ClassAction.org is privileged to have a readership that’s curious about the ins and outs of the legal process. Every day, we receive emails from readers who, for instance, would like to know how to join a case or what’s going on with a particular lawsuit or settlement, or want to share their experience with a certain product or company. Many ask us about how to contact a lawyer to file their own class action, while others—understandably—inquire about when settlement payments will be sent out.
One of the most common questions we get, though, comes from those who want to know whether people who live outside of the United States can take part in class action lawsuits filed in American courts.
So, can you join a class action filed in the United States if you live outside of the country? What about non-citizens? Can residents of Canada, Mexico or the United Kingdom take part in American class action litigation? What about people from European nations? Or South America? Can you join a proposed class action stateside if you live in Asian or African countries?
Let’s talk about it.
The short(ish) answer
U.S. courts are open to foreign litigants and nothing textually says foreign citizens cannot “join” or take part in American class action cases. But in practice, it is almost always true that you must be an American citizen in order to take part in a class action lawsuit filed in the United States.
The two-fold reason for this is related to the rules American courts must follow when weighing which consumers can and should be covered by a class action and the uncertainty as to whether a foreign court will uphold a U.S. court’s judgment or settlement terms (we’ll get into this more below). The two are related.
While there’s no hard-and-fast, etched-in-stone rule that expressly bars non-U.S. citizens from participating in class action suits, the path to getting there is usually cut off as a class action case wends its way through the American legal system.
So, where, exactly, is the juncture in the pipeline at which class actions involving non-U.S. citizens—cases called “transnational” class actions—tend to hit a snag? According to a scholarly article published in 2011 by the Hastings International and Comparative Law Review, this roadblock will ordinarily occur right around the stage in the lawsuit process known as “class certification.”
During the “class certification” stage, a court must not only consider who should be covered by a lawsuit but also, in many cases, whether a class action is the best way of handling the matter at hand. It’s at this stage that a court must consider whether the courts of foreign countries would recognize the class action judgment and it’s a crucial box that must be checked for the case to move forward.
Including foreign citizens could potentially lead to two “undesirable scenarios” as described by Hastings: a foreign court not recognizing a U.S. court’s judgment or individuals party to an unsuccessful suit stateside attempting to relitigate the case—or essentially try again—abroad in hopes of a better result.
The potential for either situation to take place is generally enough for a court to choose not to include foreign citizens in the group of people who could benefit from a U.S. class action. As Hastings succinctly put it:
The argument against certification is that the class action is not superior to other methods of adjudicating the dispute because foreign courts may not recognize the judgment.”
An example would be helpful here.
Agreed. Say you’re a Canadian citizen who lives in Toronto and wishes to take part in a proposed U.S. class action that alleges certain TRESemmé shampoos can cause hair loss and scalp damage. You’ve purchased the product for a number of years while living in Canada, believe you’ve experienced adverse effects and feel you’re owed some form of compensation.
The wrinkle in the eyes of American courts is that there is no guarantee that a Canadian court will see things the same way. Any shred of doubt in this area, no matter how seemingly minute, is enough to shut the door to non-U.S. consumers. In this completely made-up scenario, you might be better off consulting a class action attorney in Canada.
Why? As with most questions related to the American legal process, this requires a little more explanation.
The long(er) answer
While you don’t need to be a legal scholar to understand the specifics as to why non-citizens who live outside of the United States are usually precluded from taking part in stateside class actions, a refresher on how the American legal system works in contrast to how other nations’ courts operates is always helpful.
If you’ve spent any time reading about class action litigation, you know that the rules of America’s legal system allow for one party, be they an individual person or business, to represent in court a group of people or businesses who may have been affected by a product or the conduct of a particular company.
One law firm’s blog put it nicely by describing class action lawsuits as a predominantly American experience in that our legal system allows for one individual or group of individuals to file claims on behalf of a large number of people. This “large number of people” is called a “class,” and people who are included in, or “covered under,” the class are called “class members.”
