Law Times

Page 12 September 19, 2016 • Law timeS www.lawtimesnews.com Price-fixing class actions heat up BY JIM MIDDLEMISS For Law Times R ulings in price-fixing class actions are com- ing at a fast and furious pace, as Ontario courts respond to a plethora of motions involving long-awaited lawsuits in a string of cases involving electronics. In the past 10 months, On- tario courts have issued rulings in three cases dealing with price- fixing issues, including the On- tario Court of Appeal ruling in Fanshawe College of Applied Arts and Technology v. AU Optronics Corporation, deal- ing with liquid crystal displays; and the Ontario Superior Court rulings in Shah v. LG Chem, Ltd., dealing with lithium ion batteries; and Fanshawe College v. Hitachi, Ltd., dealing with co- lour display tubes and products. Those rulings are setting up another potential battle before the Supreme Court of Canada to sort out how price-fixing suits should proceed. "There has been a swell of ju- risprudence on a couple of live, in- teresting issues of law," says Chris Naudie, a class actions defence lawyer at Osler Hoskin & Har- court LLP, adding they are "ripe and suitable for appellate review." Factor in the Ontario Court of Appeal hearing later this year in the air cargo price-fixing suit Airia Brands v Air Canada and it makes for interesting times. All of this comes a scant three years after Canada's top court broke a logjam of cases by finding in a trilogy of cases that indirect purchasers of goods — those who don't by direct from an alleged price fixer but rather acquire a good that has a component in it that is subject to price fixing — can be included in the class. Those cases include: Pro-Sys Consultants Ltd. v. Microsoft Corporation, dealing with char- ges involving Microsoft's operat- ing system; Sun-Rype Products Limited v. Archer Daniels Mid- land Company, a case involving corn syrup, and Infineon Tech- nologies AG v. Option consom- mateurs, dealing with DRAM memory in computers, which set- tled for a whopping $80 million. Meanwhile, lawyers are pre- paring for the next wave of price- fixing suits, with as many as 30 cases pending involving various automotive parts manufacturers. Needless to say, all the action is creating a whack of work for lit- igators savvy in competition law. "The price-fixing bar has been very busy since the SCC [trilogy] ruling," says Charles Wright, a plaintiff class actions lawyer at Siskinds LLP who has been at the centre of the price-fixing storm. The trilogy was considered a major victory for plaintiff coun- sel, many of whom had put cases on hold to see how the court would rule on the question of indirect purchasers. "As far as I am aware, certifi- cation has been granted in every [price-fixing] case that has been heard since the trilogy. The tril- ogy clarified and simplified the path to certification," says Wright. The irony, noted Jonathan Foreman, a lawyer at Harrison Pensa LLP in London, Ont. who was part of the legal team on the DRAM memory settlement, was that until the trilogy ruling, "ev- erybody said these things [price- fixing cases] were dead. They are alive." The Infineon DRAM mem- ory case just completed its last payout. "We had a massive uptake in that case at all levels, with 880,000 consumers and 45,000 businesses and government insti- tutions participating in the case," Foreman says. That included some "seven-figure payments." "What the trilogy did, effec- tively, was confirmed the way that the plaintiff 's bar viewed these cases. We are finally back to where we thought we should be," he says. However, the latest round of cases lay the groundwork for the next round of battles, and it re- mains to be seen if plaintiffs will prevail. It's likely the top court will be called on to clarify the way for- ward and rule on a number of additional points of law, includ- ing whether umbrella purchas- ers — those who don't buy from the alleged price fixer but rather from a competitor — can be in- cluded in the class. Other issues centre on how the discoverability rule applies to the Competition Act and whether common law actions are extinguished by the statuto- ry claim for price fixing created under the Act. David Kent, a class actions lawyer at McMillan LLP in To- ronto, notes the recent round of Ontario cases are "all being de- termined at the pleading level," so there is a long way to go be- fore there's a definitive ruling on price fixing. Take the umbrella purchaser theory raised in both the Shah and Fanshawe colour display tube rulings. They are at odds, with the Fanshawe ruling sid- ing with a B.C. case. That will probably need to be sorted out by the Supreme Court. Kent says the "umbrella the- ory is alive and lives to fight an- other day," but he notes it doesn't mean it will succeed at any trial that may or may not arise. In addition, both of those rulings certified the cases as class actions. Osler's Naudie, however, says it's "not clear that [those certification rulings] have been faithful to the standard" for certification established by the Supreme Court of Canada, and he thinks they could also be challenged. As well, the Appeal Court ruling in Fanshawe v. AU Op- tronics raises questions about limitations and when the lawsuit should have been discovered. Naudie says that "everyone had hoped in 2013 the Supreme Court of Canada [in the trilogy ruling] would give some clear guidance and parties could deal with the merits of the case. "There are still a lot of issues," he says. LT Charles Wright says lawyers who work on cases related to price fixing have been busy since an SCC trilogy ruling. 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