Class Action Kryptonite: Inexplicable Delay in Seeking Re-Certification Is an Abuse of Process

July 21, 2021

Written By Ranjan Agarwal and Rabita Sharfuddin

Azar v Strada Crush Limited, 2021 ONSC 4758 reinforces the importance of the finality principle in the class actions context and that defendants should not face a “revolving door of representative plaintiffs.” Azar is an unusual case in which interpersonal conflict between class counsel and class members led to de-certification of the class action. The certification judge found that certification of the class action had become “kryptonite in the class members’ and their counsel’s hands” (after a dispute over whether the proposed representative plaintiff testified wearing a Superman costume) and refused to re-certify a class action he recently de-certified.

Background

Following class counsel’s successful certification motion, the representative plaintiff, George Azar, sought to appoint new counsel. He alleged that class counsel failed to advise him of his potential costs exposure and breached his professional obligations. Class counsel responded by moving to disqualify Azar as representative plaintiff or, alternatively, appointing a litigation guardian. Class counsel alleged Azar was unreliable and could not direct the litigation. 

While the certification judge found that a litigation guardian was unnecessary, he rejected Azar’s motion because it was motivated by his personal grievances rather than the best interests of the class. As a result, Justice Morgan ordered class counsel to move for appointment of a new representative plaintiff within 60 days.

Surprisingly, class counsel moved to re-instate Azar as the representative plaintiff six months later after an apparent reconciliation. The certification judge found that Azar was still an unsuitable representative plaintiff because of his volatile behaviour and inability to put the class’ interests before his own. Without a suitable representative plaintiff, the certification judge reluctantly de-certified the action.

Re-Certification Motion

Class counsel then brought another motion seeking re-certification of the class action and appointment of a new representative plaintiff, Taylor Winecki, nearly 2 years after Justice Morgan’s 60-day order. Winecki had participated in the litigation by swearing an affidavit in support of Azar’s motion to appoint new counsel.

Justice Morgan ruled that re-certification would render his prior rulings meaningless and constitute an abuse of process. Additionally, Justice Morgan noted that the defendants were entitled to finality and should not be forced to re-litigate settled issues. Justice Morgan also expressed concern that Azar had subsumed Winecki in his “fraudulent mayhem” and that the late proposed change to the representative plaintiff (brought nearly two years after class counsel’s original deadline) was unfair to the defendant and also constituted an abuse of process.

Takeaways from Azar

Azar shows that while plaintiffs face a low procedural burden on certification, there are limits to the court’s accommodation of procedural defects. Additionally, class action defendants should consider abuse of process arguments when faced with a “revolving door” of representative plaintiffs, especially when the plaintiff seeks to make late amendments to issues previously litigated.