Canada: Infineon Technologies AG v Option Consommateurs: Has The Supreme Court Of Canada Opened The Door To Purely Speculative Class Action Claims?

For several months now, class action practitioners in Quebec have been patiently awaiting the Supreme Court of Canada's decision in Infineon Technologies AG v Option consommateurs.1 The wait is now over; on October 31, 2013, the Supreme Court rendered its decision and upheld the Court of Appeal's decision to authorize the class action. In doing so, the Supreme Court authorized a class action comprised of a potentially heterogenous group of hypothetical victims.

At first glance, the decision may seem surprising. It does however follow a recent trend of cases which lowered the bar that class members need to meet in the demonstration of the existence of a prima facie cause of action at this stage of the proceedings. In many respects, the Supreme Court's decision is tributary to the particular facts at issue in the case. However, there still remains a risk that it may be interpreted by eager class claimants, amongst others, as having essentially eliminated the criteria required for the authorization of class actions in Quebec.

Such an interpretation would expose businesses (and ultimately consumers who always end up paying for the inefficiencies of any system) to a considerable economic risk as a result of the multiplication of purely opportunistic class actions premised on questionable legal and/or weak factual grounds. This result would be contrary to the Quebec legislature's intentions of putting in place the authorization process, precisely to prevent such abuses.

In light of the Infineon decision, the judges of the lower courts, in particular the Superior Court judges (since there is no right of appeal against a decision which authorizes a class action), will simply be left to their own devices with regards to which criteria to apply when it comes to "filtering" out frivolous class actions.

This decision was rendered concurrently with two other related cases emanating from the courts of British-Columbia, each of which also addressed the issue of indirect purchaser claims for antitrust damages. Those cases are the object of a separate McMillan bulletin.

The key highlights of the decision

  • Confirms the low evidentiary and legal threshold required for class action claimants to obtain authorization of class actions in Quebec;

  • Indirect purchasers now have a prima facie claim for antitrust damages;

  • Confirms that it is not necessary at the authorization stage for the courts to ensure that all the potential class members actually have a right of action on the merits of the case; and

  • Confirms that an indirect purchaser can have a right of action before the Quebec courts if the consumer contracts said consumer entered into with a retailer is deemed to have been concluded in Quebec.


In 2004, the US antitrust authorities concluded that a number of multinational DRAM manufacturers had been participating in a conspiracy to fix prices for dynamic random-access memory (DRAM). Several of these manufacturers pleaded guilty to the infractions.

In October 2004, a motion to institute a class action against these manufacturers was filed by a Quebec consumer (Cloutier) who had purchased a Dell computer containing DRAM. The computer was purchased over the internet from a company located in Ontario, from Cloutier's domicile in Quebec. The proposed class sought to include direct purchasers, as well as any person who could have purchased DRAM indirectly, either wholesale or retail, through the purchase of electronic products containing DRAM. Essentially, the claimant alleged that there was an overcharge for all DRAM sold in Quebec during the class period. The claimant did not however put forward any allegations corroborating their assumption that any increase in prices was actually passed down the DRAM distribution chains to the end consumers. In other words, based on the allegations of the proposed proceedings, it was possible that some of the proposed class members never actually suffered any personal harm and therefore would not have a personal right of action. Should a class action be authorized on their behalf in such circumstances?

In 2008, Mr. Justice Mongeau of the Superior Court decided not to authorize the proposed class action since the proposed recourse failed to demonstrate that any of the class members had actually suffered a prejudice. Justice Mongeau had also decided that the Superior Court of Quebec did not have territorial jurisdiction over the claim.

In November 2011, the Quebec Court of Appeal reversed Justice Mongeau's decision and authorized the class action. In doing so, the Court of Appeal concluded that the Superior Court did have jurisdiction over the case and that it was not necessary, at the authorization stage, for the class claimant to specifically allocate the alleged prejudice as between the potential victims of said prejudice.

Supreme Court of Canada decision

In its unanimous decision, written by the two Quebec judges on the bench, the Supreme Court mentions that at the authorization stage, the court's role is merely to filter out frivolous claims and that essentially, class claimants are simply required to establish that they have an arguable case on the merits.

In application of the general provision governing delictual and quasi-delictual liability in Quebec law, the class claimant has to establish prima facie all the elements of civil liability, which are (i) that the defendants committed a fault; (ii) that the claimant and the members of the class suffered an injury; and (iii) that a causal connection exists between the fault and the injury. The Court emphasised that the claimant's burden is not very high at this stage of the proceedings, and that the threshold with regards to the evidence is low, in particular in establishing the existence of a prejudice suffered by the class members. The analysis of these elements was particularly revealing in this regard.

The existences of a fault

With regards to fault, the Supreme Court acknowledged the fact that no proceeding had been initiated by Canadian authorities against the defending DRAM manufacturers. The only evidence put forward concerning proceedings against them concerned actions initiated in the United States and in Europe. The rules in Canada concerning alleged cartels (pursuant to the Competition Act) are substantially different than those applicable in the United States and in the European Union: in certain circumstances, an agreement can constitute a criminal infraction in the United States or in the European Union without necessarily infringing the Canada's Competition Act. It was argued that the existences of a guilty plea in a foreign jurisdiction does not create a presumption that a fault under Quebec law was committed.

