2011 QCCA 2115, 2011 QCCA 2115

Option Consommateurs c. Infineon Technologies, a.g. 2011 QCCA 2115 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-018872-085 (500-06-000251-047) DATE: NOVEMBER 16, 2011 CORAM: THE HONOURABLE ANDRÉ FORGET, J.A. FRANÇOIS PELLETIER, J.A. NICHOLAS KASIRER, J.A. OPTION CONSOMMATEURS APPELLANT – petitioner and CLAUDETTE CLOUTIER Designated person v. INFINEON TECHNOLOGIES AG and INFINEON TECHNOLOGIES NORTH AMERICA CORP. and MICRON TECHNOLOGY, INC. and HYNIX SEMICONDUCTOR INC. and SAMSUNG ELECTRONICS CO., LTD. and SAMSUNG SEMICONDUCTOR INC. and ELPIDA MEMORY, INC.

RESPONDENTS – respondents JUDGMENT [ 1 ] In connection with the principal appeal, judgment on which is rendered concurrently with these reasons, both the appellant and the respondents have filed there motions to present new evidence pursuant to articles 509 and 1002 C.C.P. The respondents contest the two motions presented by the appellant. The appellant, in turn, contests the respondents’ motion.

Elpida Memory, Inc. has withdrawn from the appeal and is no longer a party to these proceedings. [ 2 ] The appellant Option consommateurs seeks to introduce into evidence on appeal a press release, dated May 19, 2010, in which the European Commission announced a settlement decision in a cartel case involving ten producers of dynamic random access memory ("DRAM"), including the respondents, for a period that includes part of the time period material for the principal appeal ("motion 1").

The appellant also seeks to introduce evidence of press releases dated on or about June 24, 2010 in which lawyers acting for certain indirect purchaser plaintiffs in U.S. antitrust suits against certain producers of DRAM announced substantial settlements to put an end to part of the litigation arising out of allegations of price fixing of DRAM in the United States ("motion 2").

[ 3 ] The respondents seek to introduce into evidence five letters, dated on or about April 19, 2010 and addressed to certain amongst them by an official at the Competition Bureau of Canada. The letters announce the discontinuance of the inquiry into allegations of anti-competition activity in the DRAM industry involving respondents Hynix Semiconductor Inc., Micron Technology, Inc., Samsung Electronics Co. Ltd., Elpida Memory, Inc. and Infineon Technologies AG ("motion 3"). [ 4 ] The law governing the admissibility of new evidence on appeal is the same for all three motions.

Article 509 C.C.P. provides that in exceptional circumstances, the Court may, if the interests of justice so require, allow a party to adduce indispensable new evidence. The decided cases have uniformly identified four criteria that must be satisfied for the Court to allow evidence under

article 509: the evidence must be new, it must be indispensable, the circumstances must be exceptional and the interests of justice must require the evidence to be adduced. [1] After summarizing these requirements, Bisson, J.A., as he then was, provided useful direction as to when the exercise of the discretionary authority under

article 509 is appropriate in what has since become a leading case on point: "[i]l arrivera des cas où certaines circonstances survenues pendant l’instance en appel jetteront sur les faits mis en preuve un éclairage tellement différent de celui envisagé par celui du procès qu’une nouvelle preuve pourra être permise". [2] [ 5 ] In the class action setting, the general rule on the admissibility of evidence at the authorization stage is specified at

article 1002, paragraph 2 C.C.P. The legislature provides that "the judge may allow relevant evidence to be submitted". It may be noted that the French text of

article 1002, paragraph 2, states the rule differently: "le juge peut permettre la présentation d’une preuve appropriée ". In seeking out the common meaning between the two linguistic texts, it is plain that the criterion of relevancy – the guiding principle in evidentiary matters (article 2857 C.C.Q.) – is a sine qua non for admissibility under

article 1002 C.C.P. Motion 1: The Press Release Regarding the European Settlement [ 6 ] The appellant has succeeded in demonstrating that the evidence satisfies the requirements in articles 509 and 1002 C.C.P. Dated May 19, 2010, the press release can be said to contain new evidence. That evidence may be fairly characterized as indispensable: it will inform a determination of the international ramifications of the alleged conspiracy to fix the price of DRAM by pointing to a decision that records the sales of DRAM in the European Economic Area which violated antitrust law in Europe.

The companies involved in the settlement benefited from a reduction in fines of at least 10% in exchange for an acknowledgment of the facts alleged against them, including their participation in the conspiracy in Europe. This is critical to the outcome in appeal. The appellant alleges in the motion seeking authorization of the class action that the conspiracy took place in the "United States and elsewhere" and that its effects were felt in Quebec.

The respondents answer that the wrongdoing took place in the United States and that this conduct has no bearing on the alleged injury suffered in Quebec. [ 7 ] Not only is it new and indispensable, the evidence would have had a bearing on the decision in first instance. Pursuant to

article 1003(

b) C.C.P., the motions judge decided that the facts alleged do not seem to justify the conclusions sought in the motion. His reasoning rested, in part, on the wrongful behaviour having taken place in the United States (in particular paragraphs [177], [185] to [191] of the judgment a quo ). [ 8 ] Needless to say, the press release does not establish that wrongful behaviour took place in Quebec.

Moreover, it is not best evidence of the settlement decision and the acknowledgment of participation in the price-fixing conspiracy to which it alludes but only a second-hand account therefore, with all of the evidentiary fragility that accompanies documents of this kind. But even on that basis, the evidence does suggest that the conspiracy, at the relevant time, was one of far-reaching import and not simply contained to the United States.

It confirms the text of the charges that resulted in Plea Agreements, signed in the U.S. by certain of the respondents, in which the conspiracy to suppress and eliminate competition by fixing the price of DRAM was said to have taken place "in the United States and elsewhere". [3] It also contradicts arguments made by the respondents in first instance and on appeal that the alleged cartel did not have international ramifications and that none of the materials submitted by the appellant demonstrate that the conspiracy involved sales to computer manufacturers outside the United States or had an impact on prices outside of the United States. [4] Even if the new evidence does not make mention of Quebec, it tends to confirm the international character of the conspiracy and its effects, all of which are at the core of the appellant’s theory of its case.

The evidence is new, relevant, and indispensable in its possible bearing on the outcome of the case. The interests of justice require it to be admitted. Motion 2: The Press Release concerning the Settlement with Indirect Purchasers in the United States. [ 9 ] This evidence should not be admitted.

It is not indispensable, and the interests of justice do not require it to be adduced. [ 10 ] It is true, as the appellant argues, that a settlement with indirect purchasers might, in some circumstances, constitute an admission that some of the overcharges arising out of the alleged price fixing were "passed on" from the direct purchasers of DRAM down the chain to consumers such as the proposed representative of the class who acquired DRAM indirectly. But as spoken to in the short press releases, no such liability is established.

Certain if not all of the respondents appear to have agreed to the settlement while continuing to deny their liability for any antitrust behaviour. [ 11 ] Unlike the press release in Motion 1 which records an acknowledgment of the respondents' participation in a conspiracy in Europe, the press release in Motion 2 includes no acknowledgment whatsoever by the respondents of their liability to indirect purchasers in the United States with whom they have settled. [ 12 ] Parties settle disputes out of court for many reasons that have no necessary bearing on whether or not they are liable for the wrongs alleged against them.

In the absence of a true admission of liability, news of an out-of-court settlement does not in itself justify an inference of wrongdoing. That reasoning applies here. The press release has no probative value in establishing liability to indirect purchasers in the class and should not be admitted. Motion 3: Letters from the Competition Bureau of Canada [ 13 ] The respondents contend that these letters confirm that the appellant has no recourse under s. 36 of the Competition Act , R.S.C. 1985, c.

C-34, and serves to demonstrate the weakness of the case that there is an actionable price-fixing conspiracy under Canadian law.

[ 14 ] The evidence is not indispensable within the meaning of

article 509 and should be declared inadmissible on that basis. [ 15 ] The appellant admitted in first instance that its recourse under s. 36 of the Competition Act is prescribed. It confirmed that position in pleadings on the motion before this Court. That fact in itself might well justify the discontinuance by the Competition Bureau of its investigation.

The letters are not necessary to show that the appellant has no cause of action against the respondents under the Act. [ 16 ] Moreover, the letters have little or no value as evidence for the proposition that a conspiracy cannot be established in Canadian law or of the strength or weakness of the proof that the authorities have in hand. The letters give no such explanation for the discontinuance and there are many other possible reasons for this administrative decision.

Allowing the motion and admitting the letters into evidence on appeal would serve none of the purposes identified by the respondents. [ 17 ] Given that Elpida Memory, Inc. is no longer party to the appeal, the orders as to costs in this judgment do not apply to it.

FOR THESE REASONS , the Court: [ 18 ] GRANTS the appellant’s motion to adduce new evidence in respect of the press release relating to the settlement in the European Economic Area, with costs against the respondents except Elpida Memory, Inc.; [ 19 ] DISMISSES the appellant’s motion to adduce new evidence in respect of the press release relating to the settlement with the indirect purchasers in the United States, with costs; [ 20 ] DISMISSES the respondents’ motion to adduce new evidence in respect of the letters from the Competition Bureau of Canada, with costs against the respondents except Elpida Memory, Inc.

ANDRÉ FORGET, J.A. FRANÇOIS PELLETIER, J.A. NICHOLAS KASIRER, J.A. Mtre Daniel Belleau Mtre Maxime Nasr BELLEAU LAPOINTE For the appellant Mtre Yves Martineau STIKEMAN ELLIOTT For Infineon Technologies AG and Infineon Technologies North America Corp. Mtre Éric Vallières Mtre David Martin Low (Ontario) McMILLAN s.e.n.c.r.l., s.r.l. For Micron Technology, Inc. Mtre Madeleine Renaud Mtre Céline Legendre McCARTHY TÉTRAULT For Hynix Semiconductor Inc. Mtre Francis Rouleau BLAKE, CASSELS & GRAYDON For Samsung Electronics Co., Ltd. and Samsung Semiconductor Inc.

Mtre Sylvain Lussier Mtre Christopher Panet Naudie (Ontario) OSLER, HOSKIN & HARCOURT For Elpida Memory, Inc. Date of hearing: August 31, 2010