August 7, 2009 2:04 PM

Canadian Class Actions Take Off

Posted by Julie Triedman

Class action filings in Canada have increased dramatically in the past few years [see Canada Report: New Players At the Table in the August issue of The American Lawyer]. Meanwhile, Canadian firms are filing more antitrust and securities class action claims in tandem with U.S. plaintiffs firms.

In April one of Canada's top plaintiffs-side class action firms, Windsor, Ontario-based Sutts Strosberg, hired former Milberg of counsel Andrew Morganti as its adviser on U.S. complex litigation. At Milberg, Morganti helped redevelop the firm's antitrust practice and its relationships with clients and members of the class action bar. Now, at Sutts Strosberg, he's assisting firm founder Harvey Strosberg with the firm's institutional and commercial clients in evaluating potential parallel class actions.

We talked to Morganti about the move and the work.

Plaintiffs lawyers say Canada is an exciting place to be a class action lawyer right now. Why?

It is very exciting to be practicing in a country where the law is evolving so quickly. With respect to securities class actions, Canada is more like the U.S. was prior to the introduction of the Private Securities Litigation Reform Act. In Canada a shareholder can bring claims based on both common law tort and a new statute in the 2005 Securities Act. The Act's application is just now being interpreted in the courts, and two of the leading-edge cases are being handled by our firm with cocounsel.

On the antitrust side, more and more class actions brought in the United States now involve global cartels. That means cases can potentially be brought in other jurisdictions, including Canada. But unlike other countries like the U.K. or Italy, Canada and the U.S. have more similar legal class action systems and competition laws. And in Canada, unlike in the U.K., many antitrust claims are now being certified as class actions.

Two major Canadian class action firms have recently hired U.S. talent, and several U.S. firms have recently come to Canada in hopes of building closer working relationships with their Canadian counterparts. Why?

Increasingly, large and powerful institutional investors in Canada are asserting claims in U.S. litigation, and many more are expressing interest in engaging in such litigation in both the U.S. and Canada.

Concurrently, U.S. firms are representing institutional investors elsewhere that have sustained losses in Canadian-listed companies and are now expressing interest in litigating in Canadian courts. At the same time, U.S. firms now recognize that there are plaintiffs firms in Canada that have the sophistication to litigate complex securities fraud claims for these clients.

Barroway Topaz, for instance, has dozens of relationships with institutional investors that have invested in Canadian companies. That firm does not litigate cases in Canada but would like to offer this service to their clients who suffer losses that might be recoverable in Canada. We are discussing opportunities with Barroway Topaz to provide that service.

Tell us about a price-fixing class action you're working on right now that you think is particularly worth watching.

One case I'm particularly interested in right now is the price fixing class action involving the packaged ice industry. This is a case where you have parallel actions in the Eastern District of Michigan and here in Ontario and Alberta. We filed our statement of claim--our complaint--in May [in Grand-Slam Concert Productions Ltd. et al. v. Arctic Glacier, Inc.], which largely follows the allegations from the U.S. whistle-blower and class action litigation. Unlike previous parallel class actions brought by our firm in Canada,  here we anticipate our certification motion to be served well ahead of our U.S. counterparts. That's because Canadian plaintiffs lawyers are not required to do all the discovery that U.S. counsel must prior to a certification motion.

We're hoping to show that Canadian litigation doesn't have to always be the "caboose." Our class may be smaller, because Canada's population is smaller, but due to our ability to quickly get to certification, U.S. counsel are going to have to consider the Canadian litigation as more than just an afterthought to the U.S. litigation.

Though you only began a few months ago, can you say what's different about being a class action lawyer in Canada?

In the U.S., it's been my experience that, more often than not, defense lawyers fight every single procedural step of the way. Here, they don't. Canada is a system where the "loser pays." And that goes for any motion. If there's a motion to dismiss, known here as a motion to strike, or any other motion and a party loses, that party has to compensate the winning party for the expense of the motion practice.

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