Appeal court upholds denial of certification based on lack of common issues
The Court of Appeal for Ontario recently upheld the dismissal of a motion to certify a class action lawsuit relating to an alleged price-fixing conspiracy in the Canadian market for canned tuna.
The appellant asserted that 11 defendants conspired to fix the price of canned tuna sold in Canada, in violation of the federal Competition Act, 1985 and common law. The appellant based the claim on findings from U.S. antitrust proceedings.
These foreign proceedings found that three major tuna producers – Bumble Bee Foods LLC, Tri-Union Seafoods LLC (operating as Chicken of the Sea International Inc.), and StarKist Co. – conspired to fix prices in the U.S. between 2011–13.
A similar conspiracy involving these U.S. companies and their Canadian affiliates existed in Canada, the appellant claimed.
A judge of the Ontario Superior Court of Justice dismissed the certification motion and ruled that the case did not meet the criteria for certification under Ontario’s Class Proceedings Act, 1992 (CPA).
Specifically, the motion judge found that the appellant failed:
- to plead material facts sufficient to disclose a reasonable cause of action under s. 5(1)(a) of the CPA and to support the existence of a similar conspiracy in Canada, even though the U.S. conspiracy was proven
- to give sufficient evidence to satisfy the requirement to show “some basis in fact” for the existence of common issues across the class under s. 5(1)(c) of the CPA, given that the evidence presented focused on the U.S. market instead of Canadian consumers
- to establish that a class proceeding would be the preferable procedure under s. 5(1)(d) of the CPA, given the absence of common issues
The appellant took the case to the appeal court. The respondents asked the appeal court to quash the appeal on the basis that the appeal fell within the jurisdiction of the Ontario Divisional Court.
Refusal of certification upheld
In Lilleyman v. Bumble Bee Foods LLC, 2024 ONCA 606, the Ontario Court of Appeal issued a ruling rejecting the respondents’ jurisdictional argument. The appeal court had jurisdiction over the appeal, given that the motion judge issued an order that effectively brought the proceeding to an end and that was appealable to the appeal court.
The appeal court then addressed the appellant’s substantive arguments. First, the appeal court held that the motion judge correctly applied the legal test for determining whether the pleadings disclosed a cause of action. The appellant failed to provide evidence of material facts linking the U.S. conspiracy to the Canadian market, the appeal court said.
Second, the appeal court determined that the motion judge properly applied the standard of “some basis in fact.” The appellant failed to provide minimal evidence to support the existence of common issues affecting the class, the appeal court noted.
Lastly, given the lack of common issues, the motion judge correctly concluded that a class proceeding was not the preferable procedure in this matter, the appeal court decided.
