Infineon Technologies AG v. Option consommateurs

Infineon Technologies AG v. Option consommateurs
Collection
Supreme Court Judgments
Date
2013-10-31
Neutral citation
2013 SCC 59
Report
[2013] 3 SCR 600
Case number
34617
Judges
McLachlin, Beverley; LeBel, Louis; Fish, Morris J.; Abella, Rosalie Silberman; Rothstein, Marshall; Cromwell, Thomas Albert; Moldaver, Michael J.; Karakatsanis, Andromache; Wagner, Richard
On appeal from
Quebec
Subjects
Civil procedure
Notes
SCC Case Information: 34617
Decision Content
SUPREME COURT OF CANADA
Citation: Infineon Technologies AG v. Option consommateurs, 2013 SCC 59, [2013] 3 S.C.R. 600
Date: 20131031
Docket: 34617
Between:
Infineon Technologies AG and
Infineon Technologies North America Corp.
Appellants
and
Option consommateurs and Claudette Cloutier
Respondents
- and -
Canadian Federation of Independent Grocers
Intervener
Coram: McLachlin C.J. and LeBel, Fish, Abella, Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ.
Joint Reasons for Judgment:
(paras. 1 to 155)
LeBel and Wagner JJ. (McLachlin C.J. and Fish, Abella, Rothstein, Cromwell, Moldaver and Karakatsanis JJ. concurring)
Infineon Technologies AG v. Option consommateurs, 2013 SCC 59, [2013] 3 S.C.R. 600
Infineon Technologies AG and
Infineon Technologies North America Corp. Appellants
v.
Option consommateurs and Claudette Cloutier Respondents
and
Canadian Federation of Independent Grocers Intervener
Indexed as: Infineon Technologies AG v. Option consommateurs
2013 SCC 59
File No.: 34617.
2012: October 17; 2013: October 31.
Present: McLachlin C.J. and LeBel, Fish, Abella, Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ.
on appeal from the court of appeal for quebec
Civil procedure — Class actions — Jurisdiction of Quebec court — Application for authorization to institute class action in order to recover damages from international manufacturers that had conspired to inflate price of microchips — Whether Quebec courts have jurisdiction over dispute between international manufacturers and group consisting of direct and indirect purchasers located in Quebec given that alleged wrongdoing that forms basis of claim occurred outside Quebec — Civil Code of Québec, S.Q. 1991, c. 64, art. 3148(3).
Civil procedure — Class actions — Conditions for authorizing action — Direct and indirect purchasers — Application for authorization to institute class action in order to recover damages from international manufacturers that had conspired to inflate price of microchips — Proposed group consisting of direct and indirect purchasers who suffered losses by absorbing, in whole or in part, inflated portion of price — Whether common questions arise — Whether cause of action can be rooted in passing on of artificially inflated prices resulting from anti‑competitive practices — Whether it is sufficient to prove aggregate loss at authorization stage — Whether representative and designated member are qualified to adequately represent members of proposed group — Whether class action should be authorized — Code of Civil Procedure, R.S.Q., c. C‑25, arts. 1003, 1048.
The appellant companies are manufacturers of DRAM, which is a microchip that allows information to be electronically stored and rapidly retrieved. DRAM is commonly used in a wide range of electronic devices. The appellants sell DRAM through a number of distribution channels to original equipment manufacturers (“OEMs”), such as Dell Inc. OEMs insert the chips into various electronic products they manufacture, which are in turn sold either to intermediaries in the distribution chain or directly to final consumers. The appellants have acknowledged their participation in an international conspiracy to suppress and eliminate competition by fixing the prices of DRAM to be sold to OEMs. They were heavily fined both in the United States and in Europe for their respective roles in the conspiracy.
Option consommateurs applied to the Superior Court for authorization to institute a class action against the appellants in order to recover damages in this regard on behalf of the members of the affected class. The group comprises direct and indirect purchasers who suffered losses by absorbing, in whole or in part, the inflated portion of the price of DRAM sold in Quebec. Its claim is based upon allegations that the appellants failed to discharge statutory obligations under the Competition Act and that their conduct amounted to a fault giving rise to civil liability under the Civil Code of Québec (“C.C.Q.”). In its motion for authorization of the class action, Option consommateurs designated C as a member of the group. C is a resident of Montréal who purchased a personal computer containing DRAM on Dell’s website with her credit card. The motion judge held that the Superior Court did not have territorial jurisdiction to hear the class action. In any event, he would have dismissed the motion for authorization on the merits, because he was of the view that the requirements of arts. 1003(b), 1003(d) and 1048 of the Code of Civil Procedure (“C.C.P.”) were not satisfied. On appeal, the Court of Appeal set that decision aside and granted the motion for authorization to institute the class action.
