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Class Actions (Ont) - Certification - Disclosing Cause of Action [CPA s.5(1)(a)](a. Lilleyman v. Bumble Bee Foods LLC
In Lilleyman v. Bumble Bee Foods LLC (Ont CA, 2024) the Ontario Court of Appeal dismissed a plaintiff's 'price-fixing conspiracy' class action certification appeal.
Here the appeal court considers the CPA s.5(1)(a) 'cause of action' certification element:[18] The motion judge noted that the test for certification is to be applied in a purposive and generous manner to give effect to the goals of class actions, including to provide access to justice for litigants, to encourage behaviour modification and to promote the efficient use of judicial resources. That said, the certification test is meant to be a meaningful screening device, to ensure that the plaintiff’s claims can appropriately be prosecuted as a class proceeding.
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(2) The cause of action criterion
[20] The motion judge identified the applicable legal test on this issue as whether, assuming the facts pleaded to be true, there is a reasonable prospect that the claim will succeed. The claim must be read generously, and it will be unsatisfactory only if it is plain, obvious and beyond a reasonable doubt that the plaintiff cannot succeed: Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 SCR 158, at para. 25. He acknowledged that pleading a civil conspiracy claim may be particularly challenging “given the clandestine nature of conspiracies.”
[21] The motion judge noted, however, that bare allegations and conclusory statements based on assumptions or speculation, or which are incapable of proof, are not material facts and are not assumed to be true for the purposes of a motion determining whether a legally viable cause of action is pleaded. He also observed that the requirement to plead material facts, including identifying the acts alleged against each defendant, is particularly important in pleading a civil conspiracy so that each can know what he or she is alleged to have done as part of the conspiracy.
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[26] In short, the motion judge found that the Claim proceeded on the basis of bare allegations and conclusory statements, rather than material facts that could possibly support the conclusion that there was a conspiracy involving the defendants to unlawfully inflate the price of canned tuna in Canada.
[27] The motion judge therefore concluded that the Claim as pleaded failed to satisfy the “cause of action” criterion. He further found that the evidentiary record on the motion revealed that no purpose would be served by granting the plaintiff leave to amend her already amended Claim.
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[54] As the motion judge correctly pointed out, the court is not obliged to assume as true bare allegations and conclusory statements based on assumptions or speculation, or which are otherwise incapable of proof: Das v. George Weston Limited, 2018 ONCA 1053, at para. 74. ....
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(iii) The motion judge did not decide the merits
[58] The appellant argues that the motion judge went beyond a consideration of whether the pleadings disclosed a cause of action and erroneously decided the merits. The appellant objects, first, to the motion judge’s statement that his finding that the pleadings did not disclose a cause of action was “confirmed” by the some-basis-in-fact analysis of the common issues criterion that “actually reveals that the price-fixing conspiracy in Canada did not exist.” Secondly, the appellant takes issue with the motion judge’s statement elsewhere in his reasons that the allegations in the Claim “assume but do not demonstrate… an illegal meeting of the minds and an illegal agreement to agree to fix prices as distinct from conscious parallelism.”
[59] When these impugned statements are considered in context, they do not support the appellant’s claim that the motion judge improperly decided the merits in his “cause of action” analysis.
[60] Turning to the first impugned statement, the appellant has omitted the key opening words in the relevant sentence: “[a]s it happens, this conclusion, which is not a merits determination, is confirmed by the the-some-basis-in-fact analysis…” (my emphasis). This context makes clear that the motion judge correctly understood that his “cause of action” analysis did not involve a consideration of the underlying merits of the proceeding. Rather, he was observing that his conclusion that the pleadings failed to disclose a cause of action was confirmed by his findings on the some-basis-in-fact criterion. As this court recently noted in Teva, at paras. 34-35, a certification motion judge who considers evidence on a certification motion is quite capable of disabusing himself of that evidence in connection with the “cause of action” criterion under s. 5(1)(a). In my view, this is what occurred here and, accordingly, I see no error in this first impugned statement. . Palmer v. Teva Canada Limited
In Palmer v. Teva Canada Limited (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal against a lower court dismissal of a class action certification motion.
Here the court considers the CPA s.5(1)(a) law of "whether the pleadings disclose a cause of action":[31] The test to determine whether the pleadings disclose a cause of action for the purposes of s. 5(1)(a) of the Class Proceedings Act, 1992 is, assuming the facts as stated in the statement of claim can be proved, it is “plain and obvious” the claim cannot succeed.
[32] Section 5(1)(a) is designed to weed out claims that, on the pleadings, have no chance of success. It is not an inquiry into the merits of the action, and the facts pleaded in the statement of claim are deemed to be true: Pro-Sys Consultants, at para. 63. The question is not whether the claim is likely to succeed, but whether the suit is appropriately brought as a class action: Hollick, at para. 25. If a claim has no reasonable prospect of success, it should not be allowed to proceed to trial: R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, at para. 17.
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