2021 FC 1185, 2021 FC 1185

EDITOR’S NOTE: This document is subject to editorial revision before its reproduction in final form in the Federal Courts Reports . T-809-18 2021 FC 1185 Proposed Class Proceeding Chelsea Jensen and Laurent Abesdris ( Plaintiffs ) v. Samsung Electronics Co. Ltd., Samsung Semiconductor Inc., Samsung Electronics Canada, Inc., SK Hynix Inc., SK Hynix America, Inc., Micron Technology, Inc., and Micron Semiconductor Products, Inc. ( Defendants ) Indexed as: Jensen v. Samsung Electronics Co. Ltd. Federal Court, Gascon J.—By videoconference, October 26-28; Ottawa, November 5, 2021.

Practice — Class Proceedings — Motion seeking order to certify underlying action as class proceeding under Federal Courts Rules , r. 334.16(1) — Plaintiffs alleging that manufacturers of Dynamic Random Access Memory chips (DRAM) conspired to limit global supply, raise price of DRAM — Contending that alleged conspiracy disclosed cause of action under Competition Act ( Act ), s. 36 for breach of Act, ss. 45 , 46 — Maintaining satisfying all required legal elements for certification — Alleging that conspiracy between defendants formed, achieved through direct communications in private meetings between defendants as well as through public statements, or “signalling”, to each other — Certification motion following parallel class action commenced earlier in the U.S. — Plaintiffs advancing that their certification motion typical competition law class action raising allegation of price-fixing conspiracy — Claiming no meaningful differences between this case, previous DRAM case (Infineon Technologies AG v.

Option consommateurs (Infineon)) where certification confirmed by Supreme Court — Seeking to certify class proceeding on basis of six common questions — Submitting that some-basis-in-fact standard requiring “one-step approach” which focuses solely on commonality, that applying “two-step approach” would infuse merits analysis in certification test — Main issue whether alleged conspiracy, wrongful conduct existing in this case — Plaintiffs not satisfying reasonable cause of action requirement for certification — Distinctive feature of this case plaintiffs’ core allegation of conspiracy about supply suppression — Competition law class action herein rare case where existence of alleged conspiracy at source of claim for loss, damages under Competition Act, s. 36 challenged at certification stage — Existence of an alleged conspiracy typically not an issue in such class actions — Infineon precedent not shedding any light on main issue in dispute — Whether “plain and obvious” that pleadings disclosing no reasonable cause of action, that no claim exists — Here, adequate allegations in pleadings and minimal evidentiary background that defendants explicitly or tacitly agreeing to act in furtherance of common goal both missing in plaintiffs’ motion — Pleadings purely speculative — Failed to provide material facts — Must be supported by sufficient particularization, not be bare assertions or conclusory legal statements based on assumptions or speculation — Presumption that allegations of fact true having some limits — Allegations not assumed to be true if not precise enough or if only speculative — Court cannot weigh evidence at certification stage — Allegations, factual foundation of circumstantial events must go to establishment of an agreement, to the conduct of parties — Here, strictly no allegations, no material facts, let alone any evidentiary basis, of any “facilitating practices” in terms of conduct by defendants — Public statements relied on by plaintiffs not offering material facts to support allegation of agreement between defendants — Merely showing parallel conduct not enough to ground conspiracy claim, speculate from it that agreement must be at source of parallel conduct — Statement of claim added up to fishing expedition — Plaintiffs’ limited allegations not meeting Federal Courts Rules , rr. 174, 181 requirements — Plaintiffs also failing to show, on some-basis-in-fact standard of proof, that proposed common issues about alleged wrongful acts under ss. 45 , 46 existed in fact — Some-basis-in-fact standard requiring two-step approach to common issues requirement — Two-step test still governing in certification decisions across Canada — No conflict between Supreme Court decisions in Pro-Sys Consultants Ltd. v.

Microsoft Corporation, Hollick v.

Toronto (City) establishing that there must be some evidentiary basis to show that common issue existing beyond bare assertion in pleadings — Pro-Sys supporting two-step approach to common issues requirement — Not departing from Hollick as governing authority on some-basis-in-fact standard — Plaintiffs mischaracterized, misunderstood two-step approach when presenting it as merits-based test — Two-step approach preventing certification of artificial claims — Pro-Sys not lowering already low bar to certification to the point of absolving plaintiffs of obligation to lead any minimal level of evidence that alleged wrong existing in fact — Here, various categories of “evidence” falling short of mark, not meeting low threshold of some basis in fact — Legal memberships in legal trade associations not constituting any basis in fact supporting existence of conspiracy — References to U.S. pleadings alleging same conspiracy not appropriate evidence — Procedural dimension of class proceedings never meant to downsize certification process to meaningless one, or to become fig leaf to cover naked shortcomings of plaintiff’s motion — Court’s role, even at procedural stage of certification, to filter out untenable, unfounded, speculative claims — Motion dismissed.

Competition — Plaintiffs seeking order to certify underlying action as class proceeding under Federal Courts Rules , r. 334.16(1) — Alleging that manufacturers of Dynamic Random Access Memory chips (DRAM) conspired to limit global supply, raise price of DRAM — Contending that alleged conspiracy disclosed cause of action under Competition Act ( Act ), s. 36 for breach of Act, ss. 45 , 46 — Advancing that their certification motion typical competition law class action raising allegation of price-fixing conspiracy — Seeking to certify class proceeding on basis of six common questions — Whether alleged conspiracy, wrongful conduct existing in this case — Competition law class action herein rare case where existence of alleged conspiracy at source of claim for loss, damages under

Competition Act, s. 36 challenged at certification stage — S. 45 conspiracy offence at source of plaintiffs’ proposed class action rooted in existence of agreement to engage in prohibited conduct — Pleadings purely speculative, not supported by material facts — “Conscious parallelism” falling short of conduct prohibited by s. 45 — Incorrect to use terms “tacit agreement”, “tacit collusion”, “conscious parallelism” interchangeably to describe similar reality — Key difference between “conscious parallelism”, other conduct is absence of agreement — No precedent in Canada recognizing that unilateral “public signalling” amounting to conspiracy prohibited by s. 45 — S. 46 establishing offence for persons beyond those directly involved in conspiracies covered by s. 45 — Without s. 46, courts only having jurisdiction to impose sanctions against conspirators themselves as opposed to entities in Canada who merely implement it without being direct party to conspiracy — Conspiracy claims contained in plaintiffs’ general statements simply mirroring language of Act — Plaintiffs’ statement of claim added up to fishing expedition —To allow plaintiffs’ proposed class action to go forward on basis of record before Court would set dangerous precedent opening door to file s. 36 claims on sole basis of apparent anti-competitive effects accompanied with unfounded allegations, speculation regarding collusive conduct of alleged conspirators — S. 45 not contemplating that evidence of anti-competitive effects constituting proof of illegal agreement between competitors, without material facts or evidentiary basis regarding concerted conduct of competitors — Presence of express or tacit agreement beating heart of conspiracy provision — Absence of any investigation by Competition Bureau on impugned conduct, while not determinative of potential existence of s. 45 conspiracy, certainly telling.

