Significant Class Action Win for the Pharmaceutical Industry in Quebec

On Aug. 17, 2009, in Goyette v GlaxoSmithKline, Inc., Justice Mark G. Peacock of the Quebec Superior Court ruled in favor of the respondent GlaxoSmithKline Inc (GSK), dismissing a motion for authorization to institute a class action made by the petitioner on behalf of all persons residing in Canada who allegedly experienced dependency and withdrawal problems as a result of using the antidepressant marketed under the name Paxil.

The petitioner contended that GSK had:

• Introduced Paxil on the market without ensuring its safety;
• Failed to inform health professionals, physicians and consumers of the risks associated with discontinuing this medication; and
• Misrepresented the facts in regard thereto.

Accordingly, she claimed compensation on behalf of the members for physical, economic and moral damages suffered, and claimed punitive damages as well. The court refused to allow a class action to be brought, on the basis that the three tests set out in paragraphs (a), (b) and (d) of Article 1003 of the Code of Civil Procedure had not been met.

Facts

Notably, the motion for authorization had been made before the Code of Civil Procedure was amended in 2003, when appropriate evidence could still be filed without the court's leave. In support of its contestation, GSK was able to present evidence to the court with respect to applying the tests in Article 1003 of the Code of Civil Procedure, by way of cross-examinations of the petitioner on her affidavit and the affidavit of an expert establishing, inter alia, that an individual examination of each member of the proposed group would be required before concluding that the alleged symptoms were related to discontinuation of Paxil.

Among other things, the examinations revealed that the petitioner had agreed to take Paxil after consulting her doctor, with whom she had read the entry in the Compendium of Pharmaceutical Specialties and who had confirmed to her that there would be no risks associated with discontinuing treatment with the drug. Listed in the compendium under possible adverse effects were a range of symptoms, described as mild and transient; and under possible adverse effects, withdrawal syndrome and drug dependence were described as rare. The petitioner alleged that she had experienced severe symptoms after discontinuing treatment with Paxil. Petitioner maintained that other individuals had experienced similar symptoms, based on certain U.S. and UK news reports, articles and a list of individuals who had signed up on her attorney's Web site.

Decision

Article 1003(A) ' Identical, Similar or Related Questions

The court began by recalling the obligation that Quebec law imposes on a pharmaceutical manufacturer to inform consumers of the risks associated with a medication that it sells. The court acknowledged that the manufacturer meets this obligation by disclosing the risks to a competent intermediary, according to the recognized legal principle known as the “learned intermediary rule.” The court noted that one means by which a pharmaceutical manufacturer can provide adequate information to treating physicians about the risks associated with prescribing a medication is to disclose these risks in the Compendium of Pharmaceutical Specialties, on which the petitioner's motion for authorization was based.

In connection with the analysis of the test set out in Article 1003(a), the court lays down a first important principle. Contrary to previous rulings in pharmaceutical cases, the court established that in Quebec, the question of whether punitive damages should be awarded under the Consumer Protection Act for failure to inform cannot constitute a common question since it requires an individual analysis. Only when the members of the prospective group have proven physical, psychological, economic and moral damages on the basis of individual hearings and the amounts of those damages have been decided individually can the court consider what, if any, amount should be awarded as punitive damages, based on the criteria set out in Article 1621 of the Civil Code of Qu'bec (C.C.Q.). Article 1621 C.C.Q. requires the court to assess punitive damages in light of all appropriate circumstances, including, in particular, the extent of the reparation for which the debtor is already liable to the creditor.

The court also adopted a second important principle, acknowledged by the Quebec Court of Appeal in Voisins du train de banlieue de Blainvile Inc v Agence m'tropolitaine de transport, 2007 QCCA 236, requiring that a collective prejudice be established in order for the test in Article 1003(a) of the Civil Code of Procedure to be met. In the case at hand, the court found that establishing collective prejudice was not possible since the alleged symptoms (e.g., headaches, dizziness, vertigo and insomnia) were susceptible to infinite variations in their subjective nature, duration and intensity. The court made a distinction with cases involving defective products. It concluded that, contrary to the case under consideration, in cases involving defective products, a definite number of difficulties are experienced by the user.

