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Damages - Speculative. Palmer v. Teva Canada Limited
In Palmer v. Teva Canada Limited (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal against a lower court dismissal of a class action certification motion.
The court discussed compensable mental injury harm, here where consumed drugs were found to be contaminated but no physical harm was yet proven (ie. they were speculative):(b) Psychological injury
[53] The appellants argue the motion judge erred in law by mischaracterizing their claim in psychological harm as one of future harm.
[54] I disagree. The motion judge stated the plaintiffs’ claim correctly throughout his reasons. For example, at paras. 162 and 186, the motion judge differentiated psychological harm from future harm:In the immediate case, the Plaintiffs’ products liability claim has two branches to it. The first branch is a personal injury claim for psychological harm. The Plaintiffs purposefully eschew a physical injury claim for damages for valsartan causing cancer; rather, the Plaintiffs’ case is built on the notion that the putative class members have a claim for psychological harm arising from the contaminated valsartan being recalled and their being advised that NDMA and NDEA are possible carcinogens increasing the risk that the Class Members will be diagnosed with cancer.
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Moving on to a conclusion, in my opinion, based on this case law, it is plain and obvious that in the immediate case, the products liability claim for damages for psychological harm is not certifiable as pleaded or at all. Neither the risk of future physical or psychological harm nor the present anxiety occasioned by the risk of future physical or psychological harm is a compensable harm, and, thus, it is plain and obvious that the damages constituent element of a negligence cause of action is missing that and accordingly the cause of action criterion is not satisfied in the immediate case. This impediment cannot be cured by the Plaintiffs’ amending their pleadings. [55] The motion judge thus explicitly acknowledged that the claim was for present anxiety resulting from notification that the appellants had ingested contaminated valsartan.
[56] There is more merit to the appellants’ argument that the motion judge erred in concluding that psychological distress based on a fear of future harm (i.e., the manifestation of cancer), is non-compensable. To the extent that the motion judge reasoned there could be no cause of action for present psychological harm occasioned by the risk of future physical harm (i.e., a cancer diagnosis), this was an error. Psychological distress caused by even a speculative concern of an increased risk is still harm.
[57] The common law’s path to accepting the concept of negligently caused mental harm was canvassed by Brown J. in Saadati v. Moorhead, 2017 SCC 28, [2017] 1 S.C.R. 543. It is an error to dismiss mental injury arising from fear of future harm without first assessing the mental injury against the criteria generally applicable to the tort of negligence. In other words, recoverability for mental injury depends upon the plaintiff satisfying the same elements required for any successful action in negligence: Saadati, at para. 19.
[58] The principles for analyzing negligence claims for mental injury are set out in Mustapha. In that case, a plaintiff who purchased bottled water from the defendant, discovered dead flies floating in an unopened, unused bottle of drinking water. The plaintiff did not drink the water. But the plaintiff became obsessed with the event, sustaining psychiatric injuries including a major depressive disorder with associated phobia and anxiety. The question of liability in Mustapha did not turn on whether the plaintiff’s psychological injury was based on an imagined harm or a risk of harm or a speculative worry. The question, answered in the negative, was whether the plaintiff’s damages (psychological injury) were reasonably foreseeable.
[59] There are two guiding principles set out in Mustapha. First, not all psychological injuries rise to the level of being compensable in tort law. To qualify, they must be “serious and prolonged” and rise above the “ordinary annoyances, anxieties and fears”: Mustapha, at para. 9; Saadati, at para. 37. The appellants must pass a basic threshold noted in Mustapha, at para. 9:... psychological disturbance that rises to the level of personal injury must be distinguished from psychological upset. Personal injury at law connotes serious trauma or illness ... The law does not recognize upset, disgust, anxiety, agitation or other mental states that fall short of injury ... Quite simply, minor and transient upsets do not constitute personal injury, and hence do not amount to damage. [60] Second, not all mental injury will necessarily be caused, in fact or in law, by the defendant’s negligent conduct. Even where a plaintiff’s claim establishes a duty of care, breach of the duty, damage and factual causation, the plaintiff must still address legal causation. Legal causation is an inquiry into remoteness or foreseeability of the injury. This threshold question asks “whether the occurrence of mental harm in a person of ordinary fortitude was the reasonably foreseeable result of the defendant’s negligent conduct”: Saadati, at para. 20; Mustapha, at paras. 14-16.
