Law

Canadian courts may be taking a firmer stance against certification in pharmaceutical class actions. The recent decision of the British Columbia Court of Appeal setting aside the certification of a pharmaceutical class action in Charlton v. Abbott Laboratories Ltd. 2015 BCCA26 [Charlton] provides evidence of a growing trend in favour of defendants in prescription drug class actions in Canada. Although the certification test in most Canadian jurisdictions remains a procedural question, it is clear that courts will require plaintiffs to show that causation is capable of being proven on a class-wide basis before giving the green light to a proposed class action.

History of the Proceedings

The Charlton class action against pharmaceutical manufacturers Abbott Laboratories, Ltd. (“Abbott”) and Apotex Inc. (“Apotex”) was commenced on behalf of patients across Canada who had used or purchased the prescription drug sibutramine, alleging that the drug increased the risk of cardiovascular events such as heart attack and stroke. The plaintiffs alleged that the defendants were liable in negligence, waiver of tort and for breaches of Canada’s Competition Act and British Columbia’s Business Practices and Consumer Protection Act.

Originally developed as an anti-depressant, sibutramine was found to suppress appetites in its use for that purpose. Subsequently, Meridia, a weight-loss drug was developed by Abbott and approved for use in Canada in late 2000. In 2009, Abbott’s exclusive right to distribute Meridia ended and Apotex began distributing a generic weight loss drug containing sibutramine under the name Apo-Sibutramine. In 2010, a US medical journal published a study suggesting that sibutramine was associated with an increased risk of serious cardiovascular events for patients with pre-existing heart conditions. Shortly afterwards, the drugs were voluntarily taken off the Canadian market by Abbott and Apotex.

Decision of the BC Supreme Court

At first instance, the BC Supreme Court certified the action as a class proceeding under BC’s Class Proceedings Act. The certification judge noted that his role was not to test the merits of the action, but rather to focus on the form of the action and whether it was appropriately prosecuted as a class action. Applying the low threshold “some basis in fact” test from the Supreme Court’s leading decision in Hollick v. Toronto (City) [2001] 3 S.C.R. 158, 2001 SCC 68, the court certified the proposed class action.

Decision of the BC Court of Appeal

On appeal, the BC Court of Appeal overturned the certification order, finding that the plaintiffs had failed to adduce evidence of a workable methodology to determine the issue of general, class-wide causation – namely, that sibutramine actually increased the risk of cardiovascular events for all class members. Since the only evidence before the court was the study suggesting an increased risk for patients with pre-existing heart conditions, the court found there was no viable methodology for determining causation with respect to the wider class:

This was found to be a necessary element of proof for each of the certified common issues. As such, the question of causation was incapable of resolution based on the evidence at the certification hearing. Accordingly, the Court of Appeal found it was an error for the certification judge to have certified the class action and set aside the certification order.

Implications Going Forward

What can product liability class action defendants take away from this decision? It demonstrates how arguments relating to the merits can be imported into the certification test and used to defeat certification. As Justice Willcock stated: “The question that ought to have been asked at the certification hearing in relation to both types of claims, is not whether the resolution of the general causation question will advance the class claims, but rather, whether there is a reasonable prospect of doing so.”  The failure of plaintiff’s counsel to put forward viable evidence of class-wide causation can be considered a failure to demonstrate causation on a class-wide basis and that a class action is the “preferable procedure.”

Viewed together with the Ontario Divisional Court decision in Martin v. Astrazeneca Pharmaceuticals PLC, 2013 ONSC 1169, the Charlton decision demonstrates a shift to a stricter and more thorough analysis of proposed class action claims.