Who Goes First? Debate Over Class Action Sequencing Heats Up in British Columbia
Ontario’s recently-amended Class Proceedings Act presumes that dispositive motions brought by a defendant will precede certification unless the court orders the motions to be heard together. British Columbia has no such provision. Instead, courts presume that certification should go first, but have discretion to direct that other applications should precede it. The list of factors the court will consider is expansive and expanding.
Sequencing applications—and appeals from the resulting decisions—have become increasingly frequent in BC. Despite the presumption that certification will go first, defendants have succeeded in various circumstances in having dispositive and other applications sequenced before certification. And at least twice within the past 12 months, the BC Court of Appeal has granted an unsuccessful defendant leave to appeal a sequencing decision.
The ongoing debate over how class proceedings should be sequenced is illustrated by two recent decisions of Madam Justice Francis of the BC Supreme Court in different cases involving the same defendant, and two recent decisions of the BC Court of Appeal granting defendants leave to appeal sequencing orders.
Same Judge, Same Defendant, Different Results
In April 2021, Justice Francis released two sequencing decisions in different proposed privacy class actions brought against LinkedIn. In one, the court allowed the defendant’s summary trial application to precede certification. In the other, the court found that the defendant’s summary trial application should proceed concurrently with certification. The court’s reasons in these decisions are illustrative of the ongoing debate over the sequencing of pre-certification applications.
In Schmidt v. LinkedIn Corporation, 2021 BCSC 739, Justice Francis allowed LinkedIn’s summary trial application to precede certification. The plaintiff sued under privacy legislation. He alleged the defendant’s app continually accessed users’ devices’ clipboards, where copied information is stored before it’s pasted elsewhere, without users’ consent. The defendant argued the plaintiff’s claim was based on mistaken facts. It conceded its app accessed users’ clipboards in the course of the app’s operation, but argued there was and could be no breach of privacy because the defendant did not read, store, or transmit any clipboard information.
The court concluded “it simply does not make sense to put the parties to the expense of a certification hearing” if “the defendant’s theory of the case is correct and the plaintiff’s claim is based on mistaken facts that are easily refuted” (para. 40). The court also took heed of the defendant’s agreement to (i) defer any appeal from the summary trial decision until the certification application was decided, (ii) treat the summary trial as determinative of the s. 4(1)(a) analysis on the certification application, and (iii) not seek costs of the summary trial.
The court accepted that there were legitimate fairness concerns with a pre-certification, pre-discovery summary trial, but held the plaintiff would not be prejudiced here. If the defendant did not provide the plaintiff with adequate discovery prior to the summary trial, the plaintiff could argue that a summary trial application was premature.
In contrast, in Cronk v. LinkedIn Corporation, 2021 BCSC 738, Justice Francis held that LinkedIn’s summary trial application should proceed concurrently with the plaintiff’s certification application. In this case, the plaintiff alleged that the defendant’s dynamic ads—which displayed users’ personal information back to them—breached privacy legislation. The defendant’s position was that showing a user their own personal information did not breach privacy legislation and that users had consented to such use.
The court concluded that it likely could adjudicate the consent issue summarily because all users had the same experience, the evidence was unlikely to be contentious, and minimal if any discovery would be necessary (and any deficiencies in production prior to summary trial could result in the matter being unsuitable for summary adjudication). The defendant also again agreed to defer any appeal, treat the summary trial as determinative under s. 4(1)(a), and not seek costs. Nevertheless, the court declined to schedule the defendant’s summary trial application before certification, because the court concluded that the issues might turn out to be more complex upon delivery of the summary trial materials.
The BC Court of Appeal Weighs In
The BC Court of Appeal appears to have taken note of the increasing debate over class actions sequencing. At least twice in the past 12 months, it has granted defendants leave to appeal discretionary sequencing decisions in which the court declined to sequence a defendant’s application before certification.
In British Columbia v. Apotex Inc., 2020 BCCA 186, the BC Court of Appeal granted the defendant leave to appeal a sequencing decision in which the court declined to allow the defendant’s jurisdictional challenge to precede certification. The court noted that “the point of the appeal is of significance both to the practice, in terms of providing additional guidance for the exercise of discretion in “sequencing orders” for proposed class proceedings, and to this action in particular, given its proposed national scope” (para. 34). The appeal has since been argued and the decision is under reserve.
In Achtymichuk v. Bayer Inc., 2021 BCCA 147 the Court of Appeal granted the defendant leave to appeal a decision ordering that the defendants’ application to strike portions of the plaintiff’s certification affidavits would be heard with certification, not before. In granting leave, the court noted that “there may be some benefit to the profession from guidance being provided by this Court as to the proper procedures to be followed on sequencing applications. Sequencing applications have become increasingly common in proposed class proceedings, and this Court has not yet had the opportunity to comment on the scheduling of applications to strike inadmissible evidence in advance of the certification application” (para. 33). This appeal has not yet been argued.
As such, litigants can expect that appellate guidance on sequencing issues may be forthcoming in the near future.