April 2005

Greetings!
My associates and I have been slaving over hot computers to get out the bi-annual update to the textbook, so look for that in your mailboxes over the next couple of months. If you haven't ordered your own copy yet, visit http://www.canadalawbook.com/catalogue.cfm?DSP=Detail&ProductID=446
It is guaranteed to keep you informed on the latest class action issues (or to put your kids to sleep in record time!).
In the meantime, we set out below the breaking news from the last couple of months to tide you over.
Also, if you ever delete these email updates (how could you?!), you will be pleased to know that we have set up a "blog" at which all the historical email updates will be posted. The blog is found at:
http://classactionsincanada.blogspot.com/

CONFERENCES
Attached is a brochure for upcoming seminar on litigation against the government at which the writer will be speaking. We hope to see you there!

US CLASS ACTION NOT ENFORCED AGAINST CANADIANS (BUT IT COULD BE)
In Parsons v. McDonalds, [2005] O.J. No. 506 (C.A.), the Ontario Court of Appeal affirmed that a US class settlement did not bind Canadians due to weaknesses in the scope of the notice program. However, more importantly, the court affirmed that it is prepared to enforce US class actions that include Canadians so long as jurisdiction and due process concerns are met. For a copy of our office's paper discussing the lower court decision see: http://www.branmac.com/classactions/articles.htm

TOBACCO CLASS ACTION APPROVED IN QUEBEC
In Conseil québécois sur le tabac et la santé c. JTI-MacDonald Corp. [2005] J.Q. no 607, the Quebec court approved a class action against the tobacco companies. This is another clear example of the lower certification standard in Quebec, given that a similar class action was denied certification in Ontario.

LIGHT CIGARETTE CLASS ACTION CERTIFIED
In Knight v Imperial Tobacco, 2005 BCSC 172, the court certified a "lite cigarette" class action. Klein Lyons is counsel for the class. Their decision to restrict the claim to statutory economic claims clearly assisted in pushing the balance in favour of certification.

LONG-RUNNING CLASS ACTION SAGAS SETTLE
The fen-phen lawsuit, Wilson v. Servier Canada Inc. [2005] O.J. No. 1039 (S.C.J.), has finally settled. You can hear the weeping emanating from the Bay Street towers from here.
A settlement was also approved in the long running Hoy v. Medtronic saga on April 1. The writer was counsel for the class. Details can be found on our office's website.

INSTITUTIONAL ABUSE CASE CERTIFIED
The court certified an institutional abuse class action in W.J.R. v. British Columbia , 2005 BCSC 372, [2005] B.C.J. No. 561. The writer was counsel for the defendant Province. Details can be found on someone else's website. Wound-licking can be found occurring in our office.

CRIMINAL INTEREST RATE CASE DENIED CERTIFICATION
The B.C. Supreme Court rejected a class action filed against B.C. payday lenders over allegedly high interest rates. Madame Justice Brenda Brown ruled that the lawsuit did not meet the criteria for a class action. The lawsuit named 18 different payday loan businesses and alleged the companies violated the federal criminal code by charging annual interest rates exceeding 60 per cent. The writer acted for an array of the defendant companies (batting .500 for the month!): See MacKinnon v. Moneymart, 2005 BCSC 271.

INVESTOR CASE CERTIFIED
Roughly 200 owners of suites in an underperforming Richmond hotel were granted class-action certification in their civil case by the B.C. Supreme Court. They claim management was in a conflict-of-interest position when they allegedly shuffled guests to a competing hotel: See Sharbern Holding Inc. v. Vancouver Airport Centre Ltd. , [2005] B.C.J. No. 347

DEFENDANT ADDED TO PROPOSED CLASS ACTION
On a motion by the defendant tractor manufacturer in a proposed class alleging defects in tractor tracks, the court agreed that the track supplier was "a party of significant interest to the certification application" and ordered that the supplier be added as a defendant for the purposes of the certification: Sorotski v. CNH Global N.V., [2005] S.J. No. 174 (Q.B.)

CERTIFICATION APPEAL DISMISSED
In James v. BC, 2005 BCCA 136, the court dismissed an appeal of the order certifying this employee benefits class action.

CERTIFICATION UPHELD IN AFTER MARKET PARTS CLASS ACTION
The aftermarket parts certification order of Nordheimer J. dated November 22, 2004 was upheld as leave to appeal was denied. No reasons were given by the hearing judge, Matlow J.

