Copyright 2009, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on Competition, Antitrust & Foreign Investment, October 2009
On September 28, the Ontario Superior Court of Justice released an important decision certifying a class proceeding on behalf of both direct and indirect purchasers of hydrogen peroxide in an alleged price-fixing conspiracy. This is the first case in which a Canadian court has certified a contested class action involving indirect purchasers.
Why This Case Is Important:
- The case departs from decisions by other Canadian courts (e.g. Chada v. Bayer; Pro-Sys Consultant v. Infineon ("DRAM")), which have held that plaintiffs in an indirect purchaser case must put forward a workable methodology to demonstrate harm on a class wide basis. The court here was not prepared to look closely at the evidence of the competing experts on the issue of establishing class wide harm. The court ruled that at the certification stage it was ill-equipped to resolve competing expert opinions. It was sufficient for the court to "be satisfied that a methodology may exist for the calculation of damages."
- The Court cited the recent Ontario Court of Appeal decisions in Markson and Cassano, which held that section 24 of the Class Proceedings Act could provide a mechanism to calculate aggregate damages that otherwise would have to be determined on an individual basis. Section 24(1)(b) provides that aggregate damages are only available if 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. In the hydrogen peroxide case, the Court held that it is sufficient for purposes of section 24(1)(b) if potential liability can be established on a class-wide basis, even though entitlement to monetary relief may depend on individual assessments.
- The Court also rejected the defendants' argument that the proposed class was overly broad, including as it may virtually all individuals and businesses in Canada. The possibility that some class members may not have actually suffered a loss (i.e., if it could be shown that the alleged "supra competitive" price was not inflicted on every level of every distribution channel) was not fatal to the certification motion. The Court held that it is not necessary to show that every member of a proposed class suffered damage in order for the proposed class to be acceptable.
It is expected that leave to appeal this decision will be sought.
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