Jurisdictional challenges are increasingly shaping the landscape of Canadian class actions, particularly in British Columbia. Two recent BC Court of Appeal decisions, Altria Group, Inc. v. Stephens, 2024 BCCA 99 (“Altria”) and NHK Spring Co., Ltd. v. Cheung, 2024 BCCA 236 (“NHK”) provide timely guidance on how courts assess territorial competence under the Court Jurisdiction and Proceedings Transfer Act (“CJPTA”). Both cases involved global defendants and allegations of harm suffered in BC, raising critical questions about when BC courts can assume jurisdiction over foreign entities in cross-border class actions. These decisions provide important guidance for businesses operating internationally, plaintiffs seeking to bring claims in BC, and counsel navigating jurisdictional challenges in complex litigation.
Establishing territorial competence in BC class actions
Under section 3 of the CJPTA, a BC court has territorial competence only if there is a “real and substantial connection” between the province and the facts underlying the claim.
Section 10 of the CJPTA lists the presumptive “connecting factors” that establish this connection. One of the most significant is the commission of a tort in BC, under section 10(g). This factor is frequently relied upon in competition class actions, consumer protection claims, and conspiracy allegations involving BC markets.
Importantly, Canadian law treats a tort as having been committed where the harm is suffered, even if all of the alleged wrongful conduct occurred abroad. BC courts apply this through the two-stage framework from Ewert v. Höegh Autoliners AS, 2020 BCCA 181:
Stage 1: Does a connecting factor exist?
Once a single s. 10 connecting factor is established, a presumption of territorial competence arises. The threshold is low to ensure that legitimate claims with a real connection can proceed before BC courts. It is unnecessary to pile on additional factors such as physical presence, local business operations, or local co-defendants. A defendant can challenge jurisdictional facts, but at this stage the plaintiff need not prove their case – only show a good arguable case that the pleaded facts can be proven.
Stage 2: Can the defendant rebut the presumption?
Once a connecting factor is established, the burden shifts to the defendant to rebut the presumption of jurisdiction. The defendant must show that, despite the connecting factor, the relationship between the dispute and BC is so weak that the court should decline jurisdiction. This is a difficult burden, requiring more than a simple denial of local activity.
Key BC court of appeal decisions on jurisdiction
NHK Spring: Global supply chains, local harm
The NHK Spring decision illustrates how BC courts analyze jurisdiction in competition and price-fixing class actions involving global supply chains. In NHK, the defendants argued they had no Canadian presence, made no direct sales into Canada, and had not conspired to fix prices in Canada. The action alleged a global price-fixing conspiracy relating to suspension assemblies used in hard disk drives. Headquartered in Japan, the defendants controlled about 96% of the global market for these components during the class period (2003–2016). Although individual Assemblies were low-cost items, the global market was substantial; over $13 billion between 2003 and 2015. Expert evidence suggested that any overcharge would likely be passed through the supply chain, inflating prices of finished products sold to Canadians, including British Columbians.
The Court reaffirmed a critical principle: for territorial competence, a tort of conspiracy is committed in BC when, on unchallenged pleadings or a good arguable case, a defendant participates in a conspiracy that causes harm in BC, even if the agreement was made abroad.
The plaintiffs met the Stage 1 burden by showing a good arguable case on conspiracy, pass-through pricing, and foreseeable harm to BC consumers. Once that threshold was met, the defendants were unable to rebut the presumption of territorial competence. The court confirmed that the absence of a Canadian market, local defendants, or direct sales was irrelevant once BC-based harm was made out.
Altria: Cross-border marketing and foreseeable effects in BC
Altria applied the same jurisdictional principles in the context of cross-border marketing and consumer protection claims. Altria, a U.S. corporation, argued that BC courts lacked jurisdiction because it had no physical presence in the province and had not itself advertised or sold products in Canada. The plaintiffs alleged that Altria participated in a coordinated conspiracy with JUUL USA to market e-cigarettes using youth-focused social media strategies with foreseeable cross-border effects, including in Canada.
The Court held that the chambers judge properly applied Ewert for determining territorial competence. The plaintiffs had shown a good arguable case that the alleged conspiracy caused harm in BC. Altria’s extensive pre-transaction collaboration with JUUL USA, its financial interest in JUUL, and the nature of the marketing strategies supported an inference of coordinated conduct designed to influence young consumers, including Canadian consumers.
At Stage 2, Altria’s jurisdictional challenge failed for the same reason as in NHK: denying local activity is not enough when the alleged harm to BC residents has already established a presumptive connection.
Navigating the boundaries of jurisdiction in BC class actions
Taken together, NHK and Altria reaffirm that while jurisdictional challenges in BC class actions are nuanced, they are simultaneously predictable. When alleged harm occurs in BC, courts are inclined to assume jurisdiction even over foreign defendants with no physical presence in the province.
These decisions highlight several important principles for international businesses and litigants involved in class action litigation before BC courts:
- Cross-border conduct can create jurisdiction in BC if local harm is alleged.
- Physical presence in BC is not required for jurisdiction.
- Global supply chains and digital marketing campaigns can establish a real and substantial connection to BC.
- Defendants face a high burden when attempting to rebut presumptive territorial competence.
For global businesses, these cases underscore how cross-border operations can generate domestic liability. For plaintiffs, they reaffirm that BC courts remain accessible forums for addressing international wrongdoing with local impact.
How Siskinds LLP can help
Siskinds has extensive experience representing consumers in consumer protection and competition class actions across Canada. Our legal counsel is equipped to handle cases that highlight the evolving boundaries of BC courts’ jurisdiction over foreign entities and the growing importance of strategic, well-informed advocacy in cross-border disputes.