CITATION: Kirsh v. Bristol-Myers Squibb, 2021 ONSC 6190
DIVISIONAL COURT FILE NO.: 159/20, 160/20, 161/20
DATE: 20210921
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Hackland, Penny and Favreau JJ.
BETWEEN:
Matthew Kirsh and Gayle Kirsh
Plaintiffs (Respondents)
– and –
Bristol-Myers Squibb, Bristol -Myers Squibb Canada Co./La Société Bristol Myers-Squibb, Otsuka Pharmaceutical Co. Ltd., Otsuka Canada Pharmaceutical Inc., Otsuka America Pharmaceutical, Inc., Otsuka America, Inc., Otsuka Maryland Medicial Laboratories, Inc,. Otsuka Pharmaceuticals Development & Commercialization, Inc., H. Lundbeck A/S and Lundbeck Canada Inc.
Defendants (Appellants)
Joel P. Rochon and Golnaz Nayerahmadi, for the Plaintiffs/Respondents
S. Gordon McKee, Robin D. Linley, Natasha Lombardi and Justin Manoryk, for the Defendants/Appellants Bristol-Myers Squibb and Bristol-Myers Squibb Canada Co./La Société Bristol-Myers Squibb
Randy Sutton and Erika Anschuetz, for the Defendants/Appellants Otsuka Pharmaceutical Co., Ltd., Otsuka Canada Pharmaceutical Inc., Otsuka America Pharmaceutical Inc., Otsuka Maryland Medicinal Laboratories, Inc., Otsuka Pharmaceuticals Development & Commercialization, Inc.
Frank J. McLaughlin and Brandon Kain, for the Defendants/Appellants H. Lundbeck A/S and Lundbeck Canada Inc.
HEARD at Toronto (by videoconference): January 28, 2021
REASONS FOR DECISION
Favreau J.:
Introduction
[1] This appeal raises the issue of the circumstances under which two national class actions seeking the same or similar relief should be allowed to proceed.
[2] The representative plaintiffs in this case allege that the defendants, who are manufacturers of the antipsychotic medications Abilify and Abilify Maintena, were negligent and conspired to conceal the side effects of the medications. After the action was started, but before the certification motion, in a parallel action in Quebec, the plaintiffs amended their statement of claim to mirror the Ontario claim and the Superior Court in Quebec authorized the class action to proceed unopposed.
[3] When the certification motion was argued in Ontario, the defendants opposed certification on the basis that the Ontario action was not the preferable procedure because of the Quebec class action. The defendants also brought a motion to stay the Ontario action as an abuse of process on the basis of the Quebec action.
[4] In a decision dated March 13, 2020, Morgan J. certified the Ontario action as a national class action and dismissed the motion for a stay. In doing so, the motion judge found that the Ontario action was not an abuse of process at the time it was commenced and therefore it was not an abuse of process at the time of the certification motion. He also found that, given that the Ontario action was not an abuse of process, it also met the preferable procedure criterion for certification.
[5] The defendants argue that the motion judge’s decision should be reversed because he made errors both in his consideration of the preferable procedure criterion and in dismissing the stay motion. In particular, the defendants argue that the decision is inconsistent with other decisions dealing with overlapping class actions. The issue of when the Ontario class action was commenced is irrelevant. Given the duplication between the Ontario action and the Quebec action, the motion judge ought to have found that the Ontario action is an abuse of process and that it is not the preferable procedure.
[6] For the reasons that follow, the motion is dismissed. Both the issues of abuse of process and preferable procedure are exercises of discretion. I see no errors in principle in the motion judge’s exercise of discretion in this case.
Background
Abilify and the parties
[7] The medications at issue are Abilify and Abilify Maintena. They are atypical antipsychotics approved for the treatment of schizophrenia and manic episodes associated with bipolar disorder. The active ingredient in both medications is aripiprazole. Abilify is available in tablet form while Abilify Maintena is an injectable prolonged release form of Abilify.
[8] Matthew Kirsh and Gayle Kirsh are the representative plaintiffs in the Ontario action.
[9] There are three sets of defendants in the Ontario action:
a. Bristol-Myers Squibb and Bristol-Myers Squibb Canada Co. (the “BMS defendants”), which manufacture and market Abilify;
b. Otsuka Pharmaceutical Co., Ltd., Otsuka Canada Pharmaceutical Inc., Otsuka, America Pharmaceutical Inc., Otsuka America, Inc., Otsuka Maryland Medicinal Laboratories, Inc., and Otsuka Pharmaceutical Development & Commercialization, Inc. (the “Otsuka defendants”), which manufacture and market Abilify and Abilify Maintena; and
c. H. Lundbeck A/S and Lundbeck Canada Inc. (the “Lundbeck defendants”), which manufacture and market Abilify Maintena.
The Ontario action
[10] The plaintiffs issued the statement of claim in Ontario on June 16, 2016. The claim seeks to certify a national class action.
[11] The causes of action advanced in the claim are negligence, failure to warn and conspiracy regarding the side effects of the medications. The claim alleges that the aripiprazole contained in the medications causes compulsive psychiatric disorders that manifest as an inability to control impulsive behaviours, such as pathological gambling, compulsive shopping and spending, binge-eating and hypersexuality. The claim alleges that the defendants failed to conduct adequate testing and research, and failed to warn consumers of the known and foreseeable risks of harmful side effects. The claim also alleges that the defendants conspired amongst themselves in making false and misleading representations about the health and safety risks associated with the medications.
[12] The plaintiffs’ claim seeks to certify four classes, consisting of (1) persons who took Abilify between July 9, 2009 and February 23, 2017, (2) persons who took Abilify Maintena between February 6, 2014 and December 16, 2016, and, (3) and (4), their respective families. The plaintiffs also proposed several common issues, including whether Abilify and Abilify Maintena cause the alleged compulsive behaviours, whether and what the defendants knew about these alleged side effects, whether the defendants conspired together to avoid disclosing these side effects and whether the defendants should be required to pay punitive damages.
