Reach M.D. Inc. v. Pharmaceutical Manufacturers Association of Canada

Reach M.D. Inc. v. Pharmaceutical Manufacturers Association of Canada

The Code did not authorize PMAC to prohibit members from advertising in multi-sponsored service-oriented items like Herman M.D.; the Committee's August 1990 ruling was ultra vires and constituted unlawful means that intentionally interfered with Reach's economic relations, satisfying the tort's elements, and PMAC is therefore liable for that interference with damages to be assessed by reference limited to one year's lost profits.

Citation
C32896
Parties
Plaintiff (appellant): Reach M.D. Inc.; Defendant (respondent): Pharmaceutical Manufacturers Association of Canada; Defendant (respondent): Brian McLeod; Defendant (respondent): Paul N. Lucas; Defendant (respondent): Merck Frosst Canada Inc.
Court
Court of Appeal for Ontario
Jurisdiction
Canada
Judgment Date
29 May 2003
Procedural Posture
Civil / Appeal From Judgment of the Superior Court of Justice (trial Judgment Appealed)
Outcome
Appeal allowed in part; cross-appeal dismissed; trial judge's order set aside in part; declaration that Article 10.1 did not authorize PMAC to direct members to stop advertising in Herman M.D.; PMAC held liable in tort for intentional interference with economic relations; reference on damages ordered.
Legal Topics
Intentional Interference With Economic Relations, Ultra Vires/authority of Private Association, Trade Association Codes and Enforcement, Damages Assessment, Jurisdictional Limits of Internal Committees
Source Language
English
Tort Law Commercial/trade Association Law Administrative Law Intentional Interference With Economic Relations Ultra Vires/authority of Private Association Trade Association Codes and Enforcement Damages Assessment Jurisdictional Limits of Internal Committees

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Parties

Reach M.D. Inc.

Plaintiff (appellant)

Pharmaceutical Manufacturers Association of Canada

Defendant (respondent)

Brian McLeod

Defendant (respondent)

Paul N. Lucas

Defendant (respondent)

Merck Frosst Canada Inc.

Defendant (respondent)

Procedural Posture

Civil / Appeal From Judgment of the Superior Court of Justice (trial Judgment Appealed)

Legal Issues

  1. 1 Did PMAC's Code (Article 10.1) authorize the Committee to direct members to stop advertising in Herman M.D.?
  2. 2 If not, did the Committee's August 1990 ruling constitute a tortious act?
  3. 3 Did the trial judge correctly find that the March 28, 1990 letter was a tortious act?

Ratio Decidendi

The Code did not authorize PMAC to prohibit members from advertising in multi-sponsored service-oriented items like Herman M.D.; the Committee's August 1990 ruling was ultra vires and constituted unlawful means that intentionally interfered with Reach's economic relations, satisfying the tort's elements, and PMAC is therefore liable for that interference with damages to be assessed by reference limited to one year's lost profits.

Court Disposition

Appeal allowed in part; cross-appeal dismissed; trial judge's order set aside in part; declaration that Article 10.1 did not authorize PMAC to direct members to stop advertising in Herman M.D.; PMAC held liable in tort for intentional interference with economic relations; reference on damages ordered.

Orders

  • Set aside part of the trial judge's order
  • Declare that Article 10.1 of the PMAC Code of Marketing Practices did not authorize PMAC to direct its members to stop advertising in Herman M.D.