2020 QCCA 1666, 2020 QCCA 1666

Johnson & Johnson inc. c. Gauthier 2020 QCCA 1666 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-029093-200 (500-06-000964-185) DATE: December 8, 2020 BEFORE THE HONOURABLE GENEVIÈVE MARCOTTE, J.A. JOHNSON & JOHNSON INC. APPLICANT – Defendant v. KATHLEEN GAUTHIER RESPONDENT – Applicant JUDGMENT [ 1 ] Applicant Johnson & Johnson (J &

J) seeks leave to appeal the judgment of the Superior Court which granted the Respondent leave to institute a class action on behalf of all consumers residing in Québec who bought Tylenol products containing acetaminophen between October 23, 2015, and December 12, 2017. It argues that the judgment is flawed with respect to its application of the criteria set out in articles 575(2) and (4) C.C.P . [ 2 ] Relying on Sections 219 and 228 of the Consumer Protection Act (“ CPA ”) [1] and on

Section 52 of the Competition Act , [2] the Respondent argues that J & J misled consumers by omitting to disclose and properly caution them against the risks and side effects related to these products including the risk of liver failure and death. [ 3 ] The alleged omission is essentially based on a comparison of the disclosures found on the product labels in the USA (as compared those in Canada) during the class period, namely: 1) a maximum daily recommended dosage of between 3000 and 3250 mg in the US; 2) an express warning that consuming three or more alcoholic beverages every day while using a Tylenol product could cause severe liver damage; 3) a warning that taking a Tylenol product with another product containing acetaminophen can cause severe liver damage. [ 4 ] In Canada, the relevant label for those products sold during the same period contained the following warning: […] Do not take more than 8 caplets per day [i.e. 4000mg] [Red Warn Sign] CAUTION : […] Do not use with other drugs containing acetaminophen .

Use the smallest effective dose. Do not take more than the maximum daily dose. Overdose may result in severe or possibly fatal liver damages . […] Ask a doctor or pharmacist before use if you are pregnant or breastfeeding; have chronic alcoholism; have a serious liver or kidney disease; use any other medications including natural health products, prescription drugs, salicylates or other pain and fever relief medication. [ 5 ] After outlining the criteria for authorizing a class action under

article 575 C.C.P., the judge analyses each one and concludes that they have all been met. [ 6 ] On the second criterion dealing with the colour of right, the judge begins with a description of the Respondent’s personal right of action [3] : [21] Plaintiff’s personal right of action is described as follows: 1. She purchased and used Tylenol Products and occasionally gave some to her two children; 2. She learned about the risks and side effects of the Tylenol Products in 2017; 3.

Had she been properly informed, her use of Tylenol Products would have been different and less frequent, and she would not have given Tylenol Products to her children; 4. She is therefore entitled to compensatory damages in the form of the reimbursement of part of the cost she incurred in purchasing Tylenol Products. Such amount is estimated at $400;

5. She is also entitled to claim $100 in punitive damages as a result of the intentional breach by the Defendant of its obligations under the Consumer Protection Act ; [ 7 ] The judge points out that the proposed recourse is based on the duty to inform as opposed to a claim for bodily injury or financial loss : [25] Plaintiff submits that her proposed class action is not for bodily injury or financial loss resulting from the risk of death or acute liver failure but rather to enforce Defendant’s duty to inform the consumers in the marketplace in accordance with Sections 219 and 228 of the CPA ,

Section 52 of the Competition Act and Articles 6 , 7 , 1357 and 1401 CCQ. [ 8 ] She then goes on to quote the relevant sections of the CPA and Competition Act and refers to the principle recognized in Richard v. Time inc. [4] being the failure to perform an obligation imposed by the CPA which gives rise to an absolute presumption of prejudice. The judge also summarizes the alleged violations under the CPA and the Competition Act : [28] Plaintiff invokes the following violations of Sections 219 and 228 CPA and 52(1) of the Competition Act : 1.

For purely mercantile reasons and to protect its important market share, J&J misled consumers by omitting to disclose and properly caution against serious risks and major side effects related to the Tylenol Products, up to and including risk of death and acute liver failure requiring a liver transplant; 2. These omissions are particularly unconscionable given that these serious dangers were known and had been voluntarily disclosed by J&J in the United States, by way of warning labels appearing clearly and expressly on the bottles and packaging of equivalent Tylenol products; 3.

As far back as 1994, in the United States, J&J implemented measures to prevent accidental overdoses for Tylenol Products, namely warning information and dosage reduction; 4. Two warnings were added on the packaging of the Tylenol products supplied to the American marketplace: a warning not to take more than two alcoholic drinks per day while taking a Tylenol product and a warning not to consume more than one product containing APAP at the same time; 5. In 2011, J&J also reduced in the United States the maximum daily dosage of its products in order to establish a substantial margin of safety.