INDUSTRY CLASS ACTIONS TAKE A HIT IN QUEBEC
In Bouchard v. Agropur, 2004 QJ 13863, the court refused to certify a class action alleging that milk distributed in Quebec contained less fat content that represented (this would never happen in B.C.!). The court concluded that the case should be dismissed against many of the defendants because the plaintiff had not dealt with their dairies. The court also found that the cause of action standard was not met and dismissed the case generally. So Ragoonanan now has some support in Quebec.

VITAMIN SETTLEMENT APPROVED
In Vitapharm v. F. Hoffman La Roche, 2005 OJ 1117 (S.C.J.) and 2005 OJ 1118 (S.C.J.) the court approved settlement in an array of the vitamin price-fixing cases.

POLICE CLASS ACTION CERTIFIED
In a decision rendered by Buffoni J. on Feb. 17 the court certified a class action seeking a permanent injunction and damages with respect to the management of criminal records by the police: Ostiguy v. AG Quebec.

RAGOONANAN CASE SURVIVES SUMMARY JUDGMENT ATTACK
In Ragoonanan v. Imperial Tobacco (March 9, 2005), the court declined to grant summary judgment in favour of the defendants, stating that there was sufficient evidence to meet the low threshold.

CONFIDENTIALITY OVER NAMES PROTECTED
In earlier reasons, the court ordered disclosure of the full names and last known addresses of children set out in police records on the basis they had waived their privacy rights. On receiving further argument, the court found that it was in error in concluding that a waiver had occurred, and deleted that component of the order. The writer acted as counsel for the Province: Griffith v. Winter, 2004 BCSC 1781.

SUMMARY JUDGMENT APPLICATION BY CERTIFIED CLASS DISMISSED
In Fakhri v. Wild Oats Markets Canada, Inc., 2005 BCSC 282, the Plaintiffs sought summary judgment on behalf of part of the class who actually had a contractual relationship with the defendant. The court found that there was too much overlap between contractual and negligence claims making summary determination of contractual claims inappropriate.

LONG RUNNING CLASS ACTIONS HIT THE END OF THE ROAD
The bingo license fee challenge Nanaimo Immigrant Settlement Society v. BC has died as leave to reconsider the merits decision was denied by SCC.
The plaintiffs in the two proposed class action lawsuits brought on behalf of BCI common shareholders and seeking $1 billion in damages against BCI and BCE, which were previously dismissed by the Ontario Court of Appeal, were refused leave to appeal by the Supreme Court of Canada.

RUMLEY INTERVENTION DENIED
As previously reported, the Jericho Hill class action was settled after a number of years of litigation and the court gave its approval to the settlement in April 2004. In January 2005, four individuals applied to be added to the class for the purpose of participating in the settlement. Each of those persons had received compensation under the JIPC, ranging in amount between $20,000 and $30,000. The application was dismissed. The order approving the settlement had been entered. The class action was concluded. Even if the court were to find that accepting compensation from the JICP or related matters were mere technicalities to be overcome by a general view of fairness, the court held that it was functus. In any event, those matters were not mere technicalities: See Rumley v. BC, 2005 BCSC 189.

BANKS EFFORT TO TAKE DECLARATORY PROCEEDINGS TO SCC FAILS
The motion by the banks to strike a proposed consumer rights class action in advance of certification was denied. Leave to take the issue to the SCC was also refused: Bank of Montreal, et al. v. Attorney General of Quebec, et al. (Que. C.A., September 28, 2004) (30645).

