Canada: Is This The End Of Quebec Exceptionalism In Class Action Matters?

Copyright 2008, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Class Actions, June 2008

On May 28, 2008, the Honourable Danielle Grenier of the Superior Court of Quebec rendered a judgment authorizing the institution of a national class action in the Province of Quebec. Whereas national class actions hardly raise an eyebrow in our neighbour to the south and, even in Canada, the provincial legislature and the bench have warmed to the idea of national class actions, Quebec remained a holdout against class actions extending beyond its borders until the authorization judgment in Brito v. Pfizer Canada Inc.

LITIGATION

The proceedings underlying Quebec's first national class action are a civil liability suit brought against Pfizer Canada Inc. and Pfizer Inc. on behalf of every person residing in Canada having used Depo-Provera. Depo-Provera is a contraceptive taken by injection which is effective for a period of three months. Depo-Provera is allegedly harmful to the women who have taken it, as users may suffer an irreversible loss of their bone density, which may cause osteoporosis.

NATIONAL CLASS ACTIONS IN QUÉBEC

In recent years, various provinces – including Alberta, British Columbia, Saskatchewan and Newfoundland – have legislated to allow the inclusion of class members residing outside their province. On the other hand, the Quebec National Assembly has been deafeningly silent about allowing or prohibiting the inclusion of class members from outside the province.

The bench has been equally reticent to authorize national class actions. The two judgments rendered previously on this issue, Société canadienne des postes v. Lépine and Hocking v. Haziza and HSBC Bank Canada, both rendered by the Court of Appeal, have received a chilly reception to national class actions, especially those certified outside the province. In both Lépine and Hocking, motions were brought in Quebec to recognize and to declare enforceable class action settlements that had been rendered in another province, namely, Ontario. The Superior Court in both cases refused to declare the class action settlements enforceable in Quebec, decisions that were upheld on appeal. Lépine and Hocking are currently on appeal before the Supreme Court of Canada.

The rock upon which previous class actions had foundered and which the present judgment seeks to overcome concerns notice to the members residing outside the province and the jurisdiction before which the purported class actions were brought.

In the instant case, the court did not immediately resolve the issue of notification to the class members, preferring to defer arguments on that point to a subsequent hearing. However, the court declared itself satisfied that through a properly drafted order, class members outside Quebec could be meaningfully notified of the class action.

The court's approach to jurisdiction was twofold. On the one hand, it concluded that it had jurisdiction over Pfizer Canada Inc. whose head office is in the Province of Quebec. On the other hand, with respect to Pfizer Inc., an American company, the court concluded that Quebec was in as good a position as any other province to exert jurisdiction, and furthermore, by ensuring actual notice to the members of the class, the members would be able to consent to the jurisdiction of the Quebec Court, or otherwise exclude themselves from the class.

An argument that was dealt with by the court was the quasi-insurmountable gulf between the Quebec residents of the class, whose case is governed by Quebec law, and those residents of other Canadian provinces who, pursuant to Quebec conflict of law provisions, could elect to apply either the law of the residence of the manufacturer or the law of their home province. The court declared this apparent difficulty could be resolved by the division of the class into subclasses by applicable law, whether Quebec law or the law of the province of the class members.

THE FUTURE OF NATIONAL CLASS ACTIONS IN QUEBEC

Quebec has long been considered a haven for the plaintiff class action bar. With this recent judgment, there is no doubt that it will, for the time being, retain this status for future national class actions.

That being said, one wonders whether the court would have decided differently had it not been for Pfizer Canada Inc.'s head office located in Quebec which permitted the court to exert jurisdiction over one of the two defendants. One thing is sure, both plaintiff and defendant class action lawyers will be closely following Lépine and Hocking before the Supreme Court of Canada.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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