Jensen V. Samsung: Federal Court Of Appeal Confirms Evidentiary Requirement More Than "Mere Formality"

JurisdictionUnited States,Federal
Law FirmStikeman Elliott LLP
Subject MatterLitigation, Mediation & Arbitration, Class Actions, Trials & Appeals & Compensation
AuthorMs Danielle Royal and Alexandra Urbanski
Published date07 August 2023

In Jensen v. Samsung Electronics Co. Ltd., 2023 FCA 89, the Federal Court of Appeal (the "Court") upheld the lower court's refusal to certify a proposed class action involving allegations that the defendants had breached sections 45 and 46 of the Competition Act, R.S.C. 1985, c. C-34 (the "Act"). The decision reinforces the increased willingness by courts to scrutinize the proposed causes of action and pleadings in determining whether proposed class actions should move forward.

Background

The plaintiffs sought to certify a class action alleging that the manufacturers of dynamic random-access memory (DRAM) chips violated sections 45 and 46 of the Act by conspiring through direct communications in private meetings and through public statements - or "signalling" - to each other, to suppress the global supply of DRAM and increase DRAM prices.

As detailed in our previous post on this litigation, the defendants successfully argued that certification should be denied on the basis that the plaintiffs:

  • failed to establish a reasonable cause of action for breach of sections 45 and 46 of the Act on the facts set out in the Statement of Claim and
  • provided "no basis in fact" for the proposed common issues.

The plaintiffs appealed the Federal Court's decision denying certification, arguing that the motion judge improperly considered the merits of the case and "stepped beyond his more limited role in a certification motion".

The Decision of the Federal Court of Appeal

The Court dismissed the plaintiffs' appeal and endorsed the lower court's decision.

Reasonable cause of action

The Court upheld the motion judge's finding that the plaintiffs' pleading did not disclose a cause of action in conspiracy. Reiterating that certification must remain an important gate-keeping mechanism, rather than a "mere formality", the Court rejected plaintiffs' arguments that the motion judge had applied an inflated standard of particulars that was impossible to meet in the context of an offence that is secretive in nature. The Court echoed the motion judge's finding that, even in the absence of direct evidence of an agreement, the plaintiff must still plead material facts and full particulars of an agreement based on indirect or circumstantial evidence, such that an agreement could be inferred.

According to the Court, the motion judge had correctly held that none of the statements relied on by the plaintiffs suggested that the defendants had reached an unlawful agreement with their...

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