Accounting for Law

Lerners LLP: Angus T. McKinnon

Is The Game of "Whack-A-Mole" Coming to an End?

Lerners LLP

By Angus T. McKinnon

The existence of multiple overlapping national class actions in different jurisdictions was described by the Saskatchewan court in 2011 as a “multi-jurisdictional game of class action whack-a-mole”.1 Whether overlapping actions are commenced by one plaintiff’s counsel or competing plaintiff’s counsel, the result is the same – the interests of the class members are not generally advanced, the defendants are put to the time and expense of attempting to rationalize the proceedings and the court’s time is wasted.

When national class actions are launched in different jurisdictions, the court of one province does not have jurisdiction to stay a similar or identical national class proceeding brought in another province. Early decisions illustrated difficulties such as a provincial court’s bias towards asserting its own jurisdiction2 and the certification of competing overlapping class actions when judicial comity was not extended.3 

It now appears that the courts may be prepared to act using a variety of legal avenues. In the telephone System Access Fee class action litigation against telecommunication providers, the courts of four different provinces have, on motion by the defendants, stayed as an abuse of process duplicate class proceedings brought in different provinces by the same law firm4. In these decisions the courts looked beyond the identity of the proposed representative plaintiffs to the identity of plaintiffs’ counsel, finding that the commencement of close to identical proposed class actions in various provinces was akin to “planting cherry trees and waiting to see which one might bloom”. Such conduct was found to constitute an abuse of process, justifying the staying of the subject actions.

An alternative approach was recently taken by the Saskatchewan Court of the Queen’s Bench in Ammazzini v Anglo-American PLC.5 This case alleged that the defendants had conspired to restrict the supply of gem grade diamonds to inflate diamond prices. Class actions were commenced in British Columbia on behalf of British Columbia residents and in Ontario on behalf of all persons resident in Canada other than British Columbia residents. British Columbia and Ontario counsel were working cooperatively in prosecuting the actions. In the face of these ongoing proceedings, different counsel commenced an action in Saskatchewan on behalf of all persons resident in Canada other than British Columbia residents. Applications were brought in the Saskatchewan court by the British Columbia and Ontario representative plaintiffs seeking a conditional stay of the Saskatchewan action.

Saskatchewan is one of only two Canadian provinces to have adopted the recommendations of the Uniform Law Conference of Canada to enact provisions to promote judicial economy by limiting duplicative class actions.6 Section 4(2)(c) of Saskatchewan’s amended Class Actions Act, C-12.01, provides that notice of an application for certification must be given to the representative plaintiff in any multi-jurisdictional class action or proposed multi-jurisdictional class action commenced elsewhere in Canada that involves the same or similar subject matter. Section 5.1 of the Act provides that a person who receives notice in accordance with s. 4(2)(c) may make submissions at the certification hearing. Section 6(2) provides that consideration must be given to whether it would be preferable to resolve the claims or common issues of proposed class members in the action before the Saskatchewan court or elsewhere. Section 6(3) then goes on to set out a series of objectives and relevant factors that are to guide the court in making its decision. Finally, s. 6.1(1)(b) specifically provides that the court can refuse to certify a class action if it determines that it should proceed as a multi-jurisdictional class action in another jurisdiction.

In Ammazzini, the Saskatchewan court determined that the British Columbia representative plaintiff had no interest in and consequently no standing to apply for a stay or to oppose certification because British Columbia residents were excluded from the proposed Saskatchewan class action. In the case of the Ontario representative plaintiff however, there was a clear overlap between the Ontario and Saskatchewan proposed class as both were national in scope. As a result, the Ontario party had standing to oppose certification of the Saskatchewan action and to seek a stay of that proceeding. The court rejected the Saskatchewan plaintiff’s argument that the Ontario plaintiffs should not be permitted to file evidence, finding that such evidence was relevant to the factors the court was directed to consider under s. 6(3) of the Act.

In considering whether Ontario or Saskatchewan was preferable, Justice Currie concluded:

(a) the Ontario action involved the same or similar subject matter as the Saskatchewan action;

(b) the two actions had the same fundamental basis of alleged liability;

(c) the Saskatchewan plaintiffs had been building on the work of the Ontario and British Columbia plaintiffs and “there can be no doubt that the Saskatchewan statement of claim was drafted with at least the British Columbia statement of claim in hand”;

(d) working together, the Ontario and British Columbia plaintiffs had done the “heavy lifting” in conducting original research, selecting defendants and crafting the pleading of causes of action; and

(e) appropriate progress was being made in the Ontario action.

The Saskatchewan court specifically rejected the Saskatchewan plaintiffs’ arguments that the Saskatchewan court should prefer Saskatchewan class members’ interests and that the first action to reach a certification motion should be preferred. In the result, the court found that the Saskatchewan action was duplicative of the Ontario action and that the proposed class members did not need a duplicate proceeding. In the result, the Saskatchewan action was stayed.

The recent willingness of the courts to assert control over duplicative proceedings should be welcomed by both plaintiffs and defendants as it will help to avoid ‘claim jumping’ by competing plaintiffs’ counsel and assist defendants in rationalizing already complex proceedings. While the courts may be called upon more and more frequently to deal with competing claims, it should be recalled that it was the courts and not the legislatures that created national classes and the issues associated with them.

 

1Duzan v Glaxo-Smith-Kline Inc., 2011 SKQB 118 (CanLII) at para 37.
2Yee v Aurelian Resources, 2007 ABQB 368 (CanLII).
3Tiboni et al v Merck Frosst Canada Ltd. et al, 2008 ONSC 37911 (CanLII).
4Gillis et al v BCE Inc et al, 2015 NSCA 32 (CanLII); Turner v Bell Mobility Inc., 2016 ABCA 21 (CanLII); Drover v BCE Inc., 2013 BCSC (CanLII); Hafichuk-Walkin et al v BCE Inc. et al, 2016 NBCA 32 (CanLII).
52016 SKQB 53 (CanLII).
6The second being Alberta.

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