Sui generis: common law solutions to constitutional problems in multijurisdictional class proceedings.

• Author: Martin, J.M.

1. THE EXTENT OF THE REAL AND SUBSTANTIAL CONNECTION i. The Morguard test ii. Must the "real and substantial connection" exist between each class member and the forum? II. APPLICATION OF STATUTES BEYOND TERRITORIALITY i. "Opt In" multijurisdictional classes are inconsistent with the policy objectives of class proceedings ii. "Opt-out" multi jurisdictional classes do not themselves enforce provincial statutes beyond provincial borders iii. It is generally not appropriate for a court to certify a class action based on a statutory cause of action III. OVERLAPPING NATIONAL CLASSES IV. CONCLUSION [A class action] is a claim brought pursuant to the procedural mechanism of the CPA on behalf of a group of people similarly situated claiming relief in respect of a common wrong. It originates from the time of the issuance of the claim or notice of action. It is not an individual action that metamorphoses to a class proceeding when certified.--Justice Warren K. Winkler (as he then was), Logan v Canada (Minister of Health) (1)

   Throughout the brief history of class proceedings in Canada, academic debate and jurisprudential inconsistency have attended the prospect of a multijurisdictional class action. The constitutional and procedural difficulties posed by multijurisdictional class actions have remained unresolved for more than a decade. The controversy is founded in the aspects of federalism engaged by the prospect of litigating class proceedings across provincial boundaries. The class proceedings statutes that ostensibly authorize courts to certify class actions are acts of provincial legislatures, which cannot be binding on the residents of other provinces. Even more problematically, the vast majority of class proceedings concern property and civil rights: the exclusive jurisdiction of provincial governments and provincial courts. (2) As the Federal Court is constitutionally restricted to a narrow statutory mandate that does not include jurisdiction over the subject matter of most private-law class actions, (3) the mechanics of prosecuting a nationwide class action in a single provincial court, following the procedure outlined in a single provincial class proceedings act, has attracted a constitutional debate.

   At present, various provinces approach class proceedings in different ways, but there is an increasing trend towards legislatures authorizing courts to hear "opt-out" national class proceedings, in which plaintiff class members residing outside the province are presumptively bound by the results of the class proceeding unless they take positive steps to withdraw from the action. Courts in these provinces have been hearing such "opt-out" class proceedings for years, but their vulnerability to constitutional challenge is still a live issue.

   Some authorities contend that class proceedings statutes passed by provincial legislatures purport, in effect, to unconstitutionally grant provincial courts the jurisdiction to determine the civil rights of individuals residing outside the territorial boundaries of either that legislature or that court. (4) Other prominent authorities suggest that provincial courts do have the constitutional authority to bind out-of-province class members. Those authorities, however, disagree amongst themselves as to whether or not a "real and substantial connection" must be demonstrated between the claim of each individual class member and the forum hearing the action in order for the court to justify asserting jurisdiction over the whole class (and for other courts to enforce class settlements nationwide), (5) or whether the standard "real and substantial connection" test for assuming and recognizing jurisdiction is simply inappropriate in the class action context. (6)

   There can be little doubt that the authority of provincial courts to certify class proceedings extending beyond territorial borders has been implicitly acknowledged by all levels of the judiciary, (7) yet the constitutional capacity for them to do so remains the subject of controversy. Motions judgments over the last decade have been replete with discussion on such territorial topics, and although consensus is gradually emerging on several points, it is by no means unusual for courts to issue judgments that call a developing principle back into question. (8) As the particular attributes of class proceedings militate against the likelihood that the constitutional questions will be fully argued in the short term, the Supreme Court may be some time in setting out an explicit judgment as to the constitutionality of the national class. (9)

