SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-11-428749-00CP
DATE: 20120321

RE: Hitendra Patel , Plaintiff/Respondent

- and -

Groupon Inc. , Defendant/Moving Party

BEFORE: G.R. Strathy J.

COUNSEL:
Louis Sokolov , for the Plaintiff/Respondent

Laura K. Fric , for the Defendant/Moving Party

DATE HEARD: By written submissions

E N D O R S E M E N T

(Scheduling of Groupon Summary Judgment Motion and Leave to File Sur-Reply)

[ 1 ] The defendant Groupon Inc. (“Groupon”) seeks directions concerning the scheduling of its proposed motion for summary judgment and the plaintiff’s certification motion. Specifically, it seeks to have the summary judgment motion heard in advance of certification. In addition, it wishes to schedule a motion to seek leave to file a “Sur-Reply” pleading in response to the plaintiff’s Reply. In the interests of judicial economy, and the efficient management of this proceeding, my reasons will be brief.

Scheduling

[ 2 ] Groupon proposes to bring a motion for summary judgment dismissing two parts of Mr. Patel’s claim. First, it intends to move to dismiss the portion of the claim in which Mr. Patel seeks to recover the $25 he paid for a Groupon voucher redeemable at Gap. Groupon says this claim should be dismissed, because Gap has offered to provide Mr. Patel with a $25 gift card, allegedly in compliance with the terms of the voucher. Second, Groupon seeks to dismiss Mr. Patel’s claim that the partial redemption terms of the voucher contravene the Consumer Protection Act , 2002, S.O. 2002, c. 30 . It says he has made no attempt to partially redeem the voucher.

[ 3 ] Groupon acknowledges that such a motion, if successful, would not result in the dismissal of the entire action, as other claims would remain. It says, however, that hearing the motion in advance of certification would promote efficiency and would eliminate the need to deal with “distracting but ultimately baseless” claims, and will refocus the certification motion on the live issues between the parties.

[ 4 ] There is no significant dispute concerning the principles applicable to this issue. Scheduling matters are within the discretion of the case management judge under s. 12 of the Class Proceedings Act, 1992 , S.O. 1992, c. 6, to “make any order [the court] considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination”. The authorities governing the exercise of the court’s discretion to schedule a summary judgment motion in advance of certification were discussed at some length in McKenna v. Gammon Gold Inc. , 2009 66994 (ON SC) , [2009] O.J. No. 5151 and it is unnecessary to re-state them. In principle, the certification motion should be the first substantive motion to be heard. There are exceptions, for example where a summary judgment motion is based on a limitation period and will, if successful, result in the dismissal of the entire proceeding. Stone v. Wellington County Board of Education (1990), 1999 1886 (ON CA) , 120 O.A.C. 296 (C.A.), relied upon by Groupon, was such a case.

[ 5 ] Where, however, the motion will not dispose of the entire proceeding, and other issues will still go forward to certification, a summary judgment motion will usually not be permitted before certification. That was the ruling in McKenna .

[ 6 ] In this case, scheduling the summary judgment motion in advance of certification will only serve to delay certification, to the potential prejudice of the plaintiff and the class. Moreover, as is typical in these cases, there will likely be an appeal, regardless of which party succeeds. This will result in further delay and expense.

[ 7 ] Not only will the proposed motion not end the action, but its outcome will probably not affect the ability of the plaintiff to represent other class members whose claims may be broader than his. In other words, even if Groupon is successful in showing that Mr. Patel, for reasons peculiar to his own circumstances, cannot personally assert the claims at issue, he may still be entitled to represent the claims of other class members who do have those claims: see Western Canadian Shopping Centres Inc. v. Dutton , 2001 SCC 46 () , [2001] 2 S.C.R. 534 at para. 51 ; Griffin v. Dell Canada Inc., [2009] O.J. No. 45168 (S.C.J.) ; McCracken v. Canadian National Railway Company , 2010 ONSC 4520 at para. 459 . Thus, bringing the motion before the certification motion would not necessarily limit the scope of the certification motion.