In doing so, J&J stated the following with regards to Extra Strengh Tylenol: To help encourage the safe use of acetaminophen, the makers of TYLENOL® have lowered the maximum daily dose for single- ingredient Extra Strength TYLENOL® (acetaminophen) products sold in the U.S. from 8 pills per day (4,000 mg) to 6 pills per day (3,000 mg). The dosing interval has also changed from 2 pills every 4 - 6 hours to 2 pills every 6 hours. 6. These measures were not implemented in the Canadian market for Canada consumers; 7.

The Tylenol Products sold in Quebec and the rest of Canada prior to December 12, 2007, did not have warnings appearing on container labels and/or on the box with respect to the risk of toxicity and serious health consequences. [29] Also, at paragraph 52 of the Re-Amended Motion for Authorization, Plaintiff summarizes the alleged material omissions of fact as follows: 52. In

summary, Defendant voluntarily implemented several years ago, for the benefit and safety of American consumers, the following precautionary measures to ensure a safer use of APAP specifically aimed at reducing the risk and number of accidental overdoses causing death, acute liver failure and other severe health problems, but deliberately chose not to implement the same measures for the benefit and safety of Canadian consumers: a.

Reducing from 4000mg to 3000mg (or 3250mg depending on the Tylenol Product) in the USA the maximum daily recommended dosage of APAP in order to create a substantial safety margin between a safe use of the Tylenol Products and the risk of toxicity (which begins at 4000mg per period of 24 hours) in order to both diminish the risk of accidental overdose and allow for the safe use of acetaminophen.

For Canadian consumers, no such lowering of the recommended daily dosage to increase the margin of safety was implemented with the result that the maximum recommended daily dose of 4000mg also coincides with the starting point of toxicity. In addition, no specific warning was given to Canadian consumers that the recommended daily dosage does not provide for a safety margin and that it coincides with the toxicity threshold. b.

Expressly warning the American consumers that taking more than 2 alcoholic beverages per day while using a Tylenol Product can cause severe liver damage (which can result in death or require a liver transplant). No such warning is given to Canadian consumers on the label affixed to the Tylenol Product containers nor the box in which the container is enclosed. The only indication given to Canadian consumers concerning alcohol consumption is to consult a doctor or a pharmacist before taking a Tylenol Product if they suffer from “chronic alcoholism”. c.

Expressly warning the American consumers that taking a Tylenol Product with any other product containing acetaminophen can cause severe liver damage (which can result in death or require a liver transplant). No such clear warning is given to Canadian consumers on the label affixed to the Tylenol product containers nor on the box in which the container is enclosed. Both Canadians and Americans are advised not to use a Tylenol Product with any other product containing acetaminophen, but only the American consumers are specifically warned, in a clear, separate and additional warning, of the potentially

severe consequences of doing so, namely severe liver damage (which can result in death or require a liver transplant). [ 9 ] She quotes the contents of the product label in Canada for the period and mentions that documents issued by Health Canada concerning guidance for labelling for acetaminophen were filed into evidence by J & J along with the current label of the Tylenol product and an affidavit from the Senior Manager, Regulatory affairs from the J & J organisation. [ 10 ] She acknowledges that the past and current product labels are consistent with the requirements of the labelling standards issued by Health Canada for the manufacturers of acetaminophen products in Canada.

Yet, she concludes: [35] For the following reasons, the Court is of the view that the condition provided for at article 575 (2) is met: 1. Even if Plaintiff did not suffer personalized injury, the proposed class action presents a good colour of right in light of the allegations concerning the violations to the CPA and Competition Act ; 2. The respect of the labelling standards may not exempt Defendant from its liability in a case dealing with misrepresentation by omission; 3. The assertions found notably in paragraph 52

a) and

b) of the Re-Amended Motion for Authorization are not implausible or false. Whether they constitute a violation of the obligations imposed by the CPA and the Competition Act should be decided on the merits of the case. [ 11 ] Insofar as the criterion of article 575(4) C.C.P. dealing with the class representative is concerned, she writes: [47] When analyzing this fourth criterion, the Court must conclude that the following three elements are present: (1) interest in the suit, (2) competence, and (3) absence of conflict with other class members. [5] [48] Once again, this criterion must be given a liberal

interpretation.

No proposed representative should be excluded unless his or her interest or competence is such that the case could not possibly proceed fairly. [6] [49] Plaintiff argues that she has a personal interest in the case since she purchased Tylenol products during the class period and was misled by the Defendant’s material omission. [50] She also believes being in a proper position to adequately represent the class members, as she has reviewed the relevant information and conducted an investigation into the practices and behaviour of the Defendant, hired competent counsel, and diligently pursued the present claim. [51] Defendant submits that Plaintiff has not established a valid personal claim and cannot adequately represent the putative class.

Indeed, since the risk of developing a future illness or medical condition is not an indemnifiable injury, Plaintiff has no legal interest. Furthermore, she has failed to present an arguable case as to existence of a misrepresentation. [52] In view of the Court’s conclusions regarding the condition stipulated at article 575 (2) CPC, this fourth condition is also met. [ 12 ] In support of its application for leave to appeal, J & J argues that the judgment is seriously flawed and that leave should be granted pursuant to the test set out by this Court in Centrale des syndicats du Québec c.

