Introduction
In British Columbia v. The Jean Coutu Group (PJC) Inc.(the Appeal), the British Columbia Court of Appeal (the BCCA) held that the certification application in a class action proceeding is not the presumptive first step. [1] In overturning the decision of the British Columbia Supreme Court (the BCSC), Justice Butler found that the appellants, the Jean Coutu Group (PJC) and Pro Doc Limitée (Pro Doc), would be prejudiced if their jurisdiction applications were not heard before the certification application.[2] Traditionally, in many Canadian jurisdictions, certification applications are heard in advance of or concurrent with any preliminary applications to strike or for summary judgment. Defendants who seek to bring motions to strike or for summary judgment in advance of certification often found their motions “sequenced” to be heard together with or even after certification. This decision reaffirms the factors that courts will consider in a class action sequencing analysis and highlights how that analysis must be applied in the specific context of the case, such that the certification application will not always be heard first.[3]
Background
On August 29, 2018, the BC Government launched a class action lawsuit against opioid drug companies. The BC Government, along with other federal, provincial, and territorial governments, sought to recover millions of dollars from at least 48 defendants who were, “. . . involved in the manufacturing, marketing, distribution or sale of opioid drugs and products in Canada.”[4] The defendants included PJC and Pro Doc, companies incorporated in Quebec.[5]
In March 2020, several named defendants, including PJC and Pro Doc, filed jurisdiction simpliciter challenges arguing that BC was not the appropriate forum in which to hear the claim. In British Columbia v. Apotex Inc., the British Columbia Supreme Court ordered these jurisdiction challenges to proceed in conjunction with the certification hearing for the class action, and not before.[6] PJC and Pro Doc appealed this sequencing order as the only two defendants incorporated or based in Quebec with no involvement in BC.[7] They argued that the sequencing order prevented the defendants from challenging jurisdiction before the certification motion and was prejudicial. It required PJC and Pro Doc to remain involved in lengthy, complex, and expensive litigation pending a determination of whether the Court even had jurisdiction.
The BCCA’s Analysis
The central question before the BCCA was: “whether the judge erred in the exercise of his discretion by making a sequencing order that effectively requires the Quebec defendants to remain participants in lengthy, complex and expensive proceedings that may continue for years before having the opportunity to challenge the Court’s territorial competence over them.”[8]
Before answering this question, the BCCA reaffirmed the non-exhaustive factors from Shaver v. Mallinckrodt Canada ULC that courts in BC must consider in a sequencing application (the Shaver Factors).[9] The BCCA made clear that each pre-certification motion brought should be examined through the specific context of the case.[10] Justice Butler, writing for the BCCA, then addressed the presumption that certification motions should be the first procedural matter heard and determined in a potential class action proceeding.[11] Unequivocally, Justice Butler rejected any such presumption: “The cases that have so held … were, in my opinion, wrongly decided and should not be followed.”[12]
The BCCA allowed PJC and Pro Doc’s appeal on the grounds that the trial judge erred in his exercise of discretion with regard to the sequencing order. While the Shaver Factors were considered, the full context of the proposed class proceeding had not been properly examined. Critical to the BCCA’s determination was the size and complexity of the lawsuit. As the BCCA stated:
“The magnitude and complexity of this proceeding makes it markedly different from most class actions. Consideration of the Shaver factors in a proceeding of this nature required a more extensive consideration of potential prejudice…”[13] The potential for prejudice to the defendants would arise if they were subject to complex, expensive, and time-consuming proceedings before having the foundational issue of jurisdiction answered.[14]
Finally, the BCCA rejected the trial judge’s reasoning that overlapping issues between the jurisdictional arguments and other issues, for example, the determination of common issues and scope of the class, should prevent the appellants from first making their jurisdictional arguments: “[T]he question is not whether there is interplay between the issues; it is how best to utilize judicial resources to resolve the issues expeditiously.”[15]
The trial judge applied the correct test in examining the Shaver Factors, but failed to properly address the specific context and scope of this particular potential class action. As such, the trial judge did not account for the prejudice that the defendants would experience if the foundational question of jurisdiction were not answered up front.
Significance
PJC and Pro Doc’s successful appeal opens the door for other defendants in this class action to argue their jurisdiction applications prior to the certification motion, as noted by the BCCA.[16] Beyond that, this decision represents a number of important developments in the sequencing of class actions in BC.
The presumption that certification applications will be heard first has been supplanted. This is a particularly significant development because, as the BCCA acknowledged, sequencing applications in class action proceedings are becoming increasingly common.[17]
The BCCA reaffirmed the Shaver Factors to be considered when weighing sequencing applications, making clear that there can and should be departures. The BCCA stressed a specific contextual approach be taken to each sequencing application, evidenced in the Appeal through consistent references to the magnitude and scope of this particular class action. Further, the Court considered prejudice as a factor in weighing sequencing applications: “the question of prejudice is properly to be weighed by the judge in his exercise of discretion when considering appropriate sequencing…”[18]. Finally, the Court clarified Shaver Factor (e) requiring, “the complexity and interplay of the issues that may arise in and between the pre-certification and certification applications.”[19] As noted above, analysis on this point should centre more on how to best utilize judicial resources to resolve issues efficiently, rather than whether interplay between the issues exists.[20]
And while the hearing of applications ahead of certification may not be the rule in BC, the BCCA has shown that when certain conditions are met, it will turn the default position on its head.
Note: The BCCA’s sequencing decision is entirely consistent with the October 1, 2020 amendments to the Ontario Class Proceedings Act, 1992, S.O. 1992, c. 6. The amendments included section 4.1 which requires that motions that may dispose of the proceeding in whole or in part or narrow the issues to be determined, be heard before certification, unless the Court orders that they proceed concurrently.
[1] British Columbia v The Jean Coutu Group (PJC) Inc., 2021 BCCA 219 at para 37 [the Appeal].
[2] Ibid at para 93.
[3] Ibid at para 33.
[4] Ibid at para 1.
[5] See Her Majesty the Queen in the Right of the Province of British Columbia’s Notice of Civil Claim here.
[6] 2020 BCSC 412 at para 94.
[7] The Appeal, supra note 1 at para 4.
[8] Ibid at para 6.
[9] 2021 BCSC 455 at para 10 [Shaver].
[10] The Appeal, supra note 1 at para 33.
[11] Ibid at para 35.
[12] Ibid at para 37.
[13] The Appeal, supra note 1 at para 60. See also paras 85-86.
[14] Ibid at para 78.
[15] Ibid at para 88.
[16] Ibid at para 95.
[17] Ibid at para 33.
[18] Ibid at para 66.
[19] Ibid at para 33.
[20] Ibid at para 88.
