Green Light For Indirect Purchaser Claims in Canada

Mark Katz, Chantelle Spagnola, Dec 17, 2013

On October 31, 2013, the Supreme Court of Canada issued a trilogy of decisions holding that indirect purchasers (such as consumers and retailers) are entitled to assert claims for damages and restitution in class actions relying upon alleged competition law offenses. The SCC also set a relatively low bar for certification of competition class action claims. With this trilogy of decisions, the SCC resolved disagreements between various provincial courts of appeal over these issues. 

Although the SCC’s decisions have been interpreted by many as being plaintiff-friendly, it is important to note that the SCC also confirmed that certification judges are not mere “rubber stamps” and must apply “more than symbolic scrutiny” to the sufficiency of class action claims. The SCC’s decisions can thus be interpreted as merely shifting the day of reckoning for class plaintiffs from the certification hearing to a later date, whether that be a de-certification hearing or the trial of the common issues on the merits.

Also noteworthy is that the SCC expressly declined to follow the lead of the U.S. Supreme Court in Illinois Brick Co. v. Illinois, which denied the availability of indirect purchaser claims under U.S. federal law.The SCC also adopted a more lenient approach than U.S. courts to the level of scrutiny that should be applied in evaluating competition class action claims at the certification stage. Although the gap between Canada and the United States on these points should not be exaggerated (particularly given that indirect purchaser claims are permitted under certain state laws), it is nonetheless important for counsel involved in cross-border claims to recognize that there is now an increased prospect for Canadian courts to certify class actions that may not be permitted to proceed in the United States.

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