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The Rise And Fall Of Chadha v Bayer

Introduction

Although numerous price-fixing conspiracy class actions have been commenced in Canada, only a relatively small number have proceeded to a contested certification motion.  For those that have proceeded to a contested certification, one of the main challenges for plaintiffs has been overcoming the high evidentiary threshold established primarily by the Ontario Court of Appeal in Chadha v Bayer[1] and argued by defence counsel across the country.

Chadha was one of the first price-fixing conspiracy class actions in Canada to proceed to a contested certification.  In that case, the Ontario Court of Appeal set seemingly high evidentiary standards for establishing that fact of loss can be proven on a class-wide basis.  The Court of Appeal effectively imported the high evidentiary standards existing in the United States, without considering that, unlike the United States, there is no pre-certification discovery in Canada.

Recent Ontario and British Columbia authorities indicate that the evidentiary requirements in Chadha no longer apply.  The specific approach adopted in the various cases has differed somewhat, but the general trend reveals the use of more flexible and realistic standards to evaluate the certification criteria in price-fixing conspiracy cases.  If implemented consistently, these methods will simplify the evidence required at the certification stage.

In addition, some recent cases have gone so far as to indicate that common issues relating to the existence and scope of the conspiracy can serve as the basis for a certification order.  If these authorities are followed, this could eliminate the need to put forth expert economic evidence on the certification motion to show that fact of loss can be established on a class wide basis.  This would substantially reduce the costs of the certification motion, the time required to prepare for the certification motion, and the duration of the certification motion.  Taking into account the time and expenses incurred by all parties and the court, the costs of the certification motion can easily exceed half a million dollars.  In the more complicated cases, the expert fees alone might exceed half a million dollars.  These costs are incurred on a purely procedural motion that does not determine the substantive rights of the parties.

Court of Appeal’s findings in Chadha

Chadha related to allegations that the defendants conspired to fix the price of iron oxide used in concrete bricks.  The plaintiff sought to certify a class consisting entirely of indirect purchasers.  The proposed class consisted of owners of buildings which contained concrete bricks.  A key issue in Chadha was whether the indirect purchaser class members could establish that any overcharge was passed through a complicated chain of distribution to them on a class-wide basis, thereby establishing liability and allowing damages to be calculated on an aggregate basis.

The Court of Appeal held that the certification requirements were not satisfied.  The plaintiff’s expert assumed pass-through of the alleged illegal price increase and did not suggest a methodology for proving pass through or dealing with the other variables that affect the end price of real property.  Therefore, liability was not a common issue and the aggregate damages provisions of the Class Proceedings Act, 1992[2] could not be relied on.

In considering the expert evidence, the Court of Appeal adopted the evidentiary thresholds established by a U.S. court in In Re Linerboard Antitrust Litigation.[3]  As summarized by the Court of Appeal, Linerboard held that loss could be proven on a common basis for all class members using two types of evidence.  The first type of evidence is expert evidence regarding the presumed common impact of price-fixing.  This would involve showing that the price of the relevant product was higher than it would have been under competitive conditions. The second type of evidence was “expert empirical investigations”.  In Linerboard, the plaintiffs’ experts testified that advanced economic models could be used to establish a class-wide impact and supported their opinion with “charts, studies, company records, industry data and articles from leading trade publications”.[4]

These evidentiary requirements are not consistent with the low evidentiary standard set by the Supreme Court of Canada.  The Supreme Court of Canada requires plaintiffs to show “some basis in fact” for each of the certification requirements, other than the requirement that the pleading disclose a cause of action.  The evidentiary burden is not “onerous” and requires only a “minimum evidentiary basis”.[5]

The evidentiary requirements are also not consistent with the fact that in Ontario there is very limited pre-certification discovery under the Ontario Rules of Civil Procedure.[6]  The expert opinion in Linerboard was obtained only with the benefit of extensive defendant discovery evidence, including detailed sales data produced by the defendants in advance of certification.

Decisions issued subsequent to Chadha

Markson and Cassano

A few years after issuing its decision in Chadha, the Ontario Court of Appeal again considered the aggregate damages provisions in Markson v MBNA Canada Bank[7] and Cassano v Toronto-Dominion Bank,[8] both of which were decided outside the price-fixing conspiracy context.  These cases have been described as signalling “a different approach to be taken to certification whether it be in breach of contract or other types of cases.”[9]

Markson and Cassano relied on the aggregate damages provisions of the Class Proceedings Act, 1992 to arrive at a result that was consistent with the objectives of access to justice and behaviour modification.  The approach adopted by the Court of Appeal is transferrable to the price-fixing context and would permit recovery in circumstances where it would be impractical or inefficient to determine loss and/or damages on an individual basis.

