When Is the Iron Hot? Pre-Certification Applications to Strike
An early application to strike or summarily dismiss a claim can be an effective and efficient first line of defence in some class proceedings. However, a defendant does not have the right to require motions to be heard before certification. So, when will a court permit potentially dispositive applications to be heard first? The recent Alberta Court of Queen’s Bench decision in Carlson v Transalta Corporation, 2018 ABQB 343 (“Carlson”) provides a useful summary of the factors the court will consider to determine whether summary disposition applications will be heard prior to certification, although the Court in that case ultimately determined that a pre-certification application was not appropriate.
As summarized in Carlson, the case management judge has the discretion to schedule potentially dispositive applications before certification. The court will consider a non-exhaustive list of factors with a view to achieving the foundational goals of class actions law: judicial economy, access to justice, efficiency and fairness.
Factors that militate toward hearing applications before certification include situations where:
- the motion is likely to be successful;
- the motion would encourage settlement, substantially narrow the issues, or dispose of the entire claim;
- there may be “stigmatization” of the defendant if the claim continues; and,
- the issues are simple.
Factors that militate toward hearing applications during or after certification include situations where:
- the motion addresses matters that will be considered at certification;
- there is a high likelihood of appeal (and associated delay);
- the pre-certification steps will be expensive or cause delay; and,
- the motion has a low likelihood of success.
Other potentially relevant factors include the interplay between the issues in the pre-certification application and the certification application; the complexity of evidentiary and legal issues in each application; the nature of the pre-certification application; and the pace of proceedings thus far. As an example, it may be appropriate to hear early applications by defendants asserting they are not properly parties to the litigation.
In Carlson, the Court weighed these factors and decided against allowing the defendants’ application to strike the claim to proceed before certification. The application did not appear likely to succeed, and the Court was not persuaded that a preliminary application would “promote settlement or would even narrow the many issues now before the court” or was necessary to prevent further stigmatization of the defendants.
Even if initial hurdles are overcome and the Court hears a potentially dispositive motion before certification, there is no guarantee of success. For example, in Dennis v Canada (A.G.) et al, 2018 MBQB 88 (“Dennis”), Canada brought a motion to strike a claim related to the privatization of the Canadian Wheat Board, partly on the basis that the issues had been decided in similar class proceedings that had been dismissed or discontinued in other jurisdictions. The Manitoba Court of Queen’s Bench heard the motion before certification, but found that there was no abuse of process or failure to disclose a cause of action, and allowed the action to proceed.
Class action defendants should give careful consideration to the type of pre-certification application they might wish to make. For example, the Court’s determination on a motion to strike a claim for failing to disclose a cause of action will generally be binding on the defendant at certification. If a defendant’s preliminary application leads to a finding that a claim does disclose a cause of action, the defendant may be precluded from challenging that criterion at the certification hearing. On the other hand, a preliminary motion for summary judgment may not raise issue estoppel at certification, because summary judgment involves a separate merits-based test.