Allen . [7] where Chamberland, J., writing for the Court, expressed the view that leave to appeal should only be granted in exceptional circumstances: [57] À mon avis, les intimés ont donc raison de soutenir que le test relatif doit être exigeant. [58] L’appel doit être réservé à des cas somme toute exceptionnels. [59] Le juge accordera la permission de faire appel lorsque le jugement lui paraîtra comporter à sa face même une erreur déterminante concernant l’interprétation des conditions d’exercice de l’action collective ou l’appréciation des faits relatifs à ces conditions, ou encore, lorsqu’il s’agira d’un cas flagrant d’incompétence de la Cour supérieure. [60] Ce test est fidèle à l’intention du législateur voulant que l’appel ne porte que sur les conditions d’exercice de l’action collective.

Il est de nature à écarter les appels inutiles ou ne portant que sur des éléments accessoires, sans incidence sur l’autorisation d’exercer l’action collective. Il est respectueux de la discrétion du juge qui a autorisé l’action collective. Il n’est pas à ce point souple qu’il alourdirait indirectement le fardeau de ceux qui cherchent à exercer une action collective et à la mener à terme dans des délais raisonnables.

Il permet aussi d’assurer qu’une action collective ne procède pas sur une base erronée, évitant ainsi aux parties d’être entrainées dans un débat judiciaire, long et coûteux. [ 13 ] In the case at hand, the Applicant argues that the judge failed to analyse the facts and the documentary evidence that was filed into the Court record to determine whether they constitute an arguable case of misrepresentation under the CPA or the Competition Act , leaving the issue to be determined on the merits. [ 14 ] J & J argues that had she properly examined the issue, the judge would have concluded that the maximum daily dosage indicated on the product label in Canada during the class period was the maximum daily dosage imposed by Health Canada. [ 15 ] Rather than accepting the Respondent’s conclusion, the judge should also have analysed the general impression communicated by the representation in question, in accordance with the criteria set out in Richard c.

Time Inc. [8] As such the judge should have determined whether the impression was accurate and whether an average consumer reading the label would have concluded that consuming these products presented a risk for a person drinking three or more alcoholic beverages per day, since the Canadian label warns people suffering from chronic alcoholism not to use the products without consulting a doctor or pharmacist.

[ 16 ] Moreover, according to J & J, the judge failed to determine whether the representation was objectively capable of influencing the consumer’s decision to purchase the product so as to trigger an absolute presumption of prejudice pursuant to

section 272 CPA . This analysis would have led her to deny leave or at the very least to authorize the class action solely in respect of the subclass of consumers drinking three or more alcoholic beverages per day. [ 17 ] Finally, J & J asserts that, in any event, the class should have been limited to a subclass of consumers drinking three or more alcoholic beverages per day, which the Respondent cannot adequately represent as she testified to only drinking alcohol occasionally during social events and rarely if at all when she consumes Tylenol products.

As a result, authorization should have also been denied under 575(4) C.C.P . *** [ 18 ] I agree with the Applicant that the judgment provides rather succinct reasons regarding the existence of a colour of right or an arguable case with respect to the alleged violations of the relevant CPA and Competition Act provisions. [ 19 ] It does not examine whether the representations at issue (which were at all relevant times compliant with Health Canada regulations) are objectively capable of influencing the consumer’s decision to purchase the product, or whether a consumer drinking less than three alcoholic beverages per day would objectively decline to buy Tylenol products by reason of a different representation regarding maximum dosage or heavy alcohol consumption. [ 20 ] That being said, such a

summary analysis appears to be consistent with the minimal role attributed to the judge at the authorization stage, as recently reaffirmed by the Supreme Court in Desjardins Cabinet de services financiers inc. c. Asselin , [9] where writing for the majority, Kasirer J. states that “the judge’s role is to filter out frivolous claims, and nothing more.” This, he maintains, is “l’état du droit”, in keeping with the earlier Supreme Court decision in L'Oratoire Saint-Joseph du Mont-Royal c.

J.J . [10] . [ 21 ] Considering this very low threshold and while I entertain serious doubts as to the merits of an eventual recourse based on the misrepresentations alleged, I cannot conclude that the judgment authorizing the class action is so seriously flawed as to justify granting leave to appeal in view of the strict criteria established by this Court in Allen . [11] FOR THESE REASONS , the undersigned: [ 22 ] DISMISSES the Application for leave to appeal of the judgment authorizing the class action; [ 23 ] WITH legal costs. GENEVIÈVE MARCOTTE, J.A.

M tre Robert Torralbo M tre Simon Seida Blake, Cassels & Graydon For Applicant M tre Karim Renno Renno Vathilakis For Respondent Date of hearing: November 3, 2020