This was a motion seeking an order to certify the underlying action as a class proceeding under subsection 334.16(1) of the Federal Courts Rules . In their proposed competition law class action, the plaintiffs alleged that the leading manufacturers of Dynamic Random Access Memory chips (DRAM) conspired to limit the global supply and raise the price of DRAM [1] . The plaintiffs contended that the alleged conspiracy disclosed a straightforward cause of action under

section 36 of the Competition Act ( Act ), for breach of sections 45 and 46 of the Act . The plaintiffs sought damages or compensation on behalf of all persons or entities in Canada who purchased DRAM manufactured and/or sold by the defendants, or products containing DRAM manufactured and/or sold by the defendants, excluding the defendants and their parent companies, subsidiaries and affiliates (Class). The plaintiffs maintained that they satisfied all the required legal elements for certification, namely, (

i) that there was a reasonable cause of action; (ii) that there was an identifiable class; (iii) that there were common questions of law and fact; (iv) that a class proceeding was the preferred procedure; and (

v) that they were appropriate representatives of the Class. The defendants stated that (

i) the statement of claim did not disclose a reasonable cause of action; (ii) the issues identified by the plaintiffs did not qualify as common issues as the plaintiffs failed to provide some basis in fact for the existence or commonality of their liability or harm issues; and (iii) without liability and harm certifiable as common issues, a class proceeding is not the preferred procedure.

The plaintiffs alleged that the conspiracy between the defendants was formed and achieved through direct communications in private meetings between the defendants as well as through public statements— or “signalling”—to each other. The plaintiffs also alleged that this supply reduction resulted in supra-competitive pricing for DRAM and DRAM products that would not have occurred absent the conspiracy and, further, that this “overcharge” was passed on to end- consumers, including the plaintiffs.

The certification motion filed by the plaintiffs followed a parallel class action commenced earlier in the U.S., on which the claim in this proposed class action was directly based. The U.S. District Court found that the U.S. plaintiffs’ allegations of “plus factors” combined and viewed together fell short of alleging a plausible cause of action based on conspiracy, and that their claim amounted to nothing more than “conscious parallelism”. [2] The plaintiffs advanced that their certification motion was a typical competition law class action raising an allegation of price-fixing conspiracy.

They claimed that there are no meaningful differences between this case and a previous DRAM case where certification was confirmed by the Supreme Court in Infineon Technologies AG v. Option consommateurs ( Infineon ). The defendants challenged three of the five requirements to be met to certify a class proceeding: the reasonable cause of action, the existence of common issues of law or fact, and the preferred procedure. The plaintiffs asked the Court to certify this class proceeding on the basis of six common questions.

The first and second common issues related to the existence and scope of the alleged conspiracy and the defendants’ liability under sections 45 and 46 of the Act . The third and fourth dealt with allegations of loss and harm flowing from the alleged wrongful acts. The last two concerned additional issues of follow-on interest and investigation costs. The plaintiffs submitted that the some-basis-in-fact standard requires a so-called “one-step approach” which focuses solely on commonality, and that applying a “two-step approach” would infuse a merits analysis in the certification test.

The main issue raised by the plaintiffs’ certification motion was whether the alleged conspiracy and wrongful conduct existed in this case. Held , the motion should be dismissed. The plaintiffs did not satisfy the reasonable cause of action requirement for certification. This proposed competition law class action differed significantly from the usual price-fixing class actions brought before Canadian courts under the conspiracy provision of the Act (i.e.,

section 45 and its predecessors). The conspiracy alleged by the plaintiffs in this case was not a typical price-fixing conspiracy under

section 45 of the Act ; it was instead an alleged conspiracy to suppress the supply of DRAM, which allegedly resulted in an increase in prices for DRAM. The plaintiffs’ core allegation of conspiracy was about supply suppression. This was a distinctive feature of this case. There is no precedent where the primary focus of a competition law class action alleging a breach of

section 45 of the Act was output suppression. This competition law class action was a rare case where the very existence of the alleged conspiracy at the source of the claim for loss and damages under

section 36 of the Act was disputed and challenged at the certification stage. The existence of an alleged conspiracy is typically not an issue in such class actions. Infineon could not predetermine the result of the present certification motion as there is a fundamental difference with the current case relating to the issue of the alleged conspiracy. The Infineon precedent did not shed any useful light on the main issue in dispute.

The test to be applied on the first criterion for certification—namely, that the pleadings disclose a reasonable cause of action—is whether it is “plain and obvious” that the pleadings disclose no reasonable cause of action and that no claim exists. For the remaining four certification criteria, the plaintiffs have the burden of adducing evidence to show “some basis in fact” that the requirements have been met. Here, the

section 45 conspiracy offence at the source of the plaintiffs’ proposed class action was rooted in the existence of an agreement to engage in the prohibited conduct. There had to be adequate allegations in the pleadings as well as some minimal evidentiary background that the defendants explicitly or tacitly agreed to act in the furtherance of a common goal. Both were missing in the plaintiffs’ motion. The pleadings were purely speculative, were not supported by material facts, and therefore did not disclose a reasonable cause of action.

The plaintiffs’ pleadings failed to provide material facts showing that the defendants entered into an agreement to suppress the supply of DRAM, either directly or indirectly, and arrived at a mutual understanding. In order for allegations in pleadings to be considered as material facts, they must be supported by sufficient particularization, and must not be bare

assertions or conclusory legal statements based on assumptions or speculation. The presumption that allegations of fact are true has some limits. There has to be some specific, tangible facts, and allegations will not be assumed to be true if they are not precise enough or if they are only speculative. The documents referred to by the plaintiffs in their statement of claim formed an integral part of their claim.