Held: The appeal should be dismissed.
On the basis of the facts as alleged, the Quebec courts have jurisdiction to decide whether the class action should be authorized under art. 1003 of the C.C.P. Article 3148(3) of the C.C.Q. confers jurisdiction on a Quebec authority in a personal action of a patrimonial nature where “a fault was committed in Québec, damage was suffered in Québec, an injurious act occurred in Québec or one of the obligations arising from a contract was to be performed in Québec”. Damage suffered in Quebec is an independent connecting factor: the damage does not need to be tied to the locus of the injury or of the fault. Also, the plain language of art. 3148(3) does not preclude economic damage from serving as a connecting factor, nor is the recovery of a purely economic loss prohibited in Quebec civil law.
In the instant case, the economic damage was allegedly suffered by C — not merely recorded — in Quebec. More specifically, the damage was allegedly suffered as a result of the contract between Dell and C. Although the contract is not in fact the source of the cause of action in this case, which is extracontractual in nature, it is a juridical fact that establishes where the alleged economic damage occurred: the conclusion of the contract is the event that fixes the “situs” of the material damage suffered in Quebec. As a result, the contract is relevant, regardless of the fact that none of the appellants were parties to it, to the determination of whether the Quebec courts have jurisdiction in this case. C’s pecuniary loss flowed directly from her contract with Dell, which is deemed under Quebec’s Consumer Protection Act to have been made in Quebec. The resulting economic damage did not merely have a remote effect on C’s patrimony in Quebec; rather, she suffered it in Quebec upon entering into the contract in that province, and this brought her claim within the scope of art. 3148(3) of the C.C.Q.
At the stage of authorization of a class action, the court plays the role of a filter. It need only satisfy itself that the applicant has succeeded in meeting the criteria set out in art. 1003 of the C.C.P., bearing in mind that the threshold provided for in that article is a low one. The authorization process does not amount to a trial on the merits. Although the claim may in fact ultimately fail, the action should be allowed to proceed if the applicant has an arguable case in light of the facts and the applicable law. In this case, the motion for authorization alleges sufficient facts to demonstrate the elements required under art. 1003 of the C.C.P.
Option consommateurs has met the requirement that there be sufficient common questions for the purposes of art. 1003(a). There are no differences between the members of the proposed group at the authorization stage that adversely affect the unity of the group. All the members, regardless of their individual circumstances, have a common interest both in proving the existence of a price‑fixing conspiracy and in maximizing the amount of the resulting unlawful overcharge. Any disparity between the direct purchasers’ relationships with the appellants and those of the indirect purchasers does not alter the fact that they have a collective interest in the questions of fault and liability. Any conflicts of interests can be addressed at trial.
With respect to the requirement of art. 1003(b) of the C.C.P. that “the facts alleged seem to justify the conclusions sought”, Option consommateurs has made out an arguable case in support of its claim of the appellants’ extracontractual liability. It has discharged its burden with respect to the demonstration of fault, injury and causation. The allegations set out in the motion for authorization are sufficient to support an inference of fault, given the relatively low standard to be met at the authorization stage. Although the allegations and supporting documentation do not explicitly establish the commission of wrongful behaviour in Quebec, they certainly do point to the international nature of the conspiracy to fix the price of DRAM and to the suffering of damage outside the United States. It is not unreasonable to infer that anti‑competitive practices in the United States that have an impact on large multinational corporations and on a DRAM market that is international in scope might — indeed are likely to — affect consumers in Quebec. Further, Option consommateurs does not need to prove liability under s. 45 of the Competition Act at this stage of the proceedings, given the nature of the claim and the evidence that has already been adduced. Its claim of undue economic impact under s. 45 is relevant only to the extent that a violation of the statutory scheme can give rise to extracontractual liability under art. 1457 of the C.C.Q.
Option consommateurs has also discharged the burden of demonstrating that C and the other members of the proposed group suffered an injury as a result of the appellants’ anti‑competitive conduct. The passing on of price increases can ground a class action where the members of the group include direct purchasers. The policy considerations that militate against the defence of passing on at common law should favour, in the civil law of Quebec, compensation for a loss that has been passed on to a plaintiff. In the instant case, there is no risk of double recovery, since the direct and indirect purchasers would be combined in a single group that would make a single collective claim of an aggregate loss. It is not necessary at the authorization stage to prove that each member of the group suffered a loss. As well, the evidentiary standard for demonstrating passing through is no different than the one for demonstrating an aggregate loss. The applicant must establish an arguable case that losses were passed on. Given this low threshold, the applicant is neither expected nor required to adduce expert testimony and advance a sophisticated methodology. At this early stage, the aggregate loss alleged by Option consommateurs and supported by the exhibits is enough to meet the burden of an arguable case. If at trial Option consommateurs is unable to demonstrate how the loss was passed on to the indirect purchasers and how it is to be calculated, the action might fail at that stage.