The Quebec class action
[13] The Quebec action, Scheer v. Bristol-Myers Squibb Canada Co., was commenced on December 12, 2016, approximately six months after the plaintiffs initiated the Ontario action. The Quebec action was also commenced as a proposed national class action.
[14] Originally, the named defendants were Bristol-Myers Squibb Canada Co., Otsuka Canada Pharmaceutical Inc. and Lundbeck Canada Inc. The only cause of action pleaded was negligence and the proposed class period extended to November 30, 2017.
[15] On September 24, 2018, the Quebec Superior Court granted an order discontinuing the action against Lundbeck Canada Inc. effectively ending any claim related to Abilify Maintena.
[16] The Quebec Superior Court scheduled the authorization motion for dates in November and December 2019.
[17] When the plaintiff’s counsel in the Quebec action originally served their factum in October 2019, their submissions were consistent with the original statement of claim. There was no reference to a claim for conspiracy and the proposed end date for the class period was November 30, 2017.
[18] However, on November 5, 2019, two days before the authorization motion hearing date, the claim in the Quebec action was amended to add a claim for civil conspiracy and to shorten the class period to an end date of February 2017. With these changes, the Quebec claim was now substantially the same as the Ontario claim.
[19] The authorization hearing in Quebec proceeded on November 5, 2019. It was unopposed by the defendants in the Quebec action.
[20] On December 12, 2019, Gagnon J. released his judgment certifying the Quebec action as a national class proceeding.
The Ontario certification and stay decision
[21] By the time the certification hearing took place in Ontario on March 4-6, 2020, the Quebec national class action had already been certified. The motion judge in Ontario heard two motions, namely the plaintiffs’ motion for certification and the defendants’ motion to stay the action as an abuse of process. The defendants argued that the Ontario action should be stayed because it was duplicative of the Quebec action and, alternatively, that the Ontario action should not be certified because the Quebec action was the preferable procedure.
[22] In a decision released on March 13, 2020, the motion judge certified the Ontario action.
[23] In doing so, he rejected the arguments made by the defendants in relation to the effect of the Quebec action. In his decision, the motion judge started with an analysis of the plaintiffs’ motion for certification. He found that all criteria for certification were met. On the issue of preferable procedure, he did not directly address the defendants’ arguments that the Quebec action was the preferable procedure but, rather, stated that the defendants’ arguments were the same as on the stay motion and stated, at para. 93:
I will therefore discuss the relationship between the present claim and the Scheer claim in Part III below, in the context of the stay motion. Suffice it to say that if this action needs to be stayed then it is also not the preferable procedure, and if it does not need to be stayed then it can be evaluated on its own without reference to the parallel Québec claim.
[24] On the issue of a stay, the motion judge found that a stay was not appropriate in this case. In reaching this conclusion, he reviewed the chronology of events and the similarities between both claims. He then turned to the issue of whether a stay of proceedings was justified. He started with a review of cases in which courts have held that it is an abuse of process to have duplicative class actions in different provinces.
[25] He then made a number of observations regarding the defendants’ conduct:
[129] I cannot help but observe that the present claim has prompted an impressive effort by Defendants’ counsel. They compiled a very substantial record with several expert witnesses and complex scientific data, conducted thorough cross-examinations of the Plaintiffs and all of their experts, and filed detailed and lengthy written submissions. And yet with all of that, the identical action in Québec was met with no opposition at all by the very same Defendants (minus Lundbeck).
[130] Along the same lines, one would think that the Defendants and their counsel would have been unpleasantly surprised to find the plaintiff in Scheer amending his claim at the last moment, especially since the amendments were designed to mirror the better crafted Ontario pleading. But as it turns out, the Defendants and their counsel appear to have been pleasantly surprised – or, perhaps, not surprised at all. The Scheer plaintiff’s substantive changes and self-evident attempt to mimic the present action – an action which the Defendants were in the process of so vigorously defending – prompted no objection or, apparently, any submissions for the Québec judge to consider in his judgment.
[133] There is no evidence that the Defendants have done anything improper. However, they are undoubtedly trying to benefit from the Scheer plaintiff’s mysterious, last-minute decision to make his pleading look like the pleading herein. This circumstance has allowed them to pass the authorization hurdle in Québec without a response, allowing them to contend with a plaintiff who in seeking authorization has not had to put in the deep work that the Plaintiffs before me have done. To use the words of Justice Perell in Kutlu, the Defendants’ request for a stay of proceedings looks like a way of ensuring that they will go to trial on the merits with what they hope is “the least formidable foe”.
[26] Ultimately, the motion judge concluded that a stay of proceeding is a matter of discretion and that he did not find that the plaintiffs’ claim is an abuse of process given that it was not an abuse of process when it was originally launched:
[134] A stay of proceedings is a discretionary remedy, to be done only after “consider[ing] the entire context in which the actions have been brought”: Hafichuk-Walkin, at para 43. As the Saskatchewan Court of Appeal has said about the prospect of sustaining two claims in two provinces with the same subject matter against the same defendant, “There will sometimes be entirely valid reasons for such an approach”: Boehringer, at para 40.
[135] For class actions, this discretion is augmented by the statutory authority of the certification judge to control the proceedings. The Divisional Court has specifically held that the staying of a proceeding in favour of an extra-provincial proceeding falls within the certification judge’s “extensive powers and discretion under s. 25 of the CPA to permit them to fashion ways to address novel issues as they arise”: Mignacca v Merck Frosst Canada Ltd. (2009), 2009 ONSCDC 10059, 95 OR (3d) 269, at para 52.
[136] My colleague Justice Belobaba observed in SNC Lavalin, supra, at para 32, that “if [the first] action was not duplicative and was not an abuse of process when it was filed, it cannot become so, four months later, when [a party in another jurisdiction] filed a significantly amended pleading.” A similar observation is applicable here. Under the circumstances, I do not consider the present action to be an abuse of power.
