The statement of claim obtained by The Canadian Press shows the passengers are looking for $20 million in general and punitive damages.
At the heart of the punitive damages claim is what the suit alleges was a coverup by Air Canada, which blamed turbulence for the incident that left 16 people hurt on the Toronto to Zurich overnight flight in January last year.
"The passengers are pissed off that they appear to have been lied to by Air Canada," said lawyer Darcy Merkur.
"They were told that this was turbulence and now they find out it wasn't turbulence at all."
Among other things, the suit filed with the Ontario Superior Court alleges Air Canada "actively covered up the true cause of the terrifying episode."
It also accuses Air Canada of various failures in regard to identifying and dealing with tired crew and of pressing indemnity waivers on passengers without telling them what had happened.
None of the claims has been tested in court and the suit has yet to be certified.
Air Canada spokesman Peter Fitzpatrick said the carrier believed the lawsuit had "no merit" and would defend itself "accordingly."
It was only late last month that a Transportation Safety Board report revealed exactly what had happened aboard the Boeing 767, which was halfway across the Atlantic at the time.
According to the report, the groggy co-pilot had just awakened from a nap and was "confused and disoriented" when he at first mistook the planet Venus for an approaching aircraft.
When he did spot an oncoming plane about 300 metres below, he actually thought it was descending straight at them. To avoid what he thought was an imminent crash, the co-pilot overrode the auto-pilot by forcefully pressing on the control column.
In the ensuing 46 seconds, the plane dived 120 metres then lurched 240 metres back upward before stabilizing as the captain, who was awake and in place while the co-pilot napped, regained control.
In all, 14 passengers and two flight attendants among the mostly sleeping 103 people aboard Flight 878 suffered bruises and cuts from slamming into aircraft fixtures. Seven were treated in hospital on arrival in Zurich three hours later.
Linda Jaragina-Sahoo, of Banff, Alta., said Monday she was "very angry" at Air Canada for not telling her what had caused her ordeal.
Jaragina-Sahoo, who was pregnant at the time, said the carrier paid her $3,500 to cover time off work and medical bills.
"I have been lied to for 15 months by this airline," said Jaragina-Sahoo.
"Obviously, I would not have settled for the amount they offered me had I known it was a human error rather than just a course of nature."
Jaragina-Sahoo said the flight had been peaceful until the incident — the scariest event of her life — which has left her terrified of flying.
"It just plummeted out of nowhere," she said.
"Obviously, everybody without seatbelts were thrown violently into the air and back down."
Fitzpatrick said the airline was "fully meeting its liability obligations with respect to this matter as set out under international treaty governing air transport, which is incorporated into Canadian law."
None of the injured was buckled up even though seatbelt signs had been on for 40 minutes because of concerns over turbulence.
Merkur said there may have been no announcement before the signs were turned on.
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