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Posts Tagged ‘canada class action’

NOTE: The following is a copy of a post that I did for the recently-released Baker Hostetler Class Action Lawsuit Defense Blog. Be sure to check out the new blog for other fantastic class-action-related content!

Globalization has brought with it the growing problem of how to deal with mass disputes that transcend jurisdictional boundaries, as well as ever-increasing creativity among the members of the plaintiffs’ bar in bringing ever-larger class and mass actions. There is no single global court or other forum for bringing international or cross-border civil disputes, let alone disputes that involve allegations of mass harm. One of the key challenges for lawyers, policymakers, consumers, and businesses in the 21st century is how to efficiently resolve international mass disputes given the realities of globalization and the lack of any clear forum.

From the late 1990s through the first decade of this century, there were several trends favoring the U.S. courts as a global forum for litigating international disputes. However, recently, that trend has reversed, and the U.S. courts are becoming increasingly reluctant to entertain international class action litigation.

One of the hottest trends in securities litigation in the latter part of the last decade was what became known as foreign-cubed (or “f-cubed”) class actions, securities fraud class actions filed on behalf of foreign investors against foreign companies involving securities traded on a foreign exchange. The trend came to an abrupt halt, however, when the U.S. Supreme Court issued its decision in Morrison v. National Australia Bank Ltd., 130 S. Ct. 2869 (2010), holding that section 10(b) of the Securities and Exchange Act does not have an extraterritorial reach and only applies to securities traded on a U.S. exchange or other transactions that occurs within a U.S. state or territory. Although lower court decisions following Morrison, including a recent Second Circuit Court of Appeals decision, may breathe some life back into the idea of litigating a small subset of primarily foreign securities disputes in the U.S. federal courts, Morrison has generally closed the U.S. courts to foreign-cubed class actions.

Another promising avenue for litigating global mass disputes was international arbitration. A developing strategy was for plaintiffs who had signed form arbitration agreements to seek to compel arbitration on behalf of both themselves and others who had signed the same form of agreement. (Several arbitration associations have implemented specific rules for how class arbitrations should be conducted. Here is a link to the AAA Supplemental Rules for Class Arbitration). The Supreme Court put an end to this strategy when it decided the international price-fixing case, Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 130 S. Ct. 1758 (2010). In Stolt-Nielsen, the Court held that a party to an arbitration agreement could not compel class-wide arbitration unless the parties had expressly agreed to allow class, rather than individual, arbitration.

In the human rights area, the U.S. Alien Tort Claims Act has increasingly been used as a tool to litigate international disputes involving alleged violations of international law over the past two decades. Several circuit courts of Appeals have even allowed actions under the ATCA to be brought against private corporations, under the theory that those corporations aided and abetted a foreign government or foreign official in committing human rights abuses. However, the Circuits split on the issue, and the Supreme Court accepted certiorari to resolve the split in the case of Kiobel v. Royal Dutch Petroleum, No. 10-1491. Following an oral argument held last month, the Supreme Court issued an order directing the parties to submit supplemental briefing to address the extent to which the ATCA should permit the exercise of extraterritorial jurisdiction at all over acts that took place within a sovereign jurisdiction other than the United States. Questions posed during oral argument, especially by the conservative wing of the Court, suggest skepticism about the allowing U.S. Courts to adjudicate human rights disputes that have nothing to do with the United States.

At the same time that avenues for global mass redress in the U.S. Courts have been closing, doors have been opening in other parts of the world. Class action law continues to develop in Canada and Australia. Israel has a class action procedure that closely mirrors U.S. law. Dozens of other countries in all corners of the world now have procedures allowing at least some form of mass redress. A very recent example is a class action law enacted in Mexico that permits a form of collective litigation that, while quite different from class actions in the United States, provides express mechanisms for seeking collective redress. In 2006, the Netherlands passed a law that allows mass settlements of claims (although it does not provide a procedure for litigating contested class claims), and arguably allows residents of other EU countries to be included. In other countries, the lack of a specific class or collective action procedure has not kept courts from fashioning remedies for mass redress.

