Canada: Failure To Allege Sufficient Facts Dooms Quebec Price-Fixing Class Action
Litigation & Dispute Resolution Bulletin

In Hazan c. Micron Technology Inc. et al.¹, the Quebec Court of Appeal has confirmed the Superior Court's first instance judgment dismissing the authorization of a class action alleging an international conspiracy to fix the prices of dynamic random-access memory chips ("DRAM").

While Plaintiffs who file a price-fixing class actions normally rely on some tangible evidence to demonstrate the existence of the alleged conspiracy, such as a guilty plea, fine or indictment, the Plaintiff in Hazan advanced no specific facts or evidence to support his otherwise general and vague misconduct allegations. This was fatal to his claim.

Facts

The Plaintiff alleged that the defendants conspired to fix the prices of DRAM, referring to an investigation into a conspiracy to fix the price of DRAM in China, but failing to elaborate on the nature and results of that investigation.

Instead, the Plaintiff simply advanced that the DRAM industry was "conducive" to conspiracy, and alleged the price variation of the chips for the class period (i.e. 2016 to 2018). The Plaintiff did not support any of his allegations with any tangible facts or evidence of an alleged agreement between the parties to fix prices.

The Superior Court ruled that the allegations of fault were insufficient to meet even the low threshold for authorization.² In a biting passage, the first instance judge held that: "[z]ero times zero equals zero."³ In other words, simply repeating that the defendants conspired to fix the price of DRAM, without any evidence in support thereof, does not constitute sufficient evidence to create an arguable case.

Insufficient Allegations, Even If Taken as True

The Court of Appeal reiterates the standard of review from a decision dismissing the authorization of a class action, namely that it will only intervene in cases where the motion judge erred in law or if the judge's assessment with respect to the criteria of art. 575 C.C.P. is clearly wrong.⁴

The Court of Appeal agrees with the first instance judge's finding, noting that the Plaintiff's allegations, even if taken as true, are insufficient to demonstrate an arguable case. The Superior Court judge correctly applied the teachings of the Supreme Court of Canada in Infineon Technologies AG v. Option consommateurs⁵, which provide that even if the threshold to authorize a class action is a relatively low bar, mere assertions are insufficient without some form of factual underpinning.6

No tangible evidence whatsoever was proffered by the Plaintiff and the Court of Appeal thus dismissed the appeal with costs.

Conclusion

The Hazan case is a reminder that a skeletal application, based only on general allegations and speculations, without "some evidence" to support the existence of a conspiracy is insufficient to meet even the low threshold for authorization in Quebec. Indeed, where no public authorities anywhere have identified a conspiracy justifying sanctions or further investigation, general allegations of an international conspiracy to fix prices will not be enough to authorize a competition class action.

The Plaintiff can still file an application for leave to the Supreme Court of Canada.

Footnotes

1. Hazan c. Micron Technology inc., 2023 QCCA 132

2. Hazan c. Micron Technology inc., 2021 QCCS 2710

3. Our translation of "Zéro fois zéro donne zéro." See paragr. [63]

4. Supra note 1, at paragr. [6]

5. 2013 SCC 59

6. Ibid., paragr. [134]

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