I. Introduction
A recent decision of the Ontario Superior Court of Justice addresses important considerations on the intersection between class proceedings and mass tort litigation. Justice Glustein’s decision in Arsalani v Islamic Republic of Iran[1] provides important commentary on the appropriate opt-out procedures, opt-out period, and notice requirements in light of potentially overlapping actions.
This case involved a proposed class action arising from the tragic plane crash of UIA Flight PS752, which was shot down shortly after takeoff by the Iranian military forces on January 8, 2020. All 176 passengers and crew members were killed, including many Canadian passengers on board.
This proposed class action was brought against several defendants (the Islamic Republic of Iran, the Islamic Revolutionary Guard Corps, the Ukraine International Airlines PJSC, and John Doe Missile Operator) on behalf of the estates of the deceased passengers and their family members. The motion before Justice Glustein was to certify the action as a class proceeding.
In addition to the class proceeding, family members of passengers, retained counsel to bring mass tort litigation on their behalf. The families of at least 93 of the deceased passengers retained counsel to prosecute the actions outside of the class action, though majority of those individuals had not yet issued a claim (the “Mass Tort Litigants”).[2]
Notably, certification was not in dispute. None of the defendants, nor the proposed Interveners who were retained by the Mass Tort Litigants, opposed certification.
In certifying the action, Justice Glustien found all s. 5 criteria under the Class Proceeding Act, 1992 (the “CPA”), were satisfied.
The central issues concerned the terms of the Order, the Notice, the Litigation Plan, and the opt-out form. In particular, the Mass Tort Litigants raised concerns related to the proposed opt-out procedure and opt-out period, and the form and dissemination of the Notice to proposed class members.
II. The Courts Broad Powers under S. 12 of the CPA
The court exercised its broad powers under s. 12 of the CPA that it can make any order it considers appropriate to ensure the fair determination of the proceeding. The court agreed to hear all submissions of all the interested parties, including the proposed Interveners.
Justice Glustein reiterated the importance of ensuring that all prospective class members can fairly understand the consequences of deciding whether to opt out the class action. “The opt-out procedures must be clear so as not to prejudice the rights of any passenger or family member. Notice must be as effective as possible, without undue interference in the existing lawyer-client relationship between the Mass Tort Litigants and their counsel. All of these issues must be considered under s. 12 of the CPA”.[3]
III. Opt-Out Procedures
As part of the Certification Order, the plaintiffs’ proposed opt-out procedure required every class member who wished to opt-out of the proceeding to deliver a signed opt-out form to class counsel within 75 days from the Order. Special opt-out procedures were contemplated for minors, persons under disabilities and estate representatives.[4]
The proposed opt-out procedure was standard course for many class actions. Despite this, the Mass Tort Litigants sought to avoid the standard practice of signing and delivering individual opt-out forms to class counsel. The Mass Tort Litigants submitted they should not be required to individually sign and deliver an opt-out form to class counsel, but rather, any counsel retained by a Mass Tort Litigant, could opt out their clients by sending a letter to class counsel with a list of clients and all family members would be considered to have opted out if one family member retained counsel and opted out of the class action.[5]
While the court considered the Mass Tort Litigants’ alternative proposal, it ultimately did not adopt this approach. Opting out of a class proceeding generally involves the individual signing of an opt-out form or a written request to opt-out, which is specified in the Certification Order pursuant to section 9 of the Class Proceedings Act.[6] Doing so on an individual basis ensures that class counsel and the court have clarity on who wants to participate and who does not. Further, these forms provide some assurance that class members understand the consequences of opting out. By sending a letter simply listing the names of those who were opting out, the court could not be certain how informed they were nor that the rights of the passengers and their families were not prejudiced, especially if these litigants sought to have one family member opt-out on behalf of their entire family.[7]
The court noted:
One family member who has retained counsel (in the mass tort litigation or otherwise) cannot opt out all other family members. The decision to participate in the class action is an individual decision which must be made by each prospective class member. There is no basis to require family members to be bound by the opt-out decision of one family member who chooses to retain counsel in the mass tort litigation or in any other individual action.