Finally, the court acknowledged that civil liability on the part of GSK could not be established without assessing the specific risks disclosed to each individual patient, which vary depending on multiple factors, including:

• The nature of symptoms suffered by the members and whether they were disclosed in the Compendium of Pharmaceutical Specialties;
• The information received from the treating physician or the pharmacist; and
• The causal link between the alleged symptoms and the discontinuation of treatment with Paxil.

The court went on to accept the expert opinion that an individual medical examination of each member would be required in order to establish a causal link between the alleged symptoms and the discontinuation of treatment with Paxil. The court noted that the mere fact that symptoms were alleged to have been experienced immediately after treatment was discontinued or reduced could not, in itself, serve to establish such a causal link without considering other factors described in the expert affidavit which might have caused those symptoms.

Under the circumstances, the court decided that there was no real common question applicable to all the members of the proposed group.

Thus, this case marks the first time in Quebec where the court refused to allow a class action in a matter involving a pharmaceutical product because the test of Article 1003(a) of the Civil Code of Procedure had not been met. The court based its decision on the fact that an individual examination of each member would be required in order to establish liability on the part of the manufacturer. Unlike certain prior decisions which appear to have skirted around the necessity of establishing a causal link between the fault and the prejudice alleged, in this case, the court specifically stated that causality was an essential factor in determining liability. In the court's opinion, judicial economy would not be served by allowing an action to proceed that would require an individual trial on the merits for each member in order to establish civil liability on the part of the manufacturer (based on fault, prejudice and a causal link). The court's opinion creates an important precedent as the argument raised to contest authorization based on the necessity of conducting numerous mini-trials has until now been dismissed by the Quebec courts.

Article 1003(B) ' The Facts Do Not Seem to Justify the Conclusions Sought

Although at the authorization stage the court recognized that the petitioner merely has a burden of serious demonstration, it nevertheless concluded that the facts alleged were insufficient, even if considered as proven, to justify a cause of action for the petitioner and for those she sought to represent.

In the court's view, the petitioner did not have a case against GSK based on failure to disclose the risks associated with discontinuing treatment with Paxil, since the symptoms allegedly suffered by the petitioner were disclosed in the Compendium of Pharmaceutical Specialties. The court also based its conclusion on the petitioner's admission that her treating physician had confirmed to her that the symptoms she was reportedly experiencing were not linked to the discontinuation of treatment with Paxil. Finally, the court noted that, unlike other cases that have involved pharmaceutical products, the petitioner had failed to file an expert report establishing that the symptoms were caused by the discontinuation of treatment with Paxil.

The court reiterated the recognized principle that facts considered as proven at the authorization stage do not include impressions, opinions, legal arguments, inferences or hypotheses that have not been verified.

As for the appearance of a right of action in regard to the other members of the group, the court noted the petitioner's failure to allege sufficient factual evidence purporting to support her claim that other members of the group had suffered symptoms related to the discontinuation of treatment with Paxil. Indeed, the petitioner based her proceedings solely on Internet articles and on news reports originating from sources in the U.S. or UK, as well as from a list of individuals who signed up on her attorney's Web site. The court found that her attorney's Web site did not in and of itself constitute evidence, without an explanation of the context thereof. Even taking the foreign references as proven would not suffice to establish GSK's civil liability towards members in Canada for failure to disclose risks associated with the discontinuation of treatment with Paxil in the Compendium of Pharmaceutical Specialties in Canada.

Article 1003(D) ' The Petitioner Was Not an Adequate Representative

In light of the evidence presented, the court found that the petitioner was not an adequate representative for the following reasons:

• She did not have an individual cause of action against GSK;
• She showed a singular lack of interest in the class action that she was seeking to have authorized, in that she had never spoken to any members of the group, did not know any members of the group and had never tried to contact any of the individuals who allegedly signed up on her attorney's Web site; and
• She was unable to explain why the proceedings had remained dormant for five years.

National Class

Given the court's conclusions described above, and even though it was not obliged to rule on the question of a national class, the court nevertheless went on to find that the criteria set out in Article 3148 of the Civil Code of Qu'bec, which are necessary to justify a national class, were not met. Indeed, the petitioner admitted to not knowing whether GSK had any business activities in Quebec, whether the Paxil sold in Canada was manufactured or distributed in Quebec, or whether the monograph for it was printed in Quebec. The court referred to the recent Quebec Court of Appeal decision in Interinvest (Bermuda) Ltd v Herzog, 2009 QCCA 1428, where it was established that the business activities implicated in the dispute must be connected to the respondent's place of business in Quebec in order for the Quebec courts to assume jurisdiction in regard to every Canadian resident. Accordingly, the petitioner could only seek to represent members residing in Quebec, since they alone could demonstrate that they had suffered damages in Quebec, in conformity with one of the criteria set out in Article 3148 of the Civil Code of Qu'bec.

Comments

This is the first Quebec case in which the court has refused to authorize a class action involving a pharmaceutical product on the basis that an individualized assessment of each member of the proposed group would be required in order to establish liability. It acknowledges that the class action is a procedural vehicle that should be authorized only where all the elements giving rise to civil liability can be established on a collective basis ' namely fault, prejudice and a causal link. In addition, it underscores the fact that while hearsay evidence may be admissible in connection with the test set out in Article 1003(b) of the Civil Code of Procedure, the petitioner will nevertheless have to demonstrate a serious appearance of right. Finally, contrary to certain decisions that appear to suggest that the test in respect of representative status contained in Article 1003(d) of the Civil Code of Procedure can easily be met, this decision advocates a more restrictive and rigorous approach to that test.

Marianne Ignacz's practice focuses on commercial, corporate and civil litigation, class actions, product liability and professional liability. She has also been involved in numerous complex international class action cases under the AAA and the ICC Rules of Arbitration. She can be contacted at Ogilvy Renault LLP, 514-847-4747 or [email protected]. Anne-Louise Lamarre conducts research and analyzes and drafts opinions, arguments, contracts and factums for civil litigation, class actions, product liability and professional liability and commercial transactions. She advises and acts on behalf of clients in all areas of civil and commercial law. Phone: 514-847-4482. E-mail: [email protected].

On Aug. 17, 2009, in Goyette v GlaxoSmithKline, Inc., Justice Mark G. Peacock of the Quebec Superior Court ruled in favor of the respondent GlaxoSmithKline Inc (GSK), dismissing a motion for authorization to institute a class action made by the petitioner on behalf of all persons residing in Canada who allegedly experienced dependency and withdrawal problems as a result of using the antidepressant marketed under the name Paxil.

The petitioner contended that GSK had:

• Introduced Paxil on the market without ensuring its safety;
• Failed to inform health professionals, physicians and consumers of the risks associated with discontinuing this medication; and
• Misrepresented the facts in regard thereto.

Accordingly, she claimed compensation on behalf of the members for physical, economic and moral damages suffered, and claimed punitive damages as well. The court refused to allow a class action to be brought, on the basis that the three tests set out in paragraphs (a), (b) and (d) of Article 1003 of the Code of Civil Procedure had not been met.

Facts

Notably, the motion for authorization had been made before the Code of Civil Procedure was amended in 2003, when appropriate evidence could still be filed without the court's leave. In support of its contestation, GSK was able to present evidence to the court with respect to applying the tests in Article 1003 of the Code of Civil Procedure, by way of cross-examinations of the petitioner on her affidavit and the affidavit of an expert establishing, inter alia, that an individual examination of each member of the proposed group would be required before concluding that the alleged symptoms were related to discontinuation of Paxil.

Among other things, the examinations revealed that the petitioner had agreed to take Paxil after consulting her doctor, with whom she had read the entry in the Compendium of Pharmaceutical Specialties and who had confirmed to her that there would be no risks associated with discontinuing treatment with the drug. Listed in the compendium under possible adverse effects were a range of symptoms, described as mild and transient; and under possible adverse effects, withdrawal syndrome and drug dependence were described as rare. The petitioner alleged that she had experienced severe symptoms after discontinuing treatment with Paxil. Petitioner maintained that other individuals had experienced similar symptoms, based on certain U.S. and UK news reports, articles and a list of individuals who had signed up on her attorney's Web site.