[137] The present action was commenced for legitimate reasons and continues to have a legitimate reason to carry on.
Appeal from the motion judge’s decision
[27] The BMS defendants and Otsuka defendants brought motions for leave to appeal. On August 8, 2021, the Divisional Court granted leave to appeal from the motion judge’s decision on the following two issues:
Did the motion judge err in the application of the preferable procedure requirement in s. 5(1)(d) of the Class Proceedings Act, given the authorization (certification) of the Scheer action in Quebec?
Did the motion judge err in his application of the abuse of process doctrine?
[28] While the Lundbeck defendants did not appeal the motion judge’s decision, they support the appeal and take the position that, if the appeal is allowed, the issue of whether the class proceeding should be allowed to proceed only with respect to the claim involving Abilify Maintena against them should be remitted back to the motion judge.
The standard of review
[29] The appellate standard of review applies to this appeal. Questions of law are to be reviewed on a standard of correctness. Questions of fact or mixed fact and law (except for extricable errors of law) are to be reviewed on a standard palpable and overriding error.
[30] When dealing with an appeal from a judge’s discretionary decision, the appellate court should only interfere if the judge below “misdirected himself, came to a decision that is clearly wrong as to be an injustice, or gave no or insufficient weight to relevant considerations”: The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, at para. 24.
Issues and analysis
[31] The two issues on appeal are (1) whether the motion judge err in failing to consider the Quebec certified action when deciding the issue of preferable procedure and (2) whether the motion judge erred in failing to stay the action as an abuse of process.
[32] Given that the motion judge focused his analysis on the effect of the Quebec class action in his consideration of whether a stay should be granted, I start my analysis with the issue of the stay followed by the preferable procedure issue.
Issue 1: Did the motion judge err in deciding not to grant a stay?
[33] The appellants argue that the approach the motion judge should have taken is to apply a presumption that a duplicative class proceeding should be stayed unless the plaintiffs can demonstrate that there will be a benefit to the class in allowing both matters to proceed. They argue that, in this case, the motion judge made an error in focusing only on the issue of whether the Ontario action was an abuse of process at the time it was started.
[34] The plaintiffs argue that the proper approach to the issue of whether duplicate multijurisdictional class proceedings should be allowed to proceed requires a multifactor analysis; there should be no presumption and each case should be decided on its facts and circumstances. They argue that the motion judge in this case considered relevant factors and that he committed no error in principle.
[35] In my view, the case law does not support finding that there is a presumption that a duplicative class proceeding should be stayed unless it offers a benefit to the plaintiff class. Rather, each case should be decided on its particular facts, depending on a number of factors, including concerns over duplication.
[36] In this case, I see no error in principle in the motion judge’s exercise of his discretion not to stay the action. While he noted the potential duplication, he was also concerned with the history of these proceedings, including the last minute modifications to the claim in the Quebec action and the appellants’ choice not to oppose authorization in Quebec while vigorously opposing certification in Ontario. The motion judge was entitled to take these circumstances into consideration and it is not possible to conclude that the motion judge erred in principle or that the decision is clearly wrong.
[37] Set out below is a review of the general principles that apply to a stay of proceedings and a review of the case law dealing with duplicative national class actions, followed by a discussing of the motion judge’s decision in this case.
Doctrine of abuse of process
[38] The court has the inherent power to stay a proceeding on the basis that it is an abuse of process.
[39] The doctrine of abuse of process is meant to be more flexible than the doctrines of res judicata or issue estoppel. The court can stay an action as an abuse of process to prevent a party from relitigating an issue already decided or from bringing duplicative proceedings.
[40] As held by the Supreme Court of Canada in Behn v. Moulton Contracting Ltd., 2013 SCC 26, at para. 40, the “doctrine of abuse of process is characterized by its flexibility”. It gives courts the inherent power to prevent the misuse of the court’s procedures “in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute”. At para. 41 of Moulton Contracting, the Court stated that “the administration of justice and fairness are at the heart of the doctrine of abuse of process” and, at para. 42 that the “doctrine of abuse of process is flexible, and it exists to ensure that the administration of justice is not brought into disrepute”.
Cases dealing with overlapping class actions
[41] I turn now to a review of the application of the doctrine of abuse of process in the context of competing national class actions.
[42] In the context of class actions, the issue of overlapping multijurisdictional class proceedings arises fairly frequently. Different law firms or groups of law firms start proposed national class actions. If both actions are certified and allowed to proceed, there is a risk of duplication, inconsistent results and challenges in avoiding double recovery for individual class members. If the actions are commenced in the same jurisdiction, the court deals with the proposed duplicative class proceedings by way of a carriage motion. However, carriage motions are not available where duplicative class proceedings are started in different jurisdictions. In such cases, the issue becomes whether it may be appropriate to stay one of the two actions as an abuse of process.
[43] As indicated above, the appellants argue that there is a presumption that a duplicative class proceeding should be stayed as an abuse of process. They argue that the relevant point in time for determining which action may be an abuse of process is not when the competing actions were commenced but, rather, when the first action is certified. They argue that once one national class proceeding has been certified, it would be an abuse of process to allow another class proceeding to be certified unless there is a benefit to the class members in allowing the second action to proceed. The appellants argue that this approach accords with the principle of comity or respect for decisions in other jurisdictions. In support of their position, the appellants argue that in almost all cases where there is already a certified national class action, the second proposed duplicative national class action has not been allowed to proceed except in exceptional circumstances.
[44] From my review of the case law, I agree with the appellants that the avoidance of duplicative proceedings is the prevailing concern in deciding whether to stay a class action where a similar national class action has already been certified in another jurisdiction. However, this does not raise to the level of a presumption in favour of staying a duplicative class action unless it offers a benefit to members of the class. Rather, in the face of a potential duplicative class proceedings, the courts look at a variety of factors to determine whether the second proposed national class action is an abuse of process. This may include consideration of the benefits to class members. But it may also include other considerations, such as the history of the matter and the relationship between the two proceedings. An approach that does not limit the factors the court may consider in deciding whether to stay a duplicative class proceeding is consistent with the doctrine of abuse of process, which, as reviewed above, is meant to be flexible and is concerned with fairness to the parties and avoiding circumstances that may bring the legal system into disrepute. As reviewed below, in my view, this broader approach is consistent with the relevant case law.
