The Appeal Court rejected the findings of a lower court judge, who had found the circumstances of the move "analogous to abduction" and decided Ontario courts should have jurisdiction even though the child had never lived in Canada.
In overturning the earlier ruling, the appellate judges found Ontario Superior Court Justice Frances Kiteley had made several errors, including her finding the baby was in need of the court's protection.
"The circumstances of this case ... simply do not give rise to any protection concern," the Appeal Court ruling states.
"California's laws and procedures are similar to those of Ontario, parents have equal rights, and the best interests of the child is the principle upon which judgments pertaining to the child are made."
According to court documents, Mojdeh Razi, 36, an interior designer, was seven months pregnant when she left Toronto for California last November saying she was going to visit family.
After baby Audrey was born in mid-January, the father, waste-management entrepreneur Patrick Dovigi, 32, started custody and access proceedings in Ontario Superior Court.
Dovigi, a one-time NHL-drafted goalie, argued Ontario should have jurisdiction, saying he always believed Razi would be returning and Audrey would be parented in the province.
In her decision, Kiteley said it appeared Razi only decided to stay in California after Audrey's birth, and was "probably" in response to Dovigi's court action in Ontario.
"I do not agree that the mobility rights of a pregnant mother automatically determines jurisdiction over the child," Kiteley said.
"To decline to take jurisdiction in these circumstances would be to encourage a pregnant mother to depart from the original jurisdiction in circumstances that are arguably analogous to abduction."
The Women's Legal Education and Action Fund, which sought unsuccessfully to intervene in the appeal, said the case could have had "important repercussions" for the equality, autonomy, and mobility rights of pregnant women.
For one thing, the fund said Kiteley's ruling — if it had stood — would effectively have prevented a pregnant woman from moving without the consent of the father — an infringement on her rights.
"The requirement to obtain the father's consent would be particularly dangerous in situations where women are abused," the fund said.
"Further, if moving without consent is tantamount to abduction, women could find themselves subject to criminal prosecution if they leave the jurisdiction and refuse to return."
Dovigi referred calls for reaction to his lawyer, who declined to comment. Razi's lawyer did not immediately respond to a query seeking comment.