[ 8 ] The plaintiff is prepared to have the certification motion and the summary judgment motion heard together, with a view to promoting efficiency, saving time and avoiding duplication of resources. I am not satisfied that the process will become more efficient and cost effective by combining the summary judgment motion with the certification motion. My recent experience has been that such motions are lengthy, involve a substantial record, and that the summary judgment motion tends to divert attention and resources from the certification motion.

[ 9 ] In my view, it is more efficient and expeditious to schedule a summary judgment motion after the certification motion for the following reasons:

(a) if the action is not certified, and proceeds as an individual action, it will likely fall within the simplified procedure and can proceed to a summary judgment motion or a summary trial;

(b) if the action is certified, the claims at issue here may or may not be certified as common issues:

(i) if they are not certified common issues, then the summary judgment motion loses its significance for those claims;

(ii) if they are certified as common issues, the fact that the defendant may have a defence to the claims of the representative plaintiff will not be of particular significance;

(iii) if they are certified as common issues, and the defendant is of the view that they can be addressed on summary judgment in a way that would be binding on all class members, it may be appropriate and efficient to permit a summary judgment motion after certification for the purpose of addressing those claims on a class-wide basis – this is a result that can only be achieved after certificattion and after class members have been afforded an opportunity to opt out.

[ 10 ] In other words, it is my view that the proposed summary judgment motion, at this stage, would accomplish little of significance. It would result in a decision that affects only the representative plaintiff.

[ 11 ] If the defendant wishes to argue, on certification, that the nature of the claims of the individual plaintiff makes him an unsuitable representative of the class, it remains free to do so.

The Proposed Sur-Reply Pleading

[ 12 ] Groupon says that a Sur-Reply is necessary in order to respond to new issues raised by the plaintiff in his Reply pleading. It says that this is necessary for the purposes of the certification motion so that the parties will be aware of all claims and defences being advanced when they are preparing their materials for certification and so that the Court has a full set of pleadings when the certification motion is heard.

[ 13 ] The proposed Sur-Reply purportedly responds to allegations in the plaintiff’s Reply pertaining to information on the Groupon website consisting of (a) an “FAQ” page; and (b) the “Merchant Account Terms and Conditions”. It seeks to plead that this material has no application to “traditional” Groupon Vouchers. The FAQ were allegedly directed to merchants, not customers, and the Merchant Account Terms and Conditions related to a program called “Groupon Now!” which was introduced in Ontario in July, 2011. Groupon says that this has nothing to do with the claims at issue in this proceeding.

[ 14 ] The Rules of Civil Procedure, R.R.O. 1990, Reg. 194, do not provide for the delivery of a Sur-Reply and Rule 25.01(5) states that “[N]o pleading subsequent to a reply shall be delivered without the consent of the opposite party or leave of the court”. I note that there have been cases in which a “Rejoinder” has been permitted where (a) the reply raise new and important matters; (b) the reply introduces events subsequent to the occurrence of the loss in respect of which the action was brought; or (c) the defendant could not reasonably have anticipated the matter and pleaded to it in the statement of defence: Toronto Non-Profit Housing Corp. v. Toronto Electric Commissioners (1986), 7 C.P.C. (2d) 305 (Ont. Master) ; Firestone v. Firestone (1974), 1974 437 (ON SC) , 5 O.R. (2d) 659 (H.C.); Regal Films Corp. (1941) Ltd. v. Glen Falls Inc. Co., [1945] O.W.N. 130 (Master) .

[ 15 ] I have read the proposed Sur-Reply. It reads more like an affidavit or an argument than a pleading. While the court may order the delivery of a Sur-Reply or Rejoinder pleading in cases such as those described above, or to prevent prejudice to the defendant, it is unnecessary to address the issue at this time. Groupon will be entitled to tender all its evidence and make all its arguments in response to the plaintiff’s case on the certification motion. A pleading is not required in order to ensure that the issues are squarely before the court. For this reason, I do not propose to schedule a motion with respect to the proposed Sur-Reply prior to certification. If the issue remains alive after certification, Groupon may schedule a motion for leave at a case conference.

[ 16 ] The parties should endeavour to agree upon a timetable leading to certification. The matters at issue are not complicated and that the motion can be scheduled within the next four to six months at the outside. Dates can be obtained through my assistant or a scheduling case conference can be arranged.

G.R. Strathy J.

DATE: March 21, 2012