To establish causation under art. 1457 of the C.C.Q., the damage must be shown to be a direct consequence of the injurious act, but the plaintiff need not be the immediate victim of that act in order to recover. At the authorization stage, the applicant needs only to present an arguable case that the loss was a direct result of the alleged misconduct. In this case, although the indirect purchasers may be indirect victims, the injury they allegedly suffered was a direct result of the appellants’ anti‑competitive conduct.
Finally, regarding the requirement of adequate representation, it would be contrary to the spirit of art. 1003(d) of the C.C.P. to deny authorization for the proposed group of purchasers of DRAM on the basis of a potential conflict of interests between members of the group. The record does not suggest that Option consommateurs and C are undertaking and conducting the proceedings dishonestly or that they have failed to disclose material facts that would reveal a conflict with other members. Further, the class members clearly share a common interest in establishing the aggregate loss and in maximizing the amount of this loss. Much like art. 1003, art. 1048 of the C.C.P. is intended to be a flexible gatekeeper. Where a legal person applies to represent a class, art. 1048 directs that its mission be connected not with the interests of all members of the class, but merely with those of one of the members. Since C is a member of Option consommateurs and of the proposed group, art. 1048 does not prohibit Option consommateurs from representing the interests of the members in this case.
Cases Cited
Distinguished: Harmegnies v. Toyota Canada inc., 2008 QCCA 380 (CanLII); Bou Malhab v. Diffusion Métromédia CMR inc., 2011 SCC 9, [2011] 1 S.C.R. 214; approved: Hubert v. Merck & Co. Inc., 2007 QCCS 3291 (CanLII); referred to: Quebecor Printing Memphis Inc. v. Regenair Inc., [2001] R.J.Q. 966; Banque de Montréal v. Hydro Aluminum Wells Inc., 2004 CanLII 12052; Thompson v. Masson, [1993] R.J.Q. 69; Royal Bank of Canada v. Capital Factors Inc., [2004] Q.J. No. 11841 (QL); Spar Aerospace Ltd. v. American Mobile Satellite Corp., 2002 SCC 78, [2002] 4 S.C.R. 205; Sterling Combustion inc. v. Roco Industrie inc., 2005 QCCA 662 (CanLII); Option Consommateurs v. British Airways PLC, 2010 QCCS 140 (CanLII); Marcotte v. Longueuil (City), 2009 SCC 43, [2009] 3 S.C.R. 65; Nault v. Canadian Consumer Co. Ltd., [1981] 1 S.C.R. 553; Comité régional des usagers des transports en commun de Québec v. Quebec Urban Community Transit Commission, [1981] 1 S.C.R. 424; Comité d’environnement de La Baie Inc. v. Société d’électrolyse et de chimie Alcan Ltée, [1990] R.J.Q. 655; Château v. Placements Germarich Inc., [1990] R.D.J. 625; Tremaine v. A.H. Robins Canada Inc., [1990] R.D.J. 500; Nadon v. Ville d’Anjou, [1994] R.J.Q. 1823; Pharmascience Inc. v. Option Consommateurs, 2005 QCCA 437 (CanLII); Martin v. Telus Communications Co., 2010 QCCA 2376 (CanLII); Guimond v. Quebec (Attorney General), [1996] 3 S.C.R. 347; Berdah v. Nolisair International Inc., [1991] R.D.J. 417; Breslaw v. Montreal (City), 2009 SCC 44, [2009] 3 S.C.R. 131; Option Consommateurs v. Novopharm Ltd., 2008 QCCA 949, [2008] R.J.Q. 1350; Collectif de défense des droits de la Montérégie (CDDM) v. Centre hospitalier régional du Suroît du Centre de santé et de services sociaux du Suroît, 2011 QCCA 826 (CanLII); Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, [2001] 2 S.C.R. 534; Guilbert v. Vacances sans Frontière Ltée, [1991] R.D.J. 513; R. v. Nova Scotia Pharmaceutical Society, [1992] 2 S.C.R. 606; Pro‑Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57, [2013] 3 S.C.R. 477; Sun‑Rype Products Ltd. v. Archer Daniels Midland Company, 2013 SCC 58, [2013] 3 S.C.R. 545; Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481 (1968); British Columbia v. Canadian Forest Products Ltd., 2004 SCC 38, [2004] 2 S.C.R. 74; Kingstreet Investments Ltd. v. New Brunswick (Finance), 2007 SCC 1, [2007] 1 S.C.R. 3; Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977); Regroupement des citoyens contre la pollution v. Alex Couture inc., 2007 QCCA 565, [2007] R.J.Q. 859; Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158; Croteau v. Air Transat A.T. inc., 2007 QCCA 737, [2007] R.J.Q. 1175; Bouchard v. Agropur Coopérative, 2006 QCCA 1342, [2006] R.J.Q. 2349; Black v. Place Bonaventure inc. (2004), 41 C.C.P.B. 181; Comité syndical national de retraite Bâtirente inc. v. Société financière Manuvie, 2011 QCCS 3446 (CanLII); Bourgoin v. Bell Canada inc., 2007 QCCS 6087 (CanLII); Rosso v. Autorité des marchés financiers, 2006 QCCS 5271, [2007] R.J.Q. 61; Sun‑Rype Products Ltd. v. Archer Daniels Midland Company, 2010 BCSC 922 (CanLII); Association des résidents riverains de la Lièvre inc. v. Canada (Procureur général), 2006 QCCS 5661 (CanLII).
Statutes and Regulations Cited
Civil Code of Québec, S.Q. 1991, c. 64, arts. 1385 to 1388, 1457, 1607, 3148(3), 3168.
Code of Civil Procedure, R.S.Q., c. C‑25, arts. 93, 999, 1002 [am. 2002, c. 7, s. 150], 1003, 1010, 1031 to 1033, 1048.
Competition Act, R.S.C. 1985, c. C‑34, ss. 36 , 45 .
Consumer Protection Act, R.S.Q., c. P‑40.1, ss. 20 [rep. 2006, c. 56, s. 3], 21 [idem], 54.1, 54.2.
Authors Cited
Baudouin, Jean‑Louis, et Patrice Deslauriers. La responsabilité civile, 7e éd., vol. I. Cowansville, Qué.: Yvon Blais, 2007.
Emanuelli, Claude. Droit international privé québécois, 3e éd. Montréal: Wilson & Lafleur, 2011.
L’Heureux, Nicole, et Marc Lacoursière. Droit de la consommation, 6e éd. Cowansville, Qué.: Yvon Blais, 2011.
Lafond, Pierre‑Claude. Le recours collectif comme voie d’accès à la justice pour les consommateurs. Montréal: Thémis, 1996.
Waddams, S. M. The Law of Damages, 5th ed. Toronto: Canada Law Book, 2012.
APPEAL from a judgment of the Quebec Court of Appeal (Forget, Pelletier and Kasirer JJ.A.), 2011 QCCA 2116, [2011] Q.J. No. 16769 (QL), 2011 CarswellQue 12645, SOQUIJ AZ‑50805798, setting aside a decision of Mongeau J., 2008 QCCS 2781, [2008] R.J.Q. 1694, [2008] J.Q. no 5796 (QL), 2008 CarswellQue 5729, SOQUIJ AZ‑50498459. Appeal dismissed.
Yves Martineau, for the appellants.
Daniel Belleau, Maxime Nasr and Violette Leblanc, for the respondent Option consommateurs.
No one appeared for the respondent Claudette Cloutier.
David Sterns and Jean‑Marc Leclerc, for the intervener.
The judgment of the Court was delivered by
LeBel and Wagner JJ. —
I. Introduction
[1] At issue in this appeal is whether a proposed class action based on allegations that the appellants conspired to inflate the price of a broadly used product, the dynamic random-access memory chip (“DRAM”), and caused damage to consumers should be authorized under the Quebec Code of Civil Procedure, R.S.Q., c. C-25 (“C.C.P.”). The Quebec Superior Court said no. The Court of Appeal disagreed and said yes. For the reasons that follow, we agree with the Court of Appeal and would dismiss the appeal.
II. Background
[2] The appellant[1] companies are manufacturers of DRAM, which is a microchip that allows information to be electronically stored and rapidly retrieved. DRAM is commonly used in a wide range of electronic devices such as personal computers, GPS equipment, cellular telephones and digital cameras.
[3] The appellants sell DRAM through a number of complex distribution channels to original equipment manufacturers (“OEMs”), such as Dell Inc. and the Hewlett-Packard Company. OEMs insert the chips into various electronic products they manufacture, which are in turn sold either to intermediaries in the distribution chain or directly to final consumers.
