Litigation — Product Liability
The “waiver of tort” doctrine from the Canadian plaintiffs' class action bar continues to shape Canada's product liability class action landscape.
Waiver of tort is an unjust enrichment concept that requires defendants to disgorge revenues garnered from defective 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 classes composed of, or including, individuals who may not even have suffered losses.
Judges in Canada's largest province, Ontario, have been enthusiastic in embracing the concept as a possible independent cause of action for the purpose of certification. At least three significant product 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 Johnson & Johnson v. Serhan. Elsewhere in Canada, judicial reaction has been mixed.
It's important to remember, however, that the waiver of tort issue has not been resolved except for certification purposes. The uncertainty has done little to dampen the plaintiff bar's enthusiasm for the doctrine: for example, waiver of tort is now a standard pleading in virtually every new claim in the pharma and medical device area.
Plaintiffs' product liability lawyers are also encouraged by the erosion of the “preemption” doctrine that has found favour in the US. The doctrine holds that medical device (and other) manufacturers who comply with federal standards for their products cannot be sued on a common law or state law basis for faulty design or deficient standard of care.
While preemption has been a common and frequently successful argument for defendants, the US Supreme Court's October 2008 ruling in Wyeth v. Levine that preemption does not apply to a case based on failure to provide an adequate warning on a drug label greatly undermines the doctrine's scope. Additionally, the Obama administration has made it clear that federal preemption will be the exception rather than the rule in the current administration.
There's always the significant chance that Canadian courts will go their own way on the issue, and there are cases coming up in Québec and Ontario where arguments will be made that the federal government has occupied the field and so preempted liability where defendants have met federal standards.
If there's a bright light at the end of the tunnel for defence counsel in product liability cases, however, it may lie in the Saskatchewan Court of Appeal's decision in Merck Frosst Canada Ltd. v. Wuttenee v. Merck Frosst (Vioxx), which shocked observers by overturning the certification in a multijurisdictional class action involving the painkiller Vioxx.
The court concluded that the plaintiffs had failed to establish the existence of an identifiable class because its members could not easily be determined by ordinary consumers or until after the trial of the merits. They had also failed to identify sufficiently similar common issues because of the wide range of adverse side effects and the varying susceptibility to risk among users. Finally, the plaintiffs failed to establish that a class action was the preferable procedure.
The Wuttenee decision may signal that a more rigorous approach to class certification is on the way, particularly as the Supreme Court of Canada dismissed an application for leave to appeal in October 2009.
On the other hand, the Ontario Superior Court has certified a parallel case, Mignacca v. Merck Frosst Canada. Observers note that the Ontario pleadings are much tighter, there is a clear division 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 considered evidence from the defendants that the Ontario court characterized as properly going only to the merits of the case.