However, at the stage of a certification motion, it is not the certification judge’s task to look at these documents in detail and to determine whether or not the plaintiffs have correctly interpreted them, as this would amount to weighing evidence, something the Court cannot do at the certification stage. Canadian law has long recognized that “conscious parallelism” falls short of conduct prohibited by

section 45 of the Act , since it represents the independent response by each competitor to the perceived and predicted conduct of others. It is incorrect to use the terms “tacit agreement”, “tacit collusion” and “conscious parallelism” interchangeably to describe a similar reality. The key difference between “conscious parallelism” and other conduct is the absence of an agreement. So using “tacit agreement” or “tacit collusion” to describe such parallel behaviour is an oxymoron.

There is no precedent in Canada that has recognized that unilateral “public signalling”, i.e. conspiring through direct communications in private meetings and through public statements to each other, can amount to a conspiracy prohibited by

section 45 .

Section 46 of the Act adds and complements

section 45 by establishing an offence for persons beyond those who are directly involved in the conspiracies covered by

section 45. Without

section 46, the courts would only have jurisdiction to impose sanctions against the conspirators themselves as opposed to entities in Canada who merely implement it without being a direct party to the conspiracy. To properly plead a conspiracy, a plaintiff must notably specify the agreement to conspire between the defendants, and its purpose or object, as well as any specific conduct, described with clarity and precision, that is alleged to have been adopted by each of the conspirators in furtherance of the conspiracy.

None of that transpired from the general statements made by the plaintiffs in the statement of claim. The conspiracy claims contained in the plaintiffs’ general statements simply mirrored the language of the Act . The allegations and factual foundation of circumstantial events must go to the establishment of an agreement, and to the conduct of the parties. The plaintiffs could not simply allege general observed changes in prices without any material facts relating to the conduct of the defendants.

Here, there were strictly no allegations and no material facts, let alone any evidentiary basis, of any “facilitating practices” in terms of conduct by the defendants. The public statements relied on by the plaintiffs did not offer material facts to support any allegation of an agreement between the defendants to suppress DRAM supply, or even to support any suppression, restriction or limitation of supply as such. A unilateral action by a defendant does not become collusive simply because it happens to be preceded or followed in time by another, similar unilateral action by a competitor.

Merely showing parallel conduct is not enough to ground a conspiracy claim and to speculate from it that an agreement must be at the source of such parallel conduct. The statement of claim added up to a fishing expedition on its allegation of an illegal conspiracy. Accepting the plaintiffs’ allegations as being sufficient to support a cause of action based on a

section 45 conspiracy would turn

section 45 on its head, and strip away from this cornerstone provision of the Act what is now its most essential and central element, namely, the conduct of the alleged conspirators. The plaintiffs’ limited allegations did not meet the requirements established by rules 174 and 181 of the Federal Courts Rules and confirmed by the Federal Court of Appeal precedents. The plaintiffs also failed to show, on the some-basis-in-fact standard of proof, that the proposed common issues about the alleged wrongful acts under sections 45 and 46 existed in fact.

The some-basis-in-fact standard requires a two-step approach to the common issues requirement. It is clear that the two-step test still governs in certification decisions across Canada. The vast majority of the courts, prior to and following the Supreme Court decision in Pro-Sys Consultants Ltd. v. Microsoft Corporation ( Pro-Sys ), have continued to apply the two-step approach and to require a plaintiff to adduce some evidence (i.e., some basis in fact) for both the existence of the proposed common issues and for the commonality of each of the proposed common issues.

There is no conflict between the decisions in Pro-Sys , Hollick v. Toronto (City) and the long line of cases establishing that there must be some evidentiary basis to show that a common issue exists beyond a bare assertion in the pleadings. When the Pro-Sys decision is read as a whole and properly considered in context, it supports the two-step approach to the common issues requirement. Pro-Sys does not stand for the proposition that a plaintiff is under no obligation to establish that the alleged grounds of a cause of action need to be anchored in reality.

Pro-Sys cannot be read or interpreted as an attempt to depart from Hollick as the governing authority on the some-basis-in-fact standard. The plaintiffs mischaracterized and misunderstood the two-step approach when they presented it as being a merits-based test. There is a fundamental difference between weighing the merits of the claim (which the courts cannot do at certification) and determining whether some minimal evidence exists to support the existence of the claim (i.e. the two-step test).

The two-step approach prevents the certification of claims that would be entirely artificial, detached from reality and devoid of some minimal evidence pertaining to the alleged wrongful acts or cause of action. Neither Pro-Sys nor any other class action precedent of the Supreme Court intended to lower the already low bar to certification to the point where plaintiffs would be absolved of the obligation to lead any minimal level of evidence that the wrong they allege exist in fact.

Here, the various categories of “evidence” that the plaintiffs offered fell well short of the mark and did not meet the low threshold of some basis in fact.

For one, evidence regarding a foreign government’s investigation cannot establish a basis in fact for a conspiracy offence in Canada, when there is no evidence on the actual nature of the investigation and on the specific anti-competitive behaviour being investigated; no evidence or findings from the foreign regulators; no evidence that the scope of the investigation includes or extends to Canada; and no evidence on the foreign law and on whether the anti-competitive behaviour investigated in the foreign country, and possibly sanctioned in that country, is also conduct and behaviour that would constitute an illegal agreement under Canadian law.

Furthermore, the mere fact that the DRAM industry is an oligopoly, which is not in itself anti-competitive, was not enough evidence to authorize the certification of the class action in this case. The oligopolistic characteristics of an industry are just as likely to be consistent with innocent behaviour as with an unlawful one. No Canadian court has certified a competition class action in an oligopolistic market on the basis that conscious parallelism is a defence on the merits.

Perfectly legal memberships in perfectly legal trade associations, or even on the attendance of participants at perfectly legal trade association meetings, did not constitute any basis in fact supporting the existence of a conspiracy between the defendants. There was no evidence describing suspected or actual interactions between the defendants at trade association meetings, nor any interactions suggesting the establishment of an agreement to restrain the supply of DRAM or to increase DRAM prices.

Trade association meetings cannot, in and of themselves, be probative of an unlawful agreement without any evidence of improper conduct by the members of such trade associations. References to U.S. pleadings alleging the same conspiracy are not appropriate evidence since those pleadings are drafted by lawyers and simply constitute opinions or legal argumentation. The common issues requirement requires the plaintiffs to show some basis in fact for their proposed common issues, not some allegations made in a foreign proceeding.