[4] For our purposes, individuals or companies that acquired DRAM directly from the appellants are referred to as “direct purchasers”. The term “indirect purchaser” is used to refer to individuals and companies that acquired DRAM, or products containing DRAM, either from a direct purchaser or from another indirect purchaser at a different level in the distribution chain.
[5] The appellants have acknowledged their participation in an international price-fixing conspiracy in the multi-billion dollar DRAM market during the relevant period, from 1999 to 2002. They and their co-conspirators, with the exception of Micron Technology, Inc., pleaded guilty in 2004, in the United States District Court for the Northern District of California, to the following charges:
. . . participating in a conspiracy in the United States and elsewhere to suppress and eliminate competition by fixing the prices of Dynamic Random Access Memory (“DRAM”) to be sold to certain original equipment manufacturers of personal computers and servers (“OEMs”) from on or about July 1, 1999, to on or about June 15, 2002, in violation of the Sherman Antitrust Act, 15 U.S.C. § 1. [A.R., vol. II, at p. 130]
[6] The OEMs affected by the impugned sales were Dell Inc., Compaq Computer Corporation, Hewlett-Packard Company, Apple Computer Inc., International Business Machines Corporation and Gateway Inc.
[7] All the conspirators were heavily fined for their respective roles in the price-fixing conspiracy except for Micron Technology, which was granted clemency because it had co-operated with the authorities. However, Micron Technology also acknowledged that the U.S. Department of Justice investigation had revealed that its employees had been involved in price-fixing in the DRAM market.
[8] In 2010, the appellants also acknowledged their participation in a cartel to fix the prices of DRAM in Europe. They paid a fine in a settlement of proceedings that had been undertaken against them there.
[9] The respondent Option consommateurs alleges that this price-fixing conspiracy artificially inflated the prices of DRAM and products containing DRAM sold in Quebec between April 1999 and July 2002. Its claim is based upon allegations that the appellants failed to discharge statutory obligations under the Competition Act, R.S.C. 1985, c. C-34 , and that their conduct amounted to a fault giving rise to civil liability under the Civil Code of Québec, S.Q. 1991, c. 64 (“C.C.Q.”).
[10] Option consommateurs claims that, as a result of the alleged price inflation, both the direct and the indirect purchasers suffered damage in that they overpaid on purchases of DRAM or products containing DRAM.
[11] Option consommateurs applied to the Superior Court for authorization to institute a class action against the appellants in order to recover damages in this regard on behalf of the members of the affected class. The group comprises direct and indirect purchasers who suffered losses by absorbing, in whole or in part, the inflated portion of the price of DRAM sold in Quebec. The group was described as follows in the respondent’s motion:
[translation] Any person who purchased, in Quebec, dynamic random-access memory (DRAM) and/or one or more products containing dynamic random-access memory (DRAM) . . . between April 1, 1999 and June 30, 2002, inclusively.
However, a legal person established for a private interest, a partnership or an association may be a member of the group, but only if at all times since October 5, 2003, not more than fifty (50) persons bound to it by contract of employment were under its direction or control, and if it is dealing at arm’s length with the applicant. [A.R., vol. II, at p. 57]
[12] The class action applies to all devices containing DRAM, including computers, servers, printers, hard drives, cellular telephones, digital cameras and MP3 players.
[13] In its motion for authorization of the class action, Option consommateurs designated the respondent Claudette Cloutier as a member of the group pursuant to art. 1048(a) of the C.C.P. Ms. Cloutier is a resident of Montréal who purchased a personal computer containing DRAM from Dell Computer Corporation (“Dell”) on October 9, 2001. She accessed Dell’s website and made the purchase by credit card from her home in Montréal.
[14] The standard-form terms for the online purchase indicated that the sale was deemed to have occurred in Ontario and was subject to Ontario law. The invoice indicated that Dell’s address for payment was in Toronto, Ontario.
[15] The appellants have their head offices in other countries. Neither of them has a place of business in the province of Quebec.
III. Judicial History
A. Quebec Superior Court (Mongeau J.), 2008 QCCS 2781, [2008] R.J.Q. 1694
[16] The motion judge of the authorization proceeding held that the Superior Court did not have territorial jurisdiction to hear the class action, because no damage had been suffered in Quebec. Having found that there was no contract between Ms. Cloutier and the appellants, that the fault had been committed in the U.S. and that the appellants did not have a place of business in Quebec, he concluded that a real and substantial connection with Quebec that would be sufficient to ground jurisdiction did not exist.
