Waheed et al. v. GlaxoSmithKline Inc. et al.
[Indexed as: Waheed v. GlaxoSmithKline Inc.]
Ontario Reports
Ontario Superior Court of Justice,
Belobaba J.
October 8, 2013
117 O.R. (3d) 680 | 2013 ONSC 5792
Case Summary
Civil procedure — Class proceedings — Counsel — Law Firm B bringing motion to replace Law Firm A as carriage counsel for proposed class actions on basis of unreasonable delay as Law Firm A had not yet proceeded with certification motion — Court having jurisdiction to hear carriage transfer motion — Motion dismissed as Law Firm B failed to establish that delay was unreasonable, that there was evidence of actual prejudice or harm to putative class members, that explanation for delay was inadequate or that order compelling Law Firm A to bring certification motion within expedited time period would be unworkable or would not be in best interests of class.
Three proposed class actions involving a diabetes medication were commenced in 2007, 2009 and 2010. Carriage motions brought by Law Firms A and B in 2010 and were settled on the basis that Law Firm A would be appointed counsel for the plaintiffs in the 2007 action and the other two actions would be (effectively) stayed. Firm B brought a motion in 2013 to replace Firm A as carriage counsel on the basis of unreasonable delay, as Firm A had not yet proceeded with a certification motion.
Held, the motion should be dismissed.
The wide-ranging supervisory jurisdiction of a class action management judge under s. 12 of the Class Proceedings Act, 1992, S.O. 1992, c. 6 includes the jurisdiction to hear motions to remove and replace carriage counsel on the basis of unreasonable delay.
The court should intervene to replace carriage counsel on the ground of unreasonable delay where the moving party can satisfy each of the following four criteria: (i) the delay is clearly unreasonable by current class action litigation standards; (ii) there is evidence of actual prejudice or harm to the putative class members; (iii) the explanation for the delay is inadequate; and (iv) a court order requiring Firm A to bring the certification motion within an expedited time period (failing which it will be replaced by Firm B) is not, in all the circumstances, either workable or in the best interests of the class. Firm B's carriage transfer motion failed on each of the four criteria. [page681]
Cases referred to
Fantl v. Transamerica Life Canada (2009), 95 O.R. (3d) 767, [2009] O.J. No. 1826, 2009 ONCA 377, 72 C.P.C. (6th) 1, 249 O.A.C. 58; Martin v. Astrazeneca Pharmaceuticals PLC, [2013] O.J. No. 1182, 2013 ONSC 1169 (Div. Ct.), affg [2012] O.J. No. 2033, 2012 ONSC 2744, 27 C.P.C. (7th) 32, 216 A.C.W.S. (3d) 294 (S.C.J.); Ontario New Home Warranty Program v. Chevron Chemical Co. (1999), 46 O.R. (3d) 130, [1999] O.J. No. 2245, 99 O.T.C. 384, 37 C.P.C. (4th) 175, 88 A.C.W.S. (3d) 1138, 1999 15098 (S.C.J.); Rattray v. Woodbury County, 614 F.3d 831 (2010)
Statutes referred to
Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 12
Securities Act, R.S.O. 1990, c. S.5, s. 138.14 [as am.]
MOTION for an order replacing carriage counsel in the proposed class action.
Bryan McPhadden and Idan Erez, for plaintiffs in the Waheed action.
James Orr, Megan McPhee and Tanya Jemec, for plaintiffs in the Lloyd action.
J. Hanet, for defendants in both actions (observing).
[1] BELOBABA J.: — Law Firm A wins a carriage motion over Law Firm B. Almost three years go by and Firm A has still not proceeded with the certification motion. Firm B brings a motion to replace Firm A as carriage counsel on the basis of unreasonable delay. Does this court have the jurisdiction to hear this "carriage transfer motion"? If so, under what circumstances can Firm A be replaced? What is the test?
