Court requires opt-in from foreigners in class action

Plaintiffs’ lawyers pursuing a class action for a global price-fixing conspiracy will have to get formal opt-in from class members abroad, if yesterday’s jurisdictional decision stands in Airia Brands v. Air Canada.

The class action, which names a host of international airlines accused of fixing the price of air cargo to and from Canada since 2000, was certified yesterday by Justice Lynne Leitch at the Ontario Superior Court — the decision to certify, however, comes with one important caveat.

Despite a possibly “real and substantial” connection to Canada — the test established in the Supreme Court of Canada’s Club Resorts Ltd. v. Van Breda decision — defence counsel successfully argued that Ontario’s courts had no jurisdiction to include in the proceeding foreign class members who had not specifically opted in, defined as “absent foreign claimants.”

Armed with reams of expert opinions, lawyers for the airlines convinced Leitch that foreign courts in many of the 100-plus countries from which plaintiff class members derived would not respect the Van Breda test giving Canadian courts jurisdiction.

As a result, nothing would prevent a class member in one of those other countries from re-litigating the matter and subjecting the defendants to double jeopardy.

As the decision states: “I am satisfied that jurisdiction over class members can only be established if they are present in Ontario or have consented in some way to the jurisdiction of this court. I therefore, find that this court does not have jurisdiction simpliciter over absent foreign claimants.”

It’s a decision that stands in sharp contrast to Van Breda, where Canadian courts were able to claim jurisdiction, for a case involving injuries on a Cuban resort, based on a test establishing “real and substantial connection” to Canada.

Charles Wright, the Siskinds LLP lawyer who launched the class action in Canada, says he disagrees with the court’s analysis on jurisdiction, which finds that the plaintiffs connection to Canada is not strong enough to account for the possibility of double recovery.

Wright says that the decision essentially shuts the door to the most likely avenue for justice for foreign claimants on the off chance they might pursue an alternative, and highly unlikely, avenue for justice.

“We believe our courts in Canada follow the rules of law and provide justice,” he says, “and if other courts abroad, some other day, choose to find that that’s not so and won’t respect the judgment, that’s really a decision for them to make and that doesn’t impact on whether this court properly takes jurisdiction.”

Wright says the decision on jurisdiction will most likely be appealed. Even if it’s upheld, though, it will not prevent plaintiffs’ lawyers from sending out notices to potential foreign claimants to get formal opt-in from them.

Jurisdictional issues aside, Wright suggests the defendants’ real strategy — one that has proven successful so far — is to drag the case on and make it more difficult for class members to participate, in the hopes of reducing liability for their clients.

“Our argument was that this was a fairly clear effort to avoid liability to these people. It wasn’t really about the potential for double jeopardy or that they shouldn’t have to face a multiplicity of lawsuits. It was about the desire to not have to compensate some people at all.

“The defendants hope is that maybe people won’t see or understand the notice and won’t respond to it, and therefore won’t opt in,” says Wright. “So the real hope is — which is what we argued and what we will argue on appeal — is that they will avoid any liability to those people.”

Ultimately, however, Wright says the court’s decision on jurisdiction may backfire on the defendants:.

“If, in fact, the result of this decision is a notice that goes out that causes people to see them in 20 different jurisdictions, and they have to obtain counsel in all of those places and defend themselves, it’s not actually a good result for them.”

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