Ontario Court of Appeal Upholds Denial of Certification for Problem Gamblers

by Bennett Jones LLP
Contact

In a ruling released on July 31, 2013, problem gamblers in Ontario were denied certification of a $3.5-billion class action law suit commenced against the Ontario Lottery and Gaming Corporation. The Court of Appeal’s decision in Dennis v Ontario Lottery and Gaming Corporation marks the third in a string of decisions declining to certify the proposed action on the basis of its failure to overcome the hurdles of section 5(1)(b)-(e) of the Class Proceedings Act.

The Action

The putative class action was commenced on behalf of members of a group of more than 10,000 individuals who voluntarily signed self-exclusion forms asking the OLG to ban them from entry to its gaming establishments between December 1999 and February 2005. The action alleges that putative class members suffered losses after the OLGC failed to prevent them from entering its gaming sites, notwithstanding they had self-excluded.

Background

In 2010, Justice Cullity declined to certify the action after finding that substantially all of the issues of liability surrounding the allegations turned on proof that individual class members were vulnerable, pathological problem gamblers who returned to the OLGC sites despite signing the self-exclusion forms. Justice Cullity found this determination required an individual, case-by-case assessment which was not suitable for class treatment. In declining to certify the action, Justice Cullity also noted that judicial economy might not be gained by a class action in this instance given that, as of 2010, nine individual actions had been commenced against OLGC by self-excluded individuals and settled for an average payment of $167,000 per claim. Moreover, Justice Cullity noted that the OLGC was already subject to persistent scrutiny and had taken steps to improve its self-exclusion and responsible gaming programs, likewise reducing the need for behaviour modification through class proceedings.

The Divisional Court upheld Justice Cullity’s finding that issues of liability were predominantly individual in nature and declined to grant certification though there was a dissent.

The Court of Appeal’s Decision

The Court of Appeal upheld the Divisional Court and motion judge’s reasons, unanimously dismissing the appeal on the basis of its failure to overcome a number of procedural hurdles.

The Proposed Class Definition

The plaintiffs relied on Hickey-Button v Loyalist College of Applied Arts & Technology, where the court had certified a claim for breach of contract based on the college’s failure to provide an option it had promised. In Hickey-Button, the court concluded the class definition was not overly inclusive because the contract of every student had been breached by the defendant college’s unilateral decision not to provide an option it had previously promised. Liability therefore did not hinge upon the individual circumstances or conduct of the students. The Court of Appeal rejected this argument and distinguished the circumstances in Dennis from Hickey-Button, finding that unlike the students in Hickey-Button, not all of the signatories of the self-exclusion forms in this case could be viewed to be in the same position. Rather, claims were dependent on the actions of the members of the proposed class. The promise to use “best efforts” to exclude was, by its very terms, directly tied to the actions of the self-excluder, many of whom admittedly had never attempted to gain re-entry and thus had no actionable claim. Accordingly, the proposed class definition was found to be overinclusive.

Common Issues

The Court of Appeal held that the class was overly inclusive, emphasizing the lack of “rational relationship between the class identified by the plaintiff and the proposed common issues... Resolving the issue of whether OLG should have done more by way of enforcement of the self-exclusion forms does not make up even a very limited aspect of the liability question, given the inherently and inescapably individual nature of the claims at their core” which would “ultimately break down into individual proceedings”.

Preferable Procedure

The Court of Appeal’s decision concluded that this action failed to satisfy section 5(1)(d) of the CPA even though there are a number of cases in which Ontario courts have determined that class proceedings are the appropriate procedure to deal with “systemic wrongs”. In each of those cases, liability turned on unilateral action of the defendants and was not dependent on the individual circumstances of class members. The claims advanced against the OLGC in Dennis differed significantly. Rather than arising out of the defendant’s unilateral actions, the OLGC’s alleged wrongdoing was “inextricably bound up with the vulnerability of the individual class members” and arose by the class members’ own actions. Putative class members had chosen to return to OLGC sites to gamble and lose money and in that regard, were notably not unlike thousands of other patrons who lost money “more often than not” after attending at OLGC gaming facilities. The Court of Appeal concluded that a general finding of “systemic wrong” in this case would not avoid the need for protracted individualized proceedings, stating: “Rather than providing an effective procedural tool to advance the resolution of the claims of the proposed class members, a class proceeding would amount to little more than a general commission of inquiry into the prevention of problem gambling.”

Conclusion

Dennis serves as a clear reminder that claims with a deficient level of commonality should be denied certification in Ontario. In an era in which Ontario courts have been criticized for a host of plaintiff-friendly certification decisions, the recent decision by Ontario’s highest court confirms that the hurdle imposed by section 5(1) of the CPA will be a meaningful one in cases advancing only tenuous claims of systemic liability. Where certification will not advance the goals of the CPA and will inevitably require resolution of a host of individual issues, Dennis suggests it will be denied.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bennett Jones LLP | Attorney Advertising

Written by:

Bennett Jones LLP
Contact
more
less

Bennett Jones LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!