib. The court concluded the plaintiffs had failed to establish the existence of an identifiable class because its members could not be easily determined. They had also failed to identify suf- ficiently similar common issues because of the wide range of ad- verse side effects and the varying
Trust [
susceptibility to risk among us- ers. Finally, the plaintiffs failed to establish that a class action was the preferable procedure. Many commentators opined that the decision marks the be- ginning of a trend towards a more rigorous approach to class certification. "The Saskatchewan Court of
Appeal certainly landed a hay- maker on the chin of the plain- tiffs' bar," says Kim. On the other hand, the On-
tario Superior Court has certified a parallel case, Mignacca v. Merck Frosst Canada Ltd. While the de- cision is under appeal, Tim Buck- ley of Borden Ladner Gervais LLP's Toronto office, believes de- fence lawyers may have a tougher time preventing certification than they did in Saskatchewan. "To begin with, the Ontario
pleadings are much tighter," he says. "There's also a clear divi- sion between the Ontario and Saskatchewan decisions on whether the question of a drug's fitness for its purpose is capable of being a common issue. And perhaps most importantly, the Saskatchewan court considers evidence on certification that the
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