[17] The motion judge adopted the reasons of the Quebec Court of Appeal in Quebecor Printing Memphis Inc. v. Regenair Inc., [2001] R.J.Q. 966, and in Banque de Montréal v. Hydro Aluminum Wells Inc., 2004 CanLII 12052, in holding that the concept of damage under art. 3148(3) of the C.C.Q. cannot be stretched to the point that the fact that the person who suffered damage is domiciled in Quebec would suffice to confer jurisdiction on the Quebec courts.
[18] The judge then considered how he would have ruled on the merits of the motion had he held that the Superior Court had jurisdiction. In his opinion, Option consommateurs and Ms. Cloutier had not shown that they met all the conditions set out in art. 1003 of the C.C.P. for authorizing a class action.
[19] Although the judge conceded that the motion adequately established the existence of questions of law or fact common to the group for the purposes of art. 1003(a) of the C.C.P., he held that the motion failed on art. 1003(b) because the facts alleged did not support the conclusions being sought. More specifically, he found insufficient evidence that the appellants had breached s. 36 of the Competition Act or that an injurious act, damage and a causal connection had been shown for the purposes of s. 45 of the Competition Act . In any event, the judge found that the action was barred by the limitation period provided for in s. 36 of the Competition Act .
[20] The motion judge also held that the requirements of arts. 1003(d) and 1048 of the C.C.P. were not satisfied. In his view, the interests of Option consommateurs and Ms. Cloutier conflicted with those of the non-consumer members of the proposed group.
[21] The motion judge accordingly dismissed the motion for authorization to institute a class action. Option consommateurs appealed to the Court of Appeal.
B. Quebec Court of Appeal (Forget, Pelletier and Kasirer JJ.A.), 2011 QCCA 2115, 2011 QCCA 2116 (CanLII)
[22] The Court of Appeal rendered two concurrent judgments. In one, it granted in part a motion of Option consommateurs to introduce new evidence in the appeal. More specifically, this decision authorized the filing of evidence that the appellants had participated in anti-competitive practices in Europe and had agreed to pay fines in a settlement with the competent European authorities.
[23] In the other judgment, the Court of Appeal overturned the Superior Court’s judgment and authorized the class action. Kasirer J.A., who wrote the Court of Appeal’s reasons, noted that the claims of the direct and indirect purchaser group members were not rooted in distinct contractual or extracontractual sources. Rather, he pointed out, the class action was grounded on an allegation of a precontractual fault of conspiring to artificially inflate the price of DRAM through a price-fixing scheme, which gave rise to extracontractual liability under art. 1457 of the C.C.Q.
[24] On the jurisdiction issue, Kasirer J.A. found that the Quebec courts had jurisdiction over the claim pursuant to art. 3148(3) of the C.C.Q. Under that provision, Quebec courts have jurisdiction in personal actions of a patrimonial nature where “a fault was committed in Québec, damage was suffered in Québec, an injurious act occurred in Québec or one of the obligations arising from a contract was to be performed in Québec”. The fact that a Quebec resident’s patrimony is located in that province is not sufficient to ground jurisdiction.
[25] Kasirer J.A. held that the damage was connected with a contract that had been concluded in Quebec. Under ss. 20 and 21 of the Consumer Protection Act, R.S.Q., c. P-40.1, a remote-parties contract is deemed to be concluded at the consumer’s address if the parties are not in one another’s presence at the time of the offer or of acceptance, and the offer was not solicited by the consumer.
[26] Kasirer J.A. found that these criteria were met and that a remote-parties contract had in fact been formed between Ms. Cloutier and Dell. Accordingly, the jurisdiction of the Quebec courts did not rest merely on the existence of a Quebec patrimony, since the loss was suffered in Quebec as the result of a material event that occurred in Quebec. This was enough to ground jurisdiction pursuant to art. 3148(3) of the C.C.Q.
[27] Having recognized the jurisdiction of the Quebec courts, Kasirer J.A. turned to the requirements for authorization of a class action set out in art. 1003 of the C.C.P. He held that the motion satisfied each of the criteria.
[28] On art. 1003(a) of the C.C.P., Kasirer J.A. agreed with the Superior Court’s finding that there were sufficient common questions of law or fact.
[29] On art. 1003(b), he found that the allegations of the motion for authorization adequately established fault, the harm suffered, and causation.
