Court Refuses to Certify Canadian Price-Fixing Case

by Bennett Jones LLP

Bennett Jones LLP

For many years, it was next to impossible to certify a price-fixing class action in Canada. Today, certification is so common that refusals to certify are the rare exception. Ewert v Nippon Yusen Kabushiki Kaisha, 2017 BCSC 2357 [Ewert], is such an exception. While the threshold for certification in Canada is low, the court emphasized that certification was not a “‘file, smile and certify’ exercise.” It refused to certify the case owing to the plaintiff’s failure to demonstrate the availability of key data inputs for its econometric methodology.

The plaintiff’s allegations in Ewert followed a typical pattern for price-fixing cases. The defendants operated roll-on/roll-off vessels used to transport vehicles and heavy equipment to Canada. The plaintiff claimed that the defendants had fixed shipping prices, resulting in higher costs for the Canadian class members who purchased the imported vehicles. Several defendants had pleaded guilty to price-fixing charges in the United States.

At the certification hearing, the plaintiff’s economist set out a methodology by which he proposed to prove that harm was common to all class members. The defendants’ economist responded by arguing that the plaintiff’s model was fundamentally flawed in several respects. In particular, he stated that the proposed methodology was not credible or plausible given: (i) the model lacks the required structural stability, as the alleged conspiracy spanned 16 years, with different market characteristics; (ii) prices are privately negotiated, rendering it impossible to estimate a single standard price; and (iii) since only a quarter of cars sold in British Columbia during the proposed class period were imported from overseas, anything less than a perfectly competitive market would require individual analysis to establish a pass-through.

The plaintiff’s expert replied that: (i) the model can be adjusted for structural instability; (ii) the model relies on prices actually paid by manufacturers, not common pricing; and (iii) the model assumes the market is “close to perfectly competitive” (this point was reiterated in the plaintiff’s reply evidence)—a critical assumption the plaintiff’s expert believed to be reasonable.

These replies proved sufficient for the court to conclude that the plaintiff’s methodology had a realistic prospect of demonstrating harm on a class-wide basis at trial. While the court was skeptical that the plaintiff’s methodology would withstand the defendants’ criticisms at trial, it held that further inquiry into the relative merits of each side’s arguments at certification would descend into an impermissible “battle of the experts.”

The plaintiff was less fortunate when the court examined the data required by his expert’s methodology. His expert proposed to use (i) public information; and (ii) private information that the defendants would make available during discovery. Although the expert testified that public information was a necessary input for his methodology, he did not adequately explain how he would obtain that information or what that information would reveal.

The court noted that plaintiffs must lead evidence as to the availability of the data required by their methodology. To the extent the plaintiff’s expert relies on publically available data, the expert must specifically identify that data so that the court can ascertain that the data exists, that it will likely be available, and how it functions in the proposed method. In this case, the court held that even though the plaintiff’s expert identified some data sources, it was not clear from his evidence that the identified sources alone were sufficient for the proposed model. The court stopped short of holding that the plaintiff must also have obtained the data prior to certification, as that determination was unnecessary for its reasoning.

In so holding, the court emphasized it was not requiring that the model must be developed for certification, that documents must be obtained prior to certification, or weighing the competing expert opinions.

Although not strictly necessary, given its refusal to certify the case generally, the court also refused to certify sub-classes based on a lack of evidence. In each instance, the plaintiff baldly asserted in argument or in evidence that the general methodology could apply to the specific sub-classes. The court held that this was inadequate. For example, in his reply evidence, the plaintiff’s expert asserted that his methodology developed for the automobile market could also apply to the “high and heavy” market (being trucks, buses, agricultural and construction equipment). The court held that such evidence is not the proper subject of reply evidence (“it is something he ought to have addressed in his original report”), and in any event that the plaintiff had not shown that the methodology was workable for this market given its different characteristics.

Defendants should take heart that courts may more carefully scrutinize plaintiffs’ evidence at certification. Plaintiffs in future cases may be held to account for better explanations of the availability and utility of their methodology’s data inputs, as well as how the methodology can work for all proposed class members. We can expect more argument at certification on just how much explanation plaintiffs must now provide.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bennett Jones LLP | Attorney Advertising

Written by:

Bennett Jones LLP

Bennett Jones LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.