"Are National Class Actions Constitutional?" A Reply to Walker, Hogg and McKee

Article excerpt

Abstract

This article argues that national opt-out class actions are incapable of meeting the demands of constitutionality in Canada, despite a "real and substantial connection" to the forum jurisdiction or otherwise. Neither the legislative jurisdiction of provincial legislatures nor the adjudicative jurisdiction of provincial courts is capable of overcoming the territorial strictures engrained in the constitutional principles of our federation. While there are many persuasive policy arguments that bode in favour of allowing national classes, it is an unfortunate but inescapable reality that the national opt-out class is unconstitutional in Canada. This reality requires us to look to possible alternatives to create a viable future for pan-Canadian mass litigation. The use of coordinated parallel provincial opt-out classes will provide effective methods for managing jurisdictional disputes while ensuring that the substantive effects of provincial class proceedings legislation and the exercise of provincial superior court authority remain within provincial jurisdiction. Such parallel actions have already proved successful in practice and practitioners are working toward enhancing the efficacy of parallel actions through the creation of formal frameworks of coordination that fit within the existing provincial legislative landscape.

OVERVIEW

I.   PROVINCIAL STATUTES CANNOT GIVE RISE TO A NATIONAL CLASS

     Restrictions on the Extraterritorial Effect of Provincial Law
     The Substantive Effects of Opt-Out Class Actions Bar Provincial
     Statutes From Providing for Their Extraprovincial Operation

II.  THE PROBLEM OF CERTIFYING A NATIONAL CLASS IN A PROVINCIAL COURT

     Provincial Superior Courts are Incapable of Exercising Direct
     Jurisdiction Over National Opt-Out Class Actions

III. THE PROBLEM OF RECOGNIZING CLASS JUDGMENTS IN
     SUBSEQUENT JURISDICTIONS

IV.  LIVING WITHOUT THE NATIONAL CLASS

     Most Alternatives to the National Opt-Out Class are Similarly
     Unable to Meet the Demands of Constitutionality

     Coordinated Parallel Provincial Opt-Out Classes are the Best
     Available Constitutionally Viable Alternative to the National
     Opt-Out Class

V.   CONCLUSION

OVERVIEW

In her recently published article, "Are National Class Actions Constitutional?--A Reply to Hogg and McKee," Janet Walker vigorously defends her proposition that "there is simply no credible challenge to be made to the basic jurisdiction of Canadian courts to certify multi-jurisdictional class actions." (1) Peter W. Hogg and co-author Gordon McKee previously challenged Walker's position by arguing that the jurisdiction of the provincial superior courts in Canada to decide the claims of non-resident class members is restricted to claims that have a "real and substantial" connection to the forum province. (2) Walker's response is that there is no such restriction on the certification of national class actions as "neither the text of the Constitution nor the constitutionally mandated rules of the conflict of laws restrict court jurisdiction in this way." (3) Walker bolsters her argument with appeals to the policy benefits served by the unfettered ability of provincial superior courts to certify national class actions--namely, access to justice, judicial economy and behaviour modification. (4)

This article presents an alternative to the views represented by Walker, Hogg and McKee. It argues that provincially-constituted national class actions that bind non-residents of a forum jurisdiction on an opt-out basis are unconstitutional in Canada, even where a 'real and substantial connection' might be found to exist. National opt-out class actions are incapable of being constitutional on two bases. First, provincial legislation purporting to allow for the certification of national opt-out classes is extraterritorial and therefore ultra vires a province's legislative jurisdiction. Second, there is no extra-legislative basis upon which courts may certify national opt-out class actions, so courts certifying such actions or subsequently recognizing those certifications are acting beyond the constitutional limits of their adjudicative jurisdiction. …