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When it comes to class actions, no one involved in shaping the law wants to see Canada make the same mistakes as the United States. Opening the door to forum shopping would be high on the list.
That's what makes a recent decision by the Chief Justice of Saskatchewan so interesting.
Chief Justice John Klebuc expanded a multijurisdictional class action in Saskatchewan to pull in Canadians in nine provinces who took the painkiller Vioxx, even though a national Vioxx class action is wending its way through the Ontario courts.
More people in Ontario than in Saskatchewan took Vioxx, he acknowledges in his decision, but he essentially says Saskatchewan's beefed up class-action regime – which just came into effect April 1 – is faster and more favourable for plaintiffs than Ontario's.
Larry Lowenstein, chairman of the national litigation group at Osler Hoskin & Harcourt LLP, says that as things stand now, the Saskatchewan decision opens the door to forum shopping by Canadian plaintiffs’ lawyers.
He certified a suit led by Tony Merchant, Saskatchewan's best-known lawyer, in all provinces but Quebec. Two years ago, Mr. Merchant lost a bruising year-long fight to lead the very Ontario suit he may now have knocked out of contention.
As provinces across Canada ramp up their class-action statutes, competition is building for the large marquee lawsuits that used to go to Quebec, Ontario or British Columbia.
Anyone who doubts it need only consider this: Chief Justice Klebuc's certification disregards an order by Ontario's Chief Justice.
In 2006, Warren Winkler, then a regional senior judge, awarded carriage of a national Vioxx class action to a consortium of 19 law firms from across Canada, saying the group had superior class-action experience. And he granted an order expressly precluding Mr. Merchant from starting any new Vioxx action in Ontario.
Saskatchewan Chief Justice Klebuc rode roughshod over that order in making Mr. Merchant's national class the first to cross the all-important certification threshold. All Canadians outside Quebec who took Vioxx are now automatically pulled in to Mr. Merchant's lawsuit unless they opt out in writing – even Ontarians.
And it's tough to ignore the timing. Mr. Merchant's expanded suit was certified May 29. Certification hearings for the national suit out of Ontario began yesterday.
The spectre of competing national class-action lawsuits is not a happy one for defendants who can win in one jurisdiction and lose in another, or settle in one and be forced to litigate in the other. Larry Lowenstein, chairman of the national litigation group at Osler Hoskin & Harcourt LLP, says that as things stand now, the Saskatchewan decision opens the door to forum shopping by Canadian plaintiffs' lawyers.
“If things are going slowly or badly in one jurisdiction, you could have a competing plaintiffs group say, ‘Let's find somewhere with a light docket and a speedy court, and give it a whirl over there,'“ Mr. Lowenstein says. “It's disastrous for everybody.”
The situation may get messier before it is settled.
Merck Frosst, the maker of Vioxx, seized on the Saskatchewan certification to ask the Ontario court to stay the national consortium's suit, saying potential class members are now covered by the Saskatchewan action. (The company has also been granted leave to appeal Chief Justice Klebuc's decision.) Ontario Superior Court Judge Maurice Cullity yesterday planted Ontario's flag and ruled the national Ontario action can proceed for now, putting the courts of Ontario and Saskatchewan on course for a collision that many feel will end up before the Supreme Court of Canada.
Provinces usually operate under the principle of comity, with one court respecting the decisions of the other. And chief justices don't normally override one another. Harvey Strosberg, a well-known class-action lawyer helping steer the consortium of 19 law firms, has warned that if the Ontario court recognizes the Saskatchewan decision, it will “make a comedy of comity.”
Judge Cullity made it clear he saw no compelling reason to defer to the decision of a court that did not defer to a decision in Ontario.
“I have considerable doubt about how far the principle of comity should go in a case like this,” he said, in refusing to stay the Ontario case in order to avoid overlapping national class actions.
“The Saskatchewan court is now allowing Mr. Merchant to have carriage of a class that was denied to him in Ontario.”
Chief Justice Klebuc said in his ruling, however, that he had considered Ontario Chief Justice Winkler's order and had given “considerable weight” to the opinion he expressed “based on the evidence before him.
“However, since February, 2006, the Merchant Law Group appears to have gained considerable experience and achieved considerable success in the prosecution of class actions,” he wrote. “The information before me indicates that it now has better resources and greater capacity than it had when the [Ontario] carriage motion was heard.”
He went on to point out that his province now has a no-cost regime, while in Ontario plaintiffs in the Danier Leather case were hit with over $1-million in court costs after losing the case. He also said Saskatchewan's trial courts have a lighter caseload and more direct access to the appellate court than Ontario's so the case could be heard sooner, a benefit to elderly people who took Vioxx.
Mr. Strosberg says he believes Saskatchewan's Chief Justice and Mr. Merchant are just doing “an end run” around Chief Justice Winkler.
“The decision was final that bound Merchant to not be able to seek a national class and he [Chief Justice Klebuc] ought to have given respect to it,” Mr. Strosberg says. “Unless courts are sensitive, and recognize decisions as having some force and effect, we're going to have chaos.”
Mr. Merchant did not respond to e-mails to his office seeking comment.
Chief Justice Winkler is active on a panel of Canadian and U.S. lawyers and judges trying to develop a protocol for cross-border class actions. There is speculation that in the wake of the Vioxx case he may initiate a similar forum for Canada's chief justices to develop a protocol between provinces for managing national class actions.
A senior Bay Street litigator says all the manoeuvring on Vioxx just underscores that class actions are big business for local law firms, and judges know it as well as anyone.
“There's a recognition implicit in this decision that the provinces have competing interests in being the jurisdiction of choice,” he says. “It's a boon to the local bar, it's all driven by dollar signs.”
Sandra Rubin is a contributor to Lexpert