   It is possible, however, to locate a satisfactory middle ground in this debate. The national class has already been countenanced with approval by the Supreme Court, (10) and the extant literature on the subject has located the flashpoint of the debate: namely, the extent to which a "real and substantial connection" must be shown between class members and the forum hearing the action in order for that forum to properly assume jurisdiction, and for that exercise of jurisdiction to be upheld in other provinces. This article shows that the peculiar exigencies and attributes of class proceedings have led motion courts across the country to develop a unique perspective on the class itself as a sui generis entity with interests and rights distinct from those of the representative plaintiff, despite the fact that classes do not formally exist until certification has been granted. If this growing conception of the class as a sui generis litigant prior to certification is recognized and fostered, the constitutional battle lines need not be drawn at all, and the connection between the forum and the class-as-litigant will suffice. As this article will argue, it is consistent with the extant powers of procedure exercised by provincial courts for the class to be so recognized, with particular attention paid to matters of jurisdiction and joinder.

   This article proceeds in three parts. Part I considers the Morguard principle, as modified by Hunt, in determining the connection between plaintiff and forum necessary for a court to assert jurisdiction in class proceedings. It concludes that there must be a "real and substantial connection" between either the class writ large and the forum, or each individual class member and an action before a given forum. Part II addresses the criticism that courts certifying a national opt-out class action are enforcing their own provincial statutes over non-resident class members, concluding that these courts do not do so, but rather follow the 'procedures outlined in these statutes while exercising their inherent jurisdiction to certify the class and hear the case. Such an assumption of jurisdiction over a multijurisdictional class is appropriate provided the Morguard requirements are satisfied, except where the cause of action is predicated purely on a provincial statute. Finally, Part III proposes a remedy to the difficulties presented by overlapping national classes, in which several distinct class counsel purport to represent a national class in an identical action: specifically, the mandatory registration of all class proceedings with the Canadian Bar Association and a practice direction issued by the Canadian Judicial Council.

   THE EXTENT OF THE REAL AND SUBSTANTIAL CONNECTION

   i. The Morguard test

   Any consideration of the enforceability of provincial courts' judgments in other provinces begins with Morguard Investments Ltd v De Savoye, (11) in which La Forest J articulated a new approach to interprovincial comity:

   [T]here is really no comparison between the interprovincial relationships of today and those obtaining between foreign countries in the 19th century. Indeed, in my view there never was, and the courts made a serious error in transposing the rules developed for the enforcement of foreign judgments to the enforcement of judgments from sister provinces. The considerations underlying the rules of comity apply with much greater force between the units of a federal state, and I do not think it much matters whether one calls these rules of comity or simply relies directly on the reasons of justice, necessity and convenience. (12) In Morgard, the Supreme Court of Canada gave domestic effect to the American concept of "full faith and credit" between sister jurisdictions. The policy underlying the more plenary approach to jurisdiction was the recognition of economic reality; the increasingly uninhibited flow of wealth, goods, and people across provincial borders militated in favour of broader comity and a less isolationist approach to the assumption of jurisdiction. Indeed, the seminal term of art articulated in the Morguard ratio, "real and substantial connection," was itself borrowed from the judgment of Dickson CJC in Moran v Pyle National (Canada) Ltd (13) a case advocating a more assertive approach to the assumption of jurisdiction in cases of product liability on that basis. Chief Justice Dickson articulated his justification for adopting a looser test for assertion of jurisdiction thus:

   By tendering his products in the market place directly or through normal distributive channels, a manufacturer ought to assume the burden of defending those products wherever they cause harm as long as the forum into which the manufacturer is taken is one that he reasonably ought to have had in his contemplation when he so tendered his goods. This is particularly true of dangerously defective goods placed in the interprovincial flow of commerce. (14) That case was 15 years old when it was cited in Morguard. It has thus been a long-developing principle of Canadian jurisprudence that procedural rules concerning the assumption of jurisdiction between Canadian provinces should be considered contextually, and that interpreting provincial jurisdiction in its strictest sense is generally inappropriate.

   The Morguard principle required courts in any given province to recognize the...