The Supreme Court concluded that the allegations and supporting evidence attested to the apparent international nature and impact of the alleged anti-competitive conduct. The Court concluded that this was sufficient to support an inference of fault, given the relatively low standard to be met at the authorization stage.

Injury suffered by the proposed class members

The Supreme Court was of the view that there was no rule in civil law which would bar the right of action of an indirect victim. In this case an indirect victim is a victim who has no connection with the relevant market at issue but who could hypothetically have been passed-on a portion of the loss as an effect of the relevant distribution networks. It was argued by Infineon that the fact that the direct purchasers did not lose their right of action as a result of having passed-on the loss to their clients (indirect purchasers) militates in favour of the argument that said clients could not themselves have a right of action since this could lead to double recovery as against the DRAM manufacturers.

The Supreme Court rejected this argument and explained that maintaining the right of action of direct purchasers in situations where they have passed-on a loss to indirect purchasers was a question of judicial policy which did not imply as a corollary that indirect purchasers need to be deprived of a parallel right of action. The issue of double recovery can be assessed on a case by case basis, and, in this particular case, it was not an apparent problem, at least not at the authorization stage.

With regards to the prejudice suffered by each and every member of the proposed class, the Court was of the view that at the authorization stage, Quebec claimants are not required to produce economic evidence, or put forward a specific theory concerning the probability or even the possibility that the passing on of the inflated price to the indirect purchasers actually took place. They simply need to establish that it is plausible that such losses were indeed passed on to the indirect purchasers.

Also of importance is the fact that the Supreme Court concluded that the Quebec class claimants are not required to demonstrate that each proposed class member suffered a loss. At the authorization stage, it is sufficient to demonstrate an aggregate loss; the manner in which this loss will be divided amongst class members is an issue which may be left to be debated on the merits. Thus, one could theoretically initiate a class action for the benefit of a group of people of which it is evident that some may not ultimately be members of the class.


Infineon argued that there was no causality between the fault and the hypothetical prejudice suffered by the indirect purchasers, due to the fact that numerous factors may have influenced the ultimate price paid by the indirect purchasers for products to which DRAM was incorporated. Thus, the alleged damage could not be said to be direct.

The Supreme Court concluded that there is a distinction to be made between "indirect damages" and "indirect victims". An indirect victim can suffer a prejudice which is a direct consequence of the alleged fault. In order to satisfy the causal connection requirement, the damages suffered need to be the logical, direct and immediate result of the fault. Thus, an indirect victim could suffer a direct damage and be compensated for said damage. In light of the low burden of demonstration at the authorization stage, the Court concluded that the allegations put forward by the claimant were sufficient to meet her burden.


Infineon argued that none of the connecting factors provided for at Article 3148 CCQ were met. In particular, relying on a series of cases from the Quebec Court of Appeal, Infineon argued that purely economic and intangible prejudices are not located in any particular situs. Artificially designating the claimant's domicile as the location of this intangible prejudice would have the perverse effect of rendering all the connecting factors of Article 3148 CCQ obsolete, leaving the domicile of the claimant as the only relevant connecting factor.

The Supreme Court concluded that in the case at hand, the claimant's contract (which Infineon was not a party to) was deemed to have been concluded in Quebec by operation of the Quebec Consumer Protection Act. As a result, the claimant's alleged prejudice could be considered to have been suffered in Quebec, thus giving the Quebec courts jurisdiction.


In the short and long term, this decision will mostly likely crystallize the prevalent tendency already present in the Quebec case law that the threshold with regards to filtering frivolous class actions is extremely low.

On a practical level, the decision can be viewed as a double edged sword. If the Supreme Court's reasoning is pushed to its extremes, it could be interpreted to mean that class claimants can henceforth initiate a class proceeding alleging whatever they wish for the benefit of whomever they consider to be appropriate as long as they can demonstrate that they have an "arguable case" at the authorization stage. In other words, a right of action on behalf of each the proposed class members would not be required. It is our view that the knowledge that certain proposed class members will ultimately not have a claim should be sufficient to bar such potential members from being included in the class action. An increase in potentially unfounded and frivolous class proceedings would not benefit anyone and would circumvent the intended purpose of the filtering mechanism set forth by the authorization process.

In the absence of clear criteria by the Supreme Court or by the legislator as to what it means for class claimants to have an "arguable case", the Superior Court judges will be left to evaluate each proposed class action on a case by case basis. As a result, it is likely that the general trend will continue and that few class actions will be heard on the merits. For better or for worse, class action settlements will likely continue to be the norm in Quebec.

1 Infineon Technologies AG v Option consommateurs, 2013 SCC 59.

The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.

© Copyright 2013 McMillan LLP

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions