• The Pharmaceutical Industry Scores a Major Victory: Court of Appeal Refuses to Authorize a Class Action
  • May 15, 2012 | Author: Josée Cavalancia
  • Law Firm: Norton Rose Canada LLP - Montreal Office
  • In a judgment rendered on April 19, 2012,1 the Quebec Court of Appeal sided with the respondents Wyeth Consumer Healthcare Inc.2 and Johnson & Johnson Inc. and confirmed the dismissal of the appellant’s motion for authorization to institute a class action. The appellant, Isabelle Perreault, was seeking to represent parents who had purchased certain over-the-counter cough and cold medicines for children under the age of six. She alleged that the respondents had not provided any warning about the lack of efficacy of the medicines and their potential health risks.


    Context
    In October 2007, the U.S. Food and Drug Administration, Health Canada and the respondents issued public advisories warning of the potential risks related to dosage errors for over-the-counter cough and cold medications intended for children under the age of two. The respondents voluntarily withdrew their products intended for children in this age group. Fourteen months later, in December 2008, Health Canada issued a further advisory, which stated that the medicines should not be given to children under the age of six without a doctor’s recommendation, as there was insufficient substantive evidence of efficacy in this age group. Health Canada also issued new labeling requirements to come into effect in Fall 2009.

    The appellant had purchased Dimetapp and Infants’ Tylenol and had administered them to her 22-month-old twins to alleviate their cold symptoms. Her children did not experience any side effects. After learning about these advisories, she filed a motion with the Superior Court seeking authorization to institute a class against the respondents. The proposed class action claimed reimbursement of the price paid for the medicines, compensation for stress, trouble and inconvenience and punitive and exemplary damages.

    After the Superior Court dismissed her motion, she limited her appeal to reimbursement of the cost of the medicines and punitive damages. The appellant contended that even in the absence of injury, she had sufficient interest under the Consumer Protection Act (CPA) to have the court sanction the use of practices prohibited by the Act and to obtain a remedy for the false and misleading misrepresentations she attributed to the respondents.

    Decision of the Court of Appeal
    The Court acknowledged that, even in the absence of damages arising from a failure by the manufacturer to fulfill an obligation under the CPA, the consumer benefits from a presumption of prejudice. The Court added that, to take advantage of this presumption and claim the remedies provided under Article 272 CPA, the consumer has to prove that there has been a violation of the Act. As the appellant failed to provide such proof, the presumption of prejudice in the CPA could not help her.

    In this case, the allegations in the appellant’s motion did not demonstrate that the products purchased by the appellant were objectively harmful for the health of children under six years old when used as directed, or that the respondents had made false or misleading representations or had neglected to diligently disclose an important fact concerning the safety of their products. The appellant therefore did not establish prima facie that the respondents had failed in fulfilling their obligations under the CPA.

    As concerns punitive damages, the Court reaffirmed the principle that a mere violation of an obligation imposed by the CPA does not give rise to the automatic application of the right to punitive damages3 and that the judge must consider the whole of the merchant’s conduct to determine whether the merchant displayed significant carelessness towards the consumer. In this case, the respondents’ attitude showed the opposite to be true.

    The Court also held that the appellant had acted far too hastily in commencing her action and was, therefore, not a proper representative plaintiff (Article 1003 (d) C.C.P.).

    In conclusion, it is interesting to note that the Court drew on the rule of proportionality to point out that the respondent Wyeth had implemented a program to voluntarily refund the purchase price of its products to consumers and that the appellant should have seriously considered the possibility of using this amicable compensation method before undertaking a legal remedy to arrive at the same ends. 

    This is the second Quebec Court of Appeal decision4 dismissing a pharmaceutical class action in Quebec.

    Footnotes
    1 Perreault v McNeil PDI Inc., 2012 QCCA 713.

    2 Norton Rose Canada LLP acted as counsel for the respondent Wyeth Consumer Healthcare Inc.

    3 Citing on this matter the recent Supreme Court decision in Richard v Time Inc., 2012 SCC 8.

    4 The other being Goyette c Glaxosmithkline Inc., 2010 QCCA 2054.