Challenging the Scope of a Proposed Class in Québec Class Proceedings

Écrit par Francesca Taddeo

In the recent decision of Electronic Arts Inc. v Bourgeois, 2024 QCCA 284 (Bourgeois), the Québec Court of Appeal provided direction concerning when and how defendants can appropriately challenge the scope of a proposed class in Québec class proceedings.

In Bourgeois, the applicant sought to institute a class action on behalf of a proposed national class with respect to certain defendants (the Canadian defendants), and a proposed Québec-only class with respect to other defendants.

The Canadian defendants sought to challenge the geographic scope of the proposed class, which they argued should be limited to Québec residents only on the ground that the Québec Superior Court did not have jurisdiction to authorize a national class against them. This preliminary objection was brought as a declinatory exception, prior to the authorization (certification) hearing.

The preliminary objection motion was dismissed by the Superior Court on the basis that the applicant had met the prima facie burden of demonstrating that two of the connecting factors conferring jurisdiction on the Québec Superior Court (under article 3148 of the Civil Code of Québec (CCQ)) over non-Québec residents were present: (1) the Canadian defendants had an establishment in Québec, and (2) the dispute related to their activities in Québec.

The Québec Court of Appeal dismissed the appeal and provided additional guidance on the timing of preliminary motions intended to contest the scope of a proposed class.

The Québec Court of Appeal’s Decision upholding the Proposed National Class

The Court of Appeal stated that, on the face of the pleading, the Québec Superior Court had jurisdiction to hear the authorization motion with respect to Québec residents because it was brought by a Québec resident alleging to have suffered damages in Québec.

As for the non-Québec class members, and basing itself on the fundamental principle that a proposed class action is not in fact a class proceeding unless and until it is authorized, the Court held that the preliminary motions were unfounded because they did not go to the applicant’s individual claim. Rather, the Canadian defendants’ motions went to the claims of other potential proposed class members who—by virtue of the class action mechanism—could not yet be considered as members of the class given that the class action had not (yet) been authorized.

Based on the allegations in the authorization motion and the limited evidentiary record available at the authorization stage, the Court of Appeal upheld the Superior Court’s decision, citing the absence of a palpable and overriding error in the judge’s application of the relevant legal principles to the limited record. The Court of Appeal also took the opportunity to confirm that the question of whether any activity has taken place at a Québec establishment (i.e. one of the connecting factors set out in article 3148 CCQ) must be interpreted as relating to an activity which existed at the time that the cause of action arose. Interpreting the “activity” requirement as having to be ongoing would otherwise make it too easy for parties to evade the jurisdiction of Québec courts.

Guidance on the Timing of Preliminary Motions contesting the Scope of a Proposed Class

The Court of Appeal also clarified that any jurisdictional issue touching on the scope of the proposed class should be dealt with at the authorization hearing—not earlier—and can also be revisited at the merits or trial stage. The same is true for any motion to dismiss in favour of arbitration presented by defendants with the aim of limiting the scope of the class. In Bourgeois, certain respondents had filed motions to dismiss in favour of arbitration on the ground that some proposed members residing outside Québec were bound by arbitration clauses.

That being said, the Court of Appeal recognized that it remains appropriate for the Superior Court to consider and determine preliminary motions challenging the Court’s jurisdiction prior to the authorization stage in cases that “necessarily concern either the applicant’s individual claim or all of the individual claims, including that of the applicant.”

Key Takeaways

Key takeaways from the Bourgeois decision are that arguments aimed at challenging the scope of a proposed class should be dealt with at the authorization hearing. It remains however appropriate for motions aimed at contesting the Superior Court of Québec’s jurisdiction to be presented on a preliminary basis if these motions concern the individual claims of all class members or that of the applicant.

For further information about the Bourgeois case or any other issue concerning class proceedings in Québec, or elsewhere in Canada, please contact the author or a member of the Bennett Jones Class Action Litigation practice group.

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