Case: Altria Group, Inc. v. Stephens, 2024 BCCA 99 (CanLII)

Keywords: class actions; territorial competence; Ewert v. Höegh Autoliners AS, 2020 BCCA 181 (CanLII)

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Synopsis:

The Respondents seek to certify a class proceeding on behalf of a proposed class of persons in Canada who allegedly suffer damages as a result of their purchase and use of “JUUL” e-cigarette or vaping products. (See para. 1). The Appellant is an American corporation with a business address in Richmond, Virginia. The Respondents allege the Appellants conspired with the other defendants in the proposed class proceeding “to employ strategies perfected in the cigarette industry to advertise and market JUUL to young people”. (See para. 3).

Whereas “[t]here is no question” the other defendants to the Respondents’ action are subject to the jurisdiction of the British Columbia courts, the Appellant, Altria Group, Inc., challenges the territorial jurisdiction of the British Columbia courts with respect to these proceedings. (See para. 2). The Appellant applies pursuant to Rule 21-8 of the Supreme Court Civil Rules, for an order dismissing or staying the proceedings against it on the basis that there is no “real and substantial connection” between it and British Columbia. (See para. 13; Stephens v JUUL Labs Canada, Ltd., 2022 BCSC 1807 (CanLII) at para. 2).

The Chambers Judge (Giaschi J.) dismisses the Appellants’ jurisdictional application, finding:

    • the Respondents established a “good arguable case” that their claims involved a tort committed in British Columbia;
    • the presumption of a “real and substantial connection” under s. 10(g) of the Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28 (“CJPTA”) was engaged; and
    • the Appellants’ evidence did not rebut that presumption. (See para. 4).

The Court of Appeal (Dickson, DeWitt-Van Oosten, and Horsman JJ.A.) dismisses the Appellants’ appeal. (See para. 5).

Importance:

The Court of Appeal affirmed its prior decision in Ewert v. Höegh Autoliners AS, 2020 BCCA 181 (CanLII), which held that the question of whether a provincial superior court has territorial competence over a matter is a question of law reviewable on the standard of correctness. (See para. 39; Ewart at paras. 42-44). However, in circumstances where “there is contested evidence in a jurisdictional challenge”, the factual findings of an application judge are subject to appellate intervention “only on the ground of palpable and overriding error”. (See para. 39; Hershey Company v. Leaf, 2023 BCCA 264 at para. 36).

In this case, the Appellant argued that the Application Judge “ignored or misconstrued evidence that was material to his impugned factual conclusions” – that the reasons were “insufficient”. (See paras. 41, 44). The Court of Appeal noted that the “proper standard of review” required consideration as to whether the Application Judge’s “failure to address material evidence on a disputed issue” would give rise to a “reasoned belief” that they “must have forgotten, ignored or misconceived the evidence” in a way that affected the conclusion. (See para. 44; Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3 at para. 125).

The Court of Appeal was not persuaded that the Application Judge committed a palpable and overriding error. For the Court, “[w]hile the judge may not have cited every piece of evidence and every point raised in argument, the law does not require this of him…[t]he ‘uncited evidence’ listed by [the Appellant] had limited relevance given the live issues before the judge.” (See para. 46; Housen v. Nikolaisen, 2002 SCC 33 at para. 72).

The Appellant also alleged that the Application Judge incorrectly applied the Ewert framework. (See para. 38). The Court of Appeal outlined the two-stage Ewert framework this way:

    • At the first stage, the plaintiff must show one of the connecting factors listed in the CJPTA exists, so as to give rise to a presumption of jurisdiction. The jurisdictional facts pleaded by a plaintiff are taken to be true. If the defendant contests the pleaded jurisdictional facts with evidence, the plaintiff is required to show there is a “good arguable case” for jurisdiction.
    • At the second stage, the defendant has the onus of rebutting the presumption arising from stage 1 of the analysis by establishing that there is no relationship between the subject matter of the action and the forum, or only a weak relationship. (See para. 25; Ewart at paras. 14-17).

For the Court of Appeal, the Application Judge made no error at the first stage. Specifically, the Court rejected the Appellant’s argument that the Application Judge “erroneously reversed the onus, placing the burden on [the Appellant] to ‘negate’ the [R]espondents’ pleading that [the Appellant] was involved in the marketing or advertising of JUUL products in Canada”. (See para. 51-52). For the Court of Appeal, the evidentiary record supported the Application Judge’s conclusion that the Respondents “met the low bar of showing a good arguable case that their pleaded jurisdictional facts in relation to the tort of conspiracy could be proven”. (See paras. 55-56).

Finally, the Appellant argued that, even if the Application Judge did not err at the first stage, he should have concluded the presumption was rebutted at the second stage. The Court of Appeal noted the Appellant’s submission that “the second stage of the analysis serves an important constitutional role. A connection between a state and a dispute cannot be ‘weak or hypothetical’ as this would cast doubt on the legitimacy of the exercise of the adjudicative power of the state”. (See para. 58). However, in this case, the Court of Appeal found the Appellant’s arguments were properly found to be insufficient to rebut the presumption of territorial competence. (See para. 61).

Counsel for the Appellant: Steven Sofer, Jeremy Sapers, and Emily Hayes (Gowling WLG, Vancouver)

Counsel for the Respondent: Anthony Leoni, Kendal Paul, Jesse Kendall (Rice Harbut Elliott, Vancouver) Alex Dimson, and Katherine Shapiro (Siskinds, Toronto)

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