[45] There are certainly appellate decisions that support the appellants’ general proposition that it is appropriate to stay a class proceeding as an abuse of process where it is duplicative of a national class proceeding in another jurisdiction if it offers no benefit to the class members. However, none of the cases that focus on a comparison between the scope and relative advantages of both actions states that the only basis on which a second class action may be allowed to proceed is if it offers benefits to the class members. Rather, even where actions have been stayed as an abuse of process, the courts have emphasized that there is no hard and fast rule that duplicative class proceedings ought to be stayed.
[46] For example, in Ravvin v. Canada Bread Company, Limited, 2020 ABCA 424, the Alberta Court of Appeal upheld a decision staying two class proceedings dealing with price-fixing in the packaged bread market that focused on Alberta residents. The judge below had stayed the actions brought in Alberta on the basis of a national class action in Ontario. In upholding the decision, the Court of Appeal emphasized the limited circumstances in which it is appropriate for an appellate court to interfere with an exercise of discretion. The Court found that the judge below had considered relevant factors such as the proliferation of proceedings raising the same issue across the country, the status of the Ontario action and stays granted in other provinces in favour of the Ontario action. At para. 61, the Court of Appeal quoted with approval the following passage from the motion judge’s reasons:
On the merits of the decision, the principle is that in national class actions and multi jurisdictional class actions, if there is no reason otherwise in law or in fact to depart from the general principle of avoiding duplication, that should win the day. If there are facts or law that make a particular action different from other actions that are under way, then that would be a different situation.
[47] Similarly, in Hafichuk-Walkin et al v. BCE Inc et al, 2016 MBCA 32, the Manitoba Court of appeal upheld a decision by the lower court staying a class proceeding in Manitoba in light of a parallel class proceeding in Saskatchewan. In that case, the class proceedings in both jurisdictions were commenced by the same counsel group. The action in Saskatchewan had been advancing but the action in Manitoba lay dormant. When the plaintiffs in Manitoba sought to move forward with the action on the basis that Manitoba offered better procedural options than Saskatchewan, the lower court permanently stayed the Manitoba action as an abuse of process. The Manitoba Court of Appeal upheld that decision. In the course of its reasons, at paras. 40-41, the Court of Appeal held that the principle that the courts should avoid allowing a multiplicity of proceedings dealing with the same matter applies in the context of class proceedings, but each case must be decided on its facts:
This proposition applies equally to class actions. In our federation, parallel multi-jurisdictional class actions are permissible. However, multi-jurisdictional class actions are abusive when they are duplicative and no legitimate purpose would be served by allowing more than one class action to proceed on behalf of overlapping class members from one or more provinces (Englund at para 40; and Silver v Imax Corp (2009), 2009 ONSC 72334, 86 CPC (6th) 273 at para 133 (Ont Sup Ct), leave to appeal denied, 2011 ONSC 1035, 105 OR (3d) 212).
The context of each multi-jurisdictional class action will determine whether or not the degree of overlap between claims gives rise to an abuse of process. The comments of the Supreme Court of Canada in Western Canadian Shopping Centres Inc v Dutton, 2001 SCC 46, [2001] 2 SCR 534, are instructive in analyzing such problems. It must be remembered that class actions play an important role in ensuring judicial economy, improving access to justice and guaranteeing accountability and behaviour modification in a complex economy where many people can be affected by one illegal practice repeated over and over. Multi-jurisdictional class actions should not, therefore, be too quickly snuffed out, particularly in the early stages of litigation. As was said in Dutton (at para 51):
The diversity of class actions makes it difficult to anticipate all of the procedural complexities that may arise. In the absence of comprehensive class-action legislation, courts must address procedural complexities on a case-by-case basis. Courts should approach these issues as they do the question of whether a class action should be allowed: in a flexible and liberal manner, seeking a balance between efficiency and fairness.
[48] The Manitoba Court of Appeal concluded, at para. 57, that, in that case, allowing a “carbon copy” of the action in Saskatchewan to proceed in Manitoba would offend “the principle of comity and exposes the parties and the courts to incurring the evils that a multiplicity of proceedings can give rise to in an multi-jurisdictional dispute”.
[49] In Micron Technology Inc. v. Hazan, 2020 QCCA 1104, the Quebec Court of Appeal upheld a decision denying a stay in circumstances where there were parallel proceedings in the Quebec Superior Court and the Federal Court. In that context, the Court was influenced by the difference between the two class proceedings, and therefore the advantages of the second class proceeding to the class members. The Court rejected a rigid “first to file” approach. Instead, the Court discussed the factors a court may consider in deciding whether to grant a stay when faced with multijurisdictional overlapping class action. At para. 51, the Court stated that “[a]s a starting point and in principle, it will generally not be in the interests of justice or of the parties to have two class actions proceed on the merits in parallel in front of different courts. Besides the risk of conflicting judgments, there is also the cost to the parties and the waste of scarce judicial resources.” [Emphasis in original.] At para. 52, the Court went on to describe the factors a court may consider in deciding whether to “suspend” a class proceeding when faced with two competing multijurisdictional claims:
Once the court considering a suspension determines that the proposed class actions raise similar issues, it should also assess whether either proposed class action includes issues, remedies or class members not included in the other, whether as a result of a strategic decision by a party or as a result of limits on the territorial or subject-matter jurisdiction of one of the courts. A difference in the scope of the proposed class actions may be relevant because it suggests that additional proceedings may be necessary in the other forum to cover all of the issues, remedies and class members.
