What should a court do when faced with two motions for authorization to institute a class action which seek permission to represent the same class for the same cause of action? Since 1999, the Quebec courts have applied the “first to file” rule, developed in Hotte c Servier Canada Inc.,1 whereby the first motion for authorization filed takes precedence over any other subsequent motion seeking authorization to represent the same class.
On December 3, 2012, in Schmidt c Johnson & Johnson et al,2 the Quebec Court of Appeal handed down an important decision which adds to the Servier rule. In Schmidt, the Court had to decide which of the following two motions for authorization, both directed at various hip implant manufacturers, would prevail and which would be stayed:
- A first motion, which had been filed in the office of the Superior Court on November 26, 2010 but was obviously incomplete. The body of the motion was just three paragraphs long, and the legal argument as well as the conclusions sought remained to be completed. In addition, the motion had been served on the respondents late, in February 2011.
- A second motion, which had been filed after the first, on December 21, 2010, but whose allegations and conclusions were complete. The motion had been served on the respondents the day after it was filed, on December 22, 2010.
The Court of Appeal affirmed the ruling in first instance and stayed the first motion, which had been filed first.
In its analysis, the Court of Appeal rejected a mechanical application of the “first to file” rule. It also rejected the application, in Quebec law, of the approach that predominates in the common law provinces, the carriage hearing. Under that comparative approach, a court is to determine, in light of a series of factors, which application for certification of a class proceeding is in the best interests of the members of the proposed class.
Instead, the Court of Appeal proposed a more flexible application of the Servier rule and prescribed the following test:3
- the first motion to be filed in the office of the court is, in principle, the one that will be heard in priority;
- meanwhile, subsequent motions are stayed and will be heard, in the order they were filed, only if the preceding one is dismissed;
- the priority of the first motion may be challenged by the attorneys of record in the subsequent motions; and
- the party challenging the priority has the burden of establishing that the motion enjoying priority is not in the best interests of the putative members, but rather constitutes an abuse of the Servier rule.
By tempering the Servier rule, the test laid down by the Court of Appeal will promote the filing of motions for authorization that are more complete and better put together. This is excellent news both for the class members covered by competing motions and for respondents, who will be able to defend themselves against proceedings that have been prepared with greater care.