Decision

Article 1003(A) ' Identical, Similar or Related Questions

The court began by recalling the obligation that Quebec law imposes on a pharmaceutical manufacturer to inform consumers of the risks associated with a medication that it sells. The court acknowledged that the manufacturer meets this obligation by disclosing the risks to a competent intermediary, according to the recognized legal principle known as the “learned intermediary rule.” The court noted that one means by which a pharmaceutical manufacturer can provide adequate information to treating physicians about the risks associated with prescribing a medication is to disclose these risks in the Compendium of Pharmaceutical Specialties, on which the petitioner's motion for authorization was based.

In connection with the analysis of the test set out in Article 1003(a), the court lays down a first important principle. Contrary to previous rulings in pharmaceutical cases, the court established that in Quebec, the question of whether punitive damages should be awarded under the Consumer Protection Act for failure to inform cannot constitute a common question since it requires an individual analysis. Only when the members of the prospective group have proven physical, psychological, economic and moral damages on the basis of individual hearings and the amounts of those damages have been decided individually can the court consider what, if any, amount should be awarded as punitive damages, based on the criteria set out in Article 1621 of the Civil Code of Qu'bec (C.C.Q.). Article 1621 C.C.Q. requires the court to assess punitive damages in light of all appropriate circumstances, including, in particular, the extent of the reparation for which the debtor is already liable to the creditor.

The court also adopted a second important principle, acknowledged by the Quebec Court of Appeal in Voisins du train de banlieue de Blainvile Inc v Agence m'tropolitaine de transport, 2007 QCCA 236, requiring that a collective prejudice be established in order for the test in Article 1003(a) of the Civil Code of Procedure to be met. In the case at hand, the court found that establishing collective prejudice was not possible since the alleged symptoms (e.g., headaches, dizziness, vertigo and insomnia) were susceptible to infinite variations in their subjective nature, duration and intensity. The court made a distinction with cases involving defective products. It concluded that, contrary to the case under consideration, in cases involving defective products, a definite number of difficulties are experienced by the user.

Finally, the court acknowledged that civil liability on the part of GSK could not be established without assessing the specific risks disclosed to each individual patient, which vary depending on multiple factors, including:

• The nature of symptoms suffered by the members and whether they were disclosed in the Compendium of Pharmaceutical Specialties;
• The information received from the treating physician or the pharmacist; and
• The causal link between the alleged symptoms and the discontinuation of treatment with Paxil.

The court went on to accept the expert opinion that an individual medical examination of each member would be required in order to establish a causal link between the alleged symptoms and the discontinuation of treatment with Paxil. The court noted that the mere fact that symptoms were alleged to have been experienced immediately after treatment was discontinued or reduced could not, in itself, serve to establish such a causal link without considering other factors described in the expert affidavit which might have caused those symptoms.

Under the circumstances, the court decided that there was no real common question applicable to all the members of the proposed group.

Thus, this case marks the first time in Quebec where the court refused to allow a class action in a matter involving a pharmaceutical product because the test of Article 1003(a) of the Civil Code of Procedure had not been met. The court based its decision on the fact that an individual examination of each member would be required in order to establish liability on the part of the manufacturer. Unlike certain prior decisions which appear to have skirted around the necessity of establishing a causal link between the fault and the prejudice alleged, in this case, the court specifically stated that causality was an essential factor in determining liability. In the court's opinion, judicial economy would not be served by allowing an action to proceed that would require an individual trial on the merits for each member in order to establish civil liability on the part of the manufacturer (based on fault, prejudice and a causal link). The court's opinion creates an important precedent as the argument raised to contest authorization based on the necessity of conducting numerous mini-trials has until now been dismissed by the Quebec courts.

Article 1003(B) ' The Facts Do Not Seem to Justify the Conclusions Sought

Although at the authorization stage the court recognized that the petitioner merely has a burden of serious demonstration, it nevertheless concluded that the facts alleged were insufficient, even if considered as proven, to justify a cause of action for the petitioner and for those she sought to represent.

