Aug 13, 2012
By Jennifer Brown, Canadian Lawyer InHouse
An Ontario judge has stepped in to stop a third-party campaign to get members to opt out of a class action involving franchisees of a Canadian pet store chain, but did he go too far in doing so?
Ontario Superior Court Justice George Strathy ruled July 31 in 1250264 Ontario Inc. v. Pet Valu Canada Inc. that the efforts of a dissenting group of franchisees’ right to associate under a section of the Arthur Wishart Act interfered with the rights conferred by the Class Proceedings Act.
Strathy outlined two reasons why he felt there needed to be more control over communications in the action: The first had to do with the on-going relationship with the franchisor, while the other was the acrimonious nature of the case.
Jennifer Dolman, a franchise lawyer with Osler Hoskin & Harcourt LLP, agrees what’s unique about the case is not so much Strathy’s intervention, but that he intervened in a situation where it was a third party that had interfered with the opt-out process.
“He doesn’t reprimand them or say they weren’t allowed to do that, but says that having taken place it jeopardized the entire process. His job is to ensure class members are given an opportunity to be fully informed and can make private decisions about what they want to do with the process. Because he found enough examples of members who had been coerced he felt he had no choice but to invalidate those opt-outs,” says Dolman.
“Their right to not participate in a class action must be preserved,” says Dolman.
“Since the opt-out process was corrupted in this case, it needed to be re-opened. The results were not reliable. Class members will get another chance to opt out after plaintiff’s motion for partial summary judgment has been heard,” says Dolman.
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