Adding More Class to Class Action Authorization
Much has been written or said about the Supreme Court of Canada recent decisions in Infineon Technologies and Vivendi Canada with respect to the low threshold that is imposed on petitioners at the authorization (certification) stage of a class proceeding in Quebec.
Yet in the last two months, the Superior Court of Quebec has rejected two motions for authorization to bring a class action, in part because the petitioners had not sufficiently investigated the nature and composition of the class prior to filing their motions.
Wilkinson c. Coca-Cola Ltd, 2014 QCCS 2631
In Wilkinson, the Petitioner filed a motion for authorization against Coca-Cola, on behalf of all residents of Canada (excluding B.C. and Alberta) who purchased Glaceau Vitaminwater, on the basis of allegations that Coca-Cola had misled consumers into purchasing Vitaminewater by misrepresenting its sugar content and health benefits, and had thus violated the Quebec Consumer Protection Act, the Competition Act and the Civil Code of Quebec.
While the Court ultimately dismissed the motion for authorization as the petitioner had failed to demonstrate that the allegations of fact, if proven, would lead to the conclusions sought. Justice Micheline Perreault nonetheless took it upon herself to note in obiter that under art. 1003 d) C.C.P., a petitioner must have conducted at least a minimal investigation to advance the litigation in order to show that he will adequately represent the interests of the class members. According to the Court, the transcripts of the petitioner’s examination indicate that only 13 people from Quebec had registered on his lawyer’s website, and that the petitioner had not contacted any of these 13 people to determine whether they actually had a cause of action against the respondent. Moreover, even in light of the fact that petitioner filed an updated list with 45 people at the hearing on authorization, the petitioner failed to indicate that he had made efforts to contact any of these additional people. The Court concluded that the petitioner had made no investigation to determine whether a proper class existed.
Martel v. Kia Canada Inc.2014 QCCS 3273
In Martel, the Petitioner filed a motion for authorization against Kia Canada on behalf of all consumers who reside in Quebec and who purchased a Kia vehicle whose maintenance program, as described by the owner’s manual, differed from the maintenance program required by the dealer. The petitioner alleged that Kia had violated the Consumer Protection Act by making false representations in their owner’s manual regarding the usage of motor oil as well as their maintenance programs. While consumers were allegedly told to service their vehicle at every 12,000 km or every 12 months, they were then told by their dealers and the manufacturer that because they lived in Quebec oil maintenance had to take place at every 8,000 or 6,000 km.
In its reasons, Justice Pierre C. Gagnon held that even though the Petitioner’s Motion satisfied article 1003 (b) considering that the facts alleged in the claim seemed to justify the conclusion sought, he nevertheless refused to authorize the Class Action on the grounds that Plaintiff failed to satisfy paragraphs 1003 (a), 1003 (c) and 1003 (d) C.C.P.
The Court notes that the transcripts of the petitioner’s examination seem to suggest that the reason she decided to represent all the consumers residing in Quebec who had purchased a Kia vehicle in the prescribed period was because Petitioner looked around her community to find people who had similar claims against Kia, but because she lives in an isolated environment, and because she did not know many people in that community or who drove a Kia, she could not find anyone else who was interested in filing a claim. In support of her claim, Petitioner filed a document outlining all the sales Kia had made in Quebec from 2009 to 2010 as suggestive of a potential class.
Justice Gagnon, however, concludes that nothing in the allegations submitted or in the evidence filed permitted a Court to verify how many of the consumers had actually been affected by the faulty drafting of Kia’s owner manual. The Court reasons that it would have been expected that the petitioner and its lawyers create a website to gather information about potential members and their grievances. According to the Court, it is simply unacceptable that Petitioner omit to undertake some kind of an investigation prior to filing her motion simply because she had just moved to a new community and did not know anybody. Moreover, the Court notes that even though the recent decisions of the Supreme Court of Canada in Infineon and Vivendi require that the authorization Judge be rather flexible in his analysis of a petitioner’s claim, Justice Gagnon concludes that a petitioner must nevertheless show that there is a class of actual members whom the petitioner will be able to represent, not just hypothetical ones.
While much has been written about the Supreme Court’s liberalism regarding the authorization process in Quebec, these two decisions provide a welcome reminder that petitioners and their Counsel must not only evaluate the merit of their claims prior to bringing class action proceedings, but must also investigate the existence of, and establish first contact with, potential class members, as was underlined by the Quebec Court of Appeal in Del Guidice v. Honda Canada.
Even if the authorization process is a filtering mechanism designed to eliminate frivolous or unfounded claims, this does not free Petitioners and class counsel from the obligation of showing that a reasonable investigation was completed before the motion for authorization was filed, and that the Petitioner can provide a sufficiently realistic estimate of the number of class members to enable the court properly evaluate the conditions for authorization.
certification Civil Code of Québec Coca-Cola Consumer Protection Act Kia Canada Superior Court of Quebec Supreme Court of Canada