In the court's view, the petitioner did not have a case against GSK based on failure to disclose the risks associated with discontinuing treatment with Paxil, since the symptoms allegedly suffered by the petitioner were disclosed in the Compendium of Pharmaceutical Specialties. The court also based its conclusion on the petitioner's admission that her treating physician had confirmed to her that the symptoms she was reportedly experiencing were not linked to the discontinuation of treatment with Paxil. Finally, the court noted that, unlike other cases that have involved pharmaceutical products, the petitioner had failed to file an expert report establishing that the symptoms were caused by the discontinuation of treatment with Paxil.

The court reiterated the recognized principle that facts considered as proven at the authorization stage do not include impressions, opinions, legal arguments, inferences or hypotheses that have not been verified.

As for the appearance of a right of action in regard to the other members of the group, the court noted the petitioner's failure to allege sufficient factual evidence purporting to support her claim that other members of the group had suffered symptoms related to the discontinuation of treatment with Paxil. Indeed, the petitioner based her proceedings solely on Internet articles and on news reports originating from sources in the U.S. or UK, as well as from a list of individuals who signed up on her attorney's Web site. The court found that her attorney's Web site did not in and of itself constitute evidence, without an explanation of the context thereof. Even taking the foreign references as proven would not suffice to establish GSK's civil liability towards members in Canada for failure to disclose risks associated with the discontinuation of treatment with Paxil in the Compendium of Pharmaceutical Specialties in Canada.

Article 1003(D) ' The Petitioner Was Not an Adequate Representative

In light of the evidence presented, the court found that the petitioner was not an adequate representative for the following reasons:

• She did not have an individual cause of action against GSK;
• She showed a singular lack of interest in the class action that she was seeking to have authorized, in that she had never spoken to any members of the group, did not know any members of the group and had never tried to contact any of the individuals who allegedly signed up on her attorney's Web site; and
• She was unable to explain why the proceedings had remained dormant for five years.

National Class

Given the court's conclusions described above, and even though it was not obliged to rule on the question of a national class, the court nevertheless went on to find that the criteria set out in Article 3148 of the Civil Code of Qu'bec, which are necessary to justify a national class, were not met. Indeed, the petitioner admitted to not knowing whether GSK had any business activities in Quebec, whether the Paxil sold in Canada was manufactured or distributed in Quebec, or whether the monograph for it was printed in Quebec. The court referred to the recent Quebec Court of Appeal decision in Interinvest (Bermuda) Ltd v Herzog, 2009 QCCA 1428, where it was established that the business activities implicated in the dispute must be connected to the respondent's place of business in Quebec in order for the Quebec courts to assume jurisdiction in regard to every Canadian resident. Accordingly, the petitioner could only seek to represent members residing in Quebec, since they alone could demonstrate that they had suffered damages in Quebec, in conformity with one of the criteria set out in Article 3148 of the Civil Code of Qu'bec.

Comments

This is the first Quebec case in which the court has refused to authorize a class action involving a pharmaceutical product on the basis that an individualized assessment of each member of the proposed group would be required in order to establish liability. It acknowledges that the class action is a procedural vehicle that should be authorized only where all the elements giving rise to civil liability can be established on a collective basis ' namely fault, prejudice and a causal link. In addition, it underscores the fact that while hearsay evidence may be admissible in connection with the test set out in Article 1003(b) of the Civil Code of Procedure, the petitioner will nevertheless have to demonstrate a serious appearance of right. Finally, contrary to certain decisions that appear to suggest that the test in respect of representative status contained in Article 1003(d) of the Civil Code of Procedure can easily be met, this decision advocates a more restrictive and rigorous approach to that test.

Marianne Ignacz's practice focuses on commercial, corporate and civil litigation, class actions, product liability and professional liability. She has also been involved in numerous complex international class action cases under the AAA and the ICC Rules of Arbitration. She can be contacted at Ogilvy Renault LLP, 514-847-4747 or [email protected]. Anne-Louise Lamarre conducts research and analyzes and drafts opinions, arguments, contracts and factums for civil litigation, class actions, product liability and professional liability and commercial transactions. She advises and acts on behalf of clients in all areas of civil and commercial law. Phone: 514-847-4482. E-mail: [email protected].