The continuing lack of a single global forum for litigating mass disputes and the proliferation of new procedures permitting collective litigation abroad, are likely to have at least one near term practical impact. That is, the development of areas of law dealing with the enforcement of foreign class or collective action judgments. This has already become a reality in a huge environmental contamination case involving the drilling operations of a formal Chevron subsidiary in Ecuador. In 2010, a court in Ecuador entered an $18 million judgment in the case, and proceedings are ongoing in both the U.S. courts and in international arbitration proceedings relating to the enforceability of the judgment.

In a related vein, U.S. courts increasingly find themselves adjudicating disputes under 28 U.S.C. § 1782, which allows litigants discovery in the United States for use in connection with foreign proceedings (see this recent Second Circuit Court of Appeals decision interpreting the statute).

What does this all mean for potential litigants in global disputes? For any company or even small business that does business internationally, these developments highlight the necessity of keeping up with the constant changes in local laws as well as international trends. The procedures that might have been applicable, and arguments that might have been persuasive a year before, may no longer be viable, but new avenues and theories will have almost certainly taken their place.

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The premise sounds ridiculous, but maybe there’s more to it after all.  This quote from moose collision class action lawyer Ches Crosbie sums it up:

Six months ago when we launched this class action, most people in the province thought that we were a bit crazy.

Count most observers from outside the province as sharing that sentiment.  In two previous less-than-scholarly posts, I mocked the idea of a class action seeking relief against the government of Newfoundland and Labrador on behalf of people injured in car collisions with moose.  See entries dated October 19, 2010, Danger! Moose Crossing, and January 12, 2011, Moose Collision Litigation: The Wave of the Future in Canadian Class Actions?  

I stand corrected.

According to Sue Bailey of The Canadian Press, the trial judge has decided to certify the moose collision case as a class action.  In fact, the case for certification was evidently so compelling that the main concern raised by the judge was whether the limitation to persons hospitalized as a result of moose collisions made the class too narrow.  The judge has reportedly asked the parties to consider whether the class definition should be expanded.

According to the article, the government did not resist the motion to certify the class, so perhaps it decided it would be better to take on the moose collision issue once and for all in a single case rather than having to face a flood of individual moose collision lawsuits.  Whatever the reason, it looks like the issue of whether the province was negligent in its introduction of moose and its management of the species after introduction is moving toward a decision on the merits.

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If you’re a Canadian class action lawyer looking for next big thing in class actions, moose collision litigation was looking pretty promising.  As mentioned in this October 19 CAB entry, a class action was filed against the Province of Newfoundland and Labrador  for alleged negligence in introducing moose into the area early last century, causing an excessive number of collisions with vehicles today.

But according to an article today by Gavin Day, posted on the website of Dawson Creek, B.C. radio station 890CJDC, the trend isn’t likely to catch on in British Columbia.   The article points out that unlike in Eastern Canada, Moose are indigenous to B.C.  And don’t think changing the theory from negligent introduction to negligent population control of the moose already present is likely to work.  Day’s article quotes Gayle Hesse of the B.C. Wildlife Collision Prevention Program as saying “I think there are legal precedents already set for that [referring to prohibiting litigation against the government for failing to control moose population] in our province.”  Apparently B.C. courts have already considered the cutting-edge question of moose collision litigation and said, no thank you.

Presumably, there’s still hope in Manitoba, home of moose so vicious that they have become the mascot of a rough and tumble minor hockey league club:

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Debate about legal reforms outside the U.S. can often provide a revealing look at the strengths and weaknesses of the U.S. legal system.  For policymakers in other countries, U.S. consumer protection laws can be the gold standard for access to justice and, at the same time, the epitome of litigiousness run amok.

As an example, check out today’s column from Globe and Mail law reporter Jeff Gray discussing Bill C-36, a proposed reform being considered by the Canada Senate that would permit the government to order mandatory product recalls.  Gray has quotes from several Canadian class action lawyers, both from the plaintiff’s and defense side, making predictions on the potential effects of the bill and commenting on the development of Canada’s consumer protection laws as compared to the United States.