While there may be some bifurcation of claims if certain family members pursue their claims in mass tort or individual litigation and other family members bring claims in the class action, the case management of such claims can be addressed by the court. There is no basis to require all family members to opt out of the class action only because another family member has chosen to retain counsel.[8]
The court was clear that these principles apply even if there are parallel proceedings in the form of mass tort litigation. The decision to opt-out must always be informed and voluntary because otherwise it can be a serious access to justice issue, something that is explored in cases like 1250264 Ontario Inc. v. Pet Valu Canada Inc.[9] Class members only have one opportunity to opt-out of a class proceeding, so the court must be certain that they have been fully informed of the issues and the impact on them as an individual.[10] The existence of overlapping proceedings did not persuade the court that the possibility of these members being able to pursue justice elsewhere outside of the class proceeding would be sufficient reasoning to truncate the opt-out process by way of a list of names in place of individually-signed forms.
The court noted that signing and submitting individual opt-out forms through their counsel was not much more difficult than having their counsel submit a list of their names. The court also stressed the importance of the individual making a decision for themselves – regardless of the existence of overlapping proceedings – akin to how these class members made individual choices in retaining counsel.[11]
IV. Notice
Typically, the Notice disseminated to class members only includes the contact information for class counsel. However, the court noted the unique circumstances of this case, and in particular the Mass Tort Litigants who include hundreds of passengers and family members who have already retained counsel. The court determined that a separate opt-out notification in the Notice was required for the Mass Tort Litigants who have retained counsel.[12] The Mass Tort Litigants should be directed to contact their lawyer to ensure that those potential class members understand the steps to be taken if they wish to remain with their current counsel and proceed with the mass tort or individual litigation. The court noted that the Mass Tort Litigants retained counsel, and should not be conflated with those class members who have not retained counsel and could speak to class counsel about their rights.[13]
While the court concluded the Notice could and should direct the Mass Tort Litigants to speak to their retained counsel, the court would not go so far as to include litigation options for class members in the Notice. The court noted that it was not appropriate to set out litigation options for prospective class members in a Certification Notice; the opt-out form already puts the prospective class member on notice of the consequences of opting out of the class action by requiring an individual who opts out to state “I understand that if I opt out of the class action, I will not be entitled to share in any recovery or take any benefit of any ruling in this case, but I will be free to bring my own claim if I wish.”[14] The court reiterated that it is not the role of a Notice of Certification to set out the individual or mass tort actions which have been brought.[15]
V. Opt-Out Period
Class counsel proposed an opt-out period of 75 days from the date of certification for prospective class members to opt-out of the class action. After the conclusion of the opt-out deadline, anyone who had not opted out would be considered a class member in the class action.[16]
The Mass Tort Litigants, sought varying opt-out deadlines, with a minimum from six months after certification to two years after the date of the crash, the latter aligning with the limitation period for claims under provincial legislation that would apply to several of the class members.[17]
While opt-out periods typically run anywhere from 30 – 120 days, the court noted that these periods can be arbitrary, and there was no reason to mandate an earlier deadline in this particular case.[18] The court determined that the two-year period from the date of the crash was the most appropriate, giving putative class members until January 8, 2022 to opt-out of the class proceeding.[19] The court noted:
Each of the potential claimants…has a significant decision to make as to whether to join the class action or the mass tort litigation, bring an individual action, or not bring any action. There is no basis to truncate the opt-out deadline before the potential limitation period. This is not a class action with minimal damages and little likelihood of individual claims. Consequently, a longer opt-out period is required.”[20]
VI. Conclusion
This decision provides a useful example of how the overarching powers afforded to judges under s. 12 of the CPA can be used to manage the interplay between class proceedings and mass tort litigation. The decision to opt-out of a class proceeding remains an important individual choice, and the opt-out procedures should not adversely impact the rights of potential class members.
The court noted the significance of the opt-out procedures, specifically the opt-out form, and the contents of the Notice. Clarity in these documents remains of the utmost significance; the certification documents must be as clear as possible to provide all prospective class members with the information they need to decide whether to participate in the class action.[21]
This article was originally published in the April Issue of the BCF Class Action Netletter™, published by LexisNexis Canada Inc.
[1] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334.
[2] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 5.
[3] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 13.
[4] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 16.
[5] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 20.
[6] Class Proceedings Act, 1992, SO 1992, c 6 at s 9.
[7] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 13.
[8] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at paras 27-28.
[9] 1250264 Ontario Inc. v. Pet Valu Canada Inc, 2013 ONCA 279.
[10] 1250264 Ontario Inc. v. Pet Valu Canada Inc, 2013 ONCA 279 at para 42.
[11] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 23.
[12] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 29.
[13] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 29.
[14] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 36
[15] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 37
[16] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 38.
[17] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 39.
[18] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 46.
[19] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 41.
[20] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 43.
[21] Arsalani v Islamic Republic of Iran, 2021 ONSC 1334 at para 14.
