Canada: Lessons To Be Learned From Two Recent Canadian Carriage Disputes

Last Updated: January 26 2012
Article by Brian P.F. Moher

A nationwide network of Canadian counsel recently settled two disputes related to the carriage of two multi-jurisdictional class actions against defendant corporations, Guidant and Medtronic. The two counsel groups ultimately joined together to form a North American alliance to prosecute both of the products liability class actions. It is significant that Counsel groups from both sides of the carriage contests had entered into arrangements with U.S. counsel, which included the sharing of documentary disclosure as well as litigation strategy. These settlements signify a new era of products liability litigation in Canada, where cross-border relationships will play key roles in the prosecution of international class actions.

Background to the Carriage Disputes

In Peter et al. v. Medtronic Inc. et al., the defendant, Medtronic, is facing claims arising out of defective implantable cardioverter defibrillators and cardiac resynchronization therapy defibrillators. The claim alleges that Medtronic knew in 2003 of a short-circuiting defect in the batteries of its defibrillators, yet continued to sell devices containing the defective batteries in order to deplete its existing stock. It is alleged that corrective action was not taken until 2005.

In Lefrancois et al. v. Guidant Corporation et al., Guidant must also answer claims that it sold defibrillators it knew to be defective, and that it failed to warn patients of the defects until 2005, several years after the defects were allegedly discovered. By way of background, in June 2003, Guidant's subsidiary Endovascular Technologies, Inc. pleaded guilty to ten federal felonies in the U.S. relating to selling misbranded medical devices, and failing to report over 2,600 system malfunctions and adverse events to the FDA. As part of the plea agreement, Guidant entered into a Corporate Integrity Agreement on June 30, 2003 with the Office of Inspector General for the Department of Health and Human Services. Guidant undertook as part of that contract to promote compliance among its officers, directors, and employees with U.S. medical device regulations. It is now alleged that Guidant breached that agreement.

The Carriage Disputes

Two separate counsel groups filed motions for carriage seeking approval of the Court to proceed as counsel on behalf of the putative plaintiffs in the Medtronic litigation. The same two counsel groups also filed motions for carriage of the Guidant matter. The Medtronic motion was argued before Madam Justice Alexandra Hoy of the Ontario Superior Court of Justice, on September 21, 2006, by members of a nationwide network of lawyers, including lawyers from

  • Toronto, Ontario
  • Windsor, Ontario
  • Vancouver, British Columbia
  • Calgary, Alberta
  • Montreal, Quebec
  • Halifax, Nova Scotia

Other Canadian courts have outlined that the factors a court should consider in determining who should be appointed as solicitor of record where there is a dispute over carriage of a class action. Those factors include:

  1. the nature and scope of the causes of action advanced;
  2. the theories advanced by counsel as being supportive of the claims advanced;
  3. the state of each class action, including preparation;
  4. the number, size and extent of involvement of the proposed representative plaintiffs, and whether they or their counsel have any conflict of interest or any potential conflict of interest;
  5. the relative priority of commencing the class actions; and,
  6. the resources and experience of counsel.1

In applying the foregoing factors, a court faced with a carriage motion in respect of multiple class proceedings should consider the best interests of the putative class members, fairness to the defendants, and the objectives of the Class Proceedings Act, 1992, S.O. 1992, c. 6.2 These objectives include:

  1. more efficient handling of potentially complex cases of mass wrong;
  2. improved access to justice for those whose actions might not otherwise be asserted; and
  3. to inhibit misconduct by those who might be tempted to ignore their obligations to the public.3

At the Medtronic carriage motion, Hoy J. was faced with deciding between two equally meritorious groups. The actions had been commenced by each counsel group within the same period of time. Both groups had invested significant time and effort into the advancement of the claims, and both had an adequate number of representative plaintiffs. In addition to allegations of negligence and failure to warn, both claims sought an accounting and disgorgement of Medtronic's revenues from the sale of the defective devices. One of the counsel groups also alleged conspiracy, while the other alleged that opposing counsel had a conflict of interest. Key among the counsel groups' submissions, however, were details of the U.S. alliances that had been forged with several major U.S. law firms, Rheingold Valet Rheingold Shkolnik & McCartney, Lieff Cabraser Heimann & Bernstein, Neblett, Beard & Arsenault, and Motley Rice. Among the U.S. alliances were major players from both the Guidant and Medtronic U.S. Multi- District Litigation, including co-lead plaintiffs' counsel as well as members of the Plaintiffs Steering Committees. Such U.S. counsel relationships, it was submitted, would allow for

  • access to experts, including doctors, scientists, engineers, financial analysts, and experts on corporate behaviour
  • access to resources, such as research staff, precedents, scientific research and litigation strategy
  • access to non-confidential documentary disclosure, deposition transcripts, written interrogatories, and other evidence from respective proceedings

The Importance of International Coordination

Ultimately, the two counsel groups arrived at an agreement regarding the carriage of the two actions before Hoy J. could release her decision on Medtronic, and before Cullity J. had the opportunity to hear the Guidant motion. Despite the absence of an actual decision, however, it is clear from these two carriage disputes that international relationships are of key importance to the Canadian litigation of global-scale mass torts. International alliances promote the efficient prosecution of products liability actions, which in the end benefits both plaintiffs and defendants.


1 Vitapharm Canada Ltd. v. F. Hoffmann-La Roche Ltd. [2000] O.J. No. 4594 (S.C.J.) at para. 49; Setterington v. Merck Frosst Canada Ltd., [2006] O.J. No. 376 (S.C.J.) at para. 15; Gorecki v. Canada (A.G.), [2004] O.J. No. 1315 (S.C.J.) at para. 11; Genier v. CCI Capital Canada. Ltd., [2005] O.J. No. 1135 (S.C.J.) at para. 2; Ricardo v. Air Transat A.T. Inc., [2002] O.J. No. 1090 (S.C.J.) at para. 21.

2 Vitapharm, supra, at para. 48; Gorecki, supra, at para. 12; Ricardo, supra, at para. 20.

3 As stated in Bendall v. McGhan Medical Corp (1993), 14 O.R. (3d) 734 (Gen. Div.) at para. 41.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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