[61] In Mustapha, for example, the plaintiff’s psychological injury was “serious and prolonged”; however, the claim failed on the last element of the negligence analysis: the plaintiff’s damage was too remote to have been caused in law by the defendant’s breach. The plaintiff’s extreme psychological reaction and ensuing harm exceeded the mental harm that would have been reasonably foreseeable from a person of ordinary fortitude seeing flies in the bottle of water: Mustapha, at paras. 14 and 18.
[62] Although I agree with the appellants that the motion judge did not conduct this analysis in relation to their claim for present psychological distress before dismissing the negligence claim as not viable and doomed to fail, I do not accept the appellants’ argument – based on Anderson v. Wilson (1999), 1999 CanLII 3753 (ON CA), 44 O.R. (3d) 673 (Ont. C.A.) – that the proposed action for mental injury satisfies the s. 5(1)(a) criterion.
[63] In Anderson, this court allowed the certification of a class action for nervous shock caused by a notice sent by public health authorities advising class members that, while they were receiving treatment at certain clinics, they had been exposed to hepatitis B and faced possible infection. This court held that it was arguably foreseeable that the notice would result in shock. Given the “uncertain state of the law on tort relief for nervous shock”, it was not plain and obvious that the claim for the tort of mental distress standing alone would fail: Anderson, at p. 679.
[64] However, at the time this court decided Anderson, it did not have the benefit of the doctrinal development provided by Mustapha: the articulation of (1) the basic threshold of injury needed to garner recovery, and (2) the “ordinary fortitude” test. The law is thus more determinate than it was when Anderson was decided. A claim that yesterday was allowed to proceed due to its novelty may have since been rendered hopeless by further developments in the law and appropriately weeded out. Such was the case in Capelet v. Brookfield Homes (Ontario) Limited, 2018 ONCA 742, where the plaintiff’s claim for mental injury sustained due to mould found within his house was summarily dismissed on the person of “ordinary fortitude” test: at para. 13; and in Healey v. Lakeridge Health Corp., 2011 ONCA 55, 103 O.R. (3d) 401, where the plaintiffs’ claim for mental injury sustained upon reading notices from the hospital that they had been exposed to tuberculosis did not meet the threshold of sufficient gravity and duration set out in Mustapha to qualify for compensation: at para. 64.
[65] The operation of these principles is also illustrated in Rothwell, where the House of Lords found that in the absence of a manifestation of harm, there could be no compensable damages for the wrongdoing of increasing the risk of harm. The House of Lords adopted a similar approach to Mustapha on the issue of whether a claim for present anxiety is actionable. As canvassed above, the House of Lords found that neither the physical injury of pleural plaques nor the mental injury of anxiety due to concern that exposure to asbestos could result in fatal disease, were actionable injuries. The anxiety about the potential future onset of a life-threatening disease by itself did not rise to a level to attract the attention of the law of tort: at para. 73. However, in that action, the House of Lords also considered – separate from the claims of co-plaintiffs – a claim for non-trivial mental injury on the part of a plaintiff whose anxiety caused clinical depression. The court assessed his claim against a standard similar to the person of “ordinary fortitude”, or, as the U.K. court described it, “a person of ‘sufficient fortitude’ or ‘customary phlegm’”: Rothwell, at para. 30 quoting Lord Porter in Hay or Bourhill v. Young, [1942] 2 All E.R. 396 at 409, [1943] A.C. 92, at p. 117. Ultimately, and similar again to Mustapha, the U.K. court concluded the severe depression experienced by the plaintiff was not actionable because it was an unforeseeable response beyond that of a person of “ordinary fortitude.” This is the correct approach to mental injury damages in a negligence action: 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.
[66] Returning to the pleadings in this case, the appellants have failed to demonstrate that their mental injuries rise above the anxieties and fears commonly experienced from time to time by people living together in society. The extent of the appellants’ pleadings on this point is that class members will “inevitably experience worry, anxiety, upset and mental distress over not knowing whether prolonged ingesting of a toxic chemical has caused or will cause them to develop cancer or organ damage” and for each representative plaintiff plead standard language of experiencing “on a prolonged basis shock, worry, great mental distress and anxiety since learning of the Recall.” However, stock repetition of words echoing the legal test are not enough. The appellants have failed to plead the material facts needed to support damages recoverable under the tort, like those detailed for the plaintiffs in Mustapha or Saadati. Bare assertions of prolonged mental distress must be supported by material facts detailing the injury, otherwise a court cannot conduct the necessary analysis to conclude that mental injury has met the legal threshold: Imperial Tobacco, at para. 22. Since the facts as pleaded by the appellants are inadequate, the result reached by the motion judge is justified. The claim in negligence should not proceed.