Markson involved an allegation that the defendant received interest on cash advances from its credit cards that violated section 347 of the Criminal Code[10] (illegal interest rates).  Examining each transaction individually would have been prohibitively expensive.  If this was required, the result would be to allow the allegedly illegal conduct of the defendant to continue and leave the defendant’s customers without compensation for the violations.  The essence of the question before the Court of Appeal was whether a class proceeding is appropriate where all members of the class are at risk of being charged a criminal interest rate and thus entitled to declarative and injunctive relief, but only some of the members were actually harmed and thus entitled to damages and restitution.

The plaintiffs sought to rely on the aggregate damages provisions of the Ontario Class Proceeding Act, 1992:

23. (1) For the purposes of determining issues relating to the amount or distribution of a monetary award under this Act, the court may admit as evidence statistical information that would not otherwise be admissible as evidence, including information derived from sampling, if the information was compiled in accordance with principles that are generally accepted by experts in the field of statistics.

24. (1)  The court may determine the aggregate or a part of a defendant’s liability to class members and give judgment accordingly where,

(a)   monetary relief is claimed on behalf of some or all class members;

(b)   no questions of fact or law other than those relating to the assessment of monetary relief remain to be determined in order to establish the amount of the defendant’s monetary liability; and

(c)   the aggregate or a part of the defendant’s liability to some or all class members can reasonably be determined without proof by individual class members.

(2)  The court may order that all or a part of an award under subsection (1) be applied so that some or all individual class members share in the award on an average or proportional basis.

(3)  In deciding whether to make an order under subsection (2), the court shall consider whether it would be impractical or inefficient to identify the class members entitled to share in the award or to determine the exact shares that should be allocated to individual class members.[11]

The Court of Appeal considered whether the plaintiffs had satisfied the requirements of section 24.  Conditions (a) and

(c) posed no difficulty.  Monetary relief was claimed on behalf of the class and statistical sampling could be used to determine the aggregate or part of the defendant’s liability without proof of individual claims.[12]

The analysis with respect to condition (b) was more complicated.  The defendant submitted that liability would turn on individual assessments and therefore resolution of the common issues concerning the alleged breach of s. 347 and breach of contract could not establish its liability to any particular class member.  The Court of Appeal rejected this notion, holding that “If the defendant is correct, the kind of action sought to be pursued in this case will almost never be capable of certification.  Large institutions allegedly receiving large amounts of illegal profits from millions of small transactions will effectively be immunized from suit.”[13]

The Court of Appeal held that condition (b) had to be interpreted in light of section 24(3):

Section 24(3) provides, in part, that, “In deciding whether to make an order under subsection (2), the court shall consider whether it would be impractical or inefficient to identify the class members entitled to share in the award”.  The subsection therefore contemplates that an aggregate award will be appropriate notwithstanding that identifying the individual class members entitled to damages and determining the amount cannot be done except on a case-by-case basis, which may be impractical or inefficient.  Condition (b) must be interpreted accordingly.  In my view, condition (b) is satisfied where potential liability can be established on a class-wide basis, but entitlement to monetary relief may depend on individual assessments.  Or, in the words of s. 24(1)(b), where the only questions of fact or law that remain to be determined concern assessment of monetary relief. (emphasis added)[14]

Importantly, Markson held that only potential liability had to be established on a class-wide basis in order to satisfy the conditions of s. 24:

In the context of this case, if the plaintiff can establish that the defendant administered its cash advances in a manner that violated s. 347 and/or breached its contract with its customers, it will have established potential liability on a class-wide basis.  Each member of the class would be entitled to declaratory and injunctive relief.  The only matter remaining would be the application of the decision on the common issues to the specific account activity of each class member to determine that class member’s entitlement to monetary relief.  Section 23 can be used to calculate the global damages figure. Section 24 can be used to find a way to distribute the aggregate sum to class members.  It may be that in the result some class members who did not actually suffer damage will receive a share of the award.  However, that is exactly the result contemplated by s. 24(2) and (3) because “it would be impractical or inefficient to identify the class members entitled to share in the award”.[15]