Background
[2] Kim Orr Barristers P.C. ("Kim Orr") is counsel in two proposed class actions involving a diabetes medication called Avandia that is manufactured and distributed by GlaxoSmithKline. One is the Lloyd action, commenced in 2007 by the Merchant Law Group, and the other is the Imbesi action, commenced in 2010 by Kim Orr. In 2010, Kim Orr and Merchant agreed that Kim Orr would be the lead counsel in both actions and the two firms would work together.
[3] McPhadden Samac Tuovi ("MCST") is counsel for the plaintiffs in the Waheed action, another Avandia action that was commenced in 2009.
[4] In November 2010, carriage motions brought by Kim Orr and MCST were heard by Justice Strathy. After the hearing but before the release of the court's decision, the parties agreed to settle the carriage motion on the basis that Kim Orr would be [page682] appointed counsel for the plaintiffs in the Lloyd class action, and the Waheed and Imbesi actions would be (effectively) stayed. The parties agreed that the MCST consortium would be permitted to participate in the class action but only at Kim Orr's discretion and that no steps could be taken without Kim Orr's approval. This agreement resulted in a consent carriage order dated November 19, 2010.
[5] Almost three years have passed and Kim Orr has still not brought a motion for certification. MCST says the delay has been unreasonable and Kim Orr should be removed as carriage counsel on the proposed Avandia class action. MCST says that it has prepared a certification record and is ready bring a motion for certification immediately. MCST asks that it be granted carriage of the proposed class action.
Analysis
(1) Jurisdiction
[6] Does this court have jurisdiction to entertain a carriage transfer motion? In my view, it does, and to its credit, Kim Orr did not suggest otherwise. Although the occasions will be rare, circumstances may require that carriage counsel be removed and replaced. The procedural vehicle is s. 12 of the Class Proceedings Act, 1992[^1] ("CPA"):
- The court, on the motion of a party or class member, may make an order it considers appropriate respecting the conduct of the class proceeding to ensure its fair and expeditious determination and, for the purpose, may impose such terms on the parties as it considers appropriate.
[7] Section 12 of the CPA has been described by this court as "a flexible tool for adapting procedures on a case-specific basis".[^2] The Court of Appeal has added that the scope of s. 12 is far-reaching and is engaged "from the inception of an intended class proceeding" and "continues throughout the 'stages' of the proceeding until a final disposition, including the implementation of the administration of a settlement or, where applicable, a resolution of all individual issues".[^3] In short, a class action management judge has a wide-ranging supervisory jurisdiction under [page683] s. 12 of the CPA and this includes motions to remove and replace carriage counsel on the basis of unreasonable delay.
(2) The test on a "carriage transfer" motion
[8] This issue has not been litigated before. There are no cases on point.[^4] In my view, any test for the removal and replacement of plaintiffs' counsel in a proposed or actual class action proceeding[^5] must recognize that as a general rule class counsel, acting on plaintiffs' instructions, should be able to run the lawsuit as they see fit. This includes deciding the shape, content and pace of the litigation. Class counsel may choose to slow matters down because of pending appeals, or developments in other jurisdictions, or indeed for any good reason that class counsel believes is in the best interests of the proposed or actual class. Generally speaking, no carriage transfer motion should ask the court to review and second-guess the action or inaction of class counsel.
[9] However, on occasion, and these occasions will be rare, a carriage transfer motion will be justified. One such case is where there is clear and unreasonable delay. In my view, the court should intervene to replace carriage counsel on the ground of unreasonable delay where the moving party can satisfy each of the following four criteria:
(i) the delay is clearly unreasonable by current class action litigation standards;
(ii) there is evidence of actual prejudice or harm to the putative class members;
(iii) the explanation for the delay is inadequate; and
(iv) a court order requiring Firm A to bring the certification motion within an expedited time period (failing which it will [page684] be replaced by Firm B) is not, in all the circumstances, either workable or in the best interests of the class.
