|
Class Proceeding - 'Litigation Plan'. Voltage Pictures, LLC v. Salna
In Voltage Pictures, LLC v. Salna (Fed CA, 2025) the Federal Court of Appeal dismissed an appeal, here from the dismissal "(for the second time) [of] the appellants’ motion to certify this proposed reverse class proceeding".
Here the court illustrates the sometimes complex, almost court-'negotiated', achievement of an adequate 'litigation plan' in unusual cases like this:C. Did the Federal Court err in dismissing the application for certification because the litigation plan was unworkable?
[118] I turn now to the third issue and conclude that, even though the proposed litigation plan was unworkable due to its proposed use of the notice-and-notice regime, it was improper for the Federal Court to have refused certification for this reason considering that the Federal Court decided that the litigation plan could be amended. By providing the appellants leave to reapply for certification with an amended litigation plan, the Federal Court accepted that it was possible to make the requisite amendments.
[119] As the appellants point out, alternate arrangements could have been made to provide notice to the proposed class other than through the notice-and-notice regime in the Copyright Act. The most obvious alternate arrangement would have been for the appellants to have obtained Norwich orders for disclosure of the identities and contact information for proposed class members. This would have allowed for service upon them of notice of the class proceeding.
[120] This Court has held that an error of law made in evaluating a litigation plan is a ground for intervention: see Voltage FCA Certification Decision #1 at paras. 113–114. It has also held that it is an error of law to refuse certification based on inadequacies in a litigation plan that can be remedied. In Wenham v. Canada (Attorney General), 2018 FCA 199 [Wenham], this Court overturned a Federal Court decision that refused certification in part because of an inadequate litigation plan that failed to address how the proceeding would deal with the limitation period issue and the evidentiary record. Justice Stratas, writing for the Court, stated at paragraph 103 that:... the Federal Court overlooked that a litigation plan proposed in a certification motion is not cast in stone. Refusing to certify a litigation plan because of one alleged weakness is an error in law. A litigation plan is “a work in progress” and, in law, “whatever its flaws, it may be amended as the litigation proceeds”.
(citations omitted.) [121] Justice Stratas cited in support Cloud v. Canada (Attorney General) (2004), 247 D.L.R. (4th) 667, 2004 CanLII 45444 (Ont. C.A.), in which Justice Goudge, writing for that Court, rejected that a flawed litigation plan can bar certification, explaining as follows:[95] I do not agree that the appellants’ certification motion should fail on this basis. The litigation plan produced by the appellants is, like all litigation plans, something of a work in progress. It will undoubtedly have to be amended, particularly in light of the issues found to warrant a common trial. Any shortcomings due to its failure to provide for when limitations issues will be dealt with or how third-party claims are to be accommodated can be addressed under the supervision of the case management judge once the pleadings are complete. Most importantly, nothing in the litigation plan exposes weaknesses in the case as framed that undermine the conclusion that a class action is the preferable procedure. [122] To similar effect, the authors of Class Actions Law and Practice explain that "“[t]he judge and counsel can collaborate and develop a comprehensive plan by pre-trials, case management and actual trials in order to ensure the action proceeds efficiently”" (at § 3.179). This Court in Buffalo v. Samson Cree Nation, 2010 FCA 165, 405 N.R. 232 at paragraph 12 similarly accepted that:... in certification motions, and in the post-certification period, courts can be quite active and flexible because of the complex and dynamic nature of class proceedings: for example, they must always remain open to amendments to such matters as the class definition, the common issues and the representative plaintiff’s litigation plan, and they can play a key role in case management. [123] Often, it is preferable for the parties to first attempt to negotiate a proposed litigation plan prior to presenting it through the case management process: see McCrea v. Canada (Attorney General), 2015 FC 592 at paras. 445–446, rev’d on other grounds 2016 FCA 285; Sweet v. Canada, 2022 FC 1228 at para. 201. For example in Papassay v. Ontario, 2017 ONSC 2023, a decision cited by this Court in Wenham at paragraph 103, the Ontario Superior Court of Justice noted that, faced with a flawed litigation plan, courts should "“await negotiations between the parties over notification and other aspects of the litigation plan”" and, if the parties cannot agree, "“they may return to court for directions”" (Papassay at paras. 106–107).
[124] Moreover, even where a litigation plan is approved but new circumstances arise, the Federal Court may modify it as part of its management of proceedings: see e.g. Brake v. Canada (Attorney General), 2019 FCA 274, [2020] 2 F.C.R. 638 [Brake] at paras. 102–103, citing Federal Courts Rules, Rule 3. As such, the adequacy of a litigation plan should be viewed "“through the lens of the case management tools available to a judge post-certification”" (Jiang v. Vancouver City Savings Credit Union, 2019 BCCA 149 at para. 62, leave to appeal to SCC refused, 38738 (14 November 2019)).
[125] I thus conclude that it was improper for the Federal Court to have refused certification based on the appellants’ proposed use of the notice-and-notice regime. Instead, the Court ought to have certified the proceeding or adjourned the certification motion to allow the parties to negotiate the notice issue and, thereafter, to have allowed the appellants to present an amended plan. If needed, the Court could have explored with the appellants whether they were willing to provide notice to proposed class members in a different fashion. Only if the appellants indicated they were unwilling or unable to do so, would it have been open to the Federal Court to have dismissed the motion for certification or decertified the action. To be clear, the Federal Court possesses discretion in outlining the timing and expectations of a new litigation plan, including by conditionally certifying or adjourning prior to rendering its decision on certification. Nevertheless, it was not open to it in this case to simply refuse certification due to a flawed litigation plan when it at the same time recognized that amendments to the plan were possible.
|