In Cassano, a case dealing with allegedly unauthorized fees charged to credit card holders, the Court of Appeal made it clear that Markson applies where potential liability is established: “In the present case, unlike in Markson, the determination of the common issue relating to the breach of contract question will determine liability to all members of the class, with the only possible remaining issue being that of damages.”[16]

Cassano rejected the defendant’s arguments that the costs of calculating damages would be prohibitive, holding that:

It would hardly be of sound policy to permit a defendant to retain a gain made from a breach of contract because the defendant estimates its costs of calculating the amount of the gain to be substantial.  A principal purpose of the CPA is to facilitate recovery by plaintiffs in circumstances where otherwise metitorious claims are not economically viable to pursue.  To give any effect to the economic argument advanced by TD here would be to pervert the policy underpinning the statute.[17]

Lee Valley Tools Ltd v Canada Post Corporation,[18] another case dealing with unauthorized fees, followed Markson and Cassano holding that potential liability would be established if there was a finding that the fees were improper:

In Markson, the Court of Appeal held that the condition in section 24(1)(b) is satisfied where potential liability can be established on a class-wide basis, but entitlement to monetary relief may depend on individual assessments. Here, if there were a finding that the shipping charges were in violation of the Act, all such fees would be improper and the only remaining question would be the assessment of monetary relief. This satisfies s. 24(1)(b).[19]

In Sauer v Canada (Minister of Agriculture),[20] the plaintiff brought a claim against the defendants in negligence.  The court held that there is potential liability to all class members if the plaintiff can establish the elements of duty and breach.  Relying on Markson, the court held that this was sufficient to trigger the aggregate damages provisions, notwithstanding that causation and damages are requisite elements of a claim in negligence.  The court held that this presents no unfairness to the defendant who may dispute liability when it delivers its defence.[21]  In denying leave to appeal, the Divisional Court confirmed that the aggregate provisions are triggered where potential liability could be shown on a class-wide basis.[22]

Price-fixing conspiracy certification decisions post-Chadha

There have been a number of price-fixing certification decisions issued in Ontario over the past two years that have departed significantly from Chadha.  These decisions take a more flexible approach to the evidence required at the certification stage and are consistent with the approach adopted by the Ontario Court of Appeal in Markson and Cassano.

In Axiom Plastics Inc v E I DuPont Canada Co,[23] the Ontario Superior Court of Justice distinguished Chadha on the basis that the proposed class consisted of direct purchasers, such that class members do not need to rely on pass-through to establish harm and liability.  The court was satisfied on “basic economic principles” that persons required by their customers to buy DuPont resins would have been injured by the alleged vertical price-fixing conspiracy.[24]

In affirming the decision, the Divisional Court[25] held that the motion judge identified the distinguishing factors of Chadha.  The Divisional Court was not “persuaded that Chadha establishes the standard of evidence required in a motion for certification such as this where the class includes a discrete and readily identifiable number of direct purchasers”.[26]

The recent decision of the Ontario Divisional Court in 2038724 Ontario Ltd v Quizno’s Canada Restaurants Corp,[27] a case based on the price maintenance provisions of the Competition Act (which have now been repealed), the tort of conspiracy and breach of contract, adopted a pragmatic approach to class-wide loss and aggregate damages:

  1. The Divisional Court held that whether there was a breach of section 61 of the Competition Act was a significant component of each class member’s claim and would advance each class member’s claim.  Breach of section 61 is a common issue.[28]
  2. The Divisional Court held that whether the defendants engaged in a civil conspiracy is a common issue.  The first four constituent elements of conspiracy, which relate solely to the defendants’ conduct,[29] are common issues that would advance each class member’s claim and avoid duplication of fact finding and legal analysis.[30]
  3. The Divisional Court held that the common issues and preferable procedure requirements would be satisfied even if proof of loss could not be established on a class-wide basis.  Declaratory relief in relation to the breach of the Competition Act, liability for breach of contract and, if permitted, breach of the statutory duty of fairness would be common issues.  These common issues are “central components of the entire litigation” and a resolution of these issues would substantially advance the litigation.[31]
  4. In concluding that fact of loss was a common issue, the Divisional Court referenced the holding in Axiom that, where required to purchase the relevant product, “basic economic principles” could be used to establish loss on a class-wide basis, but did not engage in any analysis of the expert evidence relating to fact of loss.[32]  Rather, the Divisional Court indicated that the surrounding circumstances provided some basis in fact that loss is a common issue.  The surrounding circumstances that existed were: (a) homogeneous relationships between the class members and defendants; (b) commonality of the products purchased; (c) commonality of the prices paid for the products; and (d) commonality of the underlying franchise contracts and distribution agreements.[33]  The Divisional Court’s finding in this regard is noteworthy in that it indicates that, in at least some circumstances, fact of loss can be established as a common issue without resort to expert economic evidence.
  5. Noting that the plaintiffs were seeking declaratory relief and liability for breach of the Competition Act and breach of contract are common issues, the Divisional Court held that the plaintiffs were entitled to rely on the aggregate damages provisions.[34]
  6. In assessing the expert’s proposed methodology for calculating aggregate damages, the Divisional Court held that “[t]he plaintiffs on a certification motion will meet the test of providing some basis in fact for the issue of determination of loss to the extent that they present a proposed methodology by a qualified person whose assumptions stand up to the lay reader.  Where the assumptions are debated by experts, these questions are best resolved at a common issues trial.”[35]

