Problems of the National Class
| Author | Craig Jones |
| Pages | 157-198 |
CHAPTER
EIGHT
Problems
of the
National Class
A.
INTRODUCTION
At
various points throughout
my
discussion
of
class action system design,
I
have
suggested that
any
class whose members
are
drawn
from
markets smaller than
the one in
which
all
impacts
of the
tort
are
felt
will
be
suboptimal
from
the
point
of
view
of
both deterrence
and
compensation. This
is
especially
so
within
the
national
borders: where
the
prices
of
products
are
likely
to be the
same
and the
substantive
law of
mass torts
is
likewise
similar, there
are
strong
economic
rea-
sons
to
avoid duplication
of
class claims
and
permit
a
single, market-wide,
aggregation.1
As
Professor
Nagareda
points
out
(while discussing
the
constitutional compe-
tence
of the
U.S.
congress
to
enact compensation
legislation),
"mass
tort
claims
One
marked exception
to the
efficiency
of
treatment
of
mass tort
on a
national basis
is the
question
of
airborne
and
waterborne
pollution
or
disasters,
like Bhopal,
caused
by
subsidiaries
of
multinational corporations.
It
certainly
is not
radical
to
suggest that these problems,
at the
least, should
be
dealt with
on an
international
basis, perhaps through
the
"joint Canada-United States tribunal"
for
"non-market"
mass tort problems recently proposed
by
Judge Weinstein: Weinstein, Individual
Justice
in
Mass
Tort
Litigation
(Evanston,
111.:
Northwestern University Press,
1995)
at 36.
157
1.
—
Theory
of
Class
Actions
—
arise
from
quintessentially commercial activity
- the
buying
and
selling
of
prod-
ucts
-
that
is
plainly interstate
in
scope."2
Nevertheless,
the
Canadian constitution assigns
jurisdiction
over
"property
and
civil
rights" and the
"administration
of
justice"
to the
provinces, each repre-
senting only
a
fraction
of the
national market
in
mass torts. How, then,
do we
enable mass tort litigation
on the
scale
of the
"footprint"
of the
wrong?
How do
we
"fit
the
forum
to the
fuss"?
The
answer, clearly,
is
that
the
mass tort litigation system must support
actions
in
which claims
are
aggregated
on an
interprovincial
basis:
the
"national
class."
In
general, class action
legislation
need
not set out the
rules
for the
inclusion
of
foreign defendants
or
plaintiffs,
but
rather might leave such questions
to be
dealt with under
the
Rules
of
Court
and
common
law or
constitutional
principles.
Indeed, there
is
nothing
in the
Ontario
or
Quebec legislations which explicitly
states that class actions
may
include foreign
parties;
the
B.C.
and
Saskatchewan
Acts,
as
mentioned previously, provide mechanisms
for the
inclusion
of
foreign
plaintiffs
as an
opt-in
subclass.3
As we
shall see,
the
Ontario courts have read
their province's legislation
permissively,
allowing national opt-out classes;
British Columbia courts have interpreted their
own
statutes
restrictively,
so far
allowing
non-resident class members
only
on the
opt-in basis
set out in the
statute. Quebec courts seem somewhat ambivalent
on the
issue.
Obviously, foreign class
plaintiffs
present some problems
of
legal theory, par-
ticularly opt-out
classes
which
may
bind
potential
plaintiffs
if
they take
no
action
to
remove themselves
from
the
court.
If a
class action
is
said
to be
final
with
respect
to the
claims
of
persons
who do not opt
out4,
then could this
affect
the
rights
of
foreign persons
who may not
even have been aware
of the
action?
And
even
if
they were aware,
how are we to
view
the
jurisdiction
of the
laws
of one
province over
the
citizens
of
another? These
are
fundamental questions.
Consider
the
case
of a
class action begun
by
Ontario residents, alleging that
they
had
been harmed
in
Ontario
by a
product manufactured outside
the
country.
Following
Moran
v.
Pyle,5
the
tort with respect
to
those injuries
can be
said
to
have
happened
in
Ontario, regardless
of
where
the
product
was
made. However,
it
may be
that others alleging similar injuries
from
the
same products might live
2.
