Court of Appeal upholds certification denial and dismissal of drug recall class action

The Court of Appeal for Ontario released its decision yesterday in Palmer v. Teva Canada Limited, affirming the denial of certification and dismissal of a proposed class action arising from the 2018 and 2019 recall of pharmaceutical products containing valsartan.

Background

The plaintiffs sought certification of an action seeking damages for the alleged increased risk of being diagnosed with cancer in the future as a result of exposure to impurities detected in certain products containing valsartan. Notably, however, the proposed class action did not seek compensation for consumers who have been or may be diagnosed with cancer.

The plaintiffs also sought damages for costs of medical services and monitoring, refunds for the drugs consumed, and costs for the drugs thrown away after the drugs were recalled.

The claim also sought damages for psychological injury due to the shock of the recall.

Court of Appeal affirms denial of certification

The Court of Appeal confirmed there is no liability for negligence “in the air” and no right to be free from the prospect of damage, concluding that “under s. 5(1)(a) of the Class Proceedings Act, 1992, there can be no viable cause of action in negligence without actual damage.” The Court found that, in this case, the claimed bodily injuries had not materialized and may never materialize.

On psychological injury, the Court of Appeal found that the plaintiffs failed to plead the material facts needed to support damages recoverable in tort. The Court stated that “the right to protection against psychiatric illness is limited and does not extend to an illness which would be suffered only by an unusually vulnerable person.” In addition, the Court of Appeal found it was apparent that the assessment of psychological damages in this case would require proof of the harm suffered by the individual class members because the claims are “inherently individual in nature and idiosyncratic”.

The Court of Appeal found the certification judge did not err in dismissing and declining to certify the plaintiffs’ remaining claims, including for pure economic loss.

Although the Court of Appeal disposed of the appeal by finding the certification judge did not err in dismissing the action under the s. 5(1)(a) cause of action criterion, the Court also confirmed that the certification judge correctly applied the “some basis in fact” principles for the common issues criterion under s. 5(1)(c), and committed no error in finding that the plaintiffs had failed to satisfy the common issues criterion.

The authors represented Teva Canada Limited in this action.