Law Times

lAw Times • April 16, 2012 FOCUS Lawyers eager for SCC guidance on indirect purchasers Antitrust class actions BY JULIUS MELNITZER For Law Times T to hear appeals from the British Columbia Court of Appeal' court is whether indirect pur- chasers — those who bought the product after the initial purchase from those involved in the anti- competitive conduct — have a class action remedy under s. 36 of the Competition Act. The act allows for a private right of action to "any person" who has suffered a loss as a result of criminal misconduct. By a 2-1 majority in each case, the Court of Appeal held that such class actions weren't available to indirect purchasers. The decisions have so altered the landscape for competition class actions in Canada that, if upheld, they may well invite legislative intervention. The key holding of the Court of decisions in Pro-Sys Consultants Ltd. v. Microsoft Corp. and Sun- Rype Products Ltd. v. Archer Daniels Midland Co. The core issue before the top On Dec. 1, 2011, the court agreed s twin 'Indirect purchasers tend to comprise the class or at least a majority of the class in most competition class actions,' says Christopher Naudie. looking at surprise me if the Competition Bureau sought to intervene on the application for leave to appeal and argue that s. 36 is intended as a mechanism of deterrence under the Competition Act." Adding to the confusion just "Policy-makers in Ottawa are this and it wouldn't Appeal was that indirect purchasers have no remedy under s. 36. The decisions adopt the long-standing position of the U.S. Supreme Court as expressed in Illinois Brick Co. v. Illinois in 1977. But they seem inconsistent with the November 2010 decision of a different panel of the B.C. Court of Appeal in Pro-Sys Consultants Ltd. v. Infineon Technologies AG and various Ontario Superior Court rulings, including the 2009 matter of Irving Paper Ltd. v. Atofina Chemicals Inc. All of those rulings certified actions that included indirect purchasers. "These decisions could be a crippling development for the plaintiffs' class action bar, Christopher Naudie Hoskin & Harcourt LLP. "Indirect purchasers tend to comprise the class or at of Osler majority of the class in most com- petition class actions." That' least a originate in global conspiracy pros- ecutions where foreign manufac- turers have fixed the prices of ingre- dients in products that tend to go through a long chain of distribution before they reach Canada. "So the harm to someone in s because most such cases Canada is usually indirect," says Naudie. At the same time, determin- ing whether indirect purchasers should have a right of private action gives rise to significant policy considerations. "The decision does strike at the heart of deterrence as a justi- fication for the existence of class actions," says Naudie. " says he Supreme Court is poised to determine the fate and scope of antitrust class actions in Canada. and, if it grants leave, to hear the appeal at the same time as the B.C. cases. The Supreme Court hasn't yet ruled on the application. While it' to predict the outcome at the s difficult, of course, Supreme Court, it's nevertheless noteworthy that the court denied leave to appeal from the B.C. Court of Appeal' decision in favour of indirect pur- chasers in Pro-Sys v. Infineon. Let us open right door for you the two weeks before the Supreme Court granted leave in Pro-Sys and Sun-Rype, the Quebec Court of Appeal adopted the reason- ing of the minority judge in the B.C. cases and decided the case of Option Consommateurs v. Infineon Technologies in favour of indirect purchasers. "There' Option Consommateurs is a plain- tiff-friendly decision," says David Stolow of Davies Ward Phillips & Vineberg LLP. The decision took many mem- the Quebec class action s no question that bers of defence bar by surprise. "The plaintiffs' case was poorly drafted and the Court of Appeal said so, of Oslers. "So the decision was a little unnerving. been filed in the Quebec case. "In light of the Supreme Court In any event, leave to appeal has " says Sylvain Lussier, also " having granted leave in the B.C. cases, I don't see them refusing leave in Option Consommateurs," says Lussier. The B.C. and Quebec cases cen- We specialize in Employment and Labour Law in Canada Kuretzky Vassos Henderson is a leading employment and labour law fi rm situated in the heart of Toronto. We are comprised of eleven lawyers, all of whom specialize in the area of employment and labour law. We act for many prominent public and private sector employers as well as for individuals. 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On Jan. 16, the defendants in the s an Quebec case filed an application for leave to appeal to the Supreme Court. On Feb. 23, they asked the court to expedite the application ORDER # 982769 $89 Softcover approx. 400 pages January 2012 978-0-7798-2769-5 Get a cross-jurisdictional perspective on the legal policy and reasoning behind the mandatory judicial approval of class settlements. This insightful new treatise also offers recommendations for reforming class action settlement processes and the roles of participants. These recommendations are based on interviews conducted with judges in Quebec, Ontario, British Columbia and the United States. More than an analysis of the current system of class action settlement, Fairness in Class Action Settlements is a call-to-action for reform. 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