[50] In contrast to the cases above, the Divisional Court’s decision in Mignacca v. Merck Frosst Canada Ltd., 2009 ONSCDC 10059, 95 OR (3d) 269 (Div. Ct.), demonstrates that the factors the Court may consider in deciding whether to stay a duplicative class proceeding as an abuse of process are not limited to the question of whether the second class action provides a benefit to the class members. In Mignacca, this Court upheld Cullity J.’s decision certifying a multijurisdictional class action and denying a stay of proceedings in the context of a parallel national class action that had been certified in Saskatchewan. In that context, the court in Ontario had decided a carriage motion against the class counsel who were ultimately able to obtain a certification order in Saskatchewan. In its decision on appeal, the Divisional Court held that there is no hard and fast rule that parallel multijurisdictional class actions should not be allowed to proceed. But the Court did emphasize the importance of the principle of comity, stating at para. 63 that “the principle of comity is that courts must consider and respect decisions in other jurisdictions, and should not undermine prior decisions”. Ultimately, at paras. 85-86, the Court upheld the Cullity J.’s finding that the Ontario class action was not an abuse of process, based on considerations related to the integrity of the justice system:
Cullity J. was very concerned about the integrity of the justice system when the Saskatchewan court declined to apply principles of comity to the Carriage Decision. If the requested [page285] stay had been granted, it would allow counsel who had been resoundingly unsuccessful in one jurisdiction (Ontario) to in effect re-litigate the carriage issue in another province (Saskatchewan). To allow forum shopping by counsel with much to gain personally encourages, as Cullity J. points out in para. 37 of his reasons, ambulance chasing and greed, and exposes the sorry underbelly of our justice system. He states: "The practice of rushing to commence over-lapping actions in as many jurisdictions as possible in order to claim turf and secure carriage for law firms -- rather than to advance the interests of a putative class -- gives ambulance- chasing a good name and, in my opinion, smacks of abuse of process" (emphasis added).
We conclude that there is no merit to the submissions made by Merck with respect to abuse of process. Admittedly, the existence of two multi-jurisdictional proceedings adds another layer of complication to already complex litigation. The problems, however, are not insurmountable. I conclude that a greater abuse would be to allow and encourage forum shopping, and to require the Ontario plaintiffs to be required to pursue their actions in Saskatchewan, with the Merchant Group as their representatives.
[51] The decisions discussed above are appellate decisions where the courts considered whether to stay a class proceeding in circumstances where an overlapping class proceeding had already been certified in another jurisdiction. One of the obvious similarities between these cases is the emphasis on the deference owed to a motion judge’s discretionary decision on the issue of abuse of process. Another commonality between these decisions is the emphasis on the need to decide each case on its facts. While duplicative proceedings are far from ideal, there is no bar against allowing a duplicative national class action to proceed in appropriate circumstances.
[52] Besides the cases reviewed above, there are a number of other cases that did not deal directly with the issue of whether a duplicative class action should be stayed as a class proceeding but that nevertheless emphasize the variety of factors that may be relevant in deciding whether a duplicative class proceeding should be stayed as an abuse of process after another action similar action has already been stayed.
[53] In Wilson v. DePuy International Ltd., 2019 BCCA 440, the British Columbia Court of Appeal was not dealing with a stay motion but rather with an appeal from a decision refusing to certify and settle a class proceeding. The basis for the refusal was that some class members would be part of the class in the British Columbia class action and in a parallel Ontario national class action. The factual circumstances leading to the overlap were fairly complex, and included the court in Ontario taking account of the class proceeding in British Columbia as it was originally constituted. In that context, the Court of Appeal for British Columbia commented, at para. 53, that there is no general principle that “overlapping classes must be avoided… Each case presents a different and often complex factual scenario. While administrative challenges may loom large, courts are adequately equipped to address the possibility of conflicting outcomes, double recovery, and other issues by virtue of class proceedings legislation.”
[54] In Kutlu v Laboratorios Leon Farma, S.A., 2015 ONSC 7117 (Sup. Ct.), Perell J. was not dealing directly with a motion to stay duplicative class proceeding as an abuse of process. Rather, he was dealing with a motion for injunctive relief against a defendant to an action in Ontario that was also facing a class action in Alberta. In that context, at para.10, Perell J. discussed the perils of duplicative multijurisdictional class proceedings, including a concern referred to by the motion judge in this case with a potential “reverse auction”:
Much worse than carriage fights, which ultimately may serve the best interests of class members, where there are rival national class actions, there is the unseemly prospect that the defendant may be able to engineer a sort of reverse auction and settle the certification motion or the class action with the least formidable foe or the lowest bidder. The defendant then can rely on the releases in one class action to fend off a rival national class action.
[55] In DALI 675 Pension Fund v. SNC Lavalin, 2019 ONSC 6512 (Sup. Ct.), Belobaba J. dealt with a motion to stay a national class proceeding that was duplicative of a class proceeding in Quebec. The motion was brought before any certification motion. In that case, the Quebec class action was filed first. The Ontario class action was filed second, but was far more comprehensive than the Quebec claim. By the time of the motion, the Quebec action had been extensively amended and was more similar to the Ontario claim. In that context, Belobaba J. stated that, while it is preferable to avoid duplicative class proceedings, “parallel proceedings per se are not an abuse of process”. He found, at para. 42, that the Ontario action was not an abuse of process at the time it was filed and, therefore, was not an abuse of process at the time of the motion:
I therefore agree with PO that if its June action was not duplicative and was not an abuse of process when it was filed, it cannot become so, four months later, when PQ filed a significantly amended pleading. As is often the case, parallel proceedings are subject to cross-pollination and often end up looking very similar, sometimes almost identical. But that doesn’t mean that the first proceeding should prevail and the second proceeding should automatically be stayed for abuse of process. If this were to happen, the result would be a de facto adoption in Ontario of the much-criticized “first to file” rule.
