Interjurisdictional Class Actions

• Author: Jamie Cassels - Craig Jones
• Pages: 433-467

10. Interjurisdictional Class

Actions

A. INTRODUCTION

As discussed, in Western Canadian Shopping Centres v. Dutton,1the

Supreme Court of Canada read Alberta’s representative proceeding rule as

permitting a class action that was all but indistinguishable from those in

jurisdictions with class proceeding legislation.

But for those interested in the ongoing debate regarding the availabili-

ty of a true “national class action,” it is perplexing that the most significant

aspect of Dutton has gone virtually unnoticed: Dutton’s class members

were “foreign investors” whose claims arose in a number of different juris-

dictions.2In Dutton, the Court seems to have established consciously a

regime of national — indeed international — class actions, to be certified on

an opt-out basis. As such, the Dutton decision reverberates well beyond

provinces that lack class proceeding legislation.

433

1 2001 SCC 46 [hereinafter Dutton].

2 See footnote 55 and 56, infra, and accompanying text. Even Branch, who considers the

impact of Dutton on the future of the national class, does not remark on the fact that

the class at issue in the case was largely extra-provincial, with the causes of action

arising in a number of different jurisdictions: Ward K. Branch, “Chaos or Consisten-

cy? The National Class Action Dilemma,” (accessed November

12, 2003).

In this part we recap briefly why the province-by-province adjudication

of nationwide claims undermines the principal goals of aggregate litiga-

tion, and we argue that the case in favour of the “national class” is funda-

mentally sound. We discuss some of the objections that have been raised

to the national class in the past and then turn to the Supreme Court’s rea-

sons in Dutton to demonstrate that, in the aftermath of that case and the

Supreme Court’s other recent decisions, objections to the national class

must be seen as considerably diminished.

We then consider briefly the jurisprudence on national classes and

review of the legislation currently in place. We describe how courts might

interpret their provinces’ respective legislative regimes in light of the Dut-

ton decision and the role of notice requirements in certification proceed-

ing, consideration of which is likely to become of central importance.

B. NATIONAL CLASSES vs. PROVINCE-BY-PROVINCE

CERTIFICATION

1) Why the National Class is Preferable

As we have sought to emphasize throughout this book, mass torts general-

ly arise as a result of the systemic risks of business enterprises. The impact

of a single wrongful decision in the manufacturing or marketing of a mass-

produced product or service will be felt throughout the market for that

product, be it a surgical device, pharmaceutical, automobile, credit card, or

share offering. That market is likely to be national, and increasingly inter-

national, in scale.

In any instance where a class action is preferable to a host of individual

actions, it will follow that a single national class will fulfill the stated objec-

tives of class proceedings legislation (judicial economy, access to justice,

THE LAW OF LARGE-SCALE CLAIMS434

3Dutton,supra note 1 at paras. 27–29.

4 The foundations of the economic analysis of tort law rules are well-articulated in a

series of seminal publications by Calabresi, Posner, and Kaplow & Shavell, whose work

forms the basis of the analysis of class actions: Guido Calabresi, “Some Thoughts on

Risk Distribution and the Law of Torts” (1961) 70 Yale L.J. 499; Guido Calabresi, The

Costs of Accidents: A Legal and Economic Analysis (New Haven: Yale University Press,

1970); A. Mitchell Polinsky, An Introduction to Law and Economics, 2d. ed. (Boston: Lit-

tle Brown, 1989); Richard A. Posner, Economic Analysis of Law,5th ed.(Boston: Little,

Brown, 1998); Steven Shavell, Economic Analysis of Accident Law (London: Harvard

University Press, 1987); Steven Shavell, “The Level of Litigation: Private Versus Social

Optimality of Suit and of Settlement” (1999) 19 Int’l Rev. L. & Econ. 99; Louis Kaplow

& Steven Shavell, “Fairness vs. Welfare” (2001) 114 Harv. L. Rev. 961.

and behaviour modification3) and the empirical objectives of tort law (pri-

marily compensation and deterrence4) better than will thirteen provincial

and territorial classes. We expand briefly on these premises in this section.5

The class action is superior to an individual action where it permits

similarly situated plaintiffs to pool litigation resources, approaching the

economy of scale that defendants in multiple related actions enjoy as a

matter of course.6Any unnecessary subdividing of the single class action

into smaller actions will sacrifice some of the litigative efficiency of the

whole, even where plaintiffs’ counsel cooperate in bringing multiple

provincial actions.7In province-by-province certification, per-claim litiga-

tion costs will increase for plaintiffs at a greater rate than defendants,8set-

Interjurisdictional Class Actions 435

5 For a much fuller discussion of the economic effects of claims aggregation, see Craig

Jones, Theory of Class Actions (Toronto: Irwin Law, 2003).

6 The idea that mass tort defendants treat large-scale claims as a “virtual class action,”

spreading per-claim litigation costs over all classable claims, was developed in a series of

canonical articles by Harvard’s David Rosenberg. See David Rosenberg, “A ‘Public Law’

Vision of the Tort System” (1984) 97 Harvard L. Rev. 849; David Rosenberg, “Class

Actions for Mass Torts: Doing Individual Justice by Collective Means” (1987) 62 Ind. L.J.

561; David Rosenberg, “Of End Games and Openings in Mass Tort Cases: Lessons from

a Special Master” (1989) 69 B.U. L. Rev. 695; David Rosenberg, “Individual Justice and

Collectivizing Risk-Based Claims in Mass-Exposure Cases (1996) 71 N.Y.U. L. Rev. 210.

7 For discussion of informal aggregation strategies, see Howard M. Erichson, “Informal

Aggregation: Procedural and Ethical Implications of Coordination among Counsel in

Related Lawsuits” (2000) 50 Duke L.J. 381; see also Michael A. Eizenga, Michael J.

Peerless, & Charles M. Wright, Class Actions Law and Practice (Toronto: Butterworths,

1999) at §2.5 (describing the Australian experience with group litigation strategies).

For a criticism of the “litigation network” approach, see John C. Coffee, “Rescuing the

Private Attorney General: Why the Model of the Lawyer as Bounty Hunter is Not

Working” (1983) 42 MD. L. Rev. 215 at 239–41, nn 56–57. See also Charles Fried &

David Rosenberg, Making Tort Law: What Should be Done and Who Should Do It

(Washington D.C.: AEI Press, 2003) at 90 (“the combination of high costs of organiz-

ing and monitoring collaboration compounded by agency problems and strong incen-

tives for free-riding converge to preclude plaintiffs’ attorneys from efficiently

achieving the maximum scale economies required for deterrence purposes”).

8 This is tautological; forcing any class to subdivide and litigate separately will necessarily

increase per-claim litigation costs. Subdivision of a classable claim imposes extra per-

claim costs on plaintiffs to a greater extent than on defendants, who will treat common

issues — e.g., whether a product was dangerously defective — as a single question,

regardless of the number of jurisdictions in which they are defending the product.

Defendants can employ the same experts, use the same legal research, and even employ

the same lawyers in each jurisdiction where the issues are common — i.e., otherwise

“classable.” Litigation efficiencies automatically accrue to defendants in these circum-

stances far more than plaintiffs, who can at best effect only an imperfect economy of

scale between jurisdictions. David Rosenberg, “Mass Tort Class Actions: What the Defen-

dants Have and Plaintiffs Don’t” (2000) 37 Harv. J. Legis. 393 (exploring the “structural

asymmetry” inuring to the benefit of mass tort defendants absent optimal aggregation).