Court Denies Certification Where Some Defendants Left Out

Did the representative plaintiff name some players as defendants, while leaving out others, with no apparent rhyme or reason? Alberta courts have recently refused certification partly on this basis.

In early December 2013, an Alberta court sketched out a certification defence applicable where there is no explanation why the plaintiff sued some defendants but left others out of the action. The case, Condominium Corporation No. 1122235 v. Surbey, gives defendants some useful tips:

• Ask whether the representative plaintiff named all of the “necessary” or “proper” defendants to the action. Are there others who are closely connected to the plaintiff’s theory of the case but who were, for some reason, not named?
• Examine whether the representative plaintiff can give any rationale or reason why these other possible defendants were not included as defendants. Where the representative can give no rationale or reason for selectively naming defendants, this may suggest that he or she is not sufficiently informed or is not acting in the best interests of the class members.
• Consider whether other parties will be pulled into the action through third party claims or the like. What will this do for the preferability or manageability of the class action? Will separate counsel have to be appointed to defend the inevitable third party claims?

This line of defence may prove itself useful in provinces where “industry wide” class actions are becoming a reality. It is often impossible to determine why some industry participants, but not others, were named as defendants in the proposed class action. These are complex pieces of litigation at the best of times, but the partial list of industry participants makes everything so much more complex in the trenches (read: third party claims, contribution and indemnity, etc.).

With Surbey in the quiver, there may be a renewed opportunity to prevent those sorts of cases from ever being certified. Not only does the added complexity challenge whether a class action is truly preferable, but failing to include possible defendants may additionally raise questions about the representative plaintiff’s suitability to manage the action. That was the situation in Surbey.

For more on third party claims and the failure to include necessary parties, see Sonia Bjorkquist and Karin Sachar’s post of August 14th, 2013: Third Party Claims in Class Actions: Who to Invite to the Party.