Canadian Lawyer InHouse

Apr/May 2009

Legal news and trends for Canadian in-house counsel and c-suite executives

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In fact, Stieber says there was barely any exchanging of documents leading up to the settlement. Instead, negotiations took place through a flurry of phone calls between counsel, including after hours and on weekends. Most of the discord, in fact, involved disagreements among plaintiffs' counsel, many of whom had sparred in previous class action cases. "[On] the plaintiffs' side where the lawyers [are involved] in a large class action, it's often difficult to distinguish [them] from a Grade 6 schoolyard," says Tony Merchant, a Regina lawyer who represents 26 of the 29 alleged death cases resulting from Maple Leaf's tainted meat. (Maple Leaf argues just 20 people died of listeriosis last summer, a conclusion it says comes from infor- mation provided by public health authorities). But in the Maple Leaf case, counsel for the victims man- aged to avoid much of the typical wrangling over which lawyer represents whom, which jurisdiction should hear the case, and what the legal strategies should be. "We put aside the usual plaintiffs' bar squabbling because we saw that if we worked together, we could accomplish something quickly for the class," says Merchant. That's no small achievement, in fact, since many of the law- yers involved in Maple Leaf were the same people who have been battling over Vioxx. Both Rochon and Merchant, for example, have been facing off in that case for years. While Rochon, along with 18 other law firms, won the fight for carriage in Vioxx in 2006, the battle continues after both Merchant and his adversar- ies got the case certified in competing jurisdictions. "This case had all the same markings as Vioxx," says Rochon, referring to Maple Leaf. "There was an early decision amongst plaintiffs' counsel to avoid a Vioxx [from] replicating." Rochon points out, however, that the competing interests that can drag class actions on for years aren't unique to the plaintiffs' side. Contrasting the Maple Leaf litigation with the Menu Foods case, he says the delays in settling came largely from defendants representing everyone from retailers of melamine-laced pet food to insurers for the various companies named in the suit. "It was everything that Maple Leaf could have been but wasn't, starting with the 50-odd defence lawyers in one conference room in New York." As a result, mediation in Menu Foods went on for four months. But Stieber, who was also involved in that case at one point, notes that the cross-border aspects made it more difficult to resolve. "I think that with the number of class actions going on in the [United States] concurrently with Canada, there were just too many people driving the bus," he says. At the same time, he argues the dynamics of U.S. litigation add to the challenge. "I think as a group we're a far smaller commu- nity. You have a certain respect for other lawyers which I don't think exists in the U.S. There's a greater degree of, call it camaraderie, call it relationships, call it trust, that I can pick up the phone and call any one of the plaintiffs' class action guys and discuss how we see resolving it." The Menu Foods case differed from Maple Leaf in other respects as well. While McCain won kudos for publicly accept- ing responsibility for the tragedy and quickly went on to show- case the company's efforts to improve food safety in its plants, Menu Foods executives have been quiet by comparison. That company, of course, was able to pin some of the blame on Chinese exporters that supplied the tainted wheat gluten used in its products. Menu Foods declined to comment for this article. The settlement reached in Menu Foods also was less gener- ous than what Maple Leaf agreed to. The pet-food company offered compensation only for economic damages, such as for veterinary bills, but avoided paying consumers for the loss of their animals. Maple Leaf, by contrast, settled on a compen- sation grid that awards victims anywhere from $750 in cases where people became ill for a short period to at least $125,000 in cases where people died. Significantly, the agreement also included awards for people who suffered so-called nervous shock, "psychological injuries or trauma," according to language in the settlement, something plaintiffs' lawyer Clint Docken, of Docken & Co., says is rare in class actions. As a result, most lawyers representing victims in the Maple Leaf case call the agreement a fair one. "At the legal end, they really did handle it appropriately," says Merchant. Nevertheless, Docken argues the case was more amenable to a quick settlement. The fact that most of the fatalities involved elderly people, for example, meant the parties didn't have to haggle much over payments for loss of dependency. As well, many of the illness claims involved minor ailments such as stomach aches. At the same time, Docken says the motivation to settle tends to be greater in cases involving food than for those involving drug liability since consumers are less familiar with pharmaceutical brands. "With Maple Leaf, there was very strong public awareness and identification with their product generally. I suspect that you don't often get that." As a result, part of Maple Leaf's rationale throughout the crisis was a bid to rebuild its public image, of course. But while McCain's appearances before TV cameras apologizing to vic- tims at the outset may make some lawyers cringe, Stieber says he was supportive. "I was impressed along with many other people because I thought we don't see that very often. Everybody sort of runs for cover, and the day before the trial is to start, all of a sudden the defendants come out and say, 'I think we should settle now.' As defence counsel, you never want your client to admit liabil- ity except where, in this particular circumstance, you are of the view that liability would ultimately be found." George Addy, a former chief INHOUSE APRIL 2009 • 17

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