Asking the Right Jurisdictional Questions
The jurisdictional questions that Canadian class action defendants need to ask include:
- Should I attorn to the jurisdiction?
- If there are extra-provincial class members, does the court have jurisdiction over them?
- If the claim involves absent out-of-country claimants, does the court have jurisdiction over out-of-country foreign claimants?
While counsel will be guided by the scope of the claim, these questions generally need to be asked in secondary market securities claims involving purchasers of securities on U.S. or foreign exchanges, competition (or antitrust) claims on behalf of indirect purchasers of goods and services, and product liability claims.
In the United States, national class actions tend to be in federal court pursuant to statute, so there is somewhat less concern about jurisdiction, though choice-of-law issues on pendent state law claims remain.
Considering the Interplay Between Preliminary Motions (and Class Action Certification) in Competing Jurisdictions
While a motion to dismiss is often the first motion to be heard in a U.S. class action, in Canada, unless the defendant brings an early jurisdiction motion, the first motion to be heard is typically the certification motion. Unlike motions to dismiss, contested certification motions usually involve evidentiary records.
In some class actions in Canada, defendants may choose whether to file a response pleading in advance of the motion for certification. This decision, like any made in a parallel or multijurisdictional proceeding, will bear on the overlapping cases proceeding in other jurisdictions. Filing a response pleading provides an early opportunity for the defendant to deny allegations and advance a narrative, but it will also precipitate discovery obligations, which could lead to evidence being filed in court on the motion for certification and made publicly available for use in another jurisdiction. Similarly, a decision to lead evidence in response to the motion for certification may (a) make the evidence publicly available to be put to use in another jurisdiction and (b) provide one set of class counsel an early opportunity to cross-examine the defendant.
As a result of amendments to class action legislation in Ontario in October 2020, which more closely aligned certification criteria with Federal Rule 23, some discernible shifts have begun to take shape in class counsel’s approach to certain types of cases. For example, defendants are seeing plaintiffs turn to jurisdictions other than Ontario—deemed more “plaintiff friendly” for a variety of reasons—to file cases. Another discernible shift is that product liability cases are being filed as mass tort cases rather than as class actions.
The End Game
For parallel actions that proceed beyond preliminary motions and certification, defendants need to develop a coordinated settlement or trial strategy that considers each jurisdiction’s laws governing recognition and enforcement. Bearing in mind that it is unlikely that competing jurisdictions will maintain the same pace of litigation, there are steps that defendants can take on either side of the border to reduce the likelihood of having to defend against already-settled claims with respect to certain class members, and increase the likelihood that a settlement achieved in one jurisdiction will be recognized and enforced in the other.
Claims with multijurisdictional and cross-border components require defendants to implement a forward-thinking and highly coordinated approach early in the case. Not only do they require the
expertise of local counsel in multiple jurisdictions, they demand communication and coordination among all counsel—and a well-informed, in-house quarterback.