BC Court of Appeal upholds class action certification in international price-fixing case

In a recent decision, the BC Court of Appeal dismissed the appeal challenging the certification of a national class action lawsuit alleging an international price-fixing conspiracy involving key components of hard disk drives (HDDs).

The case, indexed as NHK Spring Co., Ltd. v. Cheung, 2024 BCCA 236, revolves around claims that the appellants conspired to fix the prices and supply of suspension assemblies used in HDDs, impacting the costs of various consumer and enterprise electronics.

The respondents in the case alleged that the appellants, who control about 96 percent of the global market for suspension assemblies, conspired to inflate prices unlawfully. This overcharge, the respondents claim, was passed on to consumers in British Columbia and other parts of Canada, resulting in damages or entitling them to restitution during the period from January 1, 2003, to April 30, 2016. The components in question are integral to devices such as computers, servers, and gaming consoles.

On appeal, the appellants argued that the lower court erred in assuming jurisdiction and certifying the class action. They contended that the alleged conspiracy, which was organized and executed outside Canada, did not establish a substantial connection with British Columbia or Canada as required by the Court Jurisdiction and Proceedings Transfer Act (CJPTA). Furthermore, they argued that the claim under s. 36 of the Competition Act disclosed no reasonable cause of action since the alleged conduct did not occur within Canadian territorial jurisdiction.

The Court of Appeal upheld the lower court’s decision, concluding that the economic harm suffered by British Columbian consumers due to the alleged conspiracy provided sufficient grounds for assuming jurisdiction. The court emphasized that participation in a conspiracy that foreseeably causes economic harm in British Columbia is enough to establish a real and substantial connection under the CJPTA. The judges also rejected the appellants' argument that the civil cause of action under s. 36 of the Competition Act required the impugned conduct to be an offence within Canada.

Additionally, the court found that the respondents had sufficiently demonstrated that Canadian consumers were harmed by the alleged price-fixing conspiracy, and that the claimed overcharge was passed through the supply chain into the final product prices. The court noted that the methodology used by the respondents’ experts to calculate damages was plausible and credible, allowing the class action to proceed.

Ultimately, the BC Court of Appeal's decision to dismiss the appeal supports the certification of the class action, allowing Canadian consumers to seek redress for alleged price-fixing activities conducted by major global manufacturers of HDD components.