Introduction
In a rare move, the Court of Appeal of Québec has confirmed the dismissal of an application to authorize a class action. The Court of Appeal's reasons in this case are sure to attract the attention of practitioners and their clients alike.
Background
On January 27, 2023, the Court of Appeal upheld Justice Bisson's decision dismissing an application to authorize a class action alleging a price-fixing conspiracy restricting the production of dynamic random-access memory (DRAM) chips in the judicial saga Hazan v. Micron Technology & al.1. In June 2021, we commented on Justice Bisson's original dismissal of the proposed class action.
Reasoning of the Court of Appeal
The plaintiff-appellant's appeal essentially argued that the trial judge had focused his analysis too much on the merits of the case, examining the evidence or absence thereof, instead of limiting himself to a prima facie screening of the facts, and taking the allegations at face value.
The Court of Appeal unanimously rejected this argument and held that the trial judge had correctly applied the teachings of the Supreme Court in the Infineon2 case by requiring that general and imprecise allegations be accompanied by some evidence to form an arguable case.
The Court of Appeal noted that the appellant was alleging unreliable information gathered from various sources, including class actions filed but dismissed in the United States, along with vague references to Chinese investigations. The appellant had no actual knowledge of the alleged conspiracy and was unable to put forward any evidence establishing the existence of a price-fixing agreement. Accordingly, the Court of Appeal agreed with the original judge who concluded that there was a complete absence of evidence supporting conspiracy allegations.
Of note, the appellant also tried to file an expert report as part of the appeal, arguing that the original judge should have allowed it to be filed. The Court of Appeal refused this, remarking that the original judge had refused the filing of the report twice and the appellant had not appealed those earlier decisions. The Court of Appeal also held that the appellant had failed to show any reviewable error here in any event.
Conclusion
Although the class action authorization stage in Québec is often seen by defendants as an uphill battle, this recent decision by the Court of Appeal confirms that general and vague allegations cannot be taken for true if they are not minimally substantiated. The bar may be low, but it is there. Without "some evidence" to support conspiracy allegations, class action plaintiffs are at risk of not being able to put forward an arguable case.
As Justice Bisson put it in his original judgment dismissing this proposed class action (and as quoted by the Court of Appeal in its confirmation of the dismissal), "zero times zero equals zero".
Footnotes
1. Hazan v. Micron Technology Inc., 2023 QCCA 132
2. Infineon Technologies AG v. Option consommateurs, 2013 SCC 59
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