Canada: Plaintiffs Don’t Get Second Bite At Apple In Proposed B.C. Privacy Class Action

Last week in Ladas v. Apple Inc., the British Columbia Supreme Court refused to certify a class proceeding against Apple Inc. in relation to alleged breaches of privacy involving the Location Services aspect of Apple's iOS4 operating system.

This decision indicates that British Columbia's courts remain willing to decline certification of proposed class proceedings where the claims are overly broad or improperly framed. This decision stands in contrast to Hopkins v. Kay, Condon v. Canada, and Evans v. The Bank of Nova Scotia, in which the Ontario Superior Court of Justice and Federal Court have recently certified privacy class actions. It also gives defendants some comfort that self-serving expert evidence on the merits of the action that is put forward by plaintiffs at certification will not be accepted without scrutiny.

In Ladas, the plaintiff sought to certify a class proceeding on behalf of all persons in Canada who purchased an iPhone 4, iPad, iPod, iPhone 3G or iPhone 3GS that "utilizes" the iOS4 software operating system. For a period ending May 2011, it was possible for users' location data to be recorded (in some cases without their knowledge) by devices running that operating system. The information could then be copied to a computer to which the device was connected. There was no allegation that Apple or any third party actually accessed any of the location data that might have been collected in this way, only that iOS4 made the information more accessible, thereby increasing the risk that it might be inappropriately accessed.

As a preliminary matter, before considering the certification criteria, Madam Justice Adair rejected the plaintiff's expert reports (including reports from prominent subject-matter experts) and ruled them inadmissible on the basis they were irrelevant and unnecessary to her assessment of the issues on the certification application, as they went to the merits of the claim. One of the expert reports was also inadmissible on the basis it contained unacceptable advocacy and argument, rather than an independent, balanced discussion of the issues relevant to certification.

With respect to the certification criteria set out in the Class Proceedings Act, the B.C. Supreme Court found that the claim was lacking in several material respects. First, many of the claims pleaded by the plaintiffs were untenable. The only claims that Justice Adair found disclosed a reasonable cause of action were the claim by B.C. residents under the Privacy Act, similar claims by residents of Saskatchewan, Manitoba and Newfoundland pursuant to the Privacy Act in their respective provinces, and a common law claim by residents of other provinces for intentional breach of privacy. Justice Adair rejected a bare plea of negligent breach of privacy, confirming that there is no common law tort of breach of privacy in B.C., and in any event, the constituent elements of a cause of action in negligence had not been pleaded. Justice Adair also disposed of a claim for breach of privacy under B.C.'s Business Practices and Consumer Protection Act, finding that the plaintiff had not pleaded the preconditions for a contravention of the Act, even on a generous reading of the pleading. Claims that the plaintiff's "security rights" (under the Charter of Rights and Freedoms) had been breached were summarily rejected. The court also took issue with the blanket plea of other provincial statutes that in any way mentioned privacy, finding that they did not support the plaintiff's claims and were not meaningfully particularized.

Second, the B.C. Supreme Court found that the limited causes of action for breach of privacy that survived were not enough to certify the action, as the plaintiff had not established "some basis in fact" for all of the certification criteria in the Class Proceedings Act. Justice Adair found that there was also no evidence to support a non-B.C. resident subclass and no individual was put forward as the representative of a non-resident subclass. As a result, no non-resident subclass could be certified and only a potential class of B.C. residents remained. However, Justice Adair found the plaintiff had not adduced admissible evidence to establish that there was at least one other class member and the proposed class definition was both too broad and too narrow. The failure to satisfy this requirement was sufficient to dismiss the plaintiff's application for certification.

But the court also concluded that the plaintiff failed to establish that there were certifiable common issues. Many of the proposed common issues were not connected to viable claims. The remaining proposed common issue was drafted at a high level of generality so as to appear common when it was not, and required determinations of individual issues to resolve. In particular, Justice Adair noted that subjective elements of reasonableness and context, as well as consent, are relevant to breach of privacy, and the plaintiff had not shown any basis in fact to conclude that these elements could be proved on a class-wide basis. The litigation plan was also vague and failed to demonstrate that the plaintiff or her counsel had a clear grasp of the potential complexities involved in the case, or a plan to address them.

In conclusion, the B.C. Supreme Court refused to certify the action. Notably, the court considered and declined to give the plaintiff an opportunity to try to salvage the application for certification, finding that the difficulties with the proposed class definition were not merely technical and that the plaintiffs' counsel had not proposed amendments to the claim or the common issues that would have addressed the deficiencies identified by the defendants.

The Ladas decision is another case in which the B.C. courts have scrutinized overly broad or imprecisely framed class action claims and struck or refused to certify inadequately pleaded causes of action. The Ladas decision also indicates that plaintiffs may not get another "kick" at certification if they fail to adduce some evidence to establish the criteria for certification and that expert evidence should not be admitted without scrutiny, despite the low bar at certification.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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