Class action litigants have long been awaiting a trial decision that would tackle the controversial doctrine of waiver of tort.
At the certification stage of proposed class proceedings, plaintiffs have been asserting waiver of tort alongside negligence and other tort claims, arguing that the waiver of tort doctrine should allow the court to order defendants to account for and disgorge the profits gained from the impugned conduct if a finding of negligence is made. This would effectively eliminate the traditional need for claimants to prove injury or loss in order to obtain an order for payment of damages. Most judges have punted the tough questions regarding waiver of tort to trial, on the theory that a full factual record was needed to decide them.
On June 26, 2012, Justice Lax of the Ontario Superior Court of Justice issued the decision in Andersen v. St. Jude Medical.1 Having found for the defendants, Justice Lax declined to decide this policy issue and expressly noted that the full factual record in this long common issues trial was not helpful in deciding the issue. It is hoped that this guidance will lead quickly to much-needed clarity in this important area. The case is also noteworthy for the approach taken in several other important aspects of class action product liability cases.
Andersen involved a claim against a global manufacturer of mechanical prosthetic heart valves. At its core, this was a negligence claim, focusing on whether there had been a breach of duty causing injury. Following 138 days of trial evidence and several months of legal arguments, Justice Lax dismissed the plaintiffs’ claim in its entirety. The lengthy, thoughtful decision provides guidance on the role of scientific experts, epidemiological studies, and proof of causation through scientific expert evidence, in addition to tackling the doctrine of waiver of tort.
At issue was a prosthetic heart valve with a cuff coated with a proprietary mixture called “Silzone.” The Silzone valve was designed to directly reduce the incidence of post-operative infection by inhibiting the growth of bacteria. The plaintiffs alleged that Silzone interfered with tissue healing and impaired the body’s ability to incorporate the device into the heart properly, leading to serious medical complications.
In January 2000, St. Jude voluntarily recalled all Silzone-coated products after its own ongoing randomized clinical trial, AVERT, revealed a small but statistically significant increase in a medical complication.
Approach to Expert Evidence
A key issue in the case was the reliability of the scientific experts. Justice Lax assessed the extensive expert evidence on the basis of a generally accepted hierarchy within the scientific literature of epidemiological studies that help investigate causal relationships.2 The defendants’ experts relied primarily on data from the AVERT study, a randomized clinical trial considered to be at the top of the hierarchy. The plaintiffs’ experts relied on data from cohort studies, case studies, and case reports, which were not as robust and thus lower in the hierarchy.
Breach of Standard of Care
The plaintiffs alleged that St. Jude’s testing of Silzone was inadequate and that Silzone was rushed onto the market. The parties agreed that, in determining whether Silzone should be made available to the market, St. Jude was required to perform a risk utility assessment. This assessment requires the manufacturer to weigh both the gravity and likelihood of the reasonably foreseeable risks posed by the product, relative to the potential extent of its utility and the likelihood that the potential utility could be realized.3
Justice Lax found no evidence that Silzone was rushed onto the market at the expense of completing appropriate product evaluation, despite the plaintiffs’ assertions that St. Jude prioritized profits over product safety. She noted that, while it would be naïve to think the company was unconcerned by profit, this does not mean St. Jude fell below the standard of care.4
Justice Lax concluded that there was a demand for an antimicrobial heart valve and St. Jude had appropriately tested and weighed the potential utility of Silzone with its risks. She found that the plaintiffs had not shown that additional tests were possible or would have affected the risk utility assessment.
The Court also considered whether St. Jude effectively monitored the Silzone products so as to issue warnings and/or recall the product within a reasonable timeframe. Significantly, St. Jude had already warned of the adverse events alleged by the plaintiffs in its labeling and physicians’ manual. Justice Lax found that St. Jude met its standard of care by investigating concerns, sending out a “Dear Doctor” letter, and maintaining an open dialogue with Health Canada and the FDA. When the AVERT study began to yield data that raised concerns, St. Jude ended enrolment in AVERT and issued a recall of Silzone products. Prior to this time, the available information did not indicate an additional risk that would have reasonably required an updated warning or some other action.
Justice Lax’s findings on causation, specifically, whether Silzone materially contributed to medical complications, were made largely on the expert evidence. Justice Lax decided that the scientific literature supported the conclusion that Silzone does not materially increase the risk of medical complications.
To determine materiality, Justice Lax would have applied a risk ratio of 2.0, meaning the probability of developing a medical complication was double when Silzone patients were compared with non-Silzone patients. In effect, if the epidemiological evidence demonstrated a risk ratio above 2.0, this would presumptively determine causation on a balance of probabilities, absent evidence presented by the defendant to rebut the presumption; a risk ratio below 2.0 would presumptively disprove causation, absent individualized evidence presented by a class member to rebut the presumption.5 This serves as useful guidance on available approaches to determining causation in a class action context, as more class actions begin to proceed to trials on the merits.
Waiver of Tort
Allowing claims based on waiver of tort essentially eliminates the plaintiff’s need to prove loss, so long as the plaintiff proves that the defendant engaged in some wrongdoing. Deciding on the types of wrongdoing to which it should apply engages policy concerns about the role of tort law as a compensatory mechanism. At trial, Professor Michael Trebilcock put forward the opinion that the waiver of tort doctrine would create a “super-compensatory” regime whereby plaintiffs could be overcompensated if the defendant’s gain from its wrongful conduct exceeded the damages suffered by the plaintiffs. He testified that this was undesirable because it would destabilize the deterrence and insurance functions of tort law and could deter socially productive activities.6
Justice Lax found no wrongdoing by St. Jude and therefore did not need to consider liability under the waiver of tort doctrine. She stated, however, that her experience from the trial indicated that a full factual record was not required in order to resolve the waiver of tort debate, and indeed may not require evidence at all – ultimately, it is a policy decision that hopefully will be made in the near future.
The Andersen decision is one more milestone in Canadian class proceedings and represents a further maturation of the class action regime under the Class Proceedings Act, 1992. It evidences the complexity inherent in a common issues trial, particularly one that is largely driven by expert evidence. Further, Andersen is among the growing list of cases such as Kerr v.Danier Leather and Pearson v. Inco, which reflect that a win for the plaintiffs at certification is merely the first step in a long road with many risks.
1 Andersen v. St. Jude Medical, Inc., 2012 ONSC 3660 (Andersen).
2 Andersen at paras. 48 and 366, as articulated in Rothwell v. Raes, (1988) 66 OR 449 (HCJ), aff’d (1990) 2 OR (3d) 332 (CA), leave to appeal refused  SCCA No 58.
3 Andersen at para. 62.
4 Andersen at paras. 73-74.
5 Andersen at para. 556.
6 For example, Professor Trebilcock explained that allowing waiver of tort in negligence cases may cause sellers to take socially excessive precautions on the market, take products off the market, under-invest in product innovation, and charge higher prices.