[30] In Kasirer J.A.’s opinion, the allegations of violations of s. 45 of the Competition Act , which gave rise to extracontractual liability under art. 1457 of the C.C.Q., were sufficient. Kasirer J.A. held that Option consommateurs was “far from having established its case on the merits” (para. 84), but that the evidence of plea agreements in the United States sufficed to discharge the low evidentiary burden Option consommateurs faced at this stage in respect of its allegations of undue restraint of trade. In his view, the lack of extraterritorial reach of s. 45 of the Competition Act was not a bar to the class action. It would not affect an action in civil liability under art. 1457 of the C.C.Q., the provision on which the claim was based (paras. 86-88).
[31] Kasirer J.A. held that the alleged aggregate loss suffered by the different members of the group constituted a sufficient prima facie demonstration of the loss for the purposes of art. 1003(b) of the C.C.P. In drawing this conclusion, he found that the losses of the direct purchasers and those of the indirect purchasers need not be distinguished at this stage. This issue would be properly resolved if and when the class action succeeded on its merits.
[32] Kasirer J.A. also found that at this stage, Option consommateurs could ground its cause of action on the passing on of inflated prices through the various layers of the distribution chain without there being a risk of double recovery, since the group comprised both the direct and the indirect purchasers of DRAM. Mindful of policy concerns in the area of consumer protection, Kasirer J.A. stated that precluding an action where price increases have been passed on could lead to the unjust enrichment of direct purchasers should indirect purchasers fail to take legal action against perpetrators of price-fixing conspiracies.
[33] Significantly, Kasirer J.A. held that it is not necessary to advance a sophisticated methodology of proof of loss at this preliminary stage of the class action. It would be wrong to impose an overly onerous evidentiary burden and prevent Option consommateurs from having its case heard on its merits.
[34] Kasirer J.A. found that the allegations relating to causation were sufficient to satisfy the requirements of the authorization stage, given the nature of the claim and the structure of the proposed group. Proving that the price-fixing conspiracy had led to increased prices for DRAM and products containing DRAM was a task to be undertaken at the trial itself.
[35] Kasirer J.A. then found that the requirements of art. 1003(d) were satisfied and that Ms. Cloutier could carry on as the designated member of the proposed group. He held that Ms. Cloutier had standing to represent the group on the basis of her online purchase of a computer containing DRAM. What was relevant was not the type of device she had purchased, but the fact that it contained DRAM that had been purchased at an inflated price.
[36] Finally, Kasirer J.A. found that neither Ms. Cloutier nor Option consommateurs was in a conflict of interests with the direct purchasers at this stage, since all members of the group had a common objective of maximizing the total damages award.
[37] The Court of Appeal accordingly allowed the appeal, granted the motion for authorization to institute the class action and let that action proceed to trial.
IV. Issues
[38] There are two primary issues before the Court. The first is whether a Quebec court has jurisdiction under art. 3148 of the C.C.Q. to authorize a class action in the circumstances of this case. If it does, the second issue is whether Option consommateurs meets the threshold requirement for authorization under art. 1003 of the C.C.P.
V. Analysis
[39] Before we delve into the substantive legal issues, the standard of review must be addressed. The appellants submit that the Court of Appeal erred in overturning the motion judge’s decision and finding that Option consommateurs met the threshold requirement for authorization under art. 1003 of the C.C.P.
[40] Contrary to the appellants’ arguments, the Court of Appeal did not need to find that the motion judge had made a “palpable and overriding error” or that his reasons were “patently wrong” in order to intervene. As will be seen in the reasons that follow, the motion judge misapprehended the law as it relates to key components of the art. 1003 analysis: namely, the passing on of price increases as the basis for a cause of action, the demonstration of an aggregate loss at the authorization stage, the evidentiary and legal threshold requirements for authorization, and the need to satisfy the criteria for a successful action under ss. 36 and 45 of the Competition Act . These errors enabled the Court of Appeal to apply the appropriate legal standards to the motion judge’s findings of fact and to draw the correct legal conclusions from them.
A. Jurisdiction
[41] The first issue is whether the Quebec courts have jurisdiction over this dispute between international DRAM manufacturers and a group consisting of direct and indirect purchasers located in Quebec, given that the alleged wrongdoing that forms the basis of the claim — a conspiracy to reduce competition and inflate the price of DRAM — occurred outside Quebec. The appellants are challenging the jurisdiction of the province’s courts to hear the claim at the earliest stage, that of the motion for authorization of the class action.
