Feds claim win in farmers’ proposed class action over CWB

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A Federal Court judge has knocked down most, but not all, of the pillars of a proposed class-action suit against the federal government over the deregulation of Prairie wheat and barley marketing.

Justice Daniele Tremblay-Lamer, in a decision released Nov. 29 in Ottawa, has struck out most of the claims in the suit filed in February last year by four Prairie farmers. She also granted costs to the federal government.

The four farmers — Andrew Dennis of Brookdale, Man., Nathan Macklin of DeBolt, Alta., Harold Bell of Fort St. John, B.C. and former Canadian Wheat Board director Ian McCreary of Bladworth, Sask. — had sought to launch a class action on behalf of Prairie wheat and barley growers, claiming about $17.06 billion for damages they say stem from the end of the CWB’s single marketing desk.

The claim follows from the federal Marketing Freedom for Grain Farmers Act, which took effect in August 2012, ending the Wheat Board’s monopoly on Prairie wheat, durum and barley exports and dismissing the farmer-elected portion of its board of directors.

The former board now pools and markets wheat, barley, durum and canola under the abbreviated name “CWB,” through handling arrangements with Prairie grain companies.

The four farmers, Tremblay-Lamer wrote, claimed the federal government has “unlawfully expropriated assets belonging to the CWB in which the plaintiffs had an interest.”

By that, she wrote, they mean the government “now has unfettered control over all aspects of CWB operations, it has put the CWB on the road to being wound up, and has committed its assets, purchased from the proceeds of the sale of producers’ grains, to paying for the costs of dissolution, with any surplus going to the government.”

To be sure, she wrote, “the Crown through legislation cannot take away one’s property without compensation unless the statute clearly provides otherwise,” but the farmers did not establish “a de facto taking” that would involve compensation.

The claim, she wrote, showed neither “an acquisition of a beneficial interest in the property” nor “removal of all reasonable uses of the property.” Losing the single desk to changes in the CWB regulatory scheme “is not enough in itself to claim a loss of a property interest.”

“No deprivation”

Tremblay-Lamer also cited a previous suit, brought against the government by Friends of the Canadian Wheat Board — a group which now backs the proposed class action.

Based on the outcome of that previous case — which the FCWB lost at the Federal Court of Appeal in June 2012 — Tremblay-Lamer wrote that the government “cannot be said to have acted wrongfully by enacting the (Act) and there has been no deprivation of property.”

Further, she wrote, since the Act “clearly sets out the uses for the (CWB’s) contingency fund, the change in the operations of the CWB, and the transfer of assets in the case of an eventual dissolution,” and given the outcome of the FCWB case, “it cannot be said that the changes following these provisions are unjust.”

Tremblay-Lamer’s ruling also shot down the farmers’ claim of a “breach of trust” by the federal government. The government’s previous regulation of the grain sector, she wrote, could not be taken to imply a fiduciary duty to Prairie grain farmers.

“Rather, the government must respond to a wide variety of interests when it regulates grain, including those of producers as well as consumers. Finding a fiduciary duty on these facts would place the government in an untenable position where it would face conflicting duties to both producers and Canadians in general.”

The government, she wrote, is “balancing competing interests” in regulating grain, and noted “the interests of the class themselves are not homogeneous, as seen by the tension between those in favour of and those opposed to the free market of grain.”

Tremblay-Lamer’s ruling “underscored the right of Western Canadian wheat and barley farmers to market their own grain,” Agriculture Minister Gerry Ritz said in a release Thursday.

“While courts continue to strike down these frivolous lawsuits, the fact remains that the overwhelming majority of Western grain farmers have embraced marketing freedom and are capitalizing on new economic opportunities that were impossible under the old single desk.”

“Mismanagement”

The farmers’ remaining claim alleges the federal government, during the Wheat Board’s 2011-12 pool period, “used monies that should have been paid to producers (under the Canadian Wheat Board Act) to cover substantial costs and losses” relating to CWB’s shift away from its role as a single-desk seller.

The farmers claim the government also “failed to establish a reasonable price for grain remaining unsold after the 2011-12 pool period… (and thus) caused an improper transfer from the amount to be distributed to producers.”

On that specific claim, Tremblay-Lamer wrote, government lawyers presented “no arguments… to demonstrate that the claims are untrue or could not succeed at trial.” Thus, she wrote, “the mismanagement allegations should not be struck out.”

Those claims, she wrote, “are allowed to continue.” She directed the farmers and their lawyers to “serve and file a revised statement of claim consistent with these reasons.”

The plantiffs are now considering whether to proceed with an amended claim as Tremblay-Lamer directed, or to instead mount an appeal against her ruling, Stewart Wells of FCWB said in an email Thursday.

The four farmers’ suit, spearheaded by Winnipeg lawyer Anders Bruun and Ottawa lawyer Steven Shrybman, is not the only proposed CWB-related class action on the books.

Regina class-action lawyer Tony Merchant, working with a Saskatchewan grower as his representative plaintiff, aims to seek damages of $15.42 billion from Ottawa, alleging the CWB’s assets “cannot simply be subsumed by the federal government.” — AGCanada.com Network

Related stories:
Supreme Court rejects appeals on CWB rulings, Jan. 17, 2013
Appeal court upholds “marketing freedom” law, June 19, 2012
Proposed farmers’ suit seeks claim on CWB’s assets, Jan. 9, 2012