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Uber Arbitration Clause Unconscionable

In 2017 drivers working under contract for Uber in Ontario launched a class action.  They alleged that under Ontario law they were employees entitled to various benefits Uber was not providing.  In response, Uber sought to stay the proceedings on the basis of an arbitration clause in the standard-form contract with each driver.  Under its terms a driver is required to resolve any dispute with Uber through mediation and arbitration in the Netherlands.  The mediation and arbitration process requires up-front administrative and filing fees of US$14,500.  In response, the drivers argued that the arbitration clause was unenforceable.

Law on Jurisdiction Clauses Changes in Canada

In 2011 Facebook, Inc. used the name and picture of certain Facebook.com members as part of an advertising product.  In response, a class action was started in British Columbia on behalf of roughly 1.8 million British Columbia residents whose name and picture had been used.  The claim was based on section 3(2) of the province’s Privacy Act.  In response, Facebook, Inc. sought a stay of proceedings based on an exclusive jurisdiction clause in favour of California contained in the contracts of use for all Facebook.com members.

Supreme Court of Canada Allows Courts to Sit Extraterritorially

In Endean v British Columbia, 2016 SCC 42 (available here) the Supreme Court of Canada has held that “In pan-national class action proceedings over which the superior court has subject-matter and personal jurisdiction, a judge of that court has the discretion to hold a hearing outside his or her territory in conjunction with other judges managing related class actions, provided that the judge will not have to resort to the court’s coercive powers in order to convene or conduct the hearing and the hearing is not contrary to the law of the place in which it will be held” (quotation from the court’s summary/headnote).

A Court’s Inherent Jurisdiction to Sit Outside its Home Territory

Another step in the evolution of the common law on this issue has been taken by the Court of Appeal for Ontario in Parsons v Ontario, 2015 ONCA 158 (available here).  The court disagrees in some respects with the earlier decision, on the same issue, of the British Columbia Court of Appeal in Endean v British Columbia, 2014 BCCA 61 (available here) (discussed by me over a year ago here).  It may be that in light of this conflict the Supreme Court of Canada will end up hearing appeals of either or both decisions.

Can a Court Sit Outside its Territorial Jurisdiction?

In Parsons v The Canadian Red Cross Society, 2013 ONSC 3053 (available here), Winkler CJ (of the Court of Appeal, here sitting down in the Superior Court of Justice) has held that a judge of the SCJ can sit as such outside Ontario.  No authority, it seems, requires the SCJ to sit only in Ontario.

The decision seems to me, at least on an initial reading, largely based on pragmatism.  It seems efficient to so allow and so the court does.  But I have some preliminary sense that there are some larger concerns here that are not being fully thought through.  The place where a court sits seems awfully fundamental to its existence and authority as a court.  In addition, the brushing aside of concerns about the open court principle (see paras 48-50) seems too minimal.

Article on Global Class Actions in Canada

Associate Professor Tanya Monestier of the Roger Williams University School of Law has written an article on the willingness of Canadian courts to hear class actions involving a global plaintiff class. It is entitled “Is Canada the New ‘Shangri-La’ of Global Securities Class Actions?” and is forthcoming in 2012 in the Northwestern Journal of International Law and Business. The article is available here from SSRN.

The abstract reads:

There has been significant academic buzz about Silver v. Imax, an Ontario case certifying a global class of shareholders alleging statutory and common law misrepresentation in connection with a secondary market distribution of shares. Although global class actions on a more limited scale have been certified in Canada prior to Imax, it can now be said that global classes have “officially” arrived in Canada. Many predict that the Imax decision means that Ontario will become the new center for the resolution of global securities disputes. This is particularly so after the United States largely relinquished this role last year in Morrison v. National Australia Bank.

Parallel Class Actions in Canada

Canadian provincial courts continue to analyze how to manage class actions that include class members from other provinces.  While Canada is a federal country, it is acceptable for the court in a province to certify a class that includes members from other provinces.  A difficulty arises if two provinces are each asked to certify a multijurisdictional class in respect of the same underlying claim.

Currently there are class actions against Merck Frosst in both Ontario and Saskatchewan in respect of Vioxx.  In each of these provinces, the class action regime is “opt-out”, so that the class as defined catches all described members without any specific action on the part of a particular member.  Merck moved to stay the Ontario action on the basis that it should not be subject to two multijurisdictional class actions that involve substantially the same plaintiffs and issues.  In Mignacca v. Merck Frosst Canada Ltd. (an as-yet unreported decision of the Ontario Divisional Court, dated Feb. 13, 2009) the court refused to stay the Ontario action.