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jeudi 20 septembre 2012

“First to File” rule prevails


By Marie-Hélène Beaudoin
McCarthy Tétrault

In Wainberg c. Zimmer inc., 2012 QCCS 4276, the Superior Court was seized with a Motion to Suspend a class action which was instituted first, in favor of a second class action, based on the fact that the second law firm to institute the proceedings had diligently proceeded with the drafting and filing of its Motion, and has recognised experience in class actions which results in an "added value" for the putative class members, which would be in the members' best interests.


The law firm based its Motion on the Schmidt v. Depuy International Ltd., 2011 QCCS 1533 decision, which is presently under advisement by the Quebec Court of Appeal. In that case, the Court had held that it had discretion not to apply the “First to File” rule mechanically, so as not to condone what it referred to as “ambulance chasing” and “forum shopping”. However, in the Wainberg case, the Court had no such concerns and decided that the general rule should prevail.

“[35] Therefore, until the Appeal Court renders its decision on the Schmidt Motion, the "First to File" rule still stands and prevails, except when it is obvious from the drafting of the motion that the best interests of the putative class members are not the counsel's priority.

[…]

[45] The Court's role of ombudsman for the putative class members is exercised on the basis of the proceedings filed before it and, between two motions appearing to adequately protect the best interests of the putative class members, the "First to File" rule prevails to determine which one ought to proceed and which one ought to be stayed.”
We will keep you posted when the decision is rendered by the Court of Appeal in Schmidt v. Depuy International Ltd.

The decision is available here.
 


2 commentaires:

  1. Interesting post!

    This would mean there is no absolute rule. And would this mean that the plaintiff's behaviour is to be taken into account i.e., it is when there is evidence of jurisdiction shopping that the "first to file" rule does not apply?

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  2. I think that it would only be in extreme cases that the plaintiff's behaviour or forum shopping considerations can come into play to discount the "first to file" rule. We have to remember that judges, in class action proceedings, have a duty to safaguard the members' interests, and should not allow a proposed representative to act in this quality if he is not acting in the best interest of the members. However, this consideration received two different applications in Wainberg and in Schmidt. In Wainberg, when faced with two actions of similar quality, prima facie, the Court found that it was not in the best interest of the members to start a debate and compare both actions tediously. The "first to file" rule was thus applied as a more "expedient and efficient" solution. I am looking forward to see how the Court of Appeal will rule on this issue!

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