The Court of Appeal affirmed the Divisional Court’s decision certifying the action.[36]  Notably, the Court of Appeal did not reference its earlier decision in Chadha, despite the fact that Chadha was argued by the defendants on appeal.  The absence signals the demise of Chadha as good law.

The Court of Appeal affirmed the Divisional Court’s holding that a finding as to whether the price maintenance provisions of the Competition Act were breached is “itself an appropriate common issue, which advances the litigation.”[37]  The Court of Appeal similarly agreed with the Divisional Court that the first four elements of the tort of conspiracy would advance each class member’s claim and avoid duplication of fact finding and legal analysis.[38]

This conclusion is significant in that it provides for the possibility of certifying a price-fixing conspiracy without showing that fact of loss can be proven on a class-wide basis.  In terms of the statutory claim, an analogous finding that the defendants breached s. 45 of the Competition Act is an appropriate common issue that would advance the litigation.

The conclusion is consistent with the leading authorities on the common issues requirement.  In Western Canadian Shopping Centres,[39] the Supreme Court of Canada held that the commonality question should be approached purposively.  The underlying question is whether certification would avoid duplication of fact-finding or legal analysis.  It is not necessary that the common issues predominate over the individual issues nor that the resolution of the common issues be determinative of class members’ claims.  It is sufficient that the class members’ claims share a “substantial common ingredient”.[40]  In Cloud v Canada (Attorney General),[41] the Ontario Court of Appeal held that an issue can “constitute a substantial ingredient of the claims and satisfy s. 5(1)(c) even if it makes up a very limited aspect of the liability question and even through many individual issues remain to be decided after its resolution.”[42]

The Court of Appeal, in Quiznos, agreed with the Divisional Court’s findings with respect to the aggregate damages provisions.  The Court of Appeal held that the Divisional Court correctly found that breach of s. 61(1) of the Competition Act and breach of contract could be established without proof of loss.  These findings would entitle class members to declaratory relief and therefore enable them to rely on the aggregate damages provisions.[43]  This conclusion is consistent with the holdings in Markson and Cassano that the aggregate provisions are available upon a finding of potential liability.  Applying the same reasoning in the price-fixing conspiracy context would mean that a finding of a breach of s. 45 of the Competition Act would entitle class members to declaratory relief and enable them to rely on the aggregate damages provisions.

In Irving,[44] the certification judge similarly held that a determination of the common issues relating to the existence and scope of the conspiracy could be made without reference to the individual class members and would significantly advance the litigation.[45]  On the leave to appeal decision, the court did not specifically comment on this aspect of the certification decision.

In Irving, the certification judge held that the Markson and Cassano decisions “signal a different approach to be taken to certification whether it be in breach of contract or other types of cases.”  The plaintiffs need only establish “potential liability” (i.e., that the defendants acted unlawfully) in order to trigger the aggregate assessment provisions of the Class Proceedings Act, 1992.  Further, Markson “establishes that not every class member need have suffered a loss and so it is not necessary to show damages on a class-wide basis.”[46]

The certification judge went on to consider the expert evidence regarding fact of loss and aggregate damages.  The court reiterated that it is ill-equipped at the certification stage to resolve competing expert opinions.  The court held that at the certification stage it “need only be satisfied that a methodology may exist for the calculation of damages.”  The plaintiffs’ expert attempts to postulate a methodology.  Whether that methodology will be accepted at trial is another issue.[47]