Finally, simply tendering an expert report is not sufficient to amount to some basis in fact of a proposed common issue. In conclusion, to allow the plaintiffs’ proposed class action to go forward on the basis of the record before the Court regarding the alleged agreement would have set a dangerous precedent that would open the door to file

section 36 claims on the sole basis of apparent anti-competitive effects accompanied with unfounded allegations and speculation regarding the collusive conduct of the alleged conspirators.

Section 45 does not contemplate that evidence of actual or likely anti-competitive effects constitutes proof of the presence of an illegal agreement between competitors, without any material facts or evidentiary basis regarding the

concerted conduct of the competitors. The presence of an express or tacit agreement is the beating heart of the conspiracy provision, evenmore so with the new

section 45 prohibiting hard-core cartels as per se infractions under the Act. The procedural dimension of classproceedings was never meant to downsize the certification process to a meaningless one, or to become a fig leaf to cover the nakedshortcomings of a plaintiff’s motion. It is the Court’s role, even at the procedural stage of certification, to filter out untenable, unfoundedand speculative claims. While the absence of any investigation by the Competition Bureau on an impugned conduct is not determinativeof the potential existence of a

section 45 conspiracy. But it is certainly telling. STATUTES AND REGULATIONS CITED Competition Act, R.S.C. 1985, c. C-34, ss. 36, 45, 46. Federal Courts Rules, SOR/98-106, rr. 174, 181, 334.16(1),(2), 334.18, 334.39. CASES CITED NOT FOLLOWED: Crosslink v. BASF Canada, 2014 ONSC 4529 , 244 A.C.W.S. (3d) 780 (as to the need for evidence establishing a conspiracy). APPLIED: Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158; Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, [2001]2 S.C.R. 534; Condon v. Canada, 2015 FCA 159, 474 N.R. 300; Pro-Sys Consultants Ltd. v.

Microsoft Corporation, 2013 SCC 57,[2013] 3 S.C.R. 477; Wenham v. Canada (Attorney General), 2018 FCA 199, 420 D.L.R. (4th) 534; AIC Limited v. Fischer, 2013 SCC69, [2013] 3 S.C.R. 949; Atlantic Sugar Refineries Co. Ltd. et al. v. Attorney General of Canada, (SCC), [1980] 2S.C.R. 644, 115 D.L.R. (3d) 21; Mancuso v. Canada (National Health and Welfare), 2015 FCA 227, 476 N.R. 219; Enercorp SandSolutions Inc. v. Specialized Desanders Inc., 2018 FCA 215, 299 A.C.W.S. (3d) 391. DISTINGUISHED: Infineon Technologies AG v.

Option consommateurs AG, 2013 SCC 59, [2013] 3 S.C.R. 600, affg 2011 QCCA 2116 , 213A.C.W.S. (3d) 557, revg 2008 QCCS 2781 , 2008 CarswellQue 5729; Crosslink v. BASF Canada, 2014 ONSC 1682 ,238 A.C.W.S. (3d) 547, affd 2014 ONSC 4529 , 244 A.C.W.S. (3d) 780. CONSIDERED: In re Dynamic Random Access Memory (DRAM) Indirect Purchaser Litigation, Order Granting in Part and Denying in Part Defendants’Motions to Dismiss, U.S. District Court, Northern District of California, November 24, 2020, 2020 WL 8459279 (Case No. 4:18-cv-2518-JSW-KAW, Dkt. No. 119); Hazan c. Micron Technology Inc., 2021 QCCS 2710 ; Watson v.

Bank of AmericaCorporation, 2014 BCSC 532 , 242 A.C.W.S. (3d) 775, var’d 2015 BCCA 362 , 389 D.L.R. (4th) 577; Pioneer Corp.v. Godfrey, 2019 SCC 42, [2019] 3 S.C.R. 295; Fanshawe College v. LG Philips LCD Co., 2011 ONSC 2484 , 201 A.C.W.S.(3d) 897; Irving Paper Ltd. v. Atofina Chemicals Inc., (ON SC), 99 O.R. (3d) 358, [2009] O.J. No. 4021 (QL)(S.C.J.), leave to appeal ref’d 2010 ONSC 2705 , 103 O.R. (3d) 296 (Div. Ct.); Lin v. Airbnb, Inc., 2019 FC 1563, 315 A.C.W.S.(3d) 642; Canada (Attorney General) v. Jost, 2020 FCA 212, 332 A.C.W.S. (3d) 25; L’Oratoire Saint-Joseph du Mont-Royal v.

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S.C.); R. v. Canada Cement Lafarge Ltd., (1973) 12 C.P.R. (2d)12, 1973 CarswellOnt 1031 (Ont. Prov. Ct.); R. v. Canada Packers Inc., (1988) (AB KB), 19 C.P.R. (3d) 133, 1988CarswellAlta 745 (Alta. Q.B.); Collins v. Canada, 2011 FCA 140, 418 N.R. 23; Simon v. Canada, 2011 FCA 6, [2011] 1 F.C.R. D-15;Pelletier v. Canada, 2016 FC 1356, 274 A.C.W.S. (3d) 292; Carom v. Bre-X Minerals Ltd., (ON SC), [1998] O.J.No. 4496 (QL), 41 O.R. (3d) 780 (Ont. Gen. Div.); Poundmaker Cree Nation v. Canada, 2017 FC 447, [2018] 1 F.C.R. D-4; Sivak v.Canada, 2012 FC 272, 7 Imm. L.R. (4th) 247; Hodge v.

Neinstein, 2017 ONCA 494, 414 D.L.R. (4th) 303; Grossman v. Nissan Canada,2019 ONSC 6180 , 311 A.C.W.S. (3d) 469; Cirillo v. Ontario, 2019 ONSC 3066 , 306 A.C.W.S. (3d) 296; Kalra v.Mercedes Benz, 2017 ONSC 3795 , 281 A.C.W.S. (3d) 701; Fulawka v. Bank of Nova Scotia, 2012 ONCA 443 , 352D.L.R. (4th) 1; Stenzler v. TD Asset Management Inc., 2020 ONSC 111 , 316 A.C.W.S. (3d) 19; Kaplan v. Casino Rama, 2019ONSC 2025 , 145 O.R. (3d) 736; Batten v. Boehringer Ingelheim (Canada) Ltd., 2017 ONSC 6098 , 285 A.C.W.S.(3d) 250; R. v. Khelawon, 2006 SCC 57, [2006] 2 S.C.R. 787; R. v.