(3) Applying the test to the facts herein
[10] MCST's carriage transfer motion fails on each of the four criteria. First, MCST failed to show that most class proceedings are certified in less than three years. It is well known that class proceedings generally move at a glacial pace. (One need only recall the difficulty that plaintiffs' have in securities class actions of even commencing an action within the prescribed three-year time limit.)[^6] If a moving party alleges unreasonable delay on the part of carriage counsel, it must provide comparative evidence to support this submission. No such evidence was provided.
[11] Secondly, MCST provided no evidence of any actual prejudice or harm to any of the putative class members. For example, MCST could have filed an affidavit from the plaintiffs in the Waheed action explaining why Kim Orr's delay was unreasonable and how it was adversely affecting them. No such evidence was provided.
[12] Thirdly, the explanation for the delay as provided by Kim Orr -- the need to coordinate with experts in the parallel American proceeding and await the outcome of appeal proceedings in a related pharmaceutical case[^7] -- was credible and certainly could not be described as "inadequate".
[13] Finally, during the course of the hearing, Kim Orr advised the court that it would be filing the certification motion in the Lloyd action by the middle of November, just two months away.[^8] MCST could not show that Kim Orr's undertaking to bring the certification motion within the next two months was somehow unworkable or not in the best interests of the proposed class.
[14] In sum, none of the four suggested criteria for the removal and replacement of carriage counsel have been satisfied.
Disposition
[15] The carriage transfer motion is dismissed without costs. [page685]
[16] I am denying costs because it was obviously this motion and the threat of being replaced as carriage counsel that encouraged Kim Orr to commit to filing a certification motion within two months. The putative class members in the Lloyd action were thus the unintended beneficiaries of the MCST carriage transfer motion. I advised Kim Orr at the conclusion of the hearing that I was not inclined to award costs. However, if Kim Orr thought otherwise, it should forward its costs submissions within 14 days. No such submissions have been received. No costs are awarded.
[17] My thanks to both sides for their courtesy and their assistance. I am particularly grateful that Kim Orr abandoned the various procedural arguments that were theoretically available and agreed to litigate the motion on its merits.
Motion dismissed.
Notes
[^1]: S.O. 1992, c. 6.
[^2]: Ontario New Home Warranty Program v. Chevron Chemical Co. (1999), 46 O.R. (3d) 130, [1999] O.J. No. 2245, 1999 15098 (S.C.J.), at para. 41.
[^3]: Fantl v. Transamerica Life Canada (2009), 95 O.R. (3d) 767, [2009] O.J. No. 1826, 2009 ONCA 377, at para. 39.
[^4]: There are only a handful of American cases on point. For example, in Rattray v. Woodbury County, 614 F.3d 831 (2010), the U.S. Court of Appeals for the 8th Circuit held that a 14-month delay between complaint and certification raised questions about the adequacy of class counsel and the representative plaintiffs. After reviewing the record, the court concluded that counsel's explanations for the delay were inadequate and replaced the representative plaintiff (and class counsel).
[^5]: Class action lawyers will understand that, strictly speaking, MCST is not asking to replace Kim Orr as carriage counsel on the Avandia (Lloyd) action but to be appointed carriage counsel on the Avandia (Waheed) action. That is, on the Avandia class action, the Lloyds would be replaced as representative plaintiffs by the Waheeds and MCST would take Kim Orr's place as carriage counsel on the Avandia (Waheed) class action.
[^6]: Securities Act, R.S.O. 1990, c. S.5, s. 138.14.
[^7]: Martin v. Astrazeneca Pharmaceuticals PLC, [2012] O.J. No. 2033, 2012 ONSC 2744 (S.C.J.), affd [2013] O.J. No. 1182, 2013 ONSC 1169 (Div. Ct.).
[^8]: I directed that the certification motion be filed by Kim Orr no later than November 29, 2013.
End of Document