One-Step, Two-Step: Federal Court Of Appeal Confirms Common Issues Must Have A Minimal Evidentiary Foundation At Certification

Published date02 June 2023
Subject MatterLitigation, Mediation & Arbitration, Court Procedure, Class Actions
Law FirmTorys LLP
AuthorMs Sarah E. Whitmore, Alex Bogach and Norman Chung

In Jensen v. Samsung Electronics Co., the Federal Court of Appeal unanimously confirmed that plaintiffs seeking certification of a proposed class action in Federal Court must demonstrate an evidentiary foundation for both the existence of the proposed common issues and the commonality of those issues across the proposed class.

What you need to know

  • The "two-step" approach applies to the commonality requirement at certification. Plaintiffs seeking certification of a proposed Federal Court class action must demonstrate some basis in fact that the proposed common issues exist and that they are common to the entire class.
  • Proposed common issues must have an air of reality at certification. At certification, plaintiffs will need to demonstrate at least some evidentiary foundation to support their claim in order to be successful.

Background

The two-step approach to the commonality requirement

Plaintiffs seeking certification of a proposed class action in common law jurisdictions must generally demonstrate that the claims of the proposed class raise common questions.

Courts across Canada have generally held that, to satisfy this commonality requirement, plaintiffs must meet a two-step evidentiary test: they must demonstrate a basis in fact that the proposed common issue(s) exist(s), and that the proposed issue(s) can be answered across the entire class. The two-step test was recently the focus of appeal in Jensen v. Samsung Electronics Co., where the plaintiff vigorously resisted its application and sought a one-step test, which would only require some basis in fact that the proposed common issues were common to all proposed class members.

The facts

In Jensen v. Samsung Electronics Co., the plaintiffs sought certification of a proposed class proceeding relating to the sale of Dynamic Random Access memory chips (DRAM), a type of semiconductor memory chip commonly used in most computer products. The plaintiffs alleged that the defendants, all leading DRAM manufacturers, had breached sections 45 and 46 of the Competition Act by conspiring to suppress the global supply of DRAM and, as result, drive up DRAM prices.

The Federal Court dismissed the plaintiffs' motion for certification. With respect to the commonality requirement, the motion judge applied the two-step test described above, finding that the plaintiffs had failed to demonstrate any basis in fact for the existence of their proposed common issues. Even though the plaintiffs all purchased the DRAM chips...

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