Arp, (SCC), [1998] 3 S.C.R. 339, 166 D.L.R. (4th)296; John Doe v. R, 2015 FC 236, 256 A.C.W.S. (3d) 782; Harrison v. XL Foods Inc., 2014 ABQB 720 , 247 A.C.W.S. (3d)511; O’Brien v. Bard Canada Inc., 2015 ONSC 2470 , 253 A.C.W.S. (3d) 36. AUTHORS CITED Competition Bureau Canada, Competitor Collaboration Guidelines (Gatineau: Competition Bureau, 2009). MOTION seeking an order to certify the underlying action as a class proceeding under subsection 334.16(1) of the Federal CourtsRules. Motion dismissed. APPEARANCES James C. Orr, Kyle R.

Taylor, Annie (Qurrat-ul-ain) Tayyab, James Sayce, Nathalie Gondek and Adam Tanel for plaintiffs. Subrata Bhattacharjee, Caitlin R. Sainsbury, Pierre N. Gemson and Graham Splawski for defendants Samsung Electronics Co. Ltd.,Samsung Semiconductor Inc., Samsung Electronics Canada, Inc. David W. Kent, James B. Musgrove and Samantha Gordon for defendant Micron Technology Inc. Sandra A. Forbes, Chantelle Cseh and Trevor N. May for defendant SK Hynix. SOLICITORS OF RECORD Orr Taylor LLP and Koskie Minsky LLP, Toronto, for plaintiffs. Borden Ladner Gervais LLP, Toronto, for for defendants Samsung Electronics Co.

Ltd., Samsung Semiconductor Inc., SamsungElectronics Canada, Inc. McMillan LLP, Toronto, for defendant Micron Technology Inc. Davies Ward Phillips & Vineberg LLP, Toronto, for defendant SK Hynix. The following are the reasons for order and order rendered in English by Gascon J.: I. Overview [1] The plaintiffs, Ms. Chelsea Jensen and Mr. Laurent Abesdris, seek an order certifying this action as a class proceeding undersubsection 334.16(1) of the Federal Courts Rules, SOR/98-106 (Rules).

In their proposed competition law class action, the plaintiffsallege that the three leading manufacturers of Dynamic Random Access Memory chips (DRAM) have conspired to limit the globalsupply and raise the price of DRAM. DRAM is a type of semiconductor memory chip used in most computer products that allowsinformation to be electronically stored and rapidly retrieved. The manufacturers targeted by this proposed class action are SamsungElectronics Co.

Ltd., Samsung Semiconductor Inc. and Samsung Electronics Canada, Inc. (together, Samsung), SK Hynix Inc. and SKHynix America, Inc. (together, SK Hynix) and Micron Technology, Inc. and Micron Semiconductor Products, Inc. (together, Micron)(collectively, the defendants). [2] The plaintiffs contend that the alleged conspiracy discloses a straightforward cause of action under

section 36 of the CompetitionAct, R.S.C. 1985, c. C-34 (Act), for breach of sections 45 and 46. Broadly speaking,

section 45 makes it a criminal offence for

competitors or potential competitors to conspire, agree or arrange to fix prices, allocate markets or restrict output.

Section 46 provides that it is a criminal offence for a corporation carrying on business in Canada to implement a directive or communication from a controlling person outside Canada, for the purpose of giving effect to a conspiracy entered into outside of Canada that, if entered into in Canada, would have been in contravention of

section 45 . For its part,

section 36 of the Act grants a statutory right of private action to recover damages for harm suffered as a result of certain criminal conduct prohibited by the Act , including conduct covered by sections 45 and 46 , as well as the cost of investigation and prosecution.

Here, the plaintiffs allege that the defendants have conspired, through direct communications in private meetings and through public statements—or “signalling”—to each other, in order to suppress the supply of DRAM and increase DRAM prices. [ 3 ] As the proposed representative plaintiffs for the class members, the plaintiffs seek damages or compensation from the defendants in the amount of $1,000,000,000 on behalf of all persons or entities in Canada who, from June 1, 2016, to February 1, 2018 (Class Period), purchased DRAM manufactured and/or sold by the defendants, or products containing DRAM manufactured and/or sold by the defendants, excluding the defendants and their parent companies, subsidiaries and affiliates (Class). [ 4 ] The plaintiffs maintain that they satisfy all the required legal elements for certification, namely, (

i) that there is a reasonable cause of action; (ii) that there is an identifiable class; (iii) that there are common questions of law and fact; (iv) that a class proceeding is the preferred procedure; and (

v) that they are appropriate representatives of the Class. The defendants oppose certification of the Class and contend that the plaintiffs have failed to meet their burden of showing that this action should be certified as a class proceeding. More specifically, the defendants submit that the conduct alleged by the plaintiffs does not constitute a criminal violation of the Act and does not amount to an actionable conspiracy under

section 45 or an unlawful foreign directive under

section 46 . Hence, say the defendants, (

i) the statement of claim does not disclose a reasonable cause of action; (ii) the issues identified by the plaintiffs do not qualify as common issues as the plaintiffs have failed to provide some basis in fact for the existence or commonality of their liability or harm issues; and (iii) without liability and harm certifiable as common issues, a class proceeding is not the preferred procedure. The defendants do not challenge that there would be an identifiable class or that the plaintiffs would be appropriate representatives of the Class. [ 5 ] The formation and existence of the

section 45 conspiracy alleged by the plaintiffs are the central issue in dispute between the parties, as this core allegation drives the plaintiffs’ pleadings and provides the backdrop for their proposed common issues. I pause to observe that this is highly unusual in competition law class actions brought under sections 36 and 45 of the Act . In the vast majority of those cases, whether the claims raise common issues concerning an alleged conspiracy is typically not in dispute.

The main battleground is instead with respect to the proposed common issues relating to the consequences of the alleged wrongful acts, namely whether there is some basis in fact in the record that the alleged loss or harm can be established on a class-wide basis. More often than not, it revolves around whether there is a credible and plausible methodology to establish loss or harm on a class-wide basis.

