A recent motion for discontinuance of a proposed class action in Ontario has resulted in an important decision about the management of multijurisdictional class actions in Canada.
In Underhill v. Medtronic Canada, 2023 ONSC 5919 [“Underhill”], Justice Agarwal adjourned the representative plaintiffs’ (“plaintiffs”) motion to discontinue the proposed class action but utilized multijurisdictional class action protocols to address multijurisdictional sequencing issues raised by the defendants.
Factual Matrix
The underlying claim in Underhill arises from allegations that the defendants designed, manufactured and sold defective surgical stapler products. A proposed Ontario class action was initiated in October 2021 (the “Ontario Action”). The same plaintiff law firm subsequently commenced an overlapping proposed class action in British Columbia on behalf of a different proposed representative plaintiff (the “BC Action”).
Within weeks following the commencement of the BC Action, plaintiffs in the Ontario Action brought a motion to discontinue the Ontario Action. The defendants opposed the discontinuance of the Ontario Action because a discontinuance would impair their application to stay the BC Action.
Prejudice and Abuse of Process
The defendants argued that the plaintiffs in the Ontario Action acted improperly. The defence theory was that class counsel initiated the Ontario Action as publicity to find a representative plaintiff in BC (as the class action legislation in BC requires a representative plaintiff to be a resident of BC) and that there was never an intention to prosecute the claim in Ontario. Relying on the doctrine of abuse of process, which has been used in Canada to prevent overlapping class actions, the defendants argued that the plaintiffs in the Ontario Action were “merely a vanguard, holding the line until reinforcements arrived” (at para. 36).
Justice Agarwal was not convinced. The “abuse of process” argument involved merging the identities of class counsel and their clients, which His Honour did not accept. The plaintiffs were the ones seeking a discontinuance, not class counsel.
Justice Agarwal did, however, accept the prejudice argument raised by the defendants. The claims of putative class members in Ontario were suspended upon commencement of the Ontario Action, and their claims are also suspended by the BC Action. Arguably, a stay of the BC Action could result in the resumption of the limitations period if the Ontario Action were already discontinued. Consequently, the claims of some putative class members could become statute-barred immediately upon a stay order being granted in the BC Action.
That putative class members could be fatally prejudiced by the discontinuance of the Ontario Action before disposition of the stay application in the BC Action was a risk that was “simply too great” (at para. 31). On this basis, the discontinuance motion was adjourned indefinitely. By doing so, the limitation period would remain suspended.
CBA Protocols
Underhill provides helpful insight on limitations prejudice and abuse of process. However, what makes this decision of special interest is the commentary and procedural determinations of Justice Agarwal regarding interprovincial case management protocols.
In the United States, a defendant has access to the multiple district litigation (“MDL”) system when faced with parallel class actions commenced in other States. MDL is a procedural mechanism in which a party can bring a motion in federal court to seek one claim. Benefits of a consolidated claim in MDL include the avoidance of repetitive and delayed discovery processes, inconsistent judicial determinations, excessive costs incurred by the parties, and excessive resources utilized by the judiciary. Unlike in the United States, the litigation process in Canada lacks a centralized system for managing multijurisdictional class proceedings. When faced with overlapping class actions in different provinces, the remedy available to defendants is to bring motions in other provinces to stay or dismiss parallel proceedings. It is a costly and inconvenient process.
In response to the absence of a centralized procedural mechanism for dealing with multijurisdictional class proceedings, Canadian courts have adopted into the rules of court the Canadian Judicial Protocol for the Management of Multijurisdictional Class Actions and the Provision of Class Action Notice (“CBA Protocols”). Under the CBA Protocols, judges managing overlapping class actions in different provinces can speak to each other, host joint case management hearings, and participate in joint applications and motions.
In Underhill, Justice Agarwal initiated CBA Protocols by endorsing an order that the judge in the BC Action be allowed to participate in the Ontario Action’s eventual discontinuance motion. The ultimate objective is to have one joint hearing for both the stay application in the BC Action and the discontinuance motion in the Ontario Action. It will, however, be up to the judge in the BC Action to decide whether to accept the invitation and allow Justice Agarwal to participate in the stay application.
Takeaway
Since the CBA Protocols have hardly been used outside of settlement approvals, it is refreshing to see Justice Agarwal initiate CBA Protocols in Underhill. While it remains to be seen whether a joint multijurisdictional hearing will come to fruition as contemplated by Justice Agarwal, His Honour’s endorsement is a step in the right direction. If the joint efforts contemplated by the CBA Protocols become more commonplace, it will not only save parties substantial time and costs but could also one day lead to a formalized system for streamlining multijurisdictional class proceedings in Canada.
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