On October 25th, the Supreme Court of Canada dismissed an application for leave to appeal from the judgement of the Court of Appeal for Ontario in Airia Brands Inc. v. Air Canada ("Airia Brands"). The representative plaintiffs in the case brought a proposed class action alleging that the defendant domestic and foreign air carriers engaged in a global price fixing conspiracy in respect of air cargo shipping costs. The plaintiffs sought to certify a proposed class including Absent Foreign Claimants ("AFCs"). AFCs are proposed members of an opt-out class who: (i) are not present in Canada; and (ii) have taken no active steps to indicate their intention to subject themselves to the jurisdiction of the Canadian superior court. The defendants responded with a motion for a declaration that the court did not have jurisdiction over AFCs and for an order staying the proposed class action relating to those claims.
The Ontario Superior Court of Justice granted the defendants' motion and the plaintiffs appealed. The Ontario Court of Appeal overturned the motion judge's decision and held that the motions judge had erred in rejecting the real and substantial connection test and in concluding that jurisdiction existed only if AFCs were present in Ontario or consented to the Ontario court's jurisdiction. In its decision, the Court of Appeal formulated a new test for determining when a provincial superior court may assume jurisdiction over AFCs. Justice Pepall, writing for the court, held that an Ontario superior court can take jurisdiction over AFCs where:
- There is a real and substantial connection between the subject matter of the action and Ontario, and jurisdiction exists over the representative plaintiff and the defendants;
- There are common issues between the claims of the representative plaintiffs and AFCs; and
- The procedural safeguards of adequacy of representation, adequacy of notice and the right to opt out (as described in Currie v. McDonald's Restaurants of Canada Ltd.) are provided, thereby serving to enhance the real and substantial connection between AFCs and Ontario.
While the decision of the Court of Appeal was not the first to consider the jurisdiction of provincial superior courts to certify international class actions, it was the first appellate authority in Canada to analyze the issue in detail. The decision of the Supreme Court to dismiss the application for leave to appeal has potentially significant implications for multinational businesses. In omitting any requirement to show a heightened connection between AFCs and Ontario, the Court of Appeal has arguably removed any meaningful and legitimate barrier to plaintiffs seeking to certify global class actions. The Airia Brands test permits courts to assume jurisdiction over AFCs who share common issues with representative plaintiffs, even if the claims of those AFCs do not otherwise have a real and substantial connection to the jurisdiction. In other words, Ontario courts could, in the context of a proposed class action, assert jurisdiction in respect of the claims of parties over which they would not have jurisdiction in non-class action litigation.
Airia Brands is an invitation for more international class actions. It remains to be seen to what extent class action plaintiff lawyers will take up that invitation.