Not surprisingly, the parties have indeed spent a fair amount of their written and oral submissions on this point. [ 6 ] However, this case is different and turns on the alleged wrongful conduct underlying the plaintiffs’ proposed competition law class action. This, in my view, is the determinative issue in the plaintiffs’ certification motion. [ 7 ] For the reasons detailed below, I will dismiss the plaintiffs’ motion for certification, as their case fails on the alleged

section 45 conspiracy at the heart of their proposed class action. I conclude that it is plain and obvious that the pleadings disclose no reasonable cause of action based on sections 36 , 45 and 46 of the Act , since the allegations of an actionable

section 45 conspiracy and of a prohibited

section 46 foreign directive are not anchored in material facts, are speculative and boil down to bald assertions. In addition, I find that there is no basis in fact for the common issues advanced by the plaintiffs with respect to an alleged

section 45 conspiracy. In this regard, the plaintiffs fall well short of providing the minimal evidentiary basis required to support the existence of the alleged conspiracy. This is sufficient to dismiss the plaintiffs’ motion and to deny certification. In the circumstances and without common issues dealing with the alleged wrongful conduct, none of the other proposed common issues relating to the alleged loss or harm can be certified.

Absent common issues, a class proceeding is not the preferred procedure for the just and efficient resolution of the claims of the putative Class members, and will not achieve the three principles underpinning class actions, namely, judicial economy, behavioural modification and access to justice. II. Background A. The parties [ 8 ] The plaintiffs are indirect end-consumers of DRAM who live in Toronto, Ontario. Ms. Jensen purchased a mobile phone containing DRAM in June 2017. Mr.

Abesdris purchased a laptop containing DRAM in January 2018. [ 9 ] The defendant Samsung manufactures, distributes and sells semiconductor products, including DRAM. Samsung also manufactures consumer electronics and other products that use DRAM as one of their components. Samsung Electronics Co. Ltd. is a corporation headquartered in South Korea. Samsung Semiconductor Inc. is a subsidiary of Samsung Electronics Co. Ltd. based in the United States (U.S.), whose headquarters are located in California. Samsung Electronics Canada, Inc. is a Canadian subsidiary of Samsung Electronics Co.

Ltd.; its registered office is in Ontario and it is in the business of selling electronic devices, but not DRAM. [ 10 ] The defendant SK Hynix manufactures, distributes and sells semiconductor products, including DRAM. SK Hynix Inc. is a corporation headquartered in South Korea and has manufacturing facilities in South Korea and China. SK Hynix America, Inc. is a U.S. subsidiary of SK Hynix Inc., and its headquarters are located in California. [ 11 ] The defendant Micron also manufactures, distributes and sells semiconductor products, including DRAM.

Micron Technology Inc. is a Delaware corporation headquartered in Idaho, and has production facilities in Taiwan, Singapore, the U.S., Japan and China. Micron Semiconductor Products, Inc. is Micron’s Idaho-incorporated subsidiary. B. Factual context [ 12 ] DRAM is a type of digital memory device that stores bits of data in capacitors situated in integrated circuits, allowing computers, smartphones and other digital electronic products to retain information. DRAM is a component found in virtually every electronic

product, including personal computers, smartphones, tablets, televisions, cameras, servers and other items that perform a computing function. DRAM is a standalone product which has no independent utility: it must be inserted into a device (such as a smartphone or a computer) to serve any function. [ 13 ] The defendants all manufacture and sell DRAM for use in various types of end-products. They primarily sell DRAM to original equipment manufacturers (OEMs) such as computer, mobile phone, flash drive, and memory card makers.

These OEMs then incorporate DRAM into various DRAM products and sell them to consumers or to retailers who then sell the items to consumers. Direct purchasers of DRAM use it in the products they manufacture. Indirect purchasers of DRAM are purchasers of products that contain DRAM. The Class includes both direct and indirect purchasers. [ 14 ] DRAM supply is a highly concentrated industry, and the plaintiffs have described the production and manufacture of DRAM as an oligopoly market, namely, a highly concentrated market structure where a few sellers dominate the supply of a product or service.

The defendants are the three largest manufacturers of DRAM and are estimated to have manufactured 96-98 percent of DRAM sold globally in 2017-2018. During the Class Period, the defendants accounted for the bulk of worldwide DRAM sales.

The Canadian market for DRAM accounts for approximately 10 percent of the global DRAM market, which was estimated to be worth $72.5 billion in 2017. [ 15 ] The plaintiffs estimate that the Class is likely to consist of almost all adults in Canada as most Canadian households have one or more devices containing DRAM and that the defendants control over 96 percent of the global DRAM market. C. Procedural context [ 16 ] The action was commenced in May 2018 and the plaintiffs filed their “Amended Amended Statement of Claim” on April 23, 2019 (Statement of Claim).

In their motion for certification, the plaintiffs are seeking the following orders from the Court: a. an order certifying this action as a class proceeding pursuant to the rules; b. an order appointing Ms. Chelsea Jensen and Mr. Laurent Abesdris as the representative plaintiffs for the Class; c. an order defining the Class as: i. All persons or entities in Canada who, from June 1, 2016 to February 1, 2018 purchased DRAM manufactured and/or sold by the defendants or products containing DRAM manufactured and/or sold by the defendants.

Excluded from the Class are the defendants and their parent companies, subsidiaries, and affiliates; d. or such other class definition as may be approved by the Court; e. an order that the within proceeding is certified on the basis of the six following common issues: i. Did the defendants, or any of them, breach

section 45 of the Act ? ii. Did the defendants, or any of them, breach

section 46 of the Act? iii. Did the Class members suffer loss or damage as a result of the defendants’ conduct contrary to any provision of

Part VI of the Act ? iv. Are the Class members entitled to recovery of their loss or damage pursuant to

section 36 of the Act and, if so, in what amount or amounts? v. Are the defendants, or any of them, liable to pay pre-judgment interest and post-judgment interest pursuant to sections 36 and 37 of the Federal Courts Act , R.S.C. 1985, c. F-7 and, if so, in what amount? vi. Should the full costs of investigation in connection with this matter, including the cost of the proceeding or part thereof, be fixed or assessed on an aggregate basis pursuant to

section 36 of the Act and, if so, in what amount? f. an order appointing Koskie Minsky LLP and Affleck Greene McMurtry LLP as Class counsel; g. an order approving the proposed litigation plan; h. an order staying any other proceeding based on the facts giving rise to this proposed class proceeding; i. an order declaring that no other proceeding based upon the facts giving rise to this proceeding may be commenced without leave of the Court; and j. an order for such further and other relief as counsel may advise and this Court deems just. [ 17 ] The plaintiffs supported their motion for certification with the following evidentiary record: • The affidavit, dated April 22, 2019, of Annie (Qurrat-ul-aim) Tayyab, a lawyer of Affleck Greene McMurtry LLP, one of the two Class counsel, to which 54 exhibits were attached (Tayyab Affidavit).

