Canada: Immediate Relief: Application For Certification Of B.C. Cold-Fx Class Action Dismissed

The British Columbia Supreme Court recently dismissed an application for certification of a class action regarding the cold and flu product Cold-Fx in Harrison v. Afexa Life Sciences Inc. (Harrison). The plaintiff alleged that Cold-Fx was falsely marketed as providing "immediate relief" from cold and flu symptoms. Justice Dillon dismissed the application, finding, among other things, that there was no objectively identifiable class, no evidence of two or more persons who had common complaints that they sought to have resolved in a class action, no rational relationship between the proposed class and the proposed common issues, and no appropriate representative plaintiff. Notably, Justice Dillon concluded that Mr. Harrison was merely a placeholder for his counsel, and not a genuine representative for the class, as he had been recruited by counsel and there was no evidence that he had participated in the litigation other than providing a brief affidavit four years prior to the certification application.

BACKGROUND

Harrison is the latest word in a long saga of decisions regarding this proposed class action. The plaintiff alleged that the defendants falsely represented in labelling, packaging and advertising that Cold-Fx provides "immediate relief" from cold and flu symptoms if taken at the first signs of sickness. He proposed a class of all persons resident in British Columbia who purchased Cold-Fx after March 9, 2002. In response, the defendants asserted that Cold-Fx was never marketed as an after-the-fact cold or flu remedy, only a preventative natural health product that boosts the immune system.

Despite the straightforward nature of his assertion, the plaintiff's application was complicated by the wide variety of misrepresentations—27 in total—that he alleged. Over the proposed class period, Cold-Fx was available in a variety of forms, sizes, and packages, and both the packaging and advertising changed over time. In short, the plaintiff alleged different misrepresentations regarding different packaging and advertisements, many of which did not contain the alleged misrepresentations at all.

CERTIFICATION DECISION

A number of the plaintiff's initial claims had been struck or abandoned as a result of prior applications, that had determined, among other things, what causes of action were adequately pleaded and satisfied section 4(1)(a) of the Class Proceedings Act (CPA). The certification hearing considered only whether the plaintiffs' allegations based on fraud, deceit, fraudulent misrepresentation, the Competition Act, unjust enrichment and waiver of tort, satisfied the remaining criteria for certification of a class action. Justice Dillon dismissed the application because the plaintiff failed to establish the required elements of section 4(1)(b) through (e) of the CPA.

In regard to whether there was an identifiable class, Justice Dillon accepted the defendants' argument that the proposed class definition was fatally flawed. It is critical that there is a class that is clearly defined from the beginning of the proceeding and that any person's claim to membership is capable of being determined by stated, objective criteria. Further, there must be an evidentiary basis to establish that there are two or more members in the class with a common complaint. Justice Dillon held that there must also be evidence to show that there is more than one person who desires to have their complaint determined through a class action. In this case, the plaintiff failed to meet this standard, as there was no evidence that Mr. Harrison or anyone else purchased Cold-Fx based on the alleged misrepresentations and no evidential link between the proposed class and any common complaint. Notably, Justice Dillon found that second-hand evidence that there were other persons who had told Mr. Harrison's counsel that they had purchased Cold-Fx and were interested in the class proceeding was not sufficient to satisfy this requirement.

Justice Dillon also found that the plaintiff had not shown that there was a rational relationship between the proposed class definition and the proposed common issues. This linkage must have an air of reality to ensure the class is not excessively broad. In other words, there must be an objectively established connection between the proposed class and the alleged claims. The proposed class failed to meet this standard because it included people with no claims against the defendants, since not all of the Cold-Fx products contained the alleged misrepresentations, not all the purchasers would have purchased Cold-Fx for immediate symptom relief, and not all of the purchasers were dissatisfied with the product. As a result, the proposed class was impermissibly overbroad.

With respect to whether Mr. Harrison was an appropriate representative, Justice Dillon noted that the representative plaintiff must advance the interests of the class fairly and adequately, which entails producing a plan for the proceeding and precludes conflicts of interest with other class members. The representative plaintiff cannot be a mere spectator or placeholder for the proceeding without a genuine stake in the outcome. Here, the proposed representative plaintiff was inappropriate because he had not been "vigorous" in prosecution of the case. There was no evidence at the time of the certification hearing that he had been involved or participated in the litigation since 2012. Mr. Harrison had also been recruited to serve as the representative plaintiff by counsel after he wrote a letter to a local newspaper criticizing Cold-Fx. Additionally, Justice Dillon found that the litigation plan was outdated, boilerplate and rudimentary. It failed to grapple with the complexities of the proposed class action and failed to set out a clear plan to determine liability or damages.

Consequently, the plaintiff's certification application was dismissed, with costs of the first certification hearing in 2013 thrown away awarded to the defendants. It is uncommon for costs of a certification hearing to be awarded in British Columbia, but the plaintiff had adjourned the first certification hearing in order to make significant amendments to the pleadings, which resulted in the action becoming mired in a mess of pleadings issues and related applications.

IMPLICATIONS

The decision in Harrison affirms the importance of the certification requirement that there is an objectively identifiable class of two or more persons with common complaints, and the need for a rational connection between a proper class definition and the proposed common issues. Justice Dillon's decision is also notable for the finding that Mr. Harrison is a mere placeholder for his counsel and not a genuine plaintiff with a real stake in the outcome that would adequately represent a class of plaintiffs. Both elements of the decision will be helpful for defendants that face potential class actions that are constructions of plaintiffs' counsel, rather than reflections of real complaints by actual litigants.

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