[67] Even had the injuries pleaded met the threshold for recoverable damages, they would have foundered on the person of “ordinary fortitude” standard. The appellants pleaded that shock came from reading the recall announcement, and the court was directed in oral submissions to the wording of the Health Canada notices. These notices are incorporated by reference in the pleading, they are central enough to the negligence claim to form an integral part of the claim itself and may form part of the assessment of the pleadings: McCreight v. Canada (Attorney General), 2013 ONCA 483, 116 O.R. (3d) 429, at para. 32.
[68] I agree with the motion judge’s assessment that the notices seem intended to assuage concern. The class members were advised of the NDMA contamination, that NDMA is a potential human carcinogen that may cause cancer with long-term exposure, but told to continue taking their medications unless otherwise advised by their health care provider. Within approximately two months of its first notice, Health Canada further advised that its scientists had assessed the available data to determine the potential increased risk of developing cancer and released the information to help put the risk into context for Canadians. The risk was between 0.0086% and 0.0011%, which, as Health Canada pointed out, must be considered in the context of a 50% existing lifetime risk of developing cancer. I agree that the recall would not cause a person of reasonable fortitude to sustain a psychological injury at the level compensable in tort. I also defer to the motion judge’s discretion not to permit the appellants to amend their pleadings. As explained below, amending the pleadings would not cure the other defect of the case, namely that the psychological injuries would founder on the common issues criterion.
[69] In sum, I find no error in dismissing the motion for certification of the negligence claims for physical harm (including genotoxicity) and psychological harm not yet materialized. While I find the motion judge erred in his analytical treatment of the negligence claim vis-à-vis present psychological harm, it is an error without consequence. Having applied the correct analysis from Mustapha, the negligence claim for present psychological harm damages was not reasonably foreseeable in law and doomed to fail. I would dismiss the appeal of the plaintiffs’ negligence claims for physical and psychological harm damages, which cause of action is not certifiable. . Palmer v. Teva Canada Limited
In Palmer v. Teva Canada Limited (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal against a lower court dismissal of a class action certification motion.
Here the court dismisses the class action largely on the basis that the damages sought were speculative:[4] The proposed class action is not a claim for compensation for consumers who have been or may be diagnosed with cancer as a result of consuming contaminated valsartan. The claim is for damages for the potential increased risk of being diagnosed with cancer in the future as a result of ingesting contaminated valsartan. The plaintiffs seek damages for costs of medical services and monitoring; refunds for the drugs consumed; costs for the drugs thrown away after the drugs were recalled; and psychological damages and punitive damages.
[5] The motion judge dismissed the plaintiffs’ certification motion. He found it was plain and obvious that the causes of action pleaded by the plaintiffs were not viable because they were not based on concrete injury, but on speculation or the “apprehension of an abstraction” – an increased risk of diagnosis of cancer over the baseline risk of cancer diagnosis over the course of one’s life. Moreover, the motion judge found that the proposed class action failed on the commonality and preferability criteria needed to warrant certification.
[6] I would dismiss the appeal. This is a case where the wrongful conduct on the part of the drug manufacturers is non-compensable not only because, as the motion judge found, physical harm has yet to materialize, but also because the harm that had materialized - psychological harm from the shock of the recall – was not sufficiently serious to be compensable in tort law.
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The Plaintiffs’ Claim
[19] The plaintiffs’ claim alleges that exposure to NDMA or NDEA can increase one’s risk of developing cancer: It is not based on a claim that ingesting NDMA or NDEA will necessarily or probably cause cancer.
[20] More precisely, the essence of the claim is that the defendants breached their duty of care to the plaintiffs by failing to ensure that the valsartan they produced was free of the contaminants NDMA and NDEA. As a result of these breaches, the plaintiffs claim that the class suffered psychological harm and pure economic loss of medical bills, medical monitoring, refunds, and costs for drugs thrown away.
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[22] However, the motion judge found it was plain and obvious that in the immediate case, the negligence claim for damages for psychological harm was not certifiable because neither the risk of future physical or psychological harm nor the present anxiety occasioned by the risk of future harm is compensable in tort law. He dismissed the negligence cause of action, which was the essence of the claim, under s. 5(1)(a) of the Class Proceedings Act, 1992. The motion judge also dismissed as doomed to fail the claims for toxic battery, breach of consumer protection laws, breach of competition laws, and unjust enrichment.
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[43] A successful action in negligence requires plaintiffs to demonstrate that: (1) the defendants owed them a duty of care; (2) the defendants’ behaviour breached the standard of care; (3) the plaintiffs sustained damage; and (4) that the damage was caused, in fact and in law, by the defendants’ breach: Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, [2008] 2 S.C.R. 114, at para. 3.
[44] This appeal turns on the nature of the injury and the question of whether damages for such an injury are recoverable, which are questions dealt with at the third and fourth stages of the negligence analysis.
[45] Damage (injury) to a plaintiff is an essential element in a claim of negligence. This is because the negligent conduct of a defendant can only ground an obligation for compensation to the extent that it causes damage or an actual materialized loss. It is the materialized loss that gives rise to a defendant’s obligation to compensate the plaintiff for the injury: Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19, [2020] 2 S.C.R. 420.
[46] In Atlantic Lottery, the plaintiffs claimed that they suffered injury due to an increased risk of addiction and suicidal ideation as a result of the respondent’s video lottery terminals. Writing for the majority, Brown J. stated at para. 33:It is therefore important to consider what it is that makes a defendant’s negligent conduct wrongful. As this Court has maintained, “[a] defendant in an action in negligence is not a wrongdoer at large: he is a wrongdoer only in respect of the damage which he actually causes to the plaintiff”. There is no right to be free from the prospect of damage; there is only a right not to suffer damage that results from exposure to unreasonable risk. In other words, negligence “in the air” — the mere creation of risk — is not wrongful conduct. Granting disgorgement for negligence without proof of damage would result in a remedy “arising out of legal nothingness”. It would be a radical and uncharted development, “[giving] birth to a new tort over night.” [Citations omitted.] [47] Accordingly, there is no liability “in the air” and no right to be free from the prospect of damage: 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35, [2020] 3 S.C.R. 504, at para. 44. Negligence law simply does not recognize exposure to the risk of injury or harm, or the increased risk of injury or harm, as compensable: Setoguchi v. Uber BV, 2023 ABCA 45, at paras. 54-57, leave to appeal refused, [2023] S.C.C.A. No. 190; Atlantic Lottery Corp., at para. 33. This means 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.
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[50] The motion judge appropriately drew support from other jurisdictions that have dealt with claims from asymptomatic claimants exposed to harmful substances. In Dow Chemical Company v. Ring, Sr., 2010 NLCA 20, 72 C.C.L.T. (3d) 161, leave to appeal refused, [2010] S.C.C.A. No. 187, at paras. 58-59, the court found that the pleadings failed to disclose a cause of action on behalf of plaintiffs who claimed they suffered absorption of toxic chemicals, which may cause lymphomas in the future, but were asymptomatic. As the court noted, at para. 57, “the plaintiffs seek to proceed directly from breach of a duty of care to compensation without the necessity of proving either economic or physical injury.”
[51] Similarly, in Rothwell v. Chemical & Insulating Co. Ltd., [2007] UKHL 39, 99 B.M.L.R. 139, the plaintiffs experienced fibrous thickening of the pleural membrane (pleural plaques) following exposure to asbestos in the course of their employment. In most cases, pleural plaques cause no symptoms, although they signal the presence of asbestos fibres in the lungs, which may independently cause fatal disease. In finding the damage of pleural plaques not actionable, the court stated, at para. 47:But it can at least be said that an injury which is without any symptoms at all because it cannot be seen or felt and which will not lead to some other event that is harmful has no consequences that will attract an award of damages. Damages are given for injuries that cause harm, not for injuries that are harmless. [52] The allegations of genotoxicity are similar to the injuries raised by the plaintiffs in Dow Chemical Company and Rothwell. A physical change with no perceptible effect upon one’s health is not compensable in negligence.
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