Canada: 195% Dismissed: Apple Defeats Proposed Class Action Concerning Its Liquid Submersion Indicators

On October 14, 2015, the Superior Court of Québec rendered a decision refusing to authorize a class action against Apple Canada Inc. and Apple, Inc. (together, "Apple"), declaring the Petitioner's claim prescribed (i.e. past the limitation period), and despite her allegations that it was Apple's misrepresentations that had rendered it impossible for her to act in due time (Ohana c. Apple Canada inc., 2015 QCCS 4748).

The Petitioner, Nataly Ohana, attended at an Apple store in Montreal on September 30, 2009 with a malfunctioning iPod Touch and a near well dead iPhone, while both products were still covered by Apple's one-year contractual warranty. Upon examination of the devices, Ms. Ohana was told by an Apple representative that both items had suffered from liquid damage and were thus ineligible for warranty coverage.  Ms. Ohana did not think so.  In fact, she knew with certainty that her iPhone Touch, at least, had never gotten wet.  She nevertheless chose not to raise the issue further with Apple at the time.  In February 2010, she had both devices replaced by Apple for a fee.  Years passed.  In April 2013, Ms. Ohana learned that Apple had settled a class action pertaining to the alleged unreliability of its Liquid Submersion Indicators (LSIs) in the United States.  Although the American action had been settled with no admission of fault or liability on Apple's part, Ms. Ohana launched a motion for authorization of a similar suit in Quebec.  According to Ms. Ohana, Apple's misrepresentations about the reliability of its LSIs made it impossible for her to initiate the class action sooner.

The examination of the Petitioner – which is cited in quite some detail in the ruling of the Superior Court – proved fatal to her case. When asked whether she thought, at the time of her visit to the Apple store back in September of 2009, that her devices may, indeed, have been exposed to liquid, she vehemently denied it – at least with respect to her iPod Touch.  In her own words, Ms. Ohana was "195% certain" that this device had never been exposed to liquid.  The iPhone was a different story: Ms. Ohana worked at a restaurant and occasionally left her iPhone on the counter unattended – it may have gotten wet.  Apple argued, and the Court Agreed, that Ms. Ohana's action (based solely on her iPod Touch) was therefore clearly prescribed: where Petitioner remained 195% certain that she had a claim, whatever representations were made by the Respondent to the contrary clearly did not render it impossible for her to act in the sense of article 2904 of the Quebec Civil Code.

The Court also disagreed with Ms. Ohana's interpretation of the significance of the U.S. class action – it proved nothing in terms of Apple's fault, and only fed Ms. Ohana's hypotheses which were insufficient to satisfy the requirements of article 1003 b) of the Code of Civil Procedure ("CCP") (which requires that the facts alleged seem to justify the conclusion sought).

Reflecting on the other criteria necessary for the authorization of a class action in Quebec, namely article 1003 a) CCP (requiring that the recourses of the members raise identical, similar or related questions of law or fact), the Court pointed out that what the Petitioner presented as common questions actually concealed a host of individual issues, including the level of conviction of each individual class member as to whether their device had been submerged in liquid. To undertake such an exercise for each class member, the Court ruled, was not in keeping with the principle of proportionality foreseen in article 4.2 CCP, to which all the criteria of article 1003 CCP were subject.

Ms. Ohana also did not meet the criterion of article 1003 d) CCP (requiring that the proposed member be in a position to represent the group adequately). Among other reasons, the Court noted that she did not appear to have conducted any inquiry prior to instituting her action, nor did she contact Apple or any prospective class members, choosing instead to file proceedings modelled on the U.S. class action as soon as she learned of the U.S. settlement.

The case is of special interest in the Quebec class action context, as the province is known for its relatively lenient stance at the authorization stage. The decision shows that Quebec petitioners seeking to copy U.S. class action proceedings may not be able to rely exclusively on the existence of a settlement of U.S. proceedings to meet their burden of demonstration here. Further, prescription can indeed operate to defeat a proposed class action.  Petitioners who know that they have a claim cannot avoid prescription by alleging misrepresentations, waiting to be told that a case has been filed or a settlement entered into.  You know what you know, and if you do not act in time, you risk being 195% prescribed.

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