In Crider v Nguyen, 2016 ONSC 4400, Justice Perell of the Ontario Superior Court recently dismissed a motion by Zimmer, the manufacturer of a hip implant device, seeking to stay the action of two individual plaintiffs who already appeared to be members of one or both of two overlapping and related class actions: McSherry v Zimmer in Ontario, and Jones v Zimmer in British Columbia.
In coming to his decision, Justice Perell had to navigate issues with respect to (i) whether the plaintiffs had opted in to the British Columbia class action, (ii) whether an Ontario court could make such a determination, (iii) whether the plaintiffs ought now be allowed to opt out of the Ontario class action after the expiry of a court-ordered opt out deadline, and (iv) whether and to what extent Zimmer and the other defendants might be prejudiced by allowing the plaintiffs' individual action to continue. We discuss the Court's approach to each of these issues below.
Ontario Courts Will Have To Decide Who Is In Or Out of B.C. Class Actions
The Jones class action was certified in British Columbia, and the McSherry class action was certified in Ontario. Under the Ontario Class Proceedings Act, those persons meeting the definition of a class member are presumptively in the class action unless they take steps to opt out, whereas under the British Columbia Class Proceedings Act, class members from outside the province must opt in to a class action within a prescribed time period. In this case, one of the plaintiffs submitted an opt in form to the B.C. law firm with carriage of the Jones class action, but she subsequently advised the firm that she did not wish to participate in the B.C. action as she would instead be commencing an individual action in Ontario. The B.C. law firm responded that they had closed her file, but, through clerical error, the plaintiff's opt in form was submitted to a database setting out the class members of the Jones action.
Justice Perell noted in his decision that while he could not decide a matter within the jurisdiction of the B.C. court, ultimately, as a conflict of laws problem, an Ontario court would be asked to enforce the B.C. class action judgment, and, thus, he would at this juncture have to consider whether the plaintiff was or was not a member of the Jones action. Proceeding on that basis, Justice Perell concluded that an Ontario court would not enforce a judgment made in the Jones action as against the plaintiff because it was only by clerical error that she had been added to the list of class members in the Jones action.
Lack Of Subjective Awareness Of The Right To Opt Out Is Not Enough To Be Let Out Of An Opt Out Class Action
As a result of Justice Perell concluding that Ontario courts would not enforce a judgment in the Jones action against the plaintiff, he then had to consider whether the plaintiff would now be allowed to opt out of the Ontario McSherry action and allowed to pursue her individual action. As we have written previously, when the McSherry action was first initiated, Justice Perell determined that it could proceed alongside the already-certified Jones action, and in 2014 he certified the McSherry action as a national opt out class action that would capture any non-B.C. class members who had not actively taken steps to opt in to the Jones action. The plaintiff in the present case now fell into that category, and was prima facie a class member in the McSherry action.
Justice Perell noted that while the plaintiff had not, in fact, received notice of her right to opt out of the Ontario action, class counsel in the McSherry action had complied with the court order for providing notice, and so the absence of subjectve awareness would not serve to exclude the plaintiff from the McSherry action.
Claiming Individually Against Defendants Outside The Class Action Is Not Enough To Be Let Out Of An Opt Out Class Action
The plaintiff advanced two other justifications for allowing her to opt out of the McSherry action following the expiry of the opt out deadline: first, that the nature of her claims and her damages is different than other class members and she should be allowed to pursue these claims, and, second, because there are defendants other than Zimmer in her individual action, that she should be allowed to pursue all of her claims. Justice Perell disagreed with these two justifications, noting that while the judgment in McSherry would preclude the plaintiff from pursuing Zimmer in an individual action, it would not preclude her from pursuing the other defendants, and her belief that she will receive a better outcome by way of her individual action is not reason to permit her to opt out of the McSherry action.
Prejudice To The Class Defendant Is A Major Factor
However, Justice Perell found that there was another justification for allowing the plaintiff to opt out of the McSherry action that reached the same result: class counsel was the same in both the Jones action and the McSherry action, and the plaintiff had already informed them that she did not want to opt in to the Jones action as she wished to proceed by way of an individual action. In Justice Perell's view, this amounted to notice to class counsel that the plaintiff also wished to opt out of the McSherry action, even if such notice was not presented in a formalized manner by submitting a McSherry opt out form.
Ultimately, Justice Perell saw no great prejudice to Zimmer in allowing the plaintiff to opt out given that Zimmer was aware that there were going to be a few individual actions to defend, and but for the late timing of the formality of the plaintiff's opt out, her decision to opt out should come as no surprise to Zimmer.
Justice Perell's decision is in keeping with his previously stated preference for ensuring access to justice to plaintiffs to pursue their claims, so long as providing such access does not unduly prejudice defendants. Where, as here, a plaintiff is aware that they may participate in a class action, but the plaintiff has definitively eschewed the benefits of a class action to take on the considerable risks of individual litigation against a formidable defendant, Justice Perell has demonstrated the Court's willingness to protect a plaintiff's ability to pursue that decision, so long as it is not unfair to the defendant to allow the plainitff to do so.
Justice Perell's decision indicates that in the right circumstances, the Court will permit an individual to opt out of a national class action even when (i) the individual has failed to deliver a proper opt out notice, and (ii) the opt out deadline has passed.
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