[42] According to a well-established jurisprudence of the Quebec courts, challenges to Quebec’s jurisdiction can properly be made and dealt with at the outset of a proceeding for authorization of a class action. The judgment rendered at this stage will determine, on the basis of the allegations, whether the matter appears to be properly before the court (see Thompson v. Masson, [1993] R.J.Q. 69 (C.A.)). However, this does not mean that a judgment dismissing a jurisdictional challenge at the authorization stage ends the debate over the territorial jurisdiction of the Quebec courts. This issue could be raised again later, because the judgment rendered at this stage is only an interlocutory decision (art. 1010 of the C.C.P.). The court may subsequently reconsider the issue in light of all the evidence, and decline jurisdiction, at the trial on the merits (Thompson, at p. 73).
[43] On the basis of the facts as alleged, we conclude that the Quebec courts have jurisdiction over this matter under art. 3148 of the C.C.Q. Article 3148 defines the scope of the jurisdiction of the Quebec courts under private international law by providing for certain connecting factors in respect of the jurisdiction of Quebec authorities. More specifically, art. 3148(3) confers jurisdiction on a Quebec authority in a personal action of a patrimonial nature where “a fault was committed in Québec, damage was suffered in Québec, an injurious act occurred in Québec or one of the obligations arising from a contract was to be performed in Québec”.
[44] As we mentioned above, Option consommateurs argues that every member of the group on behalf of which it intends to act has suffered economic damage as a result of the manufacturers’ unlawful price-fixing scheme for DRAM. Ms. Cloutier, the designated member of the group, is domiciled in Quebec. When she purchased a computer from Dell over the Internet from her home in Montréal, she entered into a contract of sale that required her to pay more than she should have for the computer on account of the alleged conspiracy. Option consommateurs argues that the contract is deemed to have been entered into in Quebec under the Consumer Protection Act and that Ms. Cloutier accordingly suffered damage in Quebec. The appellants counter that economic damage alone is not sufficient to ground jurisdiction and, moreover, that the contract was not entered into in Quebec.
[45] Damage suffered in Quebec is an independent factor under art. 3148(3): the damage does not need to be tied to the locus of the injury or of the fault, unlike in the case of art. 3168, to give one example. Any one of the four individual factors listed in art. 3148(3) would constitute a sufficient connection with the province to ground jurisdiction (see Royal Bank of Canada v. Capital Factors Inc., [2004] Q.J. No. 11841 (QL) (C.A.), at para. 2; Spar Aerospace Ltd. v. American Mobile Satellite Corp., 2002 SCC 78, [2002] 4 S.C.R. 205, at para. 56). In terms of the type of damage covered by art. 3148(3), there is no principled reason to exclude purely economic damage from its scope. The plain language of art. 3148(3) does not preclude economic damage from serving as a connecting factor, nor is the recovery of a purely economic loss prohibited in Quebec civil law (see C. Emanuelli, Droit international privé québécois (3rd ed. 2011), at pp. 116-18). It is clear from the Quebec jurisprudence that economic damage can serve as a connecting factor under art. 3148(3) (see, e.g., Sterling Combustion inc. v. Roco Industrie inc., 2005 QCCA 662 (CanLII); Option Consommateurs v. British Airways PLC, 2010 QCCS 140 (CanLII)).
[46] Quebecor Printing, a case the appellants rely on, should not be read so broadly as to systematically exclude a purely economic loss as a type of damage to which art. 3148(3) applies. Rather, that case indicates that where financial damage is merely recorded in Quebec, that fact is not sufficient to ground jurisdiction under art. 3148(3). To satisfy the requirement of art. 3148(3), the damage must be suffered in Quebec. As Kasirer J.A. explained in the judgment of the Court of Appeal in the case at bar, there is a distinction between damage that is substantially suffered in Quebec and damage that is simply recorded in Quebec on the basis of the location of the plaintiff’s patrimony:
[Préjudice] is to be distinguished from the “dommage/damage” that is the subjective consequence of the injury relevant to the measure of reparation needed to make good the loss. As a result, in specifying “damage was suffered in Québec/un préjudice y a été subi” as the relevant connecting factor, article 3148(3) seeks to identify the substantive situs of the “bodily, moral or material injury which is the immediate and direct consequence of the debtor’s default” (article 1607 C.C.Q.) and not the situs of the patrimony in which the consequence of that injury is recorded. [para. 65]
[47] This application of the C.C.Q. is not, as the appellants assert, a novel, or undue, extension of Quebec’s jurisdiction. Rather, it is based on the language of art. 3148(3) and on the jurisprudence. As this Court stated in Spar Aerospace, at para. 58, “[t]here is abundant support for the proposition that art. 3148 sets out a broad basis for jurisdiction.”
[48] In the instant case, the economic damage was a