Liang v. SSR Mining, Inc., 2024 ONSC 4432, involved two securities class actions respectively commenced by what is now Toronto-based Strosberg Wingfield Sutts LLP (SWS) and Toronto-based Berger Montague (Canada) PC (BMC). They were engaged in a carriage dispute.
SWS commenced the action brought by representative plaintiff Chao Liang, and BMC commenced the action brought by representative plaintiff Michael Jones, both listing SSR Mining Inc. and Rodney Antel as defendants. The cases arose from a Feb. 13 landslide at the Çöpler Mine in Erzincan, Turkey, owned by the corporate defendant. Nine people died in the landslide and many more were injured. It also caused substantial environmental destruction.
“The claims allege that SSR made material misrepresentations in core and non-core documents with respect to its safety mechanisms and management of the mine, and that, had the material facts been accurately reported, the accident would have been avoided or would have been less disastrous,” wrote Justice Ed Morgan in the decision.
“They go on to allege," he added, "that accurate reporting would have highlighted SSR’s increased risk of loss, and thus would have caused SSR’s securities to trade at a substantially lower price before the start of the class period.”
Justice Morgan found that, in order to be successful, both actions would have to pass both a certification motion and leave to proceed under section 138.8 of the Ontario Securities Act for secondary market misrepresentation claims. While there were some differences in their legal approach, they were not sufficient enough to distinguish one claim as more promising than the other.
The two firms presented different funding models for their actions. SWS presented a third-party funding agreement while BMC deposed that it did not require third-party funding as it would self-fund the action. The court found that they were both capable of handling the financial burden, with neither presenting a more desirable method than the other.
What the carriage motion turned on was the stage of development, as it was the only distinguishing factor. While the Liang action was commenced first, a few months ahead of the Jones action, that was not a definitive difference in Ontario, the court found. However, the Liang action was more developed.
“What counts is not the early filing of the Liang action, but the early investment of resources by the SWS firm in getting that claim off the ground,” said Justice Morgan.
He pointed to the fact that, while both law firms had retained Turkish experts, only SWS “obtained original source documents from the Turkish authorities and has started work on putting together the evidentiary basis for the claim.”
The firm also started working with a mining engineer while BMC was still looking to retain an appropriate mining expert. SWS had also already launched its website for the action to keep class members informed, while BMC had yet to start work on its own.
“It is, of course, still early days for both actions. Based on experience with the two law firms, I have little doubt that in the fulness of time, each of them and each of the actions will be well-developed and well-prepared for a certification motion,” the judge wrote.
“But as matters stand today — the only vantage point from which I can view the issues in this motion — the [SWS] firm and the Liang action are out front. To put matters simply, [SWS] has invested more and gone farther with its case than has BMC.”
Carriage of the proposed class action was granted to Liang with SWS, while Jones with BMC was stayed.
Counsel for Chao Liang was Jay Strosberg of Strosberg Wingfield Sutts LLP.
Counsel for Michael Jones were Andrew Morganti and Vincent DeMarco of Berger Montague PC.
Counsel for the defendants was Akiva Stern of McCarthy Tétrault LLP.
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