Many legal systems around the world, however, operate (or operated until somewhat recently) on the premise that an individual cannot be bound to a judgment (or be party to a suit) unless they affirmatively participated in a lawsuit, that is, filed the case themselves or willingly consented to being involved. This stands in stark contrast to what’s called the “opt-out” system for a U.S. class action, which is what we mean when we say there’s nothing you need to do to join or take part in a class action; you only have to make a move if and when a settlement happens, or if you wish not to participate in the settlement and preserve your right to sue individually.
If a foreign court does not allow for this, things could get hairy with regard to enforcing an American court’s ruling. Say, for instance, a foreign country’s legal system works on a more rigid two-party plaintiff-defendant model. It’s possible that courts in that country may reject a U.S. court’s judgment or settlement as it pertains to a group of class members and find it binding to only those who were affirmative parties to the lawsuit. This would leave out those who found themselves as part of a “class” merely because they did not opt out of the litigation.
Diving deeper, a foreign court could, in theory, argue in the event of a U.S. class action ruling or settlement that a party must have had “actual knowledge” of the lawsuit and affirmatively consented to being bound by its judgment. In the United States, it’s not uncommon that people who are considered “class members” to a lawsuit are unaware that the case is going on until a settlement is reached. Therein lies the hiccup that might cause a court to exclude non-U.S. citizens from a class action.
Our legal system’s stance on whether foreign individuals can take part in an American class action was crystalized in a 2007 securities case—In re Vivendi Universal, S.A. Secs. Litig.—in which the court held that if a class action judgment in the United States goes unenforced in the foreign plaintiff’s own country, the individual could in theory try to relitigate a claim in that country and start the process all over again, effectively double-dipping. It’s not a stretch to imagine this happening, say, if foreign plaintiffs in a lawsuit lost the case in the United States or if someone missed a deadline to take part in a settlement. This issue came up again big time in Anwar v. Fairfield Greenwich Ltd., the case brought by investors worldwide who claimed to have been burned by convicted Ponzi scheme orchestrator Bernie Madoff.
To put a bow on the foregoing, the uncertainty surrounding whether a foreign court would enforce a judgment issued by or settlement reached in an American court, specifically with regard to “passive” individuals not directly involved in a suit’s filing, more or less precludes non-U.S. citizens from participating in class action cases filed in America.
I’m from outside of the United States and want to take part in (or file) a class action. What should I do?
As we went into at length above, not every country has legal procedures that allow for a group of people to be represented by one plaintiff or group of plaintiffs.
So, which countries allow for class action litigation, or lawsuits that amount to what we call a “class action” in the United States? Of the 190+ countries in the world, only a relative few have adopted or have seriously considered adopting class action or “aggregate litigation” procedures.
According to a 2009 study by Stanford University professor Deborah R. Hensler titled The Globalization of Class Actions: An Overview, at least 18 countries have some form of class action or aggregate litigation procedures. They are as follows:
Argentina Australia Brazil Canada Chile China Denmark Finland Indonesia Israel The Netherlands Norway Portugal South Africa Spain Sweden Taiwan The United States
The same study added that, as of publication, at least four more nations—Austria, England, France and Poland, plus the European Union—were reportedly debating the adoption of class action-like procedures. In early 2008, Italy adopted a class action statute that was suspended when the government changed hands in January of the following year. In addition to the list above, Germany, Japan and Switzerland also have procedures for aggregate litigation, though these are typically established by contractual agreements rather than court rules.
Today, while England does not permit the filing of class actions, the United Kingdom does have collective forms of litigation known as “group litigation orders.” France introduced class actions by way of a law passed as of March 17, 2014. As of 2019, Austrian law does not provide for collective or representative class action cases in the strict sense but allows for more than just one plaintiff to file a complaint and actions that have been brought individually to be joined together. Poland, via the Polish Class Actions Act, allows for the filing of class actions centered on consumer law cases concerning contractual disputes, unfair commercial practices, consumer credit or sales matters, product liability claims, claims of medical negligence, and other consumer-focused allegations.
If you’re interested in pursuing legal recourse, your best bet may be to speak with a class action attorney in your area. Many attorneys typically offer free consultations and have an understanding of the class action or representative action laws in a particular country and would be able to offer guidance on your legal rights, how they’ve been affected, and what you could potentially do next.
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