[56] Having made this finding, Belobaba J. at paras. 41-42, nevertheless held that the issue of whether the Ontario class proceeding should be allowed to proceed could be revisited at a later date, including in the context of a certification motion where the issue of preferable procedure would be decided.
[57] Based on the decisions reviewed above, there is no presumption that a duplicative class proceeding is an abuse of process. Rather, each case must be decided on its own facts. Relevant factors are not limited to a comparison between the relevant benefits of the proceedings to the class members. The relevant considerations can also include the history and conduct of the litigation.
Whether the motion judge made an error in principle in this case
[58] The decision to grant or refuse to stay an action on the basis that it is an abuse of process is discretionary. As an appellate court, this Court owes significant deference to the motion judge’s decision that the Ontario action is not an abuse of process. The Court can only interfere if the decision was based on an error in principle or if it is clearly wrong in the sense that it would lead to an injustice.
[59] In my view, in this case, the motion judge did not make an error in principle nor is his decision clearly wrong. He was aware the Ontario action was duplicative, but he decided that the history of the proceedings did not render the Ontario action an abuse of process. His reasoning was as follows:
a. The motion judge agreed that, as a general principle, duplication should be avoided because it can increase the cost of litigation. However, he held that, in this case, it was necessary to look at the history of the Quebec and Ontario proceedings to determine which proceeding was duplicative (paras. 102-103).
b. He then conducted a detailed review of the history of both actions:
i. The Ontario claim was issued first, and it pleaded claims in negligence and conspiracy. The motion judge found that the plaintiffs’ counsel in Ontario did a substantial amount of research before and after issuing the claim (paras. 104-105).
ii. The Quebec action was commenced approximately six months after the Ontario action was commenced. It only pleaded negligence and did not plead conspiracy (Para. 106).
iii. In early 2017, two law firms started similar class proceedings. One of the actions was based in Alberta, and the plaintiffs’ counsel in that action agreed to a stay of the action in Alberta to allow the Ontario action to proceed. The other action was in Ontario and was the subject of a carriage motion, which the plaintiffs’ counsel in this case won.
iv. In September 2018, the motion for authorization in Quebec was scheduled for November-December 2019. Plaintiffs’ counsel in Quebec served their written argument on October 24, 2019, which at that time did not make any reference to a claim in conspiracy. On November 5, 2019, two days before the motion in Quebec was set to begin, the plaintiffs’ counsel in Quebec amended their claim “in order to mirror the Ontario claim in virtually every respect”. (para. 112)
v. The authorization motion in Quebec proceeded on November 7 and December 5, 2019. The defendants filed no responding materials and did not oppose the motion. In a brief judgment, the Quebec motion judge authorized the class action. The motion judge in Ontario in his decision commented that “I do not say this in criticism of the Québec court; it evaluated the unopposed motion before it in an entirely proper way. I have little doubt that the Scheer claim was duly authorized in accordance with Québec law and procedure”. (para. 114)
c. The motion judge compared the Quebec claim to the Ontario claim, and found the defendants’ contention that the amended Quebec claim is “substantially similar” to the Ontario claim “is to understate the situation”, and that “[i]n crucial parts, the Québec pleading, with minor grammatical changes, is now virtually a copy of the Ontario pleading”. (paras. 115-119)
d. The motion judge then reviewed cases dealing with duplicative national class actions. He found that, generally, courts are concerned with cases that are duplicative and have no legitimate purpose. However, relying on Perell J.’s decision in Kutlu, the motion judge said that courts are also concerned “that competing class actions commenced in different jurisdictions may prompt forum shopping by defendants in a form of race-to-the-bottom in terms of how rigorous the claims are prosecuted”. (paras. 126-127)
e. The motion judge then noted the contrast in the defendants’ response to the Quebec motion for authorization and the Ontario certification motion. He noted that, in Ontario, the defendants “compiled a very substantial record with several expert witnesses and complex scientific data, conducted thorough cross-examinations of the Plaintiffs and all their experts, and filed detailed and lengthy written submissions”. He noted that, in contrast, in Quebec, the defendants took no steps to defend against the authorization motion in Quebec, including when the claim was amended to mimic the Ontario claim. (paras. 129-130)
f. The motion judge acknowledged the defendants’ arguments that the test for authorization is different than the test for certification in Ontario. However, he found that, in both jurisdictions, the motions are essentially procedural and that the differences in approach by the courts in both jurisdiction are not sufficient to “explain the radically different approaches taken by the Defendants to the two actions”.
g. While the motion judge found that there “is no evidence the Defendants have done anything improper”, he did find that “the Scheer plaintiff’s mysterious, last-minute decision to make his pleading look like the pleading herein … allowed them to contend with a plaintiff who is seeking authorization [that] has not had to put in the deep work that the Plaintiffs before me have done”. He found that this was a way for the defendants to go to trial with “the least formidable foe”. (para. 133)
h. The motion judge emphasized that the decision whether to grant a stay on the basis of abuse of process is discretionary and that, in addition, class proceeding judges have the discretion to control their own process. He concluded that the “present action was commenced for legitimate reasons and continues to have a legitimate reason to carry on”. (paras. 135-137)
[60] Neither the doctrine of abuse of process, which is meant to be flexible, nor the principles that emerge from the cases reviewed above lead to the conclusion that the motion judge committed an error in principle. The cases consistently state that, while it is preferable to avoid duplicative class proceeding, there is no hard and fast rule that, once the court in one jurisdiction has certified a national class proceeding, the court in another jurisdiction should stay a duplicative class proceeding. The court must look at the circumstances of each case. There is also no principle limiting the factors the court can consider in deciding whether to stay a duplicative class proceeding as an abuse of process. In this sense, it cannot be said that the motion judge committed an error in principle. He was aware that the Ontario and the Quebec action are very similar. He was also aware that, generally, duplicative national class actions should be avoided. But he decided that, on the unique facts of the case before him, the Ontario action should not be stayed. In particular, he found that, given that it was Quebec claim that duplicated the Ontario action, the Ontario action was not an abuse of process. This was not an error in principle.
