Protocols for Cross-Border Cases … Will They Work?

By Betsy M. Adeboyejo
American Bar Association
Aug. 6, 2011

TORONTO — U.S. and Canadian experts weighed in on cross-border class action practices, protocols and issues yesterday at the American Bar Association Annual Meeting.

Panelists of the program “Multi-Jurisdictional, Cross-Border, and International Class Actions: Where Are We Heading?” agreed that jurisdictional and due process procedures were the top challenges to successful cross-border cases.

“We are fumbling our way toward a solution,” says the Hon. George R. Strathy, who sits on the Superior Court of Justice in Toronto. “We’re not at the end of the road, but not at the beginning of road either.”

Judges are faced with these issues all the time in situations such as airplane crashes, train derailments, purchases of securities and other instances.

“The issues we face with U.S. and Canada are the tip of the iceberg as to what we will face worldwide,” said John P. Brown, a partner at McCarthy Tétrault in Toronto and member of the firm’s National Class Action Group.

With the world growing smaller in a global economy, Brown said it is imperative that more cooperation is fostered between courts in varying countries.  “We’re dealing with very complex issues and without cooperation they could be disastrous,” added Brown, who is the chair of the International Bar Association’s Task Force on International Procedures and Protocols for Class Actions.

Brown said, to date, there have not been a lot of issues with cross-border class actions thanks to mutual cooperation. But he illustrated what could go wrong when there is a lack of communication by pointing to the case of Currie v. McDonald’s Restaurants.

The allegation in this case centered on employees of the marketing company that McDonald’s had hired to produce game pieces for a contest. The employees kept many of the winning pieces for themselves and friends, which did not give customers an opportunity to win prizes in the United States or Canada.

When the U.S. class action was settled it included Canadian customers in the settlement class. But they didn’t know a settlement had been reached. However, Brown said after the U.S. settlement was approved and a judgment was issued, McDonald’s wanted to rely on the U.S. judgment in Canada in an effort to seek a stay of the Ontario class action case, saying that the U.S. judgment had “preclusive effect.”

Brown said when deciding whether to certify a cross-border class, Ontario courts generally failed to examine the question of jurisdiction from the perspective of the Absent Foreign Claimant. He said the Ontario court eventually refused to enforce the U.S. class action judgment, citing the U.S. court’s failure to meet due process and procedural fairness requirements because the notification process was different for Canadian customers.

The panelists are hopeful that new protocols will help guide judges in cross-border cases.

Judge Denise Page Hood, U.S. district judge for the Eastern District of Michigan said that class action is an area of law where there can be a lot of creativity. She said, “If two are being creative, than it’s much more persuasive.”

Hood said that though lawyers are used to talking to each other, “in our courts, judges are not used to talking to each other about a particular case…not everybody is comfortable with talking.”  Hood said, in time, judges will improve their communication because the protocol gives them permission to talk.

Strathy agreed. “We need protocols to guide us,” said Strathy. “If we can talk we will produce a better result for the litigant.”

Panelists agreed that the protocols help to open the lines of communication. “They are an indispensable tool in the tool kit for judges and lawyers,” said Janet Walker, a professor at the Osgoode Hall Law School of York University, author and a member of the ABA Canada/U.S. Class Action Protocol Project.

“They have been developed with such a wealth of experience…people who know what will work and what will not work. I’m very optimistic about it,” Walker added.

ABA protocols for multi-jurisdictional class proceedings and protocol on court-to-court communications in Canada — U.S. Cross-Border Class Actions were established and submitted to the House of Delegates for a vote during the August 2011 session. The Protocol for Management of Multi-Jurisdictional Class Actions was established by a task force for the Canadian Bar Association and is pending approval.

“Multi-Jurisdictional, Cross-Border, and International Class Actions: Where Are We Heading?” was sponsored by the Section of Litigation.