Law Times

Page 4 September 4, 2017 • Law timeS www.lawtimesnews.com NEWS NEWS NEWS Issue likely headed to Supreme Court Umbrella purchaser debate returns to court BY ALEX ROBINSON Law Times A n ongoing debate over whether umbrella pur- chasers have a viable cause of action is head- ed back to Ontario's Divisional Court. The court has agreed to hear an appeal of a recent decision by Ontario Superior Court Justice Duncan Grace certifying a class action lawsuit by umbrella pur- chasers in Fanshawe v. Hitachi. The case concerns an alleged price-fixing scheme by manu- facturers of colour display tubes and colour picture tube com- ponents. Samsung and Philips are among the defendants and are looking to fend off a claim by umbrella purchasers, who are consumers that did not buy products from the defendant manufacturers but say they were harmed by the alleged scheme because of a rise in prices. Charles Wright, one of the lawyers representing the plain- tiff, says umbrella purchasers should be able to bring an ac- tion if it can be proven that the alleged price-fixing scheme im- pacted them and caused them damages. "Who they bought the given product from should not be con- trolling. It's not a breach of con- tract case," he says. "As long as they can establish that they were harmed by the conduct of the wrongdoer, we would say they should be able to bring that case forward." Lawyers who represent de- fendants in such actions have expressed concern that allowing umbrella purchaser claims to go forward could make defendants liable for the decisions of third parties. This would make it very hard for them to understand the extent of their liability, class ac- tion defence lawyers say. Courts in different jurisdic- tions have issued varying deci- sions on the issue, leading to an expectation that the Supreme Court of Canada will have to rule on it in order to get some clarity in the law. "One way or the other, this issue will end up at the Supreme Court," says Paul-Erik Veel, a partner with Lenczner Slaght Royce Smith Griffin LLP, who was not involved in the case. "It's a meaty enough issue with significant implications and enough of a jurisprudential split that it's hard to see it avoid- ing ending up there." In August, the Court of Ap- peal for British Columbia ruled that umbrella purchasers have a cause of action and that their claim in Godfrey v. Sony Cor- poration could be certified. In Ontario, Justice Paul Perell refused to certify part of a class action lawsuit in Shah v. LG Chem that would extend the claim to umbrella purchasers. The Divisional Court later up- held Perell's decision. In that decision, Justice Ian Nordheimer ruled that umbrella purchasers had no cause of ac- tion, as it would open up defen- dants to indeterminate liability. "First and foremost, they had no control over whether the non-defendant manufacturers chose to match prices," Nord- heimer wrote in that decision. "Second, they had no control over the volume of LIBs or LIB products, that the non-defen- dant manufacturers chose to produce and sell." While the Divisional Court has already weighed in on the is- sue in Shah, it has agreed to do so a second time in Fanshawe. In that case, the defendants appealed Grace's decision on a number of issues, but the Divi- sional Court only granted them leave on the issue of whether umbrella purchasers have a cause of action. The certifying judge, Grace, had accepted the reasoning in the B.C. decision in Godfrey and determined that it was not plain and obvious that claims brought by umbrella purchasers would be unsuccessful. The defendants argued in their application for leave to ap- peal that Grace had erred by re- lying on Godfrey. Regardless of how the Divi- sional Court rules, Veel says the umbrella purchaser issue will likely make its way up to the Su- preme Court because of the Di- visional Court's ruling in Shah. The plaintiffs in that case have sought leave to appeal the decision to the Court of Appeal. "The jurisprudence is now a bit of a mess across the country," says Veel. Wright says the varying deci- sions have created some uncer- tainty in the law, which will need to be clarified and unified to let these cases move through the courts more quickly. Veel says that if the Supreme Court eventually rules that um- brella purchasers have a viable cause of action, it would expand the potential scope of damages to which defendants in these cases could be subject. He says these cases will also likely be- come a lot more complicated. "Because the plaintiffs are advancing a claim for the pric- ing decisions made by a third party, you necessarily end up pulling all those third-party non-defendants into the case and making it a procedural and substantive quagmire for every- one involved," he says. Subrata Bhattacharjee, one of the lawyers who is representing Samsung in the matter, declined to comment. Christopher Naudie, one of the lawyers acting for Philips, did not respond to a request for comment. LT Charles Wright says the varying rulings in Ontario courts on umbrella purchasers has created some uncertainty in the law. Visit our new website to find the latest in Ontario legal news, opinion, videos and expert commentary. Find the legal content you're looking for faster with enhanced navigation. A FRESH NEW LOOK www.lawtimesnews.com Join our 55,000 monthly visitors and read respected content on any device. Untitled-8 1 2017-08-31 3:57 PM

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