20 Sep 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.

 

Commentaires (2)

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  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?

  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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