In Gifford v. Air Canada, 2025 ONSC 3335, the Ontario Superior Court of Justice denied certification to a proposed class proceeding which alleged a supply-suppression conspiracy among several airlines to lessen the supply of cross-border air travel between the United States and Canada.
Gifford provides several important takeaways concerning certification motions in proposed competition class actions. Above all, Gifford is a reminder that proposed competition class actions are liable to be denied certification if they do not properly take into account the dynamics of the Canadian market and the economic complexities associated with an allegedly cartelized product.
Background
The plaintiff in Gifford commenced a proposed class action arising from allegations that the defendant airlines “engaged in price fixing airline tickets imposed for air travel between Canada and the USA and in a uniform course of anticompetitive conduct, by conspiring to lessen the supply of air travel between USA and Canada (referred to as “capacity discipline”) thereby unreasonably enhancing the price of air travel services in Canada for travel between the USA and Canada, causing like harms to all members of the class.” In this regard, Gifford was framed as a “supply suppression” conspiracy case, as opposed to a more “typical” price-fixing conspiracy case.
Gifford was commenced in 2015, in the wake of class action litigation in the United States which alleged that several airlines were engaging in supply suppression within the U.S. domestic market. By the time of the Gifford certification decision in 2025, the proposed U.S. class action remained uncertified, there had been no regulatory proceedings in the U.S., and no defendant in the U.S. litigation had pleaded guilty or otherwise admitted wrongdoing, although two had entered into class action settlements.
The material facts of the conspiracy alleged in Gifford, as pleaded in the Statement of Claim, centred upon an annual conference held by the International Air Transport Association in June 2015. The Claim alleged that at this conference, a series of public statements were made by executives of airlines including Delta, Air Canada, and American Airlines about “discipline” in the airline industry (“2015 Comments”). Aside from the 2015 Comments, the Claim did not refer to any specific documents or other forms of communication among the alleged conspirators.
- Careful Scrutiny of Pleadings
Gifford is the latest in a series of recent cases where courts have either denied certification altogether in competition cases, or refused to certify conspiracy claims advanced under Section 45 of Canada’s Competition Act (which prohibits cartel agreements among competitors concerning price-fixing, market allocation, and supply suppression): See Jensen v. Samsung Electronics Co. Ltd., 2021 FC 1185 aff’d 2023 FCA 89; Lilleyman v. Bumblebee Foods LLC, 2023 ONSC 4408 aff’d 2024 ONCA 606; Difederico v. Amazon.com, Inc., 2023 FC 1156; Qualcomm Incorporated v. Barroqueiro, 2025 BCCA 65; Karras c. Maple Leaf Foods Inc., 2025 QCCS 4419. The decision in Gifford is yet another reminder that Courts will carefully scrutinize pleadings, and that it is not a given that conspiracy claims will be certified.
In concluding that the Claim in Gifford did not plead a viable cause of action, the Court held that the facts pleaded were not of sufficient particularity to ground a cause of action under Section 45 of the Competition Act, or under the torts of civil conspiracy and unjust enrichment. The Court held that the allegations in the Claim were generally “boilerplate” or “generic allegations” that simply “enumerates the elements of s. 45 of the Competition Act”. The Court acknowledged that the allegations relating to the 2015 Comments were more detailed than the other allegations. Nevertheless, the Court concluded that reference to the 2015 Comments alone was insufficient to ground a viable claim because there were no particulars pleaded regarding any associated agreement. As the Court observed: “There is no pleading of the context of the 2015 Comments. Who entered into an agreement?” In this vein, the Court accepted that these comments amounted to a form of unilateral conduct (i.e. “conscious parallelism”, a phenomenon where competitors not involved in a price-fixing conspiracy deliberately choose to adjust their prices in order to match those of their competitors, in the absence of any actual collusion between them), rather than conduct associated with a prohibited agreement among competitors.
In concluding that the Claim failed to disclose a cause of action concerning the alleged conspiracy, the Court also noted that the 2015 Comments identified in the Claim made no reference at all to the transborder travel market. In this regard, Gifford echoes one of the takeaways from the Ontario Court of Appeal’s recent decision in Lilleyman v. Bumble Bee Foods LLC, 2024 ONCA 606: that an alleged U.S. domestic conspiracy cannot simply be transposed into Canada based on bald allegations.
- American Proceedings Did Not Provide “Some Basis in Fact”
Gifford is a reminder that the existence of U.S. proceedings is not by itself sufficient to provide a basis for certification in Canada, even where the U.S. proceedings have survived potentially dispositive motions and resulted in settlements. This is particularly true where the allegedly cartelized product, as well as the members of the alleged conspiracy, are different in Canada.
In seeking to establish some basis in fact for several proposed liability common issues, the plaintiff relied “heavily on” two motion decisions in the U.S. proceedings. Although the U.S. proceedings related to U.S. domestic air travel (as opposed to cross-border air travel) and did not involve Air Canada as a defendant, the plaintiff emphasized that the U.S. proceedings had survived a motion to dismiss and a summary judgment motion, and had resulted in two settlements.
The Court acknowledged that “the existence of, and the nature and subject of” the American proceedings “is critical on this motion”. However, the Court concluded that the decisions in the U.S. proceedings did not provide a basis in fact for the proposed liability common issues in Gifford. As the Court explained, the American motions were procedural in nature and their dismissal “cannot stand as the evidence to support a conclusion that there is some basis in fact that an alleged conspiracy could or might have occurred as alleged in the Plaintiff’s Statement of Claim.”
- Expert Methodologies Must “Address the Complexities” Ahead
Gifford is a reminder that expert economic methodologies must sufficiently grapple with the complexities of a case in order to satisfy the requirements set out in Pro-Sys Consultants Ltd. v. Microsoft Corp., 2013 SCC 57 for the certification of loss-related common issues in proposed competition class actions. As set out in Pro-Sys, to certify loss-related common issues in a competition class action, a plaintiff must tended expert evidence at certification which offers “a realistic prospect of establishing loss on a class-wide basis so that, if the overcharge is eventually established at the trial of the common issues, there is a means by which to demonstrate that it is common to the class”. Moreover, the proposed methodology relied “cannot be purely theoretical or hypothetical, but must be grounded in the facts of the particular case in question”. Simply put, “the expert methodology must be sufficiently credible or plausible to establish some basis in fact for the commonality requirement.”
The economic experts of the plaintiff and defendants in Gifford both agreed that calculating loss would require a market-by-market analysis focusing on city pairs. As the Court noted, both experts agreed that “there is not one single market for air travel between Canada and the U.S” and it is “also clear that the number of markets to be analysed is large” (with the defendants’ expert suggesting there were as many as 1,000 markets).
The Court concluded that the plaintiff’s proposed expert methodology was not sufficiently credible or plausible within the meaning of Pro-Sys, finding that it “does not address the complexities he will encounter in undertaking his analyses”. The Court agreed that the plaintiff’s proposed methodology could not overcome the “unique challenges posed by the complex and multi-faceted nature of defining and accounting for the thousands of separate markets for transborder air travel.” The Court also concluded that the inability of the plaintiff’s expert to control for broader macroeconomic conditions (such as the Great Recession) “renders his analysis purely hypothetical”, because he would not be able to account for non-conspiratorial explanatory variables affecting prices.
Any article or other information or content expressed or made available in this Section is that of the respective author(s) and not of the OBA.