[61] It also cannot be said that his decision is clearly wrong. As reviewed above, the doctrine of abuse of process is concerned with fairness to the parties and concerns over the integrity of the administration of justice. It may be preferable for the defendants to only face one class proceeding dealing with allegations of negligence and conspiracy in relation to the side effects of Abilify. However, in this case, the motion judge found that it would not be unjust for the defendants to have to defend against both class actions given their apparent role in trying to choose the jurisdiction in which the claim would be adjudicated. By not opposing the motion for authorization in Quebec after the last minute amendments to the Quebec claim, the defendants chose to take the risk that the Ontario court would nevertheless allow the Ontario action to proceed. Allowing the Ontario action to proceed would not bring the administration of justice into disrepute. On the contrary, as held by the motion judge, staying the action could be perceived as sanctioning what Perell J. described as a “reserve auction” in Kutlu. Again, in the unique circumstances of this case, I do not find that the motion judge’s decision was clearly wrong.
[62] The appellants argue that the motion judge erred by failing to take account of the principles of comity in his decision. Comity requires that the court in one jurisdiction respect the decisions of other courts unless there are compelling reasons for not doing so. In this case, the appellants argue that comity should have led the motion judge to respect the decision of the court in Quebec. While the motion judge did not directly address the issue of comity, I do not find that his failure to do so in this case raises to the level of an error in principle or makes the decision clearly wrong. While the motion judge in Quebec did consider whether to authorize the proposed Quebec class proceeding, he was not called upon to address any arguments related to the history of the Quebec class proceeding in relation to the Ontario proceeding. In effect, the motion proceeded unopposed. The Ontario decision does not disrespect the Quebec decision nor does it cast any doubt on the validity of that decision. Rather, the motion judge in Ontario was in a unique position to assess whether the Ontario action was an abuse of process given the overall history of both proceedings. In the circumstances, his failure to address or discuss the issue of comity was not an error in principle.
[63] The appellants also argue that the motion judge erred in protecting the interests of counsel for the plaintiffs. They argue that the motion judge was unduly focused on the work done by the plaintiffs’ counsel rather than on the interests of the class members. Relying on the decision in Silver v. IMAX, 2013 ONSC 1667 (Sup. Ct.), the appellants argue that the motion judge failed to recognize that it is not the role of the court to protect the interests of class counsel. In Silver, the court amended the class definition of a certified class proceeding in Ontario for the purpose of removing a barrier to a world-wide settlement of a class action in the United States. In that context, the motion judge, at para. 179, stated that it is “not the function of the court to favour or protect the interests of class counsel within this jurisdiction, knowing that they have invested time and resources into the litigation, and that their compensation will depend on the size of the judgment or settlement they are able to achieve… [C]lass action counsel assume significant risks, including the potential that the court may certify a smaller class than that requested. In pursuing an action when there are existing parallel proceedings in another jurisdiction, class counsel are aware that the other action might move more quickly or reach a determination before their own case is decided or resolved.” However, in my view, the motion judge did not make his decision for the purpose of protecting class counsel. Rather, he did so for the purpose of protecting what he saw as the interests of the class members in having the action pursued by the more “formidable foe”, namely class counsel who had invested significant effort into researching the merits of the claim. In addition, his decision was based on the concern with avoiding reverse auctions. Again, these were not irrelevant considerations in the context of the issue of whether the Ontario action is an abuse of process.
[64] Ultimately, the motion judge’s decision not to grant a stay is entitled to significant deference. I see no error in principle nor is his decision clearly wrong.
Issue 2 – Did the motion judge err in failing to decide that the Quebec action is the preferable procedure?
[65] The defendants argue that the motion judge conflated the test for staying the action with the test for the preferable procedure criterion, thereby failing to apply the proper test for determining whether the Ontario action is the preferable procedure for resolving the plaintiffs’ claims. Indeed, as reviewed above, when dealing with the defendants’ argument that the Ontario class proceeding is not the preferable procedure given the Quebec proceeding, the motion judge stated that the argument made by the defendants on this issue were the same as the arguments made on the stay motion and that “if this action needs to be stayed then it is also not the preferable procedure, and if it does not need to be stayed then it can be evaluated on its own without reference to the parallel Québec claim”. I agree with the defendants that it would have been preferable for the motion judge to explicitly and separately explain his reasoning for finding that the Quebec action was not the preferable procedure for resolving the plaintiffs’ claims. However, in my view, his conclusion that this action is the preferable procedure is nevertheless supported by his findings on the motion for a stay and the record before the court.
[66] In AIC Limited v. Fischer, 2013 SCC 69, at para. 65, the Supreme Court stated that a certification judge’s decision on preferable procedure is entitled to special deference because of the judge’s expertise. However, the “deference does not protect the decision against review for errors in principle which are directly relevant to the conclusion reached”.
[67] In Fischer, at para. 22, the Supreme Court stated that “the preferability inquiry had to be conducted through the lens of the three principal goals of class actions, namely judicial economy, behaviour modification and access to justice”. At para. 23, the Court also stated that this is “a comparative exercise. The court has to consider the extent to which the proposed class action may achieve the three goals of the CPA, but the ultimate question is whether other available means of resolving the claim are preferable, not if a class action would fully achieve those goals.”
[68] In this case, in his section addressing the preferable procedure criterion, relying on the Court of Appeal’s decision in Myotrophic Lateral Sclerosis Society v. Windson, 2015 ONCA 572, the motion judge stated that, to be the preferable procedure, the class action must be “fair, efficient and manageable” and there “must be no other procedure that is preferable”. Before getting to the issue of the Quebec action, the motion judge first considered and dismissed other arguments made by the defendants that a class proceeding was not the preferable procedure. For example, he did not agree with the argument that there were too few members of the Abilify Maintena class to justify addressing those claims through a class action and arguments that the individual issues of causation would overwhelm the common issues. It was after consideration of these arguments that the motion judge cursorily stated that if the action was not stayed as an abuse of process, then it could be evaluated on its own without reference to the Quebec claim.
