Carriage decision encourages striving to avoid multiplicity of class actions

In Winder v Marriott International Inc, Justice Perell granted carriage of a data breach class action commenced against Marriott International, Inc., Marriott Hotels of Canada Ltd., and Starwood Canada ULC (collectively “Marriott”) to Siskinds LLP. The decisive factor on the carriage motion was Siskinds’ willingness to pursue a litigation strategy that would potentially limit the number of overlapping class actions relating to the breach. In his decision, Justice Perell emphasized the importance of striving to avoid a multiplicity of class actions and provided interesting suggestions on how forum issues in multi-jurisdictional class actions could conceivably be resolved.

Background

In late 2018, Marriott announced that an unauthorized party had gained access to its reservations database. The data breach potentially affected around 500 million hotel guests. Following the announcement, various class actions were commenced against Marriot in Ontario, Québec, British Columbia, Alberta and Nova Scotia.

In Winder, Justice Perell was asked to decide which of two proposed national class actions commenced in Ontario against Marriott should be allowed to proceed – the action being prosecuted by Siskinds LLP or the action being prosecuted by a consortium of firms including Koskie Minsky LLP (the “Consortium”). As Justice Perell put it, “[t]o consortium or not to consortium, that is the question.”

General principles on carriage motions

First, Justice Perell reaffirmed that courts will grant carriage to class counsel whose proposed action will better promote access to justice, behaviour modification, and judicial economy, and will better advance the interests of class members while being fair to the defendants. He then listed 17 factors courts will consider on carriage motions in determining which action should proceed. Those factors include the quality of the proposed representative plaintiffs, the quality of proposed class counsel, the preparation of the action, and the interrelationship of class actions in more than one jurisdiction.

Justice Perell considered the 17 factors, but found that the “tipping point” was the approach respective class counsel planned to take regarding the interrelationship of parallel class actions in other jurisdictions.

The issue of multiple class actions

In his reasons, Justice Perell wrote forcefully on the importance of striving to avoid a multiplicity of class actions. He explained that class proceeding statutes are aimed at achieving access to justice while avoiding the requirement of multiple proceedings and noted the many disadvantages of having multiple proceedings regarding the same subject-matter. Among the disadvantages cited by Justice Perell were: (i) the duplication of fact-finding and legal analysis; (ii) the embarrassment of inconsistent outcomes; (iii) the wasted resources of lawyers and experts; (iv) the wasted judicial resources; and (v) the risk of defendants shopping around for bargain settlements.  

Justice Perell noted that in Canada, unlike in the U.S., there is no pan-Canadian procedure to address the issue of overlapping class actions in multiple provinces. However, he also noted that the Uniform Law Conference of Canada (“ULC”) has made recommendations^[1] for addressing multi-jurisdictional class actions in Canada and that those recommendations have been adopted in Alberta and British Columbia. The ULC’s recommendations encourage courts to consider, at the certification stage, whether certain claims should be left to be resolved in proceedings in other jurisdictions. The ULC’s recommendations have not been adopted in Ontario, though the Law Commission of Ontario recently recommended they be.^[2]

Avoiding a multiplicity of class proceedings tips the scales

Justice Perell found little on the first 16 factors of his carriage analysis to differentiate between the proposed actions of Siskinds and the Consortium. However, he found that Siskinds had the edge on factor 17, the “interrelationship of class actions in more than one jurisdiction”.

The Consortium’s apparent litigation strategy was to have multiple overlapping class actions across the country and then to resolve the procedure going forward by way of co-operation agreements among class counsel. In fact, Koskie Minsky, a member of the Consortium, had itself commenced a parallel national class action in British Columbia and a parallel regional class action in Nova Scotia. In addition, the Consortium had entered into a co-operation agreement with class counsel in a parallel national class action in Alberta.

Conversely, Siskinds did not concede to the need for overlapping class actions and had not “prejudged” attempting to use the ULC’s recommended procedure for addressing the multi-jurisdictional issues in the case. Further, unlike the Consortium’s approach, Siskinds’ approach did not suffer from the “not uncommon inconsistencies and ironies” of class counsel commencing multiple overlapping class actions.

In Justice Perell’s view, it was preferable that the courts in the various provinces, not class counsel, determine how to manage the overlapping class actions and move the matter forward. On the record before him, Justice Perell found there to be a reasonably strong case that a single national class action would provide appropriate access to justice, behavior modification, and judicial economy, and believed that such an outcome was more likely if Siskinds was granted carriage.

Guidance on procedure for determining how many class actions should proceed

In an obiter “epilogue” to his reasons, Justice Perell offered suggestions on how the parties could conceivably attempt to sort out the “procedural morass” that had arisen in the Marriott case as a result of the commencement of numerous overlapping class actions. He suggested two potentially supportable options: (a) the defendants could bring simultaneous forum conveniens motions in each province in which a class action had been commenced; or (b) Siskinds could bring simultaneous motions to settle how the action should proceed pursuant to the ULC’s recommended procedure (possibly using analogous conflicts of laws rules in jurisdictions that had not adopted the ULC’s recommendations). Justice Perell also mentioned the possibility that either of these motions could arguably be heard at a single joint hearing in any one of the relevant provinces.

Implications

The decision in Winder provides a welcome affirmation of the courts’ acknowledgement of the importance of avoiding a multiplicity of proceedings in the class actions context, and makes clear that Ontario courts expect class counsel to pursue litigation strategies that aim to limit overlapping actions. The decision also provides thought-provoking suggestions, from one of Canada’s most prolific class action judges, on the procedures parties to multi-jurisdictional class actions could potentially follow in attempts to limit redundant litigation.

The goal of limiting overlapping class actions espoused by Justice Perell is laudable. However, we note that, in practice, until such time as provinces like Ontario and Québec adopt the ULC’s recommendations on multi-jurisdictional class actions, resolving issues of parallel proceedings will continue to depend upon the voluntary co-operation of counsel and the willingness of the various courts to engage in inter-provincial co-ordination.