On March 6, 2013, the Honourable Justice William Fraiberg of the Quebec Superior Court rendered a unique decision limiting class actions in an important way. By their very nature, class actions include groups of individuals (in this case consumers). In the case of United Parcel Service du Canada Ltée ("UPS"), over thirty million transactions are affected by class actions brought against it, and there are thus an unending supply of Plaintiffs over time. If a first class action fails, a new group of consumers for a different time period can easily be found. However, Justice Fraiberg, has put an end to serial class actions which raise the same issues but for differently constituted groups of consumers. He did so by declaring a second class action brought against UPS res judicata or chose jugée.

Plainly, this is an important decision for all those in the business of serving consumers. What follows is a detailed explanation of Justice Fraiberg's landmark decision.

Background

On January 8, 2013, the Petitioner Jean Gauthier brought a motion for authorization to bring a class action against UPS seeking compensatory and punitive damages on the ground that the latter charged him and other members of the proposed class unsolicited and abusive customs brokerage fees in connection with the importation of goods to Canada (the "Gauthier Motion").  

In a judgement rendered on March 6, 2013, Justice Fraiberg granted UPS's motion seeking to dismiss the Gauthier Motion for Authorization, concluding that it was chose jugée or res judicata because it was identical to a motion for authorization brought by Petitioner Dominic Leblanc (the "Leblanc Motion"), which was dismissed only four months earlier.  Indeed, Justice Fraiberg had himself heard and dismissed the Leblanc Motion.

In the Leblanc Motion, M. Leblanc sought authorization to undertake a class action on behalf of a class comprising of individuals who were charged brokerage fees for the international delivery of goods in Canada from the United States for supposedly unsolicited brokerage services rendered by UPS.

On October 1st 2012, the Superior Court of Quebec dismissed the Leblanc Motion, finding that the questions raised were not similar and therefore unsuitable for class action treatment, that the class action had no reasonable chance of success on the merits and that Mr. Leblanc was not an appropriate representative of the proposed class.

While an appeal as of right existed from this judgement dismissing the Leblanc Motion for Authorization, the Petitioner Leblanc did not exercise this right.

The Gauthier Motion

The Gauthier Motion sought to represent the same class, was based on the same cause of action and sought the same damages as the Leblanc Motion.  Mr. Gauthier claimed however that he had suffered his damages for the first time on November 27, 2012 - less than two months after the Leblanc Motion was dismissed. He therefore argued that he could not possibly be included in the class proposed in the Leblanc Motion, based on the differing time periods that the proposed classes spanned.  Justice Fraiberg dismissed Mr. Gauthier's argument stating that the time period alone was not sufficient to make the class "different" from the one proposed in the Leblanc Motion:

"[9] That three months after the judgment dismissing Mr. Leblanc's motion, Mr. Gauthier seeks authorization to bring a class action on behalf of a group of alleged victims identical in every respect to Mr. Leblanc's group except for being defined as existing between January 2010 and January 2013 as opposed to Mr. Leblanc's, existing from 2003 to 2006, does not fundamentally change anything.

[10] Both Petitioners were acting in an identical capacity against the same proposed defendant and seeking the same damages for the same reasons.

[…]

[13] It is not credible that Mr. Gauthier suffered his damages for the first time on November 27, 2012 and thus can claim that he is a member of a different class from Mr. Leblanc's."

In granting UPS's motion to dismiss, Justice Fraiberg held that it would serve no useful purpose nor would justice be served by permitting still another motion for authorization to bring a class action against UPS to proceed when a judgement had already disposed of the earlier motion on grounds which go to the merits of the authorization rather than derive from mere procedural considerations. In effect, because the judgement dismissing the Leblanc Motion is a final judgement, it must therefore constitute res judicata or chose jugée vis-à-vis any subsequent motion which proposes an identical class and seeks the same categories of damages and for the same legal reasons.

In the Court's view, finding otherwise would lead to the unwanted and unjust situation where there would never be any closure of unsuccessful class action initiatives since "successive would-be representatives of alleged victims could continue to pop up, immunizing themselves against a defence of res judicata by disingenuously claiming to be parties who are different from earlier alleged victims simply because they suffered the damages that they allege after the last dismissal judgment invoked against them."

Interestingly, in refusing to hear the Gauthier Motion, the Court  pointed to the fact that Mr. Gauthier's attorneys, Merchant Law Group, were also involved in the Leblanc case. Indeed, they originally represented Michael Smythe, Mr. Leblanc's predecessor as the proposed representative of the alleged victims of the practice, before dropping out of the file for unexplained reasons. It was the Court's opinion that because they were not content with the outcome of Mr. Leblanc's effort on behalf of the alleged victims, Mr. Gauthier's attorneys decided to try to have the authorization case heard all over again, "cutting and pasting" the essential allegations of Mr. Leblanc's motion and recruiting Mr. Gauthier to be their plaintiff, claiming that he was acting for a new class because the damages occurred after the dismissal judgment of October 1, 2012.

In fact, the Court noted that that the entire initiative against UPS in Quebec has been lawyer-driven, not victim-driven. And while arguments were raised by UPS that the Gauthier Motion therefore amounted to an abuse of process, the Court held that since there were no reported Quebec judgments on point (this case being the first), it was not an appropriate occasion to grant a conclusion as to abuse of process.

Despite the fact that there have been no reported Quebec judgments which have applied the rule of res judicata to judgments refusing authorization to bring class actions, the Court held that an "economic and credible system of class action judicature" required that the rule of res judicata apply to judgments denying authorization to bring class actions; much in the same way as it does to those that grant it. The rule cannot just go one way.

The present judgement was not appealed by Mr. Gauthier.

Conclusion

This is an important decision not only because it is the first of its kind, but because it sends a clear message to the legal community and public at large that a judgement rendered on the motion for authorisation must dispose only once of all substantially similar motions that can be instituted against a defendant based on the same facts. In effect, the Superior Court has confirmed that a defendant cannot be held hostage by successive would-be representatives of alleged victims disingenuously claiming to be parties who are different from earlier alleged victims simply because they suffered the damages after the last dismissal judgment invoked against them.