Kohler v Apotex Inc: An Analysis of Parallel Multi-Jurisdictional Class Proceedings

Authors: Jason Mohrbutter, Jared Biden

This post was written prior to our January 2017 merger, under our previous firm name, MacPherson Leslie & Tyerman LLP.

In Kohler v Apotex Inc., 2015 ABQB 610 [Kohler] the Alberta Court of Queen’s Bench dealt with a certification application concerning alleged mishandling of oral contraceptives resulting in unwanted pregnancies.

The defendant consented to certification. This was not the end of the application, however. Faced with a parallel proceeding in Ontario, Associate Chief Justice Rooke had to determine whether to certify the Alberta action as a national proceeding, or stay the action out of deference to the Ontario proceeding.

Resolution of this issue required consideration of sections 5(6) to 5(8) of the Class Proceedings Act, RSA 2000, c C-16.5(d). These sections apply where multi-jurisdictional proceedings are extant in multiple provinces on the same subject-matter. The sections impose a number of mandatory factors for the court to consider in determining whether a particular claim would be better handled in another Canadian jurisdiction.

The Alberta provisions are functionally equivalent to the sister-provisions found in Saskatchewan’s class actions legislation (see subsections 6(2) and (3) of The Class Actions Act, SS 2001, c C-12.01). Outside of these two provinces, no other Canadian jurisdiction has enacted similar provisions in their class action legislation. To further complicate matters, there is a dearth of jurisprudence on the Alberta and Saskatchewan provisions. Accordingly, Kohler provides much-needed guidance in an area of law that is likely to grow in importance as national class actions become more prevalent.

Based on a consideration of the factors, Rooke A.C.J. determined that the Ontario proceeding should be accorded no deference, and certified the Alberta proceeding as a national class action.

The first two factors consider whether the proceedings serve the “ends of justice” and the parties’ interests. With similar allegations in the actions and two capable court systems Rooke A.C.J. judged these factors as neutral. (The similarity of the allegations also lead to a neutral finding of the fifth enumerated factor, which requires a consideration of the basis for liability in each jurisdiction.)

The third factor focuses on the need to avoid irreconcilable judgments. There was a danger of irreconcilable judgments if the Alberta and Ontario proceedings both continued to completion, but came to different conclusions on liability and other issues. However, Rooke A.C.J. held that this factor alone was not determinative. If deference was always granted to proceedings in other jurisdictions based solely on this factor, then no class action could continue in Alberta in the face of multiple proceedings.

The fourth factor involves judicial economy. Rooke A.C.J. noted that maintaining parallel proceedings across multiple jurisdictions on an ad hoc basis is contrary to this important policy. For that reason, it would be useful to have the courts in each affected jurisdiction maintain a supervisory role over the class members within that jurisdiction.

The danger that multiple proceedings pose to judicial economy is evidenced by the national litigation that took place over the drug Vioxx.

In that context, trial courts in both Saskatchewan and Ontario certified class proceedings. The subject matter of both claims was functionally identical. Neither court was willing to stay their action in favour of the other. The potential damage to judicial economy and cross-jurisdictional comity— and the danger of irreconcilable judgments— was averted only after the Saskatchewan Court of Appeal reversed certification on other grounds (see Wuttunee v Merck Frosst Canada Inc., 2009 SKQB 509, rev’d 2009 SKCA 43). To avoid such conflicts in the future, Rooke A.C.J. called on the Canadian Bar Association to provide recommendations for a multi-jurisdictional case management protocol. However, the judicial economy factor was also neutral, perhaps because the Ontario action had not yet been certified.

The sixth factor concerns the relative stage of each proceeding. This factor was highly relevant because all other considerations were largely neutral. The Alberta action was significantly further along than the Ontario proceeding. Notably, the Alberta action had been certified, while a certification hearing had not yet been held in Ontario. Associate Chief Justice Rooke noted:

[43] Where a parallel class action in another jurisdiction has not yet been certified, courts have been slow to stay the class proceeding before them – especially where doing so does not adequately protect potential class members… The potential to be included in a separate out-of-province action at some unknown time is no reason to preclude the Plaintiffs from pursuing their properly-filed, ongoing action in Alberta…

Another factor concerns the location of the class members and representative plaintiffs. Rooke A.C.J. rejected the notion that Ontario was preferable simply because more class members lived there. To favor Ontario for this reason would mean proceedings in that jurisdiction would almost always take precedence over those in other jurisdictions. In any event, a settlement could be administered in either jurisdiction. This consideration was neutral, as was the factor concerning the location of the evidence and witnesses. In a complex action with witnesses from across Canada and Europe, neither jurisdiction was significantly more convenient than the other.

The final consideration deals with the advantages and disadvantages of having identical litigation in more than one jurisdiction. Rooke A.C.J. noted that parallel proceedings might be warranted in certain limited circumstances. For example, parallel proceedings might be acceptable in some cases in order to promote access to counsel in one’s home jurisdiction. However, such situations are necessarily rare and there can be significant disadvantages to having parallel litigation in multiple jurisdictions. Rooke A.C.J. noted that multiple actions breed duplication of effort and legal services that can result in individual class members taking home a smaller piece of the award pie. Ultimately, however, this final factor was also neutral.

On the whole, Associate Chief Justice Rooke was satisfied Alberta was the appropriate venue for the proceedings. Of course, this does not prevent the Ontario plaintiffs from continuing their litigation in Ontario.

Based on the analysis of Rooke A.C.J., one might make the observation that many of the factors are likely to be neutral in most cases. If so, the most important factor might be, as in Kohler, a consideration of which proceeding is furthest along or already certified. If this holds true, it might be that the requirements of the Alberta and Saskatchewan Acts incentivize plaintiffs and their counsel to engage in a “race to certification.”

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.