COSTS REFUSED IN FAILED CERTIFICATION HEARING
Tobacco companies sought over $1.2 million in costs against the plaintiffs and their lawyers (Sommers & Roth) as a result of the failed certification motion. They were awarded zero. The tobacco companies alleged that their defence costs were needlessly driven up by Plaintiff lawyers who were the real "powers" behind the suit. They argued that the lawyers who brought the suit must bear the brunt of the tobacco firms' defence costs. The Plaintiffs argued that awarding costs against them and their lawyers would ensure that no one would pursue the tobacco companies again in a class action. The Plaintiffs further maintained that the suit was brought by smokers with real health problems and that the suit was a matter of public interest. The Plaintiffs also argued that tobacco companies have long tended to adopt "scorched earth" legal tactics to ensure that those who sued them would run out of money.
In awarding no costs to the tobacco companies, Justice Winkler concluded that the proceeding raised novel points of law. Firstly, his Honour found that the class action was commenced when class actions were relatively new in Canada. Secondly, the court held that the claim that the tobacco companies were involved in a conspiracy was a novel legal issue. Justice Winkler also found that the class action involved a matter of public interest.
In particular, His Honour determined that the action had special significance for the community at large and beyond the members of the proposed class. The fact that the tobacco industry is heavily regulated in Canada was a major factor substantiating his finding that there was a strong public interest component in the case. Justice Winkler also stated that the case engaged a strong behaviour modification aspect, mainly due to the fact that the claim had been brought by four Plaintiffs with modest individual losses who were seeking to represent a much larger group of millions of smokers in Ontario.
Justice Winkler stated that he was entitled "to take judicial notice of the fact that the use of tobacco products is considered to constitute a serious risk to the health of the public in this province and elsewhere in Canada". His Honour also stated that "any proceeding that might have the effect of either curtailing the use of those products or visiting the health costs of their use on the defendants rather than the public at large" clearly raised issues that went beyond the interests of the class. He added that the case was "of some specific societal significance to residents in Ontario and the rest of Canada".

WEBB V. K-MART STILL ALIVE
The court denied an effort by the Hudson's Bay Company to dismiss a class-action lawsuit brought against it by 1,000 Kmart workers terminated after their company merged with the defendant in 1998. The defendant sought to have the lawsuit seeking severance pay for laid-off workers dropped because the case had not been advanced by a number of previous motions or proceedings. See [2005] O.J. No. 449 (S.C.J.)

VEHICLE CLASS ACTION DENIED CERTIFICATION
Although Quebec courts generally love class actions, there is still some hope for defendants. In Lallier v. Volkswagen, (February 8, 2005), the court refused to certify a class action alleging defects in the defendants' vehicles on the basis that there was too much variety between the models involved.

ANOTHER NOISE CASE DENIED CERTIFICATION IN QUEBEC.
Similarly, another area where Quebec courts don't seem to like class actions is in relation to noise. In Dorion v. CNR, 2005 QJ 1410 (S.C.) the court refused certification of this railway noise case.

SCOPE OF STATEMENT OF CLAIM DEBATED
In Howarth v. DPM Securities Inc., 2005 QJ 1083 (S.C.), the court reviewed the principles involved in the peculiar Quebec issue of the extent to which the statement of claim must dovetail with the earlier certification order.

EMPLOYEE BENEFITS CASE DISMISSED ON BASIS OF LACK OF JURISDICTION
In Vernon v. General Motors of Canada Ltd. [2005] O.J. No. 486 (C.A.) the court confirmed that the dispute raised by the proposed class action should be determined under the collective agreement, and not through the civil courts.

OF CHICKENS AND EGGS
In Potter v. Bank of Canada [2005] O.J. No. 772 (S.C.J.) the court was asked to rule on the appropriate timing of the certification motion and defendant’s motions for dismissal and to strike portions of the Statement of Claim. The court held as follows: "I am of the view that it would be more efficient and in the interests of justice if the Bank's motion were heard and decided first. Depending on the result, the hearing of the certification motion may be entirely avoided or the length of the certification motion may be substantially shortened."

EMPLOYEE BENEFITS CLAIM SETTLES
See Kanagaratman v. Li, 2005 OJ 771. Koskie Minsky acts for the class.

CERTIFICATION REFUSED IN EXCHANGE RATE CLASS ACTION
In Cassano v. Toronto-Dominion Bank [2005] O.J. No. 845 (S.C.J.) the court refused certification of a class action against TD challenging its right to set exchange rates. The court held that damages could not be determined on a class wide basis, and that the plaintiff had failed to show that there was a manageable way of determining damages individually. The court stated: "The principle of stare decisis is likely to be more powerful than the limitations that are attached to those of res judicata and issue estoppel if the decision on the first of the common issues was obtained in an individual proceeding commenced by any cardholder"

PENSION CASE MERITS DISMISSAL UPHELD ON APPEAL
See Assoc. provinciale des retraités d'Hydro-Québec c. Hydro-Québec, [2005] J.Q. no 1644

CLASS ACTION SETTLEMENTS ANNOUNCED
Settlement of a premium offset lawsuit has been announced by Quebec insurer La Capitale MFQ. Yves Lauzon acts for the proposed class. Interestingly, the court had already rejected an earlier class action lawsuit by the same firm using a different plaintiff.
Settlement of the class action against Air Transat in relation to the forced landing of Flight TS236 has been announced. Camp Fiorante Matthews acts for the class. The settlement is for $7.6 million.
Easyhome Ltd. announced that subject to court approval it has settled a class action lawsuit that was commenced in April, 2004 for the restitution of rent and fees charged to easyhome customers, which were alleged to have constituted interest charged in excess of the maximum rate prescribed by the Criminal Code of Canada.

NEW FILINGS
Quebec:
An array of class actions have been filed in Hull by Saskatchewan lawyer Tony Merchant including:
Pawlachuk v. BCE Inc.
Rosa v. Sunquest
Brock v. Merck Frosst
Droyer v. Sears Canada
Kruger v. Pfizer Canada
Bethel v. Lord Conrad Black and
Blanchett v. Bell Canada
A Quebec farmer hopes to secure court approval for a class-action suit against the federal government and animal feed company Ridley Inc. over mad cow disease and the U.S. ban on Canadian beef exports. Donald Berneche of St-Gabriel-de-Brandon, Que., alleges that Canadian authorities delayed in prohibiting the addition of meat and bone meal from ruminant animals in cattle feed. This, he argues, made it possible for a case of bovine spongiform encephalopathy to be found in an Alberta cow in 2003, causing the U.S. border closure against Canadian cattle and beef. The cow, born in the spring of 1997, became infected with BSE soon after being fed with Ridley's products, Berneche alleged. The case seeks certification as a class action on behalf of all affected farmers in the province.
A new action alleges DaimlerChrysler Canada Inc. failed to notify consumers of defects on certain models that resulted in "catastrophic failures" of the cars' steering systems. The suit, filed by Quebec firm Siskinds Desmeules against DaimlerChrysler Corp. and its Canadian division, alleges Chrysler was aware of a faulty steering system after "thousands" of consumer complaints across North America, but did not tell consumers of necessary repairs or issue a recall.

British Columbia:
Press reports indicate that a class action lawsuit has been commenced by Canadian Taxpayers' Federation against the Hospital Employees Union for damages caused as a result of alleged illegal strike action.
Other cases filed since our last report include:
R.N. Parton Ltd. v. Bayer Inc.: Rubber chemicals price-fixing case filed by Poyner Baxter.
Birrell v. Providence Health Care: Infected materials at BC Ear bank. Klein Lyons is counsel for the prospective class.
R.N. Parton Ltd. v. Bayer: Price fixing
Castellani v. Hoffmann La-Roche et al: Accutane class action filed by Michael Dunn.
Smith v. Vancouver City Savings: Criminal interest rates Pro-Sys Consultants v. Infineon Technologies: Dynamic random access memory Bodnar v. Community Savings: Criminal interest rates Pro-Sys Consultants v. Microsoft: Abuse of dominant position Erickson v. Nan Ya Plastics Corporation et al: Polyester staple price fixing
Class actions have been commenced in BC and Alberta by Bruce Lemer against Telus for charges for incoming calls that begin even before the phone starts ringing.

Alberta:
The firm of Stevensons Barristers announced that it has commenced a class action in the Court of Queen's Bench of Alberta against Eli Lilly & Company and Eli Lilly Canada Inc., the makers and distributors of Zyprexa, for damages claiming $900,000,000.00. This action is similar to the one which has been brought in the Ontario Superior Court on behalf of all persons in Canada who were prescribed Zyprexa and who became diabetic as a result of taking that drug. The lawyers for the plaintiff, Harvin Pitch, counsel to Stevensons Barristers, and Colin Stevenson intend to work with law firms across Canada and the United States in pursuing this claim and other similar claims against the manufacturers and distributors of Zyprexa, Eli Lilly & Company and Eli Lilly Canada Inc.

Ontario: Investors who bought hedge funds from troubled Portus Alternative Asset Management Inc. launched a $240-million class-action lawsuit against Manulife Securities International, the dealer that recommended the investment.
Class actions have been launched against Aviva Canada Inc. ("Aviva"), Lombard General Insurance Company of Canada ("Lombard") and Royal & Sun Alliance Insurance Company of Canada ("Royal"). The lawsuits allege that Aviva, Lombard and Royal wrongfully denied commercial insurance claims for perished stock and business interruption losses caused by the August 2003 Blackout.

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