Competing Class Actions: The Unsettled Law of Carriage Motions

Written by on April 24, 2018.

Class counsel trying to predict the outcome of a carriage motion has little to learn from two recent decisions by the Ontario Superior Court of Justice.

Carriage motions are unique to class actions.  They arise when multiple class actions are filed for what is essentially the same case and counsel are unwilling to work together.  In these circumstances, the court is asked to determine which counsel (or counsel group) will have “carriage” of the class action.

Courts are supposed to grant carriage to the action that is better for the interests of the class members.  Courts have identified 16 factors as being relevant to this analysis, relating generally to the theory of the case and the qualifications of the proposed representative plaintiffs and class counsel.   Predicting how these factors will be weighed by the court in deciding who gets carriage has proven difficult.  Two recent decisions David v. Loblaw, 2018 ONSC 1298 (“Bread”) and Quenneville v. Audi AG, 2018 ONSC 1530 (“German Cars”) further muddy the waters.

These cases are in agreement that the courts will not engage in a “beauty pageant” between competing firms and German Cars suggests that, in the ordinary course, minimal evidence is required in this regard.  The cases diverge in their treatment of the remaining factors.  In Bread, carriage was awarded on the basis of preparation and readiness.  In the German Cars action (decided six days later), carriage was awarded based on case theory and the court treated the different level of preparation as irrelevant.

The Bread action related to allegations that the defendant grocery chains fixed the prices of packaged bread.  That case turned on level of preparedness and readiness of class counsel.  Justice Morgan commended the successful counsel team for taking initiative in challenging a gift card program implemented by Loblaws that operated as a setoff against any ultimate damages award.  He described the gift card motion as a “major undertaking at the very outset of the action”.  Justice Morgan also noted that the successful counsel team had better consortium agreements (agreements among firms to coordinate their cases across Canadian jurisdictions), which reflected their more proactive approach.

The German Cars action related to allegations that certain German car manufacturers conspired to stifle innovation and charged unlawfully inflated prices for cars leased or owned by Canadian customers.  Carriage turned on case theory.  Justice Perell said that, while neither team scored a “knockout blow”, the balance was tipped in favor of the successful counsel team because they had a “superior and more creative” case theory.   The other counsel team was accused of pleading a conventional price-fixing action despite the facts suggesting a more subtle cartel arrangement.  By contrast, the successful counsel team pled a novel theory of law based on a claim of deceptive marketing, an approach approved by Justice Perell who stated that courts should consider “some encouragement of creativity” in evaluating competing case theories.  Justice Perell considered the level of preparedness to be irrelevant on the facts.  He found that “[g]enerally speaking, the preparation factor is designed to weed out laggards and late-arriving Class Counsel attempting to poach on the work done by others.”  Justice Perell stated that it was ill-advised for the successful counsel team to have served a certification record in the face of a carriage motion.

So here we are, more than a quarter-century after the enactment of the Class Proceedings Act in Ontario, with little certainty in carriage motions.  The Bread action favoured the side that was slightly ahead in the litigation process.  The German Cars action treated this factor as irrelevant and granted carriage to the side that had a more creative case theory.  Overall, there is little certainty as to what factor is most important, though at least the cases do unite on what factor is not important:  barring exceptional circumstances, quality of counsel is unlikely to be a major point of contention in future carriage battles.

Posted in Class Actions