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Commonality Confirmed – Ontario’s Divisional Court Clarifies that there are Two Steps to the Class Action “Common Issues” Certification Inquiry

The Divisional Court’s recent decision in Kuiper v Cook (Canada) Inc offers appellate guidance on an ongoing debate arising in the context of the class action certification requirement that the claims or defences of class members must raise “common issues”. The debate centres on whether the common issues inquiry is a one or two-step inquiry. A three-judge panel unanimously determined in Kuiper that “the two-part test still governs the commonality inquiry”. The Divisional Court’s decision granted partial certification of a proposed class proceeding that the motion judge had previously refused to certify. BLG has commented on this in an earlier post.

Kuiper is a products liability class action. The products at issue relate to certain implantable inferior vena cava (IVC) filters, which were designed to trap blood clots in order to address potentially fatal pulmonary embolisms. The claims advance two principal allegations: (1) defective design; and, (2) breach of the duty to warn. The motion judge denied certification because he determined, among other things, that the plaintiffs had failed to satisfy the commonality requirement for these claims.

On appeal, the plaintiffs argued that the motion judge’s commonality inquiry was flawed because he conducted a two-part common issues inquiry: whether there was “some basis in fact” that (1) the asserted issue actually exists and (2) the issue is common to the entire class. Plaintiffs asserted that only the second aspect of this inquiry needed to be established for the proposed common issues to be certified (i.e., a one-step inquiry).

The argument for a one-step commonality approach relies upon a comment made by the Supreme Court in its 2013 Pro-Sys decision that “[i] n order to establish commonality, evidence that the acts allegedly occurred is not required ... the factual evidence required at this stage goes only to establishing whether these [proposed issues] are common to all the class members.”1 Confusion arose and the Supreme Court’s statement has been interpreted in some cases as a direction that the question of commonality should involve a singular inquiry, focused only on whether the asserted issue had class-wide application. In 2017, one prominent class actions judge observed that “ ... it is time to retire the two step approach and focus only on class-wide commonality.”2 Just a few short months after that decision, the Divisional Court disagreed with this assessment, noting that the Supreme Court’s comments did not specifically address or preclude the application of a two-step commonality inquiry.3 However, the Divisional Court did not explicitly resolve the one-step versus two-step commonality debate at that time.

Unsurprisingly, class counsel have advocated for a one-step inquiry, which arguably sets a slightly lower threshold for certifying proposed common issues in a class proceeding. Those in favour of the two-step inquiry, particularly on the defence side of the ledger, have supported the view that commonality cannot be established in the absence of some evidence that the issue actuallyexists across the class in its entirety.

The Divisional Court’s conclusion in Kuiper that “the weight of judicial and appellate authority is that the two-part test still exists” is a welcome clarification for defendants, as it guards against artificial common issues being certified without any evidentiary basis supporting whether, in fact there actually is “an issue”. In short, the Divisional Court was convinced that the necessity of there being “some basis in fact” for a common issue contemplates more than just a bare assertion of an “issue” in the pleadings.

Having affirmed the two-step commonality approach – the same approach that the motion judge had applied at the Kuiper certification motion – the Divisional Court nevertheless overturned the motion judge’s finding that there was no commonality with respect to the proposed duty to warn common issue.

The Divisional Court held that there was indeed some basis in fact to support both the existence and the class-wide application of an issue of defect in the duty to warn, the evidence in the record of four regulatory advisories that had been issued about IVC filters. In fairness to the motion judge, however, the Divisional Court noted that the plaintiffs had not relied on these four advisories at the certification motion as forming some basis in fact for the alleged breach of the duty to warn. The plaintiffs had re-calibrated their evidentiary focus on appeal, leading the Divisional Court to conclude that “[w]ith this change in emphasis”, the plaintiffs now cleared “the low bar for finding that the duty to warn is a common issue”. The class action was therefore allowed to proceed with respect to this newly certified common issue.

While Kuiper is a clear statement from an intermediate appellate court that the two-step commonality inquiry is alive and well, the Court of Appeal may yet weigh in on this back-and-forth debate.


 

1 Pro-Sys Consultants Ltd v Microsoft Corporation, 2013 SCC 57 at para 110.

2 Kalra v Mercedes Benz, 2017 ONSC 3795 at para 46.

3 Batten v Boehringer Ingelheim (Canada) Ltd, 2017 ONSC 6098 (Div Ct) at para 15.

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