In Amyotrophic Lateral Sclerosis Society of Essex County v Windsor (City), the Court of Appeal for Ontario held that the deemed undertaking rule (which prohibits parties from using information obtained in discovery for any purpose except the underlying litigation) did not apply to the names and number of opt-outs in a certified class action. The Court found that class members are akin to parties and therefore opt-out information that identifies class members is information that defendants and the general public are entitled to.
Two class actions were certified against the City of Windsor and the Town of Tecumseh for charging fees to charitable groups holding fund-raising lottery events. After certification, the defendants launched a campaign to convince class members to opt-out. The campaign emphasized the potential harm to municipal finances from the class actions, including that taxes may increase and services cut to pay for any damage award. The plaintiffs objected to the campaign, and the class action management judge found it crossed the line and created “undue influence”. Therefore, he gave class members who had delivered an opt-out notice a chance to reconsider. He also issued a protection order prohibiting defendants’ counsel from passing the number or identity of opt-outs to their clients during the reconsideration period to prevent any further undue influence.
After the reconsideration period, the defendants moved to lift the protection order. The plaintiffs responded by seeking a revised protection order or, alternatively, a declaration that the deemed and/or implied undertaking rules applied to the opt-out information. The class action management judge agreed with the defendants and lifted the protection order.
The plaintiffs successfully appealed to the Divisional Court. According to the Divisional Court, the opt-out information was information that would ordinarily be available through the discovery process and therefore the deemed undertaking rule applied to it.
Court of Appeal decision
The defendants then obtained leave to appeal to the Court of Appeal. Nordheimer J.A., on behalf of a unanimous Court, found that the Divisional Court had made two errors and allowed the appeal.
First, the Divisional Court incorrectly found that class members were not parties to the litigation and therefore entitled to anonymity. Nordheimer J.A. held that while class members may technically not be parties, they are very much akin to parties because, once the opt-out period has expired, any class member that does not opt-out becomes part of the class of plaintiffs advancing a claim against the defendants.
Second, the Divisional Court incorrectly concluded that the opt-out information was equivalent to information produced in the discovery process and thus protected by the deemed undertaking rule. The core purpose of the deemed undertaking rule is to protect private information a party is compelled to produce. However, the opt-out information was created as a result of a court-ordered opt-out process. Therefore, Nordheimer J.A. held that the opt-out information was not the private information of any party and was information that all parties are entitled to.
Nordheimer J.A. added that Canadian courts operate on the openness principle. In general, the public is entitled to know what proceedings are commenced, along with the particulars of those proceedings and whose rights are being submitted for adjudication. In addition, a defendant is entitled to know who is using the court process to advance a claim against it. Therefore, as class members are akin to parties, the opt-out information that merely confirmed their identity was public and not private information.
Class members occupy a gray zone. Section 14 of the Ontario’s Class Proceedings Act makes clear that, in general, class members cannot participate in the underlying litigation without leave of the Court, which distinguishes them from parties in a regular action. At the same time, class members are akin to parties in many other ways. A class action is a vehicle for advancing their claims, and class members will be bound by any resulting judgment. Amyotrophic confirms that, once the opt-out period has passed, class members will generally be treated like parties. In Amyotrophic, this meant that class members’ identities was public information like that of parties to any regular action. In future cases, it is conceivable that this principle may be extended and potentially result in class members being subject to the additional rights or obligations imposed on parties to an action.