Law Times

Law Times • sepTember 5, 2016 Page 9 www.lawtimesnews.com Some copycat suits have emerged No flood of class actions on food BY MARG. BRUINEMAN For Law Times T he rush of class actions expected in the Cana- dian food and beverage industry hasn't yet ma- terialized in the way that many lawyers had anticipated after seeing a f lood of them in the United States. Some copycat suits have sur- faced north of the border and others followed Canadian Food Inspection Agency recalls, but the activity here hasn't come close to the rapid rise of suits in the U.S., particularly in Califor- nia, which has been dubbed "the food court" for the many food class actions that have been cer- tified there. "We haven't seen plaintiffs' counsel go after manufactur- ers for misrepresentation like in the U.S.," says Craig Lockwood whose practice at Osler Hoskin & Harcourt LLP in Toronto fo- cuses on class action defence in product liability. "In Canada, it's been fairly quiet. "I feel like the f loodgates haven't opened yet. But I expect that they will at some point; it's just a question of when." While the CFIA has conduct- ed investigations involving mis- representations, they can't levy criminal sanctions, which leads many class action lawyers to be- lieve that will drive complaints to the civil courts. Much of the action in the U.S. expected to occur here centres around food labelling — content ingredients and misrepresenta- tions of health benefits. And a focal point has been on the use of the word "natural" on the la- bel and its definition. In a copycat of litigation in the U.S., Danone in Quebec set- tled a class action for about $1.7 million in 2013. It faced an alle- gation that some of its products advertised the health effects of probiotics in the absence of scientific support. Danone paid out, but it denied wrongdoing. While class actions are the logical approach because indi- vidual claims tend to be fairly small and involve a large num- ber of people, those in the food and beverage industry could also create some difficulty for certification, says Brian Radnoff, a partner at Lerners LPP, where he practises commercial litiga- tion, including class actions. "It's definitely a growth area; it just presents some complica- tions. And there are lots of good arguments defendants can raise to defend certification," he says. "The most usual claims you would expect in these types of proceedings is the negligent mis- representation claim. But neg- ligent misrepresentation claims are extremely difficult to certify. And that's because you have to show individual reliance on the misrepresentation." Generally, certification could prove to be a challenge because individual reliance is not a com- mon issue and it will necessitate individual trials of hundreds of thousands, maybe millions, of consumers. In British Columbia, an appli- cation for certification was dis- missed because of the different "situational need" of the differ- ent consumers. In Clark v. En- ergy Brands Inc., the plaintiffs said the labelling and marketing of the company's Vitaminwater beverages gave the impression the product was healthy and had a minimal amount of sugar. The company indicated that cane sugar was listed as the second ingredient and the number of calories was on the label and ar- gued that drink preferences are a matter of personal choice. The court found the circum- stances of each purchase is end- lessly variable, meaning class ac- tions are not suitable. "Even in the U.S., the ques- tion of damages has caused a lot of controversies," says Robin Reinertson, who represents the defendants in class actions. "How do you determine what the damages are to the consum- er, especially if there's no proof of harm?" Pointing to Clark as an exam- ple, she says the challenge for con- sumer claims is the motivations of many people are so different. And just as activity surround- ing food and beverage class ac- tions is state specific there, vari- ous provincial consumer legisla- tion is already resulting in more activity in particular provinces. California's legislation re- moves the burden from the plaintiff on key courses of ac- tion, which are requirements in Canada, observes Reinertson, a partner and litigator with Blake Cassels & Graydon LLP in Van- couver. There have also been some high-profile settlements in New Jersey and Florida. In Canada, British Columbia and Quebec have legislation that appear most aggressive and more friendly to consumers. Because Canadian defence lawyers feel it's only a matter of time before they see an uptake of class actions in the food and beverage area, many have been doing proactive work with many of the companies. Reinertson warns that the food and beverage industry should be careful because, in addition to the risk of liability for damages resulting in costs and claims, any class action can erode a company's reputa- tion. While the Clark decision provides some direction, she says, she is still seeing interest in food and beverage litigation in Canada, "so it's still important for companies to be mindful of regulatory regime." For Lockwood, seeing the activity in the United States as something of a crystal ball for what might follow in Canada prompted him to be proactive with his clients. "We have actually been work- ing with companies behind the scenes, particularly in the context of recalls, [on] how to prepare themselves for class ac- tions," adds Lockwood. "Most of the issues that we've dealt with have not turned into litigation. "We're seeing CFIA being extremely interventionist these days. It may be because they are being so interventionist that the plaintiffs' bar is finding itself less room to move." LT FOCUS Robin Reinertson says the food and beverage industry should be careful because a class action can erode a company's reputation. © 2016 Thomson Reuters Canada Limited 00239HV-A70100-CE An essential courtroom reference for Ontario civil litigators AVAILABLE RISK-FREE FOR 30 DAYS Order online: www.carswell.com Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Order # 987140-65203 $138 Hardcover + Softcover + CD-ROM + Thomson Reuters Proview eBook August 2016 Hardcover approx. 1720 pages Softcover approx. 1520 pages 978-0-7798-7140-7 Annual volumes supplied on standing order subscription Practice Advisor available upon request on standing order subscription Multiple copy discounts available eBook only A09408-17ON-65203 $115 Print only 987140BD-65203 $115 Shipping and handling are extra. Price subject to change without notice and subject to applicable taxes. 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