Continuation of the "First to File" Rule in Québec?

September 14, 2012

A recent decision from the Québec Superior Court has stated that the “first to file” rule continues to dictate the carriage of class actions within that province (except when it is obvious that the best interests of the putative class members are not the counsel’s priority), until such time as the Québec Court of Appeal changes the status quo.

Wainberg c. Zimmer (Wainberg) concerned a motion to stay one of two proceedings launched against Zimmer of Canada Limited (Zimmer) for its allegedly defective hip replacement implants. Two proceedings were launched by different plaintiffs: one who sought to be the representative for all of Canada and alternatively for Québec residents, and another who sought to be the representative for only Québec residents. Zimmer did not favour either motion as no substantive steps had been taken in either; it only asked that one be stayed to avoid a multiplicity of proceedings to include one representative plaintiff in mediation proceedings.

Justice Gouin concluded that the first motion should proceed because there was no significant difference between the two and because it was filed first.

The motions against Zimmer were related to several proposed class actions in Ontario, Alberta, British Columbia, New Brunswick and Nova Scotia, some regional, some national, some opt-in and some opt-out class actions. Recently in McSherry v Zimmer GMBH, an Ontario regional class action plaintiff successfully argued that three different national class actions motions originating in Ontario should be stayed.  In that decision, Justice Perell for the Ontario Superior Court of Justice provided extensive commentary on the issues arising from overlapping class actions in multiple jurisdictions and the use of carriage and stay motions as solutions.

In Wainberg, Justice Gouin noted that some Québec courts had applied an automatic “first to file” rule to determine which overlapping class action should proceed. However, in other cases, a discretionary approach was applied in response to the practice of law firms filing overlapping class actions in multiple jurisdictions, motivated by a desire to “claim turf and secure carriage for law firms” rather than to advance the interests of a class. Schmidt c. Depuy International Ltd. (Schmidt) recently applied discretionary criteria for this purpose. Leave to appeal that decision was granted and the case is currently under reserve with the Québec Court of Appeal.

Justice Gouin recognized that in Ontario, a list of factors are applied by the courts when determining which class actions should proceed; the factors are meant to provide for the best interests of all putative class members and to ensure fairness to the defendants. However, he concluded that these factors have not yet been established in Québec and where there is no significant difference between motions that would be detrimental to the class members, the first motion to be filed should proceed.

Schmidt provides the Québec Court of Appeal with an opportunity to determine if the first to file rule will continue to be automatically applied in Québec.

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