[69] On its own and in isolation, this statement appears to be an error in principle. The test on a motion for a stay is not the same as the analysis required to decide whether the Quebec action is preferable procedure to the Ontario action for resolving the plaintiffs’ claims. As held in Fischer, the motion judge ought to have compared the two proceedings to determine whether allowing the plaintiffs’ claims to be adjudicated in the Quebec action was preferable to allowing them to proceed in Ontario. As referred to above, in DALI 675 Pension Fund, Belobaba J. specifically held that, even if the duplicative national class proceeding in that case was not found to be an abuse of process, the issue of whether it was the preferable procedure to a parallel Quebec class proceeding could be addressed at the certification motion through the preferable procedure analysis. In other words, quite rightly, he recognized that the issues are distinct and should be considered and decided separately.
[70] Having said that, while the motion judge in this case did not explicitly consider whether the Quebec class action was preferable to the Ontario claim, his analysis and findings in relation to the stay motion are consistent with his finding that the Quebec action is not the preferable procedure. In particular, while he recognized the duplicative nature of the proceedings, i.e. that allowing the plaintiffs’ claims to be decided in the Quebec action would promote judicial economy, his concerns were focused on access to justice. In particular, the motion judge made a finding of fact based on the record before him that counsel for the plaintiffs in Ontario had done extensive research in support of the claim. He also surmised that, given that the amendments to the Quebec claim were last minute amendments, the plaintiffs’ counsel were more “formidable foes” that the plaintiffs’ counsel in Quebec. In other words, he appears to have been influenced by a view that the plaintiffs’ counsel in Ontario were in a better position to pursue the claims against the defendants, especially the claims in conspiracy which had been a last minute addition in Quebec. This does not mean that plaintiffs’ counsel in Quebec are not perfectly competent to pursue the claim for their clients’ benefit. However, the motion judge in Ontario was required to decide whether the Quebec claim is the preferable to the Ontario claim for addressing the plaintiffs’ claims. As held by the Supreme Court in Fischer, the motion judge’s decision on preferable procedure is entitled to special deference. I see no error in principle in the motion judge’s finding that the Ontario class action is the preferable procedure given his view that Ontario plaintiffs’ counsel appeared to be better prepared to prosecute the claims against the defendants.
[71] In any event, even if this Court were to decide afresh whether the Quebec action is preferable to the Ontario action, in my view it is evident that the Quebec action is not clearly preferable. The Quebec action only deals with Abilify whereas the Ontario action deals with Abilify and Abilify Maintena. This difference is not immaterial. If this Court were to find that the Quebec class action is the preferable procedure for deciding the claims involving Abilify, the Ontario court would still have to deal with the claims involving Abilify Maintena, which raise similar issues about the potential side effects of the aripiprazole. The Lundbeck defendants argue that, if this Court agrees with the appellants that the Ontario action against the other defendants should be stayed or not certified, the issue of whether the claims against the Lundbeck defendants should remain certified should be remitted back to the motion to be decided afresh. However, the motion judge already addressed this issue directly in his decision by stating that there was evidence of a sufficient number of people with claims in Ontario involving Abilify Maintena and that, to make each of them bring individual actions, “would run directly counter to the goal of access to justice…” Accordingly, in the circumstances, given that the Quebec action does not include a claim on behalf of people who took Abilify Maintena, it is hard to see how the Quebec action is the preferable procedure for advancing the plaintiffs’ claims.
[72] While it would have been preferable for the motion judge to conduct an analysis of the preferability criterion by directly comparing the Ontario action to the Quebec action, his conclusion that the Ontario class action is the preferable procedure is nevertheless supported by his reasoning on the stay issue and by the record as a whole. Accordingly, I see no reason for overturning his decision certifying the Ontario action as a class proceeding.
[73] Before concluding on this issue, I add a couple of observations. First, as emphasized by the case law, while duplicative class proceedings are generally undesirable, there are strategies for dealing with them. As held by Belobaba J. in DALI 675 Pension Fund, at para. 13, issues of overlapping jurisdiction can be resolved practically through cooperation between counsel and with some guidance from the court. There may also be opportunities for the courts in each jurisdiction to co-operate in the case management of the proceedings, including by co-ordinating document production, hearing portions of the evidence or in other ways. Second, as in Silver, depending on how both proceedings move forward, it is always open at a later stage for the court in Ontario to determine that the Ontario action is no longer the preferable procedure and to decertify part or all of the action at that point.
Conclusion
[74] For the reasons above, the appeal is dismissed.
[75] As agreed between the parties, the respondents are entitled to their costs in the amount of $30,000 to be paid by the BMS defendants and the Otsuka defendants. No costs are to be paid by the Lundbeck defendants.
Favreau J.
I agree _______________________________
Hackland J.
I agree _______________________________
Penny J.
Released: September 21, 2021
CITATION: Kirsh v. Bristol-Myers Squibb, 2021 ONSC 6190
DIVISIONAL COURT FILE NO.: 159/20, 160/20, 161/20
DATE: 20210921
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Hackland, Penny and Favreau JJ.
BETWEEN:
Matthew Kirsh and Gayle Kirsh
Plaintiffs (Respondents)
– and –
Bristol-Myers Squibb, Bristol -Myers Squibb Canada Co./La Société Bristol Myers-Squibb, Otsuka Pharmaceutical Co. Ltd., Otsuka Canada Pharmaceutical Inc., Otsuka America Pharmaceutical, Inc., Otsuka America, Inc., Otsuka Maryland Medicial Laboratories, Inc,. Otsuka Pharmaceuticals Development & Commercialization, Inc., H. Lundbeck A/S and Lundbeck Canada Inc.
Defendants (Appellants)
REASONS FOR JUDGMENT
FAVREAU J.
Released: September 21, 2021