On the leave to appeal decision,[48] the court denied leave to appeal, but held that Chadha remained good law.[49]  The court held that the plaintiffs could not rely on the aggregate damages provisions to prove class-wide injury or avoid proof of class-wide injury.[50]  The court referred to passages from Markson wherein the Court of Appeal specifically stated that its decision did not offend the Court of Appeal’s earlier holding in Chadha and confirmed the Court’s holding that the aggregate provisions are only available once liability has been established and provide a method to assess damages, not the fact of damage.[51]

The court held that, unlike the expert in Chadha, the plaintiffs’ expert analyzed the market and, relying on economic theories, industry reports, pricing information and other empirical evidence, concluded that the conspiracy would have impacted all direct purchasers.  With respect to at least two major applications, he concluded that a regression analysis could be used to determine pass through to indirect purchasers.[52]

The court found that the plaintiffs had shown a credible and plausible method to establish loss and damage on a class-wide basis.  That the defendants’ challenged the validity of that opinion did not lead the Court to the conclusion that the opinion should not be accepted at the certification stage.  The Court opined that at certification, a judge is not obligated to make any determination on the merits of the expert opinions.[53]

The leave to appeal decision was released prior to the Court of Appeal decision in Quizno’s.  To the extent that there are inconsistencies between the leave to appeal decision and Quizno’s, the governing law is that which was enunciated in Quizno’s.

In British Columbia, the courts have declined to apply Chadha and have adopted an approach whereby statistical evidence can be used to prove both fact of loss and quantum of damages.

In Pro-Sys Consultants Ltd v Infineon Technologies AG,[54] the plaintiff asserted a tort claim for civil conspiracy to fix prices and intentional interference with economic interests, damages pursuant to section 36 of the Competition Act, and restituionary awards in unjust enrichment, constructive trust and waiver of tort.  The British Columbia Court of Appeal overturned the certification judge’s decision denying certification.  The Court of Appeal indicated that the plaintiff might be able to establish that the defendants benefited from their wrongful conduct and thus prove liability without resort to economic evidence.  Three defendants had pleaded guilty in the United States to price-fixing and their plea agreements indicated that the amount of the fine was calculated based on the gross pecuniary gain derived from the criminal conduct.  Proof of these admissions would establish liability in the resitutionary actions.[55]

The plaintiff also argued that it could use common statistical evidence to prove that the defendants obtained a wrongful gain from their unlawful conduct.  The plaintiff proposed to use economic evidence to show that the defendants benefited from the conspiracy, thus establishing liability, and, at the same time, the amount of the benefit.[56]

This approach was accepted in Knight v Imperial Tobacco Canada Ltd.[57]  In that case, the British Columbia Court of Appeal affirmed the certification of an aggregate award as a common issue for disgorgement of the defendants’ wrongful conduct without an antecedent liability finding.  Rather, the aggregate assessment would establish concurrently both that the defendant benefited from its wrongful conduct and the extent of the benefit.[58]

Infineon held that Chadha was not the relevant authority in British Columbia:

I digress to note that much argument was addressed to us at the hearing of this appeal concerning the state of the law in Ontario in regard to whether aggregate monetary awards can be the subject of a common issues trial.  In particular, there was disagreement as to whether the decisions in Chadha and Markson v. MBNA Canada Bank, 2007 ONCA 334, 282 D.L.R. (4th) 285, are in conflict and, if so, as to which case correctly states the law in that province.  The chambers judge was drawn into that dispute and discussed it in his reasons.  As I have concluded that Knight settles the point in this province, I do not consider it necessary to address the submissions made concerning those cases.[59]

The plaintiff’s expert proposed to use a multiple regression analysis to establish pass-through. The Court of Appeal held that the certification judge subjected the plaintiff’s expert evidence to rigorous scrutiny and weighed it against the expert evidence of the defendants.  In doing so, the certification judge failed to adequately consider that the plaintiff’s expert evidence was “necessarily preliminary” since the plaintiff does not yet have access to the evidence necessary for the expert to perform his analysis.  The Court of Appeal held that this was “fundamentally unfair” at the pre-certification stage, when the plaintiff has not had discoveries and an adequate opportunity to marshal the evidence required by the expert for his analysis.  At the certification stage, the plaintiff is only required to show a “credible or plausible methodology” for establishing pass-through and aggregate damages.  The evidence of the plaintiff’s expert satisfied this low threshold.[60]

As the Court of Appeal’s reasons focused largely on the restitutionary claims, clarification was sought on the terms of the certification order.  At that time, the Court of Appeal confirmed that the common issues relating to the tort of conspiracy and interference with economic interests, and damages pursuant to section 36 of the Competition Act are also certified.[61]

In Pro-Sys Consultants Ltd v Microsoft Corp,[62] the British Columbia Supreme Court considered the impact of the British Columbia Court of Appeal decision in Infineon.  Microsoft argued that Infineon could not be taken as authority for using the aggregate damage provisions to establish harm (i.e., liability) because Infineon was predicated on the existence of guilty pleas.  The court did not accept this argument.  Although it was true that the Court of Appeal referenced the guilty pleas, the guilty pleas were made only with respect to direct purchasers and are therefore irrelevant to the indirect purchaser claims.[63]  The Court of Appeal accepted the methodology of the plaintiff to use a “but for” analysis to show that the defendants benefited from the conspiracy; thus establishing both liability and the amount of the benefit.  The court held that the plaintiff did not need to rely on the aggregate damages provisions to prove that the defendant profited from the alleged wrongful conduct or the amount of the profit.  The aggregate provisions do not purport to be a complete code for the admissibility of statistical evidence in class proceedings, nor do they render otherwise admissible evidence as inadmissible.  Statistical evidence, incorporated in an expert report, is properly admissible to prove profits.  With respect to the damage claim (as opposed to the restitutionary claim), the aggregate provisions are not engaged.  Pro-Sys will use economic evidence to attempt to show harm to all class members, i.e., that all class members overpaid for software.[64]

The Court disagreed with the plaintiff’s interpretation of Markson – that in order to rely on the aggregate provisions, it is sufficient to show a plausible methodology of demonstrating harm to some class members.  Unlike in Markson, in Microsoft there is an issue with respect to whether the alleged overcharge was passed onto class members at all.  The court noted that Infineon did not address this issue directly.  However, based on the arguments and evidence advanced in that case, it would seem that the Court of Appeal must have accepted that for certification of the damages claims, a method of showing harm to all class members need not be demonstrated and that the aggregate provisions can be used to establish liability.  The court reiterated that the aggregate provisions are not engaged when the plaintiff seeks to use expert evidence to show that all class members suffered harm.  Expert evidence would be admissible apart from the aggregate provisions.[65]  The court went on to conclude that the plaintiff had put forth a plausible methodology for proving class-wide loss.[66]

In Sun-Rype Products Ltd v Archer Daniels Midland Company,[67] the court did not engage in a debate regarding the authoritativeness of Chadha and Markson.  The court held that at the certification stage, the plaintiff had to provide “credible and plausible methodology” for showing class-wide harm and pass-through.[68]

Conclusion

The law with respect to certification in price fixing cases has evolved substantially in recent times. The Court of Appeal decision in Chadha no longer provides the road map for certification in these cases and the high evidentiary threshold which was established in Chadha has been replaced by a more flexible and realistic evidentiary standard.

In British Columbia, plaintiffs must only show, through expert economic evidence, that a “credible and plausible methodology” exists to prove fact of loss and quantum of damages on a class-wide basis.

In Ontario, it appears possible to certify a price-fixing class action based on common issues relating to the nature and scope of the conspiracy.  It also appears possible to rely on the aggregate damages provisions upon a finding of potential liability, namely a breach of section 45 of the Competition Act.  However, until a more substantive body of caselaw is developed, it is likely that plaintiffs will continue to put forth some expert evidence, although the scope of that expert evidence remains unclear and will likely be driven by the specific facts of each case.

While the law with respect to certification has been relaxed in these cases, the requirement for plaintiffs to overcome the economic complexities of price-fixing conspiracy class actions, with the associated costs of doing so, has not been eliminated.  Rather, the necessity of overcoming these complexities has simply been delayed until a later stage of the litigation. As the certification requirements are relaxed and the law becomes more certain, and in keeping with a growing trend in these cases, it is expected that the extent to which price-fixing conspiracy class actions are actively litigated beyond the certification stage will increase.  Defendants will no longer be able to leverage certification risk to achieve an economic settlement, and plaintiffs will no longer be prepared to entertain early resolution based on certification risks alone.  Plaintiffs’ decisions to entertain early resolution will be driven primarily by the liability analysis.


[1] [2003] OJ no 27 (CA), leave to appeal to SCC refused, [2003] SCCA no 106 [Chadha].
[2] Hollick v Toronto (City), [2001] SCJ no 67 at paras 21, 24-25 [Hollick].
[3] 203 FRD 197 (ED Pa 2001); aff’d 305 F3d 145 (CA3 Pa 2002) [Linerboard].
[4] Chadha, supra note 2 at para 36.
[5] Hollick, supra note 3 at paras 21, 24-25.
[6] RRO 1990, Reg 194.
[7] [2007] OJ no 1684 (CA), leave to appeal to SCC refused, [2007] SCCA no 346 [Markson].
[8] [2007] OJ no 4406 (CA), leave to appeal to SCC refused, [2008] SCCA no 15 [Cassano].
[9] Irving, supra note 1 at para 118.
[10] RSC 1985, c C-46.
[11] SO 1992, c 6.
[12] Markson, supra note 8 at para 45.
[13] Ibid at para 46.
[14] Ibid at paras 47-48.
[15] Ibid at para 49 [emphasis added].
[16] Supra note 9 at para 42 [emphasis added].
[17] Ibid at para 49.
[18] [2007] OJ no 4942 (SCJ).
[19] Ibid at para 40 [emphasis added].
[20] 2008 CarswellOnt 5081 (SCJ), leave to appeal refused, 2009 CarswellOnt 680 (Div Ct).
[21] Ibid at paras 43, 52-53.
[22]  Ibid at para 50.  See also: Grant v Canada (Attorney General), [2009] OJ no 5232 (SCJ) at paras 111-113, holding that Markson and Cassano do not apply where proof of damage is a requisite element of the cause of action.  However, the persuasiveness of this holding is open to debate, as the authorities relied upon by the court in reaching its conclusion have either been overturned or overtaken.
[23] [2007] OJ no 3327 (SCJ), aff’d [2008] OJ no 1973 (Div Ct).
[24] Ibid at para 137.
[25] Supra note 24.
[26] Ibid at para 52.
[27] (2008), 89 OR (3d) 252 (SCJ), rev’d [2009] OJ no 1874 (Div Ct), rev’d [2010] OJ no 2683 (CA) [Quizno’s].
[28] Ibid at para 75.
[29] The elements of the tort of conspiracy are as follows: (1) the defendants entered into an agreement to fix prices; (2) the conduct was unlawful; (3) the defendants acted in furtherance of the agreement; (4) the defendants ought to have known that the conspiracy would likely harm class members by forcing them to pay inflated prices; and (5) the conspiracy caused harm to class members.
[30] Quizno’s, supra note 28 at para 81.
[31] Ibid at para 141.
[32] Ibid at para 96.
[33] Ibid at para 95.
[34] Ibid at para 123.
[35] Ibid at para 102.
[36] Supra note 28.
[37] Ibid at para 43.
[38] Ibid at para 49.
[39] Western Canadian Shopping Centres Inc v Dutton, [2001] 2 SCR 534.
[40] Ibid at para 39.
[41] (2004), 73 OR (3d) 401 (CA).
[42] Ibid at para 53.
[43] Ibid at para 55.
[44] Irving, supra note 1.
[45] Ibid at para 114.
[46] Ibid at para 118.
[47] Ibid at para 143.
[48] Irving, supra note 1.
[49] Ibid at para 39.
[50] Ibid at para 45.
[51] Ibid at paras 41-43.
[52] Ibid at para 54.
[53] Ibid at para 62.
[54] Pro-Sys Consultants Ltd v Infineon Technologies AG, [2008] BCJ no 831 (SC), rev’d [2009] BCJ no 2239 (CA), leave to appeal refused, [2010] SCCA no 32 [Infineon].
[55] Ibid at para 33.
[56] Ibid at para 34.
[57] [2006] BCJ no 1056 (CA).
[58] Infineon, supra note 55 at paras 35-36.
[59] Ibid at para 40.
[60] Ibid at paras 67-68.
[61] Pro-Sys Consultants Ltd v Infineon Technologies AG, [2010] BCJ no 293 (CA).
[62] Pro-Sys Consultants Ltd v Microsoft Corp, [2010] BCJ no 380 (SC) [Microsoft].
[63] Ibid at paras 112-115.
[64] Ibid at para 116-120.
[65] Ibid at paras 122-127.
[66] Ibid at para 164.
[67] [2010] BCJ no 2010 (SC).
[68] Ibid at para 163.
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