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It’s been a while since his last posting, but Vancouver, B.C. attorney Ward Branch’s latest entry on Class Actions in Canada has been worth the wait.  He has a synopsis on what appears to be every Canadian class action decision of note in recent memory.  If you’re looking to get up to date on the Canadian class action scene, don’t miss it.

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Yesterday, NERA Economic Consulting issued a working paper entitled Trends in Canadian Securities Class Actions: 2009 Update.  The paper covers offers a variety of figures and statistics on cases being pursued, time to resolution, the values of settlements reached in 2009, the exposure represented by cases still pending, and the number of cases with parallel U.S. proceedings.  One key trend discussed in the report is the development of the law on “secondary market liability” provisions of provincial securities acts, especially the Ontario Securities Act.  For a primer on secondary market liability in Canada, see this article from Canadian firm McCarthy Tétrault entitled Ten Quick Tips on Minimizing Exposure to Secondary Market Civil Liability.

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Sorry to all my loyal readers (I use the plural form optimistically) for my absence from the Blawgosphere during the past week.  During my hiatus, Ward Branch of the Vancouver, B.C. firm Branch MacMaster sent me a copy of this decision denying class certification in an Alberta case filed against a chiropractic professional association and a would-be defendant class of chiropractors.  The case had received quite a bit of press in Canada when it was filed, no doubt due in no small part to the catastrophic injuries suffered by the named plaintiff, allegedly as a result of treatment received from a chiropractor.  (See, e.g., this June 2008 Canadian Press article).  In addition to addressing class certification issues, the decision addresses some interesting issues regarding the duty of care owed by a professional association to the public for injuries allegedly caused by its failure to properly regulate its members.

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In the latest installment of Bulletproof Blog‘s series on class action trends from the plaintiffs’ perspective, Larry Smith interviews Canadian lawyer Won Kim.  Kim discusses a recent Ontario court ruling that allows U.S. plaintiffs’ firms to provide administrative support and legal expertise to their Canadian counterparts for class action litigation in Canada.  For the complete article, click the link below.

http://www.bulletproofblog.com/2009/11/04/whats-next-the-plaintiffs-perspective-new-ruling-allows-massive-u-s-support-for-class-action-litigants-in-canada/

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A pair of recent letters to the editor of the Yuma, Arizona online newspaper the Yuma Sun debate the impact of class action lawsuits on the success of national healthcare reform in Canada.

The first letter, from David P. Bossler, argues that the success of universal health care in Canada can be attributed in part to restrictions on contingent fee awards and a loser pays rule:

In Canada, the lawyers in class action suits gets paid by the plaintiff for their efforts, win or lose. The plaintiffs get the entire monetary reward and the loser pays court costs.

This eliminates the spurious extremely costly class action suits that bankrupt companies, pay peanuts to the plaintiffs and make billionaires out of the lawyers.

The response, from Canadian lawyer Mark Mounteer, counters that fee agreements and fee-shifting rules in many parts of Canada are quite similar to those in the U.S. and that class actions involving medical malpractice issues are uncommon in both countries:

It would be unusual in either Canada or the U.S. for a class action to be brought for a doctor’s negligence. A class action is brought where a large number of persons are injured by a common cause. A doctor’s error is likely to cause damage to only one person.

As Mounteer intimates, class actions in many parts of Canada are becoming more and more similar to those common in the U.S.  One important thing to consider in thinking about Canadian class actions is that jurisdiction in the federal court system in Canada is much more limited than that of the U.S. federal courts.  So, class action practice is limited almost exclusively to superior courts in individual provinces.  Procedures governing class actions and other aspects of civil procedure can vary significantly from province to province. 

A good source for information on class actions in Canada is Ward Branch’s blog, Class Actions in Canada.

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Julie Treadman of the American Lawyer published this intriguing article today summarizing her interview with former Milberg attorney Andrew Morganti, who has been working as a consultant for a plaintiff’s class action firm in Ontario, Canada.  Morganti provides his perspectives on the fast-developing areas of securities and antitrust class action law in Canada, opportunities for U.S. class action lawyers to assist or consult with Canadian firms, and cooperative efforts between plaintiffs’ firms in the U.S. and Canada to pursue parallel litigation in both countries.

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