Canada: Ontario Court Dismisses Canada's First Product Liability Class Action Trial

On June 26, 2012, Justice Lax of the Ontario Superior Court of Justice released her decision in Andersen v St. Jude. It is the first ever trial decision in a product liability class action in Canada.¹

The Andersen case arose after St. Jude, a medical device manufacturer, recalled certain heart valves that had a proprietary "Silzone" coating in early 2000, after a clinical study revealed a small but statistically significant risk of medical complications. A proposed class action against St. Jude was commenced in 2001 with the plaintiffs alleging that St. Jude had been negligent in the design of the Silzone valve, had rushed the device to the market and had failed to recall it promptly when the alleged problems arose. In 2003, the action was certified as a class proceeding by the Ontario Superior Court. The certified common issues included issues relating to the defendants' conduct in the design, manufacture, marketing and recall of the Silzone valve, the medical impact of the Silzone coating and the available legal remedies.

The subsequent common issues trial was the longest, and arguably most complex, class action trial in Canada to date. The court was in session for 146 days over the course of 18 months and heard testimony from 40 witnesses, including 23 experts. In a 206-page decision, Justice Lax found that St. Jude was not liable on any of the plaintiffs' claims, ruling that the company exercised reasonable care in the design, testing and monitoring of the Silzone valve, in its warnings of the risks inherent in the valves' use and in the eventual recall of the device. Justice Lax also held that the plaintiffs had failed to demonstrate that the coating on the heart valve impaired healing or caused tissue damage as alleged or that it materially increased the risk of the alleged adverse health effects (with one narrow exception).

Key common issues considered

As the first product liability class action trial decision, Andersen represents the first comprehensive treatment of many of the common issues typically certified in these cases; most notably, those common issues relating to the manufacturer's "duty of care" and "duty to warn", "general causation" (whether the product can cause the adverse health effects), and whether the product creates a "material risk" of such adverse health effects. Justice Lax relied extensively on the expert evidence in her determination on each of the common issues. Her detailed analysis includes significant discussion on the relative reliability of the different types of medical and epidemiological testing and data. Noteworthy highlights of the decision include:

• On the appropriate standard of care, Justice Lax relied not only on the experts but also on the approval of the Silzone valve by U.S. and Canadian regulators as evidence that the design and testing of the valve met industry and regulatory standards.
• Justice Lax rejected the plaintiffs' submission that based on the "robust and pragmatic" approach she could still make an inference of causation in the absence of reliable scientific evidence. She held that the cases relied on by the plaintiff² in this regard had no application to the case before her, in which considerable expert evidence had been adduced that was contrary to any inference of causation.
• Justice Lax found that the plaintiffs' expert evidence on causation and risk was less persuasive based, in part, on the fact that much of it was based on in vitro as opposed to in vivo studies, or on non-randomized studies.
• Using simple math and the application of the "but for" test and the balance of probabilities standard of proof, Justice Lax concluded that a product creates a "material" risk of an adverse effect if that risk is at least two times the risk of the adverse effect occurring absent such use. However, Justice Lax went on to explain that a determination of material risk as a common issue is not determinative of individual causation. Instead, for the purpose of individual class member claims, the court's finding in relation to the material risk common issue merely creates a presumption of causation (or no causation) that can still be rebutted on the evidence in a subsequent individual trial.

Waiver of tort debate remains unresolved

Andersen is also the first class action to go to trial that included a claim in waiver of tort, whereby a plaintiff waives the right to damages in tort and instead claims a disgorgement of the defendant's gains resulting from its alleged wrongful conduct. As Justice Lax acknowledged, there had been considerable anticipation that her ruling would resolve an ongoing debate as to whether liability in waiver of tort requires proof of harm to the plaintiffs or class members. However, given Justice Lax's finding that St. Jude had not engaged in any wrongful conduct, the plaintiffs had failed to make out a claim in waiver of tort regardless of whether they were required to prove harm. Accordingly, Justice Lax refused to engage in the debate as any such analysis would be merely "academic". Instead, Justice Lax commented on the appropriate timing and venue for the resolution of the waiver of tort debate. Justice Lax "respectfully disagreed" with the prior cases (including appellate authority) that found a full factual record was necessary to resolve issues of waiver of tort. Justice Lax opined that based on her experience in the Andersen trial, the resolution of the waiver of tort debate "is not dependant on a trial with a full factual record and may require no evidence at all."

Notwithstanding the failure to resolve the waiver of tort debate, Andersen is an important decision in the development of Canadian class action jurisprudence. It will serve as a benchmark for the conduct of future product liability class action trials and, as such, will undoubtedly have an impact on how these cases are framed and argued both in the pleadings and at the certification stage.

Footnotes

1. This excludes the trial decision in Denis v Bertrand & Frère Construction Co., [2008] O.J. No. 1284, as it was a product liability class action certified solely on the issue of damages, the parties having agreed on liability in advance.

2. Snell v Farrell, [1990] 2 SCR 311; Athey v Leonati, [1996] 3 SCR 458.

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