May 2, 2023
Dolden Wallace Folick’s Class Action Newsletter – May 2023
Too Broad to Certify: The Risk of Generalization
By Christopher Stribopoulos and Elka Dadmand, Dolden Toronto
Email: [email protected] and [email protected]
In Price v. H. Lundbeck, 2022 ONSC 7160, the representative plaintiffs sought to certify a class action alleging that the antidepressant drug “Celexa,” manufactured and distributed by the defendants, caused fetus anomalies or pregnancies to spontaneously abort and miscarry. Justice Glustein dismissed the certification motion because the plaintiffs failed to satisfy the common issue and preferable procedure requirements under ss. 5(1)(c) and (d) of Ontario’s Class Proceedings Act, S.O. 1992, c. 6 (the “CPA”).
In framing the common issues, the plaintiffs sought to establish that Celexa was a “teratogen,” i.e. an agent that could cause congenital malformation. The broadness of this proposed common issue was a fatal flaw.
Justice Glustein held that even if Celexa was a teratogen, it did not establish that Celexa caused, or could have caused, the specific malformations that each plaintiff allegedly suffered. Likewise, the failure to warn could not stand on its own as a common issue because it required that the defendant warn of a specific defect rather than a generalized risk. The plaintiffs’ framing of this proposed common issue was so overly broad that it failed to advance the claim and was not a common issue suitable for certification.
The plaintiffs’ framing of the common issues negatively affected their position that a class action would be the preferable procedure.
Justice Glustein noted that a class action could not be the preferable procedure if there was no common issue suitable for certification. Even if the plaintiffs established that Celexa was a teratogen or that the defendants breached their duty to warn of that teratogenicity, those issues did not materially advance the litigation. The general causation of each specific congenital malformation remained an issue for each class member and an overwhelming number of individual issues remained.
A strategy within a defendant’s arsenal is to argue against broadly framed class action claims. The Court will not certify class actions where the common issues are so broadly defined as to fail to serve the ends of fairness or efficiency. Being attuned to the overarching intent of class actions is an effective method to defend certification.
Defence Pleadings in Class Actions: Ontario Court Reinforces the Presumptive Requirement
By Christine Galea and Jacqueline Riccobene, Dolden Toronto
Email: [email protected] and [email protected]
The historical “common practice” of permitting defendants in a proposed class proceeding to defer the filing of defence pleadings until after the action has been certified has increasingly attracted judicial criticism by the Courts in certain provinces over recent years.
The Ontario Superior Court’s decision in Richard v. The Attorney General of Canada, 2022 ONSC 6847 (“Richard”) re-affirms that a defendant in a class proceeding is presumptively required to comply with the Rules of Civil Procedure (the “Rules”). This includes filing a statement of defence prior to the certification motion, unless the defendant can establish “special circumstances” justifying a deferral.
Section 35 of Ontario’s Class Proceedings Act provides that the Rules apply to class proceedings. Rule 18 requires the delivery of a statement of defence within twenty days after service of a statement of claim, with an additional ten days if the defendant serves a notice of intent to defend.
The representative plaintiffs commenced a proposed class action against the federal government on behalf of a proposed class of non-citizens who were allegedly detained in provincial correctional facilities for punitive and non-administrative purposes. The plaintiffs sought damages for alleged breaches by the federal government of their Charter rights as well as a duty of care and fiduciary duties owed to the class.
The federal government brought a motion seeking an order deferring the filing of defence pleadings until after the outcome of the certification motion on the basis that:
- the litigation was so complex that a deferral was necessary;
- substantial resources, time and effort would be required to properly prepare the statement of defence, which could be “wasted”; and
- the statement of defence was unlikely to be useful or necessary to the certification motion.
Review of Case Law
Justice Glustein recognized that in the early years of class action litigation in Ontario, a practice arose whereby the parties would agree that defence pleadings need not be filed until after certification. This was in line with the view that the statement of defence had little utility prior to the certification hearing due to the likelihood that the statement of claim would be reformulated as a result of the certification decision.
Nevertheless, Justice Glustein recognized this convention has been rejected in Ontario, citing the Court’s earlier decisions in Pennyfeather v. Timminco Ltd., 2011 ONSC and Smith v. Sino-Forest Corporation, 2012 ONSC 1924.
In Pennyfeather, Justice Perell expressed that the usual practice should be revisited. He discussed the “major advantages” to the Court and the parties of closing pleadings prior to certification, including the potential to narrow issues and the utility of the statement of defence in providing information for analyzing the preferable procedure criterion and the plaintiff’s litigation plan. In Sino-Forest Corporation, Justice Perell expanded on his reasoning in Pennyfeather, stating that it is generally desirable to normalize class actions with the procedure under the Rules and to prevent defendants from deferring a statement of defence for tactical reasons.
Justice Glustein considered decisions of the Courts in other provinces as well. In recent years, British Columbia, Alberta and New Brunswick have been moving away from the “common practice” of deferring defence pleadings until after certification unless the defendant can show a “good reason” to defer.
His Honour ultimately endorsed the importance of defence pleadings in providing legal and factual context for the certification motion and in articulating the competing positions of the parties for the s. 5(1)(a) analysis, and the remainder of the certification test.
Application of Law
Justice Glustein held that the federal government did not discharge its onus in establishing that there were “special circumstances” justifying a deferral, and the motion was dismissed. The claim itself was straightforward; the federal government knew the claim against it and could respond to the claim and deny the allegations against it in the statement of defence. None of the federal government’s objections were accepted.
In addition, the federal government had conflated preparation of the statement of defence with preparation for discovery or trial in asserting that substantial time, effort and resources could be “wasted.” A defence pleading can be drafted without the need to investigate every fact and without obtaining voluminous documentation. Lawyers could not be said to be waiting for the outcome of the certification motion before investigating the material facts, researching the applicable law and knowing what defences are available.
A full and fair assessment of the issues at the certification motion is an additional factor in favour of pre-certification filing of defence pleadings.
The “common practice” of deferring defence pleadings until after certification is becoming progressively discouraged by the Courts in certain provinces, particularly British Columbia, Alberta and New Brunswick. The Ontario Superior Court seems to be moving in this direction as well.
Following the Richard decision, defendants in Ontario should be cognizant of the presumptive requirement to deliver a statement of defence prior to the certification motion, in accordance with the applicable Rules. In order to rebut this presumption, rather than relying on “common practice,” defendants must establish that there is “good reason” for the Court to justify deferral.
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