Academic journal article Texas International Law Journal

Personal Jurisdiction over Non-Resident Class Members: Have We Gone Down the Wrong Road?

Academic journal article Texas International Law Journal

Personal Jurisdiction over Non-Resident Class Members: Have We Gone Down the Wrong Road?

Article excerpt

"It has not been easy to reconcile contemporary class-action practice with traditional adversary procedure. "'

I. INTRODUCTION

With class action regimes in Canada in their infancy, at least in relation to those in the United States, Canadian courts are still filling some critical gaps in class action jurisprudence.2 One such gap is in the area of the so-called "national" class action: a class action in a provincial forum that purports to determine the rights of residents in all Canadian provinces and territories. In reality, many "national" class actions are more appropriately termed "multijurisdictional" or "interjurisdictional" since such classes may not be truly national in scope.

One important matter yet to be resolved with respect to national or multijurisdictional classes involves the issue of personal jurisdiction over nonresident class members, that is, litigants who reside outside the province in which the class action is brought. On what basis does an Ontario court have the power to bind, for instance, an individual from British Columbia or Québec? Courts and commentators have struggled to articulate a precise answer to this question. The loose consensus appears to be that a court in one province has personal jurisdiction over a class member in another province if there is a "real and substantial connection" between the plaintiff class and the adjudicating forum. Divergent approaches have developed with respect to the real and substantial connection test as it applies to a nonresident plaintiff class. Some courts have merely required that there be an issue common to all class members, resident and nonresident, to find jurisdiction; that commonality, in itself, supplies the real and substantial connection sufficient to assert jurisdiction over nonresident class members. Other courts have insisted that there be an actual link, in the sense of a nexus, between the nonresident plaintiff class and the adjudicating forum in order to ground jurisdiction. This lack of uniformity in the application of the real and substantial connection test is problematic for parties seeking finality in litigation. In particular, defendants cannot be assured that a settlement or judgment rendered in one province will in fact be enforceable in another since the enforcing court may conclude that the adjudicating court did not have jurisdiction over nonresident class members under its view of the real and substantial connection test.3 There is thus the possibility that a defendant who has proceeded on the assumption that a settlement or judgment will be res judicata will nonetheless be required to re-litigate the claim. This hardly promotes the principles of "order and fairness" which are said to lie at the heart of the Canadian conflict of laws.4

This article suggests that it is necessary to re-think whether a real and substantial connection is needed to ground jurisdiction over a nonresident plaintiff class. The real and substantial connection test, initially propounded by the Supreme Court of Canada in the landmark case of Morguard Investments Ltd. v. De Savoye,5 and later given constitutional status in Hunt v. T&N pic,6 was developed to govern the question of when courts can assume jurisdiction over an individual, out-ofprovince defendant. The test cannot be readily transposed to the separate question of whether a court has jurisdiction over an amorphous class of unnamed plaintiffs. Instead of focusing on the issue of whether there is a real and substantial connection between a nonresident plaintiff class and the adjudicating forum to support the assumption of jurisdiction, courts should re-orient their analysis towards ensuring that procedural safeguards are afforded to nonresident plaintiffs. If a nonresident class member is provided with sufficient notice, an opportunity to opt out, and adequate representation, an adjudicating court should be viewed as jurisdictionally competent and its judgment accorded preclusive effect. …

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