Product Liability e-COMMUNIQUÉ - November 2014

Pruning the Weeds in Class Action Proceedings

By Emily Larose, Stephanie Voudouris

In its 2014 decision in Player v Janssen-Ortho Inc.1 the British Columbia Supreme Court dismissed a class action claim against two pharmaceutical manufacturer defendants in a pre-certification summary trial. Resolution of substantive issues prior to certification is out of the ordinary in proposed class actions in Canada, especially in light of jurisprudence suggesting judicial reluctance to tackle complex matters at that early stage. Decisions such as this may signal a growing willingness on the part of Canadian courts to address substantive as well as procedural issues at this early stage.

The Case

The action alleged, among other things, that prescription painkillers (transdermal fentanyl patches) manufactured, marketed and distributed by five drug companies were defectively designed and caused serious harm in ordinary use.

Prior to the certification hearing, two of the defendants (Teva Canada Limited and Sandoz Canada Incorporated) brought applications for a summary trial to dismiss the action against them. Teva and Sandoz argued that the Plaintiffs' claim was over inclusive because they manufactured different types of transdermal fentanyl patches.

The Plaintiffs argued that a summary trial was inappropriate because the class action had not yet been certified. Since the decision would only be binding on the Plaintiffs, other members of the proposed class could pursue the claim thus leading to the kind of duplicate proceedings that class proceedings statutes were enacted to avoid. The Plaintiffs argued that it would be more appropriate and efficient to certify the class and then hear the summary trial so that any decision would be binding on the proposed class as a whole.

The Decision

The Court ruled that a summary trial was appropriate and dismissed the case against both Teva and Sandoz.

While there is precedent in British Columbia of judgment being granted in pre-certification summary trials, previous such cases concerned questions of contract or statutory interpretation. By contrast, Jansen-Ortho Inc. involved many disputed facts, especially those put forward by experts, and a voluminous evidentiary record.

The Court emphasized that the purpose of the summary trial is to expedite the early resolution of cases by allowing parties to put in evidence via affidavits, rather than oral testimony. The court must consider a number of factors to determine whether a summary trial is appropriate. These factors include: the complexity of the matter, the urgency of the matter, the cost of litigation, and whether credibility is a critical factor in the determination of the dispute.

In determining that this case was appropriate for summary trial, the Court noted that:

The parties had completed witness examinations and cross-examinations; Although the materials filed were extensive (in excess of 5000 pages), the issues were straightforward; Access to justice concerns expressed by the Supreme Court of Canada indicate that judges should interpret summary trial rules broadly so as to encourage the streamlining of trial proceedings and the recognition that access to justice does not necessarily mean relying on the conventional trial as a means to resolve disputes. A fourth consideration may also have influenced the Court's decision, although it was not explicitly mentioned: the plaintiffs could still pursue their claims against the three remaining defendants.

It is important to note the Court's express recognition of the practical benefits of pre-certification summary trials. The Court acknowledged that a decision to dismiss the action in a summary trial can only bind the plaintiffs. It also noted, however, that where issues concern the liability of the defendant(s), the dismissal can serve as a catalyst for settlement between other members of the proposed class and the defendant(s), or as an incentive to narrow the issues to be tried. In this regard, the Court says:

Class actions are a powerful tool. They allow an action to proceed where an individual plaintiff would find the cost of an action prohibitive as well as in actions where the research and investigation is not within the ability of a single plaintiff. However, it is not a tool where simply making an allegation against a defendant or group of defendants is sufficient. There must be evidence to warrant the expense of a full trial (para. 207).

Evidence at a Pre-Certification Summary Trial

In most Canadian provinces, including Ontario, a pre-certification class proceeding is treated as an individual action. In the class action context, the Court ruled that evidence from members of the putative class is nonetheless admissible but only for the purpose of determining whether it would be unjust to decide the issues in the application through a summary trial. If evidence from the plaintiffs is not enough to justify a finding of liability, the plaintiffs can point to evidence from proposed class members to show the court why it would be inappropriate to allow the case to proceed via summary trial (i.e., the issues are too complex).

Key Take Away Principle

The Court's decision may signify a trend whereby courts will begin to address complex substantive issues during the preliminary stages of class action proceedings, thus requiring both plaintiffs and defendants to put their best case forward at an early stage. His reasons suggest that pre-certification summary trials may function as gate-keepers for superfluous class actions. In this regard, he expressed the view that "it is not a principle of class action law that weeds should be allowed to ripen and grow, instead of being nipped in the bud."

Footnote

1. 2014 BCSC 1122 (Janssen-Ortho Inc.)

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