Shah et al. v. LG Chem, Ltd. et al.
[Indexed as: Shah v. LG Chem, Ltd.]
2018 ONCA 819
Court of Appeal for Ontario, Rouleau, L.B. Roberts and Fairburn JJ.A.
October 12, 2018
Civil procedure — Class proceedings — Certification — Plaintiffs
alleging that defendant manufacturers and suppliers conspired to fix
price of lithium-ion batteries — Conspiracy allegedly impacting “umbrella
purchasers” whose batteries originated from non-defendants as it
increased price of all lithium-ion products — Unlawful means conspiracy
and statutory claim for breach of s. 45 of Competition Act being certified
but only with respect to purchasers whose lithium-ion products originated
from defendants — Plaintiffs’ appeal allowed — Divisional Court erring
by excluding umbrella purchasers from class — Principle of indeterminate
liability not applying to either statutory claim or unlawful means
conspiracy claim — Claims properly pleaded — Claims raising common
issues with exception of quantification of damages for umbrella
purchasers — Separate representative plaintiff not required for umbrella
purchasers — Class proceeding preferable procedure for resolving
common issues — Competition Act, R.S.C. 1985, c. C-34, ss. 36 and 45.
Torts — Conspiracy — Principle of indeterminate liability not applying
to unlawful means conspiracy claim or statutory claim for breach of s. 45
of Competition Act — Competition Act, R.S.C. 1985, c. C-34, ss. 36 and 45.
The plaintiffs brought a proposed class action against the defendant manufacturers and suppliers on the basis that they had conspired to raise, maintain, fix
and/or stabilize the price of lithium-ion batteries (“LIBs”) sold in Canada between
specified dates. The conspiracy was alleged to have impacted all purchasers of LIBs,
those whose LIBs originated from non-defendants (the “umbrella purchasers”) as
well as those whose LIBs originated from the defendants (the “non-umbrella
purchasers”). The plaintiffs maintained that because the alleged cartel members
held so much of the market share, the increase in the cartel’s prices caused non-conspirators to also raise their prices (the “umbrella effect”). On a motion to certify
the action as a class proceeding, the certification judge refused to certify the
plaintiffs’ unlawful means conspiracy claim, but certified their statutory claim for
damages under s. 36 of the Competition Act for breach of s. 45 of the Act, although
only in relation to the non-umbrella purchasers. The Divisional Court found that the
certification judge erred in denying certification of the unlawful means conspiracy
claim. The court certified that claim. The court found that the certification judge did
not err in removing the umbrella purchasers from class membership, as to include
umbrella purchasers would expose the defendants to indeterminate liability. The
plaintiffs appealed the exclusion of umbrella purchasers from the class.
Held, the appeal should be allowed.
The principle of indeterminate liability did not apply to either the statutory
claim or the unlawful means conspiracy claim. With respect to the statutory claim,
Parliament did not intend that the principle of indeterminate liability would apply
to claims under s. 36 of the Competition Act for recovery of damages arising from
conspiratorial conduct caught by s. 45. The combined operation of ss. 36 and 45 of
the Act do all of the necessary work in terms of limiting liability. It was therefore
not plain and obvious that the umbrella purchasers’ statutory claim had no