Canada: Saskatchewan Court Of Appeal Sidesteps Issue Of Overlapping Classes

Merck Frosst Canada Ltd. v. Wuttunee ("Merck Frosst"), 2009 SKCA 43 (CanLII)

In its recent decision in Merck Frosst, the Saskatchewan Court of Appeal unanimously overturned the certification of a Saskatchewan class proceeding that would have directly overlapped with a proposed class proceeding in Ontario. However, it did not do so on the basis of the multiplicity of proceedings issue, preferring to ground its decision on the plaintiffs' failure to satisfy certain basic elements of the certification test, i.e. (as discussed below) the "identifiable class", "common issues" and "preferable procedure" requirements.

The matter came before the Court of Appeal on appeal from the Saskatchewan Court of Queen's Bench, which had issued an order certifying the class proceeding against Merck, the manufacturer and distributor of the drug Vioxx. In 2004, Merck voluntarily withdrew Vioxx from the market after the results of a study suggested that taking the drug may increase the risk of heart attack or stroke.

The Saskatchewan proceeding was certified as a multi-jurisdictional class action on behalf of all Canadians (except residents of Quebec) who purchased or ingested Vioxx and fell within certain enumerated subclasses. A consortium of law firms that had carriage of a similar proposed class action that was underway in Ontario (an action that excluded Saskatchewan residents) appeared before the Saskatchewan Court of Queen's Bench to request that the Saskatchewan action not proceed. The certification judge, Justice Klebuc (now Chief Justice of the Saskatchewan Court of Appeal), denied the motion and the Saskatchewan proceeding continued as a multi-jurisdictional class action that included residents of Ontario on an opt-out basis. In his reasons for refusing the stay, Justice Klebuc noted that the Saskatchewan action had been brought on broader grounds than the Ontario action and that, unlike the Ontario action, the Saskatchewan action had already been certified.

Merck then tried to have the Ontario action stayed. However, Justice Cullity declined to stay the proceedings and certified the Ontario action as a multi-jurisdictional proceeding on behalf of all Canadians, except residents of Quebec and Saskatchewan. Merck appealed this ruling but to no avail.

The upshot of all of this litigation was that, at the time this case went before the Saskatchewan Court of Appeal, all Canadians with Vioxx-related claims, other than residents of Quebec and Saskatchewan, could potentially have been members of two overlapping class actions against Merck. It was therefore anticipated that the Saskatchewan Court of Appeal's ruling would provide useful guidance on the multiplicity of proceedings issue.

Surprisingly, however, while the Court of Appeal acknowledged "the potential for chaos and confusion" were multiple overlapping class actions to be permitted, it did not consider whether the Court of Queen's Bench had been correct to allow the action to proceed as a multi-jurisdictional class action in light of the parallel proceedings in Ontario. Instead, the Court of Appeal concluded that it was unnecessary to consider that issue as the members of the panel were of the opinion that the certification order should be quashed on other, more traditional, grounds.

Identifiable Class

First, the Court of Appeal held that Justice Klebuc had erred in finding that an acceptable "identifiable class" had been put forward by the plaintiffs, as required by the Class Actions Act. The proposed class definition included all persons who either purchased or ingested Vioxx and fell within one of the following four subclasses: (1) persons who were induced to purchase Vioxx rather than a cheaper alternative due to unfair marketing practices; (2) persons who purchased Vioxx and claim that it was poor quality, defective or unfit for the purpose of pain management; (3) persons who ingested Vioxx and claim that it caused or exacerbated a cardiovascular condition; and (4) persons who purchased Vioxx and claim that it caused or exacerbated a gastrointestinal condition.

According to the Court of Appeal, each of the subclass descriptions was either overly complex, too subjective or unnecessarily merits-based. Further, the claims put forward by the plaintiffs were too diverse and some of the claims were completely unrelated. According to the Court, the only thing that some of the plaintiffs had in common was the defendant. As well, the factual bases of some of the claims were unclear or too vague. The Court emphasized that unclear class definitions could make it difficult for potential class members to make informed decisions with respect to whether to opt-in or opt-out of a class.

Common Issues

The Court of Appeal also held that the certification judge erred in finding that the requirement pursuant to The Class Actions Act to raise "common issues" had been met by the plaintiffs. The Court of Appeal found that the same defects of overly diverse and unclear claims that precluded the finding that there was an identifiable class also prevented the Court of Appeal from finding that common issues had been properly defined. The proposed common issues were made up of too many sub-issues that were not common to all of the class members and the analysis required to resolve each of the issues put forward would be "unacceptably complex".

Preferable Procedure

Finally, in light of the above, the Court of Appeal held that Justice Klebuc erred in holding that the proposed class action would meet the requirement of being the preferable procedure for dealing with the plaintiffs' claims. In the Court's view, the case as presented was too complex to be manageable in the context of a class action and a class proceeding would not be a fair and efficient way to deal with the claims of the various class members. Accordingly, the order certifying the action was quashed.

No Decision on Overlapping Classes

As a result of their decision on the merits of the certification, the Court of Appeal decided that consideration of the overlapping classes issue was "unnecessary". While the effect of this decision is that the prospect of overlapping class actions disappeared, the Saskatchewan Court of Appeal's refusal to address the central question of whether that multiplicity is appropriate in the context of multiple provincial jurisdictions with class action legislation, effectively leaves the issue to be decided in another case.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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