Richard
Nagareda
"Autonomy, Peace
and Put
Options
in the
Mass Tort Class
Action" (2002)
115
Harv.
L.
Rev.
749 at
769.
3.
B.C.
s.
8(l)(g), 16(2); Sask. 18(2), 21(1).
4. As is
provided
for in
Quebec Civil Code art. 2848,
and as was
asserted under
the
Ontario
Act in
Carom
et
al
v.
Bre-X
Minerals Ltd.
et
al.
(1999),
44
O.R. (3d)
173
(Sup.
Ct.
J.).
5.
Moran
v.
Pyle
National
(Canada)
Ltd. (1974), [1975]
1
S.C.R. 393, Dickson
J. at
409:
By
tendering
his
products
in the
market place directly
or
through normal dis-
tributive
channels,
a
manufacturer
ought
to
assume
the
burden
of
defending
158
—
Problems
of
the
National Class
—
outside Ontario.
If
non-resident class members were allowed
to
join
the
suit
as
part
of a
"national class," then
a
foreign defendant might argue that,
as to the
dis-
pute
between
it and a
non-resident plaintiff,
the
Ontario court
has no
jurisdiction
and
its
Class Proceedings
Act
could
not
apply. This
was the
case described
in
Wilson
v.
Servier
Canada Inc.:
[89]
The
defendants
state
. . .
that
the
subject-matter
of
claims
by the
non-Ontario
plaintiff
has no
real
and
substantial
connection
with
Ontario because
(1) the
defen-
dants
do not
reside
in
Ontario
or
have
any
offices
in
Ontario;
(2) the
defendants
do
not
have
assets
in
Ontario;
(3) the
defendants
do not
operate
or
carry
on
business
in
Ontario;
and (4) the
defendants
do not
market, promote
or
sell Ponderal
or
Redux
in
Ontario.6
A
similar problem
was
addressed
in
Harrington
v. Dow
Corning.7
In
that
case, foreign manufacturers
of
breast implants were subject
to a
suit
in
British
Columbia alleging that
the
implants were
unfit.
Could non-resident member sub-
classes
be
included
in the
B.C. action?
If so, on
what constitutional theory
of
ter-
ritoriality?
What were
the
implications
for the
choice
of law
questions that would
necessarily follow?
There
are two
closely integrated components
of the
question
of
provincial
superior courts' jurisdiction over class action suits with class members
from
other
jurisdictions.
The
first,
and the one
that
has
generated
the
lion's
share
of
judicial analysis,
is
whether
the
court itself
has
jurisdiction over
the
various non-
resident
claims. This might
be
viewed
as
jurisdiction over
the
non-resident
plain-
tiffs
(in an
opt-out case
-
obviously
in an
opt-in case these plaintiffs must attorn
and
the
question
of
jurisdiction
is not an
issue),
or it
might
be
viewed
as
juris-
diction over
the
defendants with respect
to
non-residents' claims.
The
second,
and
more traditional, "extraterritoriality" question
is to
what extent
the
provin-
cial legislatures might design
a
system
to
grant
or
extinguish
rights to
parties
outside
the
province's borders. This latter question
is
premised
to an
extent
on
the
traditional view
of
class
litigation
as a
device that
does
not
exist absent leg-
islation,
a
premise that appears
to be
moot
in the
wake
of the
Supreme Court's
decision
in
Dutton.8
Nevertheless, because both class
proceedings
statutes
and
legislation
in
other provinces with which they might conflict (principally limita-
tions acts
as I
discuss later)
are
provincial legislation,
and
because
the
provinces
do not
have
the right to
legislate
extraterritorially,
the
issue
of
legislative
territo-
riality
cannot
be
completely evaded.
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
con-
templation
when
he so
tendered
his
goods. This
is
particularly
true
of
danger-
ously
defective
goods placed
in the
interprovincial
flow of
commerce.
6.
Wilson
v.
Servier
Canada
Inc.
et
al
(2000),
50
O.K.
(3d)
219 at
para.
89
(Sup.
Ct.
J.).
7.
Harrington
v. Dow
Corning
Corp.,
8.
Western
Canada
Shopping
Centres,
Inc.
v.
Dutton,
[Button}.
159
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