The Quebec Court of Appeal Refuses to Get Carried Away
In Schmidt v. Johnson & Johnson et al. the Quebec Court of Appeal has qualified its approach to carriage in class action matters.
Since 1999, when that same Court rendered its decision in Hotte v. Servier, the rule in Quebec has been that the first party to file a class proceeding with respect to a particular defendant and proposed class will have carriage of the litigation. Any subsequent class proceedings will be suspended given the appearance of lis pendens.
This approach to carriage is different from that adopted in the U.S. and common law Canada, where carriage hearings are typically held in order to determine which counsel would be best suited to pilot the class action.
In Schmidt, the Court of Appeal stated that while it would not be appropriate to import carriage hearings into Quebec (with all of the delays, complexities and subjectivity they entail), judges should exercise their discretion not to apply the “first to file rule” in cases where doing so is not in the best interests of class members.
In its reasons, the Court of Appeal laid out the following analysis:
- The first motion for authorization to institute a class action will, in principle, be given priority;
- Subsequent motions will be suspended and only heard if the first motion for authorization is dismissed;
- The priority of the first motion may nevertheless be contested;
- Class counsel who wants to contest the priority of the first motion has the onus of showing that it was not brought in the best interests of class members and constitutes an abuse of the rule articulated in Servier.
As one instance of procedural abuse, the Court of Appeal points to class action proceedings filed for purely dilatory or strategic reasons, such as the shotgun approach adopted by some firms whereby multiple identical motions are filed simultaneously across Canada in order to pre-empt the entry of other potential class counsel.
class action class counsel Hotte v. Servier lis pendens motions Quebec Court of Appeal Schmidt v. Johnson & Johnson Servier