The Godfrey Decision: The Supreme Court Of Canada Weighs In On Umbrellas, Discoverability, Complete Codes, And Certification Methodologies

In its highly anticipated decision, the Supreme Court of Canada in Pioneer Corp. v. Godfrey, 2019 SCC 42 (Godfrey), a price fixing class action, settled a number of issues, including: whether umbrella purchasers have a cause of action; whether the discoverability principle can extend the statutory limitation period for private actions under the Competition Act; whether causes of action in tort and equitable remedies can be sought alongside the claims under the Competition Act; and, the appropriate standard to certify loss as a "common issue" as between class members.

The majority of the Court dismissed the defendants' appeal, leaving undisturbed the lower court's certification of the class action for the alleged cartel conspiracy between manufacturers of Optical Disc Drives (ODD).

The Godfrey decision is the Court's first major decision on class action certification of competition law claims since it decided the so-called "Trilogy" in 2013.1 In the Trilogy, the Court held that indirect purchasers had a cause of action,2 and that plaintiff expert methodologies to establish loss as a common issue must be, "sufficiently credible or plausible to establish some basis in fact" but need not meet a "robust or rigorous" evidentiary standard.3 In Godfrey, the Court extended a potential cause of action to umbrella purchasers and confirmed that the standard to be applied to plaintiff expert methodology is lower than is applied in other jurisdictions, including the United States, at least at the certification stage. Further, the Court held that discoverability can be applied to extend the limitation period for section 36 claims and that plaintiffs are not restricted to the statutory cause of action in section 36.

Overview

In addressing the four key issues on appeal, the Court held as follows:

Umbrella purchasers have a cause of action under section 36 of the Competition Act. The discoverability principle can apply to extend the limitation period in subparagraph 36(4)(a)(i) of the Competition Act. The statutory cause of action under section 36 of the Competition Act is not a "complete code" and, as such, does not bar a plaintiff from advancing other common law and equitable claims, such as common law conspiracy, unjust enrichment and waiver of tort. To certify loss as a "common issue", the expert methodology must establish that the harm reached each level in the chain of commerce. The methodology, for the purposes of certification, does not need to establish that each member of the class would have suffered damages, or propose a way to differentiate between those who did and those who did not suffer harm. This confirms that the evidentiary burden on plaintiffs at certification is light in comparison to other jurisdictions, including the United States. Background

The representative plaintiff, Neil Godfrey, alleged that manufacturers of ODDs and associated products conspired to fix prices between 2004 and 2010. This proposed class action named multiple defendants, four of which, as the plaintiff alleged, controlled 94 percent of the global ODD market. Mr. Godfrey applied to certify this class proceeding, consisting of direct, indirect and umbrella purchasers, under the British Columbia Class Proceedings Act.

Discussion

1. "Umbrella...