Ontario court stick handles around “excessively over-pleaded” class action
A class action will not be certified unless it is a fair, efficient and manageable way to resolve proposed common issues. That principle was recently applied by Justice Perell in Berg v Canadian Hockey League to significantly narrow both the proposed claims and the scope of the class in a multi-jurisdictional class action. Berg demonstrates how defendants can successfully oppose attempts to certify superfluous claims, and significantly narrow a class action even if it is ultimately certified.
Proposed class action and certification decision
The plaintiffs in Berg asked the Court to certify a class action against 20 amateur hockey clubs in Ontario, Michigan, and Pennsylvania on behalf of current and former players. Their main grievance was that the clubs did not pay their players minimum wages and overtime pay that was allegedly owed under employment standards statutes. In the context, the plaintiffs also sought to certify claims for breach of contract, breach of duty of honesty, good faith and fair dealing, negligence, conspiracy, unjust enrichment, and waiver of tort.
Justice Perell ultimately certified the claims for breaches of employment law statutes and unjust enrichment against the clubs located in Ontario, but refused to certify any claims against the American teams or the remaining causes of action against the Ontario teams.
Redundant claims rejected
A majority of the plaintiffs’ proposed claims were not certified because they were deemed to add little, at a tremendous cost. Justice Perell concluded that if the plaintiffs succeeded in showing that the employment statutes applied and had been infringed by the defendants, they would succeed on their breach of statute and unjust enrichment claims, and obtain all of the relief sought.
Conversely, if the employment statutes were not breached, the plaintiffs would “not be able to snatch victory from the jaws of defeat” by proving any of the other claims. These redundant claims would, however, have created enormous problems of manageability. The conspiracy claim was singled out in this respect. In particular, Justice Perell noted that this singular allegation, which came with “more than a taint of moral reprehensibility,” would probably lead to each defendant mounting a separate defence and enormously expand the factual footprint of the action.
American classes “a management nightmare”
Justice Perell also dismissed the plaintiffs’ attempt to certify two classes pursuing claims for breach of employment statutes in Michigan and Pennsylvania. He accepted that Ontario had jurisdiction simpliciter and was a convenient forum, and was willing to assume that any judgment issued by an Ontario Court would be enforceable in Michigan and Pennsylvania; however, Justice Perell held that an Ontario class action was not the preferable procedure for resolving the American classes’ claims.
He began by noting that the plaintiffs wanted to pursue different claims against the American and Ontario teams, and this “differentiation of the claims against the Ontario and American teams [was], in and of itself, a management nightmare.” Further, there was a real chance of inconsistent outcomes for the different classes, and the Court would have to struggle with the different ways in which the test for finding an employment relationship had been applied in the different jurisdictions.
Ultimately, Justice Perell concluded that there was “no unfairness to the players, who are pursuing claims to enforce Michigan and Pennsylvania statutes to pursue those claims in Michigan and Pennsylvania”, but it would “not be just and fair to the American team defendants for an Ontario court to decide the application of American law” to the claims advanced against them.
Berg demonstrates that plaintiffs do not have unlimited latitude when framing a putative class proceeding. As noted by Justice Perell, the Class Proceedings Act is designed to “provide the class members with the access to justice that they need, [but] needs are different than wants.” The manageability and fairness of the class proceeding are important considerations, and they provide defence counsel with a basis for challenging superfluous claims or overly-expansive class definitions.