The exhibits attached to the Tayyab Affidavit include articles regarding an investigation by China’s economic regulator (9 exhibits); financial reports and documents related to the defendants (8 exhibits); public statements and transcripts of earnings calls and investor calls involving the defendants (Public Statements) (35 exhibits); documents from trade associations in the DRAM industry (3 exhibits); and documents related to a prior conspiracy involving the defendants (4 exhibits). • The supplementary affidavit of Annie (Qurrat-ul-aim) Tayyab, dated February 13, 2020, to which was attached the “Indirect Purchaser Plaintiffs’ Consolidated Amended Class Action Complaint” (Amended U.S.

Complaint) filed in a related class action litigation

commenced in the U.S. and based on facts closely similar to this matter. • The affidavit, dated April 22, 2019, of the plaintiff Chelsea Jensen. • The affidavit, dated April 21, 2019, of the plaintiff Laurent Abesdris. • The affidavits, dated April 22, 2019, and February 12, 2020, of Dr. Hal J. Singer. Dr. Singer is an economist and managing director at Econ One Research, Inc. in Washington, D.C. Dr. Singer submitted an expert report and a reply expert report (Singer Reports). Dr.

Singer was cross-examined. [ 18 ] The defendants resisted the motion for certification with the following evidentiary record: • The affidavit, dated December 19, 2019, of Trevor May, an articling student at Davies Ward Phillips and Vineberg LLP, counsel to SK Hynix, to which 10 exhibits were attached. These exhibits include financial documents and transcripts of various earnings calls and investor calls involving the defendants. • The affidavit dated December 19, 2019, of Dr. Mark A. Israel. Dr.

Israel is an economist and Senior Managing Director at Compass Lexecon, an economic consulting firm, in Washington, D.C. He submitted an expert report in response to Dr. Singer. Dr. Israel was not cross-examined. D.

Summary of the plaintiffs’ allegations [ 19 ] In their Statement of Claim, the plaintiffs assert a single statutory cause of action under

section 36 of the Act , for breach of

section 45 forbidding conspiracies and of

section 46 on implementation of a foreign directive. [ 20 ] Under

section 45, the plaintiffs allege that the defendants conspired, agreed or arranged to fix, maintain, increase, or control the price for the supply of DRAM; to allocate sales, territories, customers, or markets for the production or supply of DRAM; and to fix, maintain, control, prevent, lessen, or eliminate the production or supply of DRAM (Statement of Claim, at paragraph 135). This paragraph of the plaintiffs’ pleading essentially echoes the language of

section 45 of the Act . However, I note that, throughout the Statement of Claim, the plaintiffs repeatedly refer to a much narrower conspiracy and to the defendants conspiring to “suppress DRAM supply and increase DRAM prices” (see, e.g., Statement of Claim, at paragraphs 2, 5, 18, 22, 26, 45, 50, 52, 128, 129 and 130). [ 21 ] Under

section 46, the plaintiffs allege that the defendants implemented a foreign directive, instruction, intimation of policy or other communication, which communication was for the purpose of giving effect to a conspiracy, combination, agreement or arrangement entered outside Canada that, if entered in Canada, would have been in contravention of

section 45 of the Act (Statement of Claim, at paragraph 136). Again, this paragraph reproduces the language of the Act . [ 22 ] In

summary, the plaintiffs claim that, prior to 2016, the defendants competed vigorously over market shares but that, in early 2016, the defendants conspired to reduce the supply of DRAM in order to drive up DRAM prices. Throughout 2015 and the first half of 2016, DRAM prices had steadily declined. However, after the second quarter of 2016, prices reversed course and began a sharp ascent to record highs, for all types of DRAM, all sizes and all markets. According to the Statement of Claim, at that point in time, the defendants adopted the same policy of refusing to increase their own supplies of DRAM.

They signalled, through public statements made to investors and at industry conferences, what the plaintiffs present as coordinated decisions to limit the supply of DRAM. According to the plaintiffs, Micron’s and Samsung’s public statements reassured each other and SK Hynix of their continued participation in the conspiracy.

The plaintiffs further allege that the nature of the DRAM market, an oligopoly where the defendants were responsible for at least 96 percent of worldwide DRAM sales, fostered this collusion. [ 23 ] According to the plaintiffs, the defendants’ reduction of DRAM supply below market demand marked a departure from prior market behaviour, where the defendants and other market participants competed primarily, if not solely, on price, aiming to increase their own market share. [ 24 ] The plaintiffs allege that the conspiracy between the defendants was formed and achieved through direct communications in private meetings between the defendants as well as through public statements—or “signalling”—to each other, both of which, say the plaintiffs, are actionable forms of conspiracy conduct well recognized by the case law in Canada.

In terms of evidentiary basis, the plaintiffs’ allegations rely on what they called four main indicia of breaches of

section 45 of the Act .

First, a regulatory investigation initiated by the Chinese antitrust authorities (China Investigation); second, massive and coordinated supply restrictions and price increases in the Class Period, resulting in steep increases in prices for DRAM products and in revenues for the defendants; third, the continuous and repeated statements made in private and in public by the defendants’ senior executives that they would restrict DRAM supply and that their competitors would do likewise; fourth, a similar anti-competitive conduct admitted by the defendants a few years ago in the same DRAM industry. [ 25 ] The plaintiffs allege that this supply reduction resulted in supra-competitive pricing for DRAM and DRAM products that would not have occurred absent the conspiracy and, further, that this “overcharge” was passed on to end-consumers (i.e. indirect purchasers), including the plaintiffs, who purchased DRAM products.

The overcharge and harm to the plaintiffs and Class members is the difference between the price actually paid as a result of the alleged conspiracy and the price that would have been in place in the absence of such conspiracy. [ 26 ] The plaintiffs contend that the alleged conspiracy ended after news broke of the China Investigation undertaken by the Chinese antitrust authorities on alleged suspicions of DRAM price-fixing. [ 27 ] As mentioned above at paragraph 16, the plaintiffs propose six common issue questions.

The first two questions concern the alleged wrongful conduct and liability issues for breach of sections 45 and 46 of the Act . The next two questions concern harm or loss issues resulting from the alleged wrongful conduct. Finally, the last two questions relate to follow-on interest and investigation costs issues.

E. The parallel U.S. class action [28] It is important to observe that the certification motion filed by the plaintiffs follows a parallel class action commenced earlier inthe U.S., on which the claim in this proposed class action is directly based. The allegations made in the U.S. class action are closelysimilar to what is pleaded in this case. The two plaintiffs in fact indicate, in their respective affidavits, that it was the news reports on theU.S. class action that prompted them to get involved in this class action lawsuit in Canada.

