Lexpert US Guides

www.lexpert.ca | LEXPERT • December 2014 | 15 CLASS ACTIONS memory chips. e court unanimously (9-0) certifi ed the indirect purchaser classes in Microso! and Infi neon, but in a split decision (7-2) rejected certifi cation for both direct and indirect purchasers in Sun-Rype. e rejection of the indirect purchasers was based on the plaintiff s' inability to off er any evidence showing that at least two individuals (two being the minimum number for a class) could "self-identify" by proving they purchased a product that actually contained the impugned syrup, which tended not to be identifi ed on product labels. What is salient for the purposes of cross-border litigation in anti- trust cases, however, is that in all three cases the court rejected the 1977 US Supreme Court decision in Illinois Brick Co. v. Illinois, which has served to bar indirect purchaser claims in federal courts (but not in state courts) for more than three decades. "Despite recognizing that there were complicated issues of multiple and double recovery in allowing indirect purchaser claims to proceed, the SCC clearly believed that trial judges would be able to sort these things out," says Adam Fanaki in Davies Ward's Toronto offi ce, who represented the Canadian Chamber of Commerce, an intervenor in Sun-Rype. e upshot may be that US counsel may see Canada as a more favorable jurisdiction in which to initiate cross-border anti-trust class actions. "Everything is pointing in that direction," says Monique Jilesen of Lenczner Slaght in Toronto. Otherwise, while arbitration clauses ousting the right to bring class actions have found considerable favor in American courts, Canadian courts have taken a more circumspect approach to invalidating arbitration clauses. Indeed, some Canadian provinces, including Ontario, have prohibited such clauses in consumer contracts. " e message we're getting from our Supreme Court is very diff erent from the messages the Roberts court is sending, which may be part of a concerted eff ort at tort reform in the US as well as a conservative attack on the class-action mechanism," Martin says. Finally, the existing system appears to be evolving toward a welcome degree of maturity at an ever more rapid pace. Consider, for example, the vexing and ubiquitous issue of national class actions, with which the SCC at last seems poised to deal. In February 2014, the court granted leave to appeal the decision of the Manitoba Court of Appeal in Meeking v. Cash Store Inc. At issue is the scope of a provincial superior court's juris- diction in a class proceeding over residents of other provinces. " e SCC has recently shown more interest than ever in class actions and continues to grant leave in these types of cases," Yates says. Should the parameters of national class actions be institution- alized by way of Meeking or otherwise, it may well be that lawyers in Québec will benefi t most. In its recent decisions in Vivendi Canada Inc. v. Dell'Aniello and in Infi neon Technologies v. Options Consommateurs (part of the indirect purchaser trilogy), the SCC confi rmed that the bar for certifi cation in Québec is lower than in the common-law provinces. e decision came in the case of a retired Vivendi worker who sought authorization for a class action a er a new employer unilat- erally amended the company's private health insurance plan. e Québec Superior Court refused to authorize the class action, but the Québec Court of Appeal overturned that decision. A condition of bringing class actions in Québec is that at least one common question must exist that advances every class member's claim. e principle is known as "commonality." e SCC ruled that the requirement to advance the resolution of every class member's claims did not mean that the answer to the common question must be identical for each individual or benefi t them similarly. e court held that to "meet the commonality requirement of article 1003 (a) of the Québec Code of Civil Procedure, the applicant must show that an aspect of the case lends itself to a collective decision and that the parties will have resolved a not insignifi cant portion of the dispute. It is enough that the answer to the question does not give rise to confl icting interests among the members," write André Durocher and Enrico Forlini of Montréal in Fasken Martineau's Litigation & Dispute Resolution Bulletin. "In short, at the authorization stage, the approach to be taken to the commonality requirement in Québec civil proce- dure is a fl exible one." e SCC was also careful to point out that the commonality requirement in the Québec legislation was broader than corre- sponding provisions in Canada's other class action provinces. " e situation in Québec now is that plaintiff s are not required to show that class actions are the best procedure, or that any common questions have a common answer," says Chris- tine Carron in Norton Rose Fulbright Canada LLP's Montréal offi ce. "All plaintiff s need is a common question, which amounts to no more than a question of fact or law that's not negligible and somehow advances the resolution of the issues for class members." In Québec and elsewhere, however, all of this is ripe for signifi - cant legislative reform. A er all, Québec has 35 years' experience with class actions while the common-law provinces now have two decades of such experience. e fi rst concrete sign of this type of change came in January 2014, when the Law Commission of Ontario (LCO) announced a sweeping framework for an ambitious review of the province's class-action legislation. What is apparent from the LCO's announcement of its frame- work for class-action review is that tinkering is not on the agenda. While concerns about self-dealing by plaintiff s' counsel and the dangers of third-party funding permeated the announcement, the list of core issues include access to justice, whether Ontario should become a "no-costs" class-action regime, and the shape and sustainability of the Class Proceedings Fund. e list goes on to embrace other procedural, substantive and costs matters, including national classes, procedural effi ciency, certifi cation and evidentiary requirements, take-up rates, the cy-près doctrine, the interaction of common-law and statutory causes of action, and the treatment of waiver of tort. e LCO also cautions that "the list is far from exhaustive" and promises consideration of additional issues that arise as the project proceeds. It is of course too early to speculate about precisely what the LCO or similar bodies may do. But whether the discussion focuses on jurisprudential or legislative change, one thing is clear: American eyes should be watching the Canadian class-action scene very closely. Julius Melnitzer is a freelance legal-affairs writer in Toronto.

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