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Ruling consolidates BSE class action suits

An Ontario cattleman’s lawsuit against the federal government over losses due to BSE is now certified as a class action, with its “class” expanded to include all Canadian cattle producers outside Quebec.

Justice Joan Lax of the Ontario Superior Court of Justice ruled Tuesday that the suit — with Niagara Falls beef cattleman and dairy farmer Bill Sauer as its representative plaintiff — may proceed as a class action.

Sauer’s was one of four co-ordinated suits filed by lawyers in April 2005 on behalf of cattlemen in four provinces, also including Quebec, Saskatchewan and Alberta.

The suits had all named the federal government, unnamed federal bureaucrats and Winnipeg feed company Ridley Inc. The suits claim well over $10 billion in total damages as a result of international bans on trade in Canadian beef following the arrival of BSE in Canada.

Negligence, the suits allege, led to BSE making its way into the feed that in turn infected the Alberta cow that was found to be Canada’s first case of the brain-wasting cattle disease.

Lax’s ruling also gives conditional approval to Ridley’s proposal to settle out of the Ontario suit, as the feed company announced Thursday.

That settlement, worth $6 million nationwide, would end Ridley’s exposure to these suits but does not require the feed company to admit to any wrongdoing or negligence. The company denies the suits’ allegations.

Besides, Lax wrote, shareholders’ equity in Ridley is such that Canada’s cattle producers, if successful in their suits, would only see a tiny fraction of their claimed damages paid out to them before the feed company would be forced into bankruptcy.

Ridley’s settlement, she wrote, “focuses the litigation on the party that is capable of providing meaningful compensation to class members.”

The lawsuits’ allegations against the government, in its role as regulator of Canada’s cattle industry, have yet to be proven in court.

The Ontario suit had originally proposed to include cattle producers from the six remaining provinces as part of its “class,” but as Lax noted in her ruling, the Ontario statement of claim has been amended to include cattle producers in all provinces except Quebec as part of the “class.”

The Quebec suit was already separately certified as a class action in June 2007, with cattleman Donald Berneche of St-Gabriel de Brandon as its representative plaintiff.

Stayed

With Lax’s ruling, the representative plaintiffs in the Alberta and Saskatchewan suits “will seek a stay of those actions so that the four actions become two: the Quebec action and an Ontario action in which Sauer will represent all cattle farmers in Canada, except Quebec,” she wrote.

Ottawa and Ridley had appealed separately to the Supreme Court of Canada in September last year to block certification of the suits before they could proceed in lower courts, but the country’s top court in July rejected both the company’s and the government’s appeals.

In arguing against certification before Lax at a hearing in June, federal government lawyers contended that the suits’ proposed “class” didn’t offer any definition of what constitutes a cattle farmer and that it would be “subjective and unworkable,” given the different sectors (dairy, beef, veal, breeding) and stages (cow-calf, backgrounding, feeding) in cattle operations, Lax wrote.

But Lax ruled that the suits’ proposed class members “all have a relationship to the farming of cattle from which they earn their livelihood in whole or in part.”

Where government lawyers argued that certification as a class action would make assessment of actual damages unmanageable, Lax ruled that the “ghostly spectre of unmanageability” in this case was unconvincing.

“As with most ghosts,” she wrote, “it will either vanish in the daylight of case management, the direction of the trial judge or agreement of the parties, or it will return in the night to haunt this proceeding,” in which case Ottawa could then move to have the suit decertified.

Details aren’t finalized on who or what groups would be eligible to collect from Ridley’s $6 million settlement fund — nor on how they would collect.

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