Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
Issue link: https://digital.carswellmedia.com/i/1484268
12 www.lexpert.ca Feature Maple Leaf Foods arose aer the company recalled its products due to contamination and created an approximately eight-week meat shortage for franchisees of Mr. Sub restaurants. Maple Leaf and Mr. Sub were under an exclusive supply agreement. e franchisees brought a class action claiming economic loss and reputational injury, seeking compensation for loss of past and future sales, profits, capital value, and goodwill. e Ontario Superior Court certified the class action, and both sides sought summary judgment. e motion judge found Maple Leaf owed the franchi- sees a duty of care, but the Ontario Court of Appeal reversed that decision. An SCC majority then confirmed the Court of Appeal's ruling. "In Maple Leaf Foods, the Supreme Court came back and said: No, we meant what we said in Winnipeg Condominium so many years ago," says Woodin. "You really can't sue for shoddy products. We're not here to enforce a contract with a manufacturer that you don't want to buy from again because you don't think you got good value for your money. We are really here to deal with safety issues in the context of negligence claims. And if you don't have that, and you can't prove an imminent risk of harm, then we're not going to certif y the case." Christopher Richter, a partner at Torys LLP in Montreal, says Bourbonnière v. Yahoo! Inc., 2019 QCCS 2624 and Setoguchi v. Uber BV, 2021 ABQB 18 demonstrated the courts taking a stricter approach in class actions in the privacy realm where the claim lacks tangible harm. Bourbonnière v. Yahoo! Inc. was the Quebec class action following the Yahoo! data breach exposing the personal informa- tion of at least 500 million user accounts in 2014 – part of a series of security breaches the company experienced over several years. Quebec Superior Court Justice Chantal Tremblay refused to authorize the class action partly because the represen- tative plaintiff did not show that she had experienced any out-of-pocket costs or any harm that rose above normal inconve- niences and frustrations. A failure to show harm or loss also led Alberta's Court of King's Bench Justice John Rooke to deny certification in Setoguchi v. Uber. Hackers attacked Uber in 2016 and accessed the names, phone numbers, and emails of around 800,000 Canadian customers. e hackers demanded a ransom, and Uber paid $100,000 for a guarantee that they would destroy the data. But there appeared to be "no evidence of actual first instance or post-breach harm … only speculation about a future possibility of loss or harm," said Justice Rooke. "is area is moving quickly," adds Richter, noting that courts authorized two privacy class actions in Quebec in August. In Sciscente v. Audi Canada Inc., 2022 QCCS 2911 and Zuckerman v. MGM Resorts International, 2022 QCCS 2914, the plaintiffs argued there was actual harm because the breach forced them to purchase a credit monitoring service to guard against misuse of their personal information. "It remains to be seen whether such alle- gations of fact at the authorization stage will give plaintiffs anything more than a tempo- rary procedural victory," says Richter. In Ontario, tougher certification is also the result of the province's 2020 amendments to the Class Proceedings Act. "Practically speaking ," says MacKinnon, "one of the big changes is that it permitted defendants to bring motions before certi- fication to get rid of the case at an early stage. at's a really big deal because until the action is certified, the plaintiff 's lawyers are bearing a lot of risk. So, if a defendant can get rid of the case at an early stage before it's certified, then there's really no possibility for the plaintiff to be able to get it settled. ey lose a lot of leverage." Aer the amendments, she says many Ontario class actions migrated to BC, which is perceived as a more plain- tiff-friendly jurisdiction. But judges in BC followed the trajectory of Alberta and the rest of the country by requiring "some meat "The disclosure gets made. The class action gets started. But then the court says, where's the harm" Granting disgorgement for negligence without proof of damage would result in a remedy arising out of legal nothingness, and would be a radical and uncharted development Cheryl Woodin BENNETT JONES LLP Justice Russell Brown SCC