Originally published in Blakes Bulletin on
Competition Law, May 2008
On May 6, 2008, the B.C. Supreme Court issued its Reasons
for Judgment in Pro-Sys Consultants Ltd. v. Infineon
Technologies AG et al., 2008 BCSC 575 denying the
Plaintiff's application to certify Canada's
first combined direct and indirect price-fixing conspiracy case
as a class action under the Class Proceedings Act,
R.S.B.C. 1996, c. 50 (Act).
The proposed class action was brought against certain
international manufacturers of dynamic random access memory
chips (DRAM) who were alleged to have been engaged in an
unlawful conspiracy to fix prices from April 1, 1999 to June
30, 2002. DRAM is an essential component in virtually all
electronic products used today, including mainframe computers,
servers, laptops, automobiles, global positioning devices,
cellular phones, cameras and video games. The defendants,
collectively, were alleged to have accounted for more than 70
percent of the DRAM market.
Among the important issues addressed in this case is the
Court's finding that it was necessary for the Plaintiff
to establish that harm from the alleged conspiracy to fix
prices could be determined on a class-wide basis for the direct
and indirect purchasers.
The Court also rejected the Plaintiff's position
that its pleading of waiver of tort and constructive trust
relieved it of this requirement. In particular, the Court held
that there must be evidence of a methodology capable of proving
on a class-wide basis that the alleged wrongful conduct that
is, the alleged price-fixing conspiracy by the defendants in
respect to DRAM products caused a wrongful gain that arose from
the overcharges actually passed on to the various layers of
Justice Masuhara specifically rejected the
plaintiff's position that it was appropriate for the
plaintiff to rely upon the aggregation provisions of the Act as
a basis to prove liability. His Lordship observed that
aggregation provisions are only available after liability has
been established, that is the amount and degree of pass through
has been determined on a class-wide basis.
The B.C. Court also held that absence of a class-wide means
to prove liability meant that a class proceeding was not the
preferable procedure for the resolution of any common issues.
As Justice Masuhara observed, the absence of a class-wide basis
to prove liability leads to an unmanageable process that will
not move the litigation forward in any meaningful way.
This decision entails that the complexities inherent in
combined direct and indirect price-fixing conspiracy cases will
render them unsuitable as class proceedings unless the evidence
before the Court establishes there is an acceptable method for
determining loss on the part of class members or a
corresponding gain to the defendants on a class-wide basis.
To view the full reasons of the British Columbia Supreme
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