ARTICLE
16 February 2014

2013 U.S. Class Action Decisions With The Potential To Affect Canadian Class Actions

MT
McCarthy Tétrault LLP

Contributor

McCarthy Tétrault LLP provides a broad range of legal services, advising on large and complex assignments for Canadian and international interests. The firm has substantial presence in Canada’s major commercial centres and in New York City, US and London, UK.
Outside of Canada, there were several appeal decisions from the U.S. Supreme Court in 2013 that may well prove to have an impact here in Canada.
Canada Litigation, Mediation & Arbitration

Outside of Canada, there were several appeal decisions from the U.S. Supreme Court in 2013 that may well prove to have an impact here in Canada.

In regards to class action waiver clauses, a six justice majority of the U.S. Supreme Court held, in American Express Co. v. Italian Colors Restaurant, that the Court could not invalidate an express class action waiver in an arbitration agreement and so the claims should be continued by arbitration (although, the three remaining justices handed down a very strong dissent). This is an issue that has had little comment so far in Canada and has yet to be considered by our own Supreme Court. (See previous discussion here).

In the competition law realm, the U.S. Supreme Court also issued its judgment in Comcast Corp. v. Behrend, overturning certification of an antitrust class action. This ruling emphasized the importance of scrutinizing the plaintiff's expert evidence at certification, even where it overlaps with the merits, and continues the trend towards a more rigorous review of U.S. certification motions as seen in other U.S. cases. Given the significant impact which prior U.S. Supreme Court cases have had on competition class actions in Canada it is likely that Comcast will play an important role in future litigation in this country. (See previous comment here).

In the securities law field, the recent U.S. Supreme Court ruling in the Amgen Inc. v. Connecticut Retirement Plans & Trust Funds securities fraud class action is an important milestone in the evolution of the defences to securities disclosure class actions in the U.S., and potentially in Canada. The Court addressed two questions relevant to public issuers: the necessity for plaintiff investors to prove that alleged misrepresentations to the market by companies are material, and that they were relied upon. The dissent in this case show that debate on these issues will continue and points to potential changes in the law favourable to public issuers facing class actions. (See previous comment here).

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