In their written materials submitted in thismatter, the plaintiffs indeed referred to the parallel proceeding in the U.S. District Court for the Northern District of California involvingmost of the defendants (U.S. defendants), namely In re Dynamic Random Access Memory (DRAM) Indirect Purchaser Litigation.Moreover, the plaintiffs filed the Amended U.S. Complaint submitted by the U.S. plaintiffs as an exhibit to one of their affidavitsprovided in support of this motion. This Amended U.S. Complaint had been filed following a decision by the U.S.

District Court whichgranted in part the U.S. defendants’ motion to dismiss the original complaint for failure to state a claim in conspiracy in violation of theU.S. federal antitrust laws but also allowed the U.S. plaintiffs to amend (Jones v. Micron Technology Inc., 400 F.Supp.3d 897 (N.D. Cal.2019) (Jones)). [29] On November 24, 2020, after the hearing of the certification motion before this Court, the U.S. District Court issued anotherdecision, dismissing in part the Amended U.S.

Complaint, again for failure to state a claim of conspiracy in violation of the U.S. federalantitrust laws (In re Dynamic Random Access Memory (DRAM) Indirect Purchaser Litigation, Order Granting in Part and Denying inPart Defendants’ Motions to Dismiss, U.S. District Court, Northern District of California, November 24, 2020 [2020 WL 8459279] (seeCase No. 4:18-cv-2518-JSW-KAW, Dkt. No. 119)).

In an oral direction issued on December 7, 2020, I determined that, in thecircumstances, this latest U.S. decision was relevant to the certification motion before this Court and that it could be accepted for filing.Of course, even though they relate to the same factual background as in the case at bar, these U.S. precedents are not binding on thisCourt, and I am mindful of the fact that a U.S. motion to dismiss a class action is subject to a standard different from the Canadianstandard on certification motions and involves a more extensive weighing of evidence.

I am also aware that the November 24, 2020,decision of the U.S. District Court was appealed to the U.S. Court of Appeal for the Ninth Circuit in January 2021, and that this appeal isstill pending. [30] That said, it is worth noting that, in those decisions, the U.S. District Court found that the U.S. plaintiffs’ allegations of “plusfactors” combined and viewed together fell short of alleging a plausible cause of action based on conspiracy, and that their claimamounted to nothing more than “conscious parallelism”.

Broadly speaking, conscious parallelism refers to situations where, in theabsence of an agreement to limit competition, competitors unilaterally adopt similar or identical business practices or pricing, as a resultof rational and profit-maximizing strategies based on observations of market trends and activities of competitors. This type of conduct isfrequent in oligopolistic markets where competitors base their actions in part on the anticipated reactions of their rivals.

In the U.S., suchparallel conduct is not unlawful on its own under the applicable federal antitrust legislation, and a plaintiff must plead some “factualenhancement” (called “plus factors” in the U.S.) showing further circumstances pointing toward a meeting of the minds of the allegedconspirators.

These factual enhancements are economic actions and outcomes that are largely inconsistent with unilateral, lawful conductbut largely consistent with explicitly coordinated action (In re Musical Instruments and Equipment Antitrust Litigation, 798 F.3d 1186(9th Cir. 2015), at page 1194). [31] While the U.S. plaintiffs presented allegations of parallel conduct between the U.S. defendants, the U.S. District Court found thatthere was insufficient evidence of “plus factors” pointing toward the meeting of the minds of these defendants, whether express or tacit.More specifically, the U.S.

District Court found that the general oligopolistic market conditions prevailing in the DRAM industry werenot “plus factors” allowing one to conclude that there was a conspiracy, as they were just as likely to be consistent with innocentbehaviour as with unlawful one. The U.S.

District Court also determined that membership in trade associations and attendance at tradeassociation meetings offered nothing more than an opportunity to collude for the U.S. defendants, and that an opportunity without morewas insufficient to state a conspiracy. [32] With respect to the U.S. defendants’ public statements and allegations of public signalling, the U.S.

District Court found that thestatements alleged in the pleadings were made in public settings during earnings calls with investors or at industry conferences, that theywere the individual U.S. defendants’ indications of their own future behaviour, descriptions of their past behaviour, predictions ofindustry trends and observations about competitors’ behaviour, and that such statements were insufficient to support an inference ofconspiracy because they were not “largely inconsistent with unilateral, lawful conduct”. On the contrary, said the U.S.

District Court, theU.S. defendants’ behaviour and statements were consistent with lawful conscious parallelism, and did not constitute circumstantialevidence of a conspiracy in that case. [33] The U.S. District Court also concluded that allegations relating to past investigations in the DRAM industry or previous guiltypleas by the U.S. defendants were not sufficient to suggest a contemporary conspiracy, and that allegations of investigations or casesoutside the U.S. were unpersuasive as foreign laws (in this case, China’

s) may prohibit behaviour that is lawful under U.S. laws. [34] I should also add that, in late June 2021, the Superior Court of Quebec dismissed an application for authorization to institute aclass action alleging the same conspiracy to restrict the production and increase the prices of DRAM that underlies the plaintiffs’certification motion (Hazan c. Micron Technology Inc., 2021 QCCS 2710 , 2021 CarswellQue 10368 (Hazan)).

In that case, thecourt concluded that the Quebec criteria for the authorization of the class action were not met due to vague, imprecise and generalallegations, and to the absence of some evidence establishing, even summarily, the existence of the alleged conspiracy.

Thus, said thecourt, the application did not present an “arguable case”. [35] Again, even though the Hazan decision relates to the same factual background as in the case at bar, this precedent is not bindingon this Court, and I am mindful of the fact that an application for authorization of a class action in Quebec is not subject to the exactsame standard governing certification motions before this Court.

However, I should observe that the “arguable case” requirementapplicable in Quebec has been described by the S.C.C. as a “less demanding” evidentiary burden and a less rigorous standard than thesome-basis-in-fact standard that applies in other parts of Canada and before this Court (Infineon Technologies AG v. Optionconsommateurs AG, 2013 SCC 59, [2013] 3 S.C.R. 600 (Infineon), at paragraph 128). As is the case for the parallel U.S. decisionreferred to above, the Hazan decision is currently under appeal.

F. The particular nature of this case [36] It is also necessary, at the outset, to underscore the particularities of this proposed class action. The plaintiffs advance that theircertification motion is a typical