On September 20, 2019, the Supreme Court released its long-awaited decision in Pioneer Corp v Godfrey. Godfrey is the Supreme Court’s latest decision involving price-fixing class actions, and expands on and clarifies the basic approach to these cases that the Court laid out six years ago in Pro-Sys Consultants Limited v Microsoft Corporation.
Background and Issues
The plaintiffs allege that the defendants conspired to fix the price of optical disc drives and related products. They commenced an action for damages arising from the alleged conspiracy and moved to certify the action as a class proceeding.
The case raised four discrete issues.
First, the plaintiffs sought to include as part of the class not only direct purchasers of the drives, but also indirect purchasers (who purchased the drives from the direct purchasers) and so-called umbrella purchasers (who purchased drives made by companies who were not alleged to have participated in the conspiracy on the theory that the conspiracy still led those manufacturers to set higher prices as well). Prior to Godfrey, there had been significant controversy in the jurisprudence as to whether umbrella purchasers had a cause of action and could be included in a proposed class.
Second, the case raised an issue as to whether the two-year limitation period in the Competition Act is subject to the principle of discoverability. The plaintiffs in Godfrey commenced the action against some of the defendants more than two years after the allegedly conspiratorial conduct had occurred. Those defendants argued that the applicable two year limitation period in the Competition Act had expired prior to the plaintiffs’ attempt to add them to the action and that the claims were statute-barred. Again, the jurisprudence on this issue had been mixed.
Third, the case raised a question as to whether s 36(1) of the Competition Act, which creates a statutory cause of action for breaches of the Act, ousted the availability of common law claims (such as civil conspiracy) against individuals who engage in price-fixing.
Finally, there was a question regarding the appropriate standard for certification of a class action involving indirect purchasers, namely whether a plaintiff must be able to show (through expert evidence) that all indirect purchasers at that level were impacted by the conspiracy, or only that the impact of the conspiracy reached the indirect purchaser level in some way. The latter is obviously much easier to show than the former.
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