_Q.B. A.D. 1995 No. 1412 J. C. S. IN THE QUEEN'S BENCH JUDICIAL CENTRE OF SASKATOON BETWEEN: HEATHER JANE GRAY and DOW CORNING CANADA INC., DOW CORNING CORPORATION, THE DOW CHEMICAL COMPANY, MEDICAL ENGINEERING CORPORATION and BRISTOL-MYERS SQUIBB COMPANY DEFENDANTS N. W. Fursman for the plaintiff (respondent) R.G. Kennedy for the defendant (applicant) The Dow Chemical Company No one appearing for the other parties FIAT GEREIN J. April 24, 1996 The statement of claim in this action was served ex juris upon all the defendants. At this time the onedefendant, The Dow Chemical Company, seeks a declaration thatthis Court lacks jurisdiction to entertain the action insofaras it relates to that particular defendant. The Court is alsoasked to set aside the service ex juris. have concluded that the requested relief should not be granted. The Facts For the purpose of this application assume that all the allegations in the statement of claim are true and that they do form the basis of good cause of action in both tort and contract. These are the circumstances of the plaintiff. On May 1, 1980, she underwent bilateral augmentation mamoplasty and received silicone breast implants manufactured by Dow Corning Canada Inc. or Dow Corning Corporation. Ten years later on July 23, 1990, the plaintiff received replacement breast implants, bearing the trade name Surgitek, which were manufactured by Medical Engineering Corporation and Bristol- Myers Squibb Company. Finally, on October 1, 1992, she had the breast implants removed. The plaintiff presently suffers from fibromyalgia,chronic fatigue and a persistent immune mediated skin rash onher chest. It is alleged that her condition is a result ofthe silicone implants, the connection having been discoveredonly in 1994. It is further alleged that her condition was caused by negligence attributed to the manufacturers of the breast implants. Four of the defendants are American corporations with their respective head offices in the United States of America. The remaining defendant is Dow Corning Canada Inc. which is incorporated pursuant to the laws of Canada with its head office located in Mississauga, Ontario. To ensure that there was no uncertainty about its status and sphere of business activity, an affidavit was filed on behalf of the defendant, The Dow Chemical Company, setting forth the 2.Dow Chemical was founded in 1897 in the State of Michigan and incorporated in the State of Delaware in 1947. At present it is publicly held corporation organized under the laws of the State of Delaware having its principal offices at the Dow Centre in Midland, Michigan. 3.Dow Chemical was served with the Statement of Claim in this action at its offices in Midland, Michigan on or about November 7, 1995. 4.Dow Chemical does not now, nor has it ever carried on business within the Province of Saskatchewan, has no assets nor employees located within the Province of Saskatchewan, and is not licensed nor registered to carry on business within the Province of Saskatchewan. accept that The Dow Chemical Company has no presence in Saskatchewan. now quote those paragraphs in the statement of claim which particularize the claim and give details about the role of the various defendants. 11. The Plaintiff states that her symptoms and damages were caused by the negligence of the Defendant manufacturers of the breast implants. Such negligence includes, but is not limited to the following: (a) the design of the breast implants were defective: (i)the Defendants relied upon inadequate research and development tests in their design of the product; (ii)the Defendants failed to conduct appropriate clinical tests and investigations on human subjects following the design stage of the product; (iii)the Defendants misinterpreted the results of research and investigations which were undertaken; (iv)the Defendants deliberately or negligently ignored the tests which contraindicated the use of silicone breast implants; and (v)the Defendants incorporated material in the design of the breast implants which stimulated the formation of excess scar tissue within the breast, and have tendency to leak, and to harden. (b)the manufacture of the breast implants was defective: (i)the implants leak their viscous silicone filling into the breast tissues; (ii)the implants stimulate the formation of excess scar tissue within the breast; and (iii)the implants are made of foreign substance which is inappropriate for implantation within the human body. (c)the Defendants failed to properly warn the Plaintiff and her caregivers of the risks and dangers associated with the breast implants: (i)accordingly, the Plaintiff's consents to the surgical procedures were not informed as regards the nature of the material to be implanted in her body. 12. The Defendants delayed, concealed, and/or deliberately, negligently, or otherwise failed to reveal relevant test data and documents to the United States Food and Drug Administration (the "FDA"), Health and Welfare Canada ("H&WC"), the medical profession, Heather June Gray, and the public at large. This failure to disclose pre- and post-dated the implant 13. The Defendants provided assurances to the FDA, H&WC, the medical profession, and the public at large that the symptoms of this Plaintiff were not related to the silicone gel breast implants, despite being possessed of information to the contrary. In the circumstances, the Defendants were under further obligation to advise individuals who had already received implants and their medical caregivers, of the dangers associated with those implants. 14. The Defendants negligently acted in concert with other manufacturers of silicone breast implants with respect to the amount of information they provided to or withheld from this Plaintiff, the appropriate regulatory authorities, the medical profession, and the public at 15. The Plaintiff further alleges that the Defendants designed, manufactured and marketed breast implants that were dangerous, not of merchantable quality and not fit for their purpose. 16. The Defendants expressly and implicitly warranted that these silicone breast implants were fit for the purposes intended as cosmetic aids, and that they were of merchantable quality. The Defendants were in breach of these express and implied warranties. 17. The Plaintiff, when purchasing these silicone implants, relied upon the representations of the Defendants with respect to the implants, that they were fit for the purpose intended and that they were of merchantable quality. The Plaintiff has acted and relied upon those misrepresentations to her own detriment. 18. The Plaintiff pleads and relies upon the provisions of the Sale of Goods Act, R.S.S. 1978, Chapter S.1, and amendments thereto, and The Consumer Products Warranties Act, R.S.S. 1989, c. C-30, and amendments thereto. 19. The Plaintiff further states that the Defendant Dow Chemical is at law responsible for the liabilities of Dow Corning with respect to silicone breast implants. Dow Corning Corporation was created by Dow Chemical for the sole purpose of designing, manufacturing and distributing silicone products, including silicone gel breast implants. Following the creation of Dow Corning Corporation, Dow Chemical continued to be involved in the field of silicone research and dominated and controlled Dow Corning Corporation in all respects. Dow Corning Corporation was in fact an agent, creature, or puppet of Dow Chemical with respect to silicone breast implants. 20. Dow Chemical's involvement with silicone breast implants includes, but is not limited to the following: (a)Dow Corning dominated and controlled Dow Corning Corporation's silicone breast implant operations such that Dow Chemical was the de facto operating mind; (b)Dow Chemical scientists provided the scientific basis for the use of silicone in medical devices; (c)Dow Chemical performed experiments and studies which contraindicated the use of silicone in medical devices and showed that the projects were potentially hazardous to those who received them; (d)Despite evidence to the contrary, Dow Chemical continued to represent to the medical and scientific community, and the general public, that silicone was an appropriate produce for insertion into the human body; (e)Dow Chemical provided scientific assistance and guidance, including use of their laboratories and researchers, to Dow Corning Corporation; (f)Dow Chemical conspired and/or acted in concert with Dow Corning Corporation to study the effects of silicone on the immune system in secret and deceptive 21. The Plaintiff states that the facts of this case entitle her to rely on the principle of res ipsa loquitur. On the basis of what is set out above, the question to be answered is whether this Court should accept jurisdiction in respect to the defendant, The Dow Chemical Company. As indicated earlier, believe that it should do so. The Submissions On behalf of The Dow Chemical Company it is acknowledged that on occasion Saskatchewan court will assume jurisdiction over matter even though the defendant does not reside within the province and cannot be served therein. However, it is submitted that this is not such an occasion for the statement of claim does not disclose an actionable wrong on the part of The Dow Chemical Company. Rather, it does no more than describe relationship between that company and another and that relationship in itself does not provide justification for this Court to assume jurisdiction. This is so even if there is derivative liability for that condition arises totally in foreign jurisdiction and it is there that the legal consequences of the relationship should be pursued. In opposition, the plaintiff points to the fact that she has suffered injury and consequent damages in Saskatchewan and says that this is sufficient basis upon which to generally assume jurisdiction. Contrary to the view of the defendant, the plaintiff submits that the statement of claim does describe wrongful conduct on the part of The Dow Chemical Company and that such conduct caused her damage in both tort and contract. It should be noted that the within application is founded solely on the argument that this Court has no jurisdiction over The Dow Chemical Company. The doctrine of forum non conveniens was not invoked and have not taken it into consideration in my deliberations. The Law There are two sources from which the Court of Queen's Bench in Saskatchewan acquires jurisdiction over an in personam action. The first is the common law which provides that this Court has jurisdiction where there is service of the process within the province. The second is what is frequently called "assumed jurisdiction" which is creation of legislation. It empowers court to assume jurisdiction over cause of action which arose in this province despite the fact that the defendant's residence is elsewhere and the process must be served ex juris. This new jurisdiction was introduced in England by The Common Law Procedure Act, 1852, 15 Vict., c. 76. That same jurisdiction was incorporated into the law of Saskatchewan by the enactment of s. 12 of The Queen's Bench Act, R.S.S. 1978, c. Q-1. As stated in Standard Trust Co. v. Ginnell (1993), 1992 CanLII 8118 (SK QB), 106 Sask. R. 27 (Q.B.), the exercise of the statutory jurisdiction is governed by Rule 31 of The Queen's Bench Rules of Court. The parts of that rule which are relevant to this application are the following: 31(1) Service out of Saskatchewan may be effected without order wherever: (f)the action is in respect of contract where: (v)a breach or alleged breach of contract wherever made has been committed in Saskatchewan or (vi)damages have been sustained in Saskatchewan, arising from breach committed elsewhere; or (g)the action is founded on tort committed in Saskatchewan; In applying rule 31(1)(g) it is necessary to determine the situs of particular tort. This problem confronted the Supreme Court of Canada in Moran v. Pyle National (Canada) Ltd., 1973 CanLII 192 (SCC), [1975] S.C.R. 393. The unanimous resolution is well summarized in the headnote to the reported judgment. Where foreign defendant carelessly manufactures product in foreign jurisdiction which enters into the normal channels of trade and he knows or ought to know both that as result of his carelessness consumer may well be injured and it is reasonably foreseeable that the product would be used or consumed where the plaintiff used or consumed it, then the forum in which the plaintiff suffered damage is entitled to exercise judicial jurisdiction over that foreign defendant. Accordingly, the Courts of Saskatchewan had jurisdiction to entertain the present action. With the foregoing in mind, turn to the application itself. Analysis The defendant, The Dow Chemical Company, is not resident in Saskatchewan and has no direct or real connection to the province. As result, that defendant cannot be served with the statement of claim within the territorial jurisdiction of this Court. It therefore follows that this Court does not have jurisdiction over that defendant on the basis of the common law. One must then move on to determine whether there is statutory jurisdiction. The plaintiff herein is assumed to have suffereddamages both in contract and tort. Applying Queen\'s Bench Rule31(1)(f) and (g) and following what was stated in the Morancase, this Court should assume jurisdiction absent any reasonto the contrary, although any uncertainty or doubt is to beresolved in favour of the defendant. It is argued that such reason does exist in that the statement of claim makes no allegation that the plaintiff's damages were caused by the defendant, The Dow Chemical Company, and more particularly by any culpable conduct on the part of that defendant. In short, it is argued that there is no causalconnection between the defendant, The Dow Chemical Company, andthe plaintiff\'s damages. Rather, the pleadings portray nothing more than relationship, akin to that of vicarious liability, between the defendant, The Dow Chemical Company, and one of the other defendants, namely, Dow Corning Corporation. It is submitted that the existence of such relationship is not in itself sufficient to justify this Court assuming jurisdiction over the action. This submission may well have merit were the statement of claim drafted in the manner suggested. However, do not see it that way when read the pleading as whole and not in isolated segments. In my opinion, the statement of claim speaks to four main topics, vis-ï¿½-vis, the activities of the defendants. The first is the negligence in the design and manufacture of the breast implants. These allegations are contained in para. 11 and specifically refer to the negligence of the "Defendant manufacturers". take this phrase to mean those parties who actually created or fabricated the implants. This being so, the paragraph cannot be interpreted as including the defendant, The Dow Chemical Company, but rather it has reference to the other four defendants. The second topic, which is set out in paras. 12 to14, inclusive, addresses the failure to inform certainregulatory bodies and the public at large about the risk ofbreast implants. This failure to inform is attributed to all defendants without exception. Assuming that the defendants had duty to provide information and failed to do so with resultant damage to the plaintiff, then an action will lie in tort. In respect to this the court should assume jurisdictionand it should do so in respect to the defendant, The DowChemical Company, for that party is here included with theother defendants. The third topic is that of contract and those allegations are contained in paras. 15 through 18, inclusive. The allegations of non-merchantable quality and breach ofwarranties are made about all of the defendants. recognize that these paragraphs contain references to manufacturing and that the defendant, The Dow Chemical Company, was earlier omitted from that activity. However, there still remains thematter of marketing and distributing the implants and insofaras The Dow Chemical Company may have played a role in that areait could be accountable in contract. The pleading alleges such accountability on the part of that company and therefore this Court should assume jurisdiction over the claim in contract through the operation of Queen's Bench Rule 31(1)(f). The final topic is contained in paras. 19 and 20. Here the allegations are only in respect to the defendant, The Dow Chemical Company, and not the other defendants. The allegations are somewhat extensive, but in general they address two situations. The first is the plea that the corporate entity, DowCorning Corporation, was created for a specific task by thedefendant, The Dow Chemical Company, and that in the carryingout of that task they were in reality one and the same entity. The plaintiff here is suggesting that the corporate veil shouldbe pulled aside and any wrongful acts of Dow CorningCorporation should be treated as being those of The DowChemical Company. Were this to occur, the result would be something other than imposition of responsibility by reason of vicarious liability. If the plaintiff succeeds, the wrongful act or fault would be directly attributable to The Dow Chemical Company. This differs significantly from vicarious liabilitywhere no fault is attributable to the third party, butliability attaches because of the relationship such asemployer-employee, or principal-agent. If fault is found to bedirectly attributable to The Dow Chemical Company, then thereis a causal connection. The second situation is that the defendant, The DowChemical Company, breached its duty to disclose the riskinherent to the breast implants. This is largely repetition of what is stated earlier in the statement of claim, but what is significant is that the defendant, The Dow Chemical Company, is singled out. Thus, here also there is an allegation which suggests link between the alleged failure to disclose and the plaintiff's injuries. Accordingly, in respect to both situations, thereare allegations which I must assume have a factual basis. That being so, the statement of claim does disclose wrongful conduct on the part of the defendant, The Dow Chemical Company, and there is causal connection between that conduct and the alleged damages suffered by the plaintiff. Accordingly,liability may rest with the defendant, The Dow ChemicalCompany, in both tort and contract and it is appropriate forthis Court to assume jurisdiction in respect to the claim as itrelates to the defendant, The Dow Chemical Company. Conclusion In the result, the application is dismissed. Theplaintiff will have her taxable costs of the application in anyevent of the cause.
FIAT. The plaintiff brought an action against five defendants claiming fibromyalgia, chronic fatigue and a skin rash were the result of silicone implants. One of the defendants, Dow Chemical, sought a declaration that the Court of Queen's Bench did not have jurisdiction to hear the action and to have the service ex juris set aside. Dow Chemical argued that there was no causal connection between it and the plaintiff's damages. HELD: The application was dismissed. The plaintiff was awarded her taxable costs in any event of the cause. It must be assumed that the allegations have a factual basis and liability may rest with the defendant, Dow Chemical, in both tort and contract, therefore it was considered appropriate to assume jurisdiction.  1)The Court did not have jurisdiction over the defendant on the basis of common law. The defendant is not resident in Saskatchewan and has no direct or real connection to the province. 2)The plaintiff is assumed to have suffered damages in both contract and tort. Applying Queen's Bench Rule 31(l)(f)(g) and the Moran case, the Court should assume jurisdiction absent any reason to the contrary. 3)Three of the four main topics in the statement of claim have reference to Dow Chemical: the failure to inform certain regulatory bodies and the public at large about the risk of breast implants; marketing and distributing the implants which were of non-merchantable quality and breach of warranties. 4)The final plea was that Dow Corning and Dow Chemical were in reality one and the same entity. It was thus suggested that the corporate veil should be pulled aside and any wrongful acts of Dow Corning should be treated as those of Dow Chemical. This differs significantly from vicarious liability where no fault is attributable to the third party but liability attaches because of the relationship. If fault were found to be directly attributable to Dow Chemical there would be a causal connection. 5)The allegation that Dow Chemical breached its duty to disclose the inherent risk suggested a link between the alleged failure to disclose and the injuries.  6)The doctrine of forum non conveniens was not invoked and therefore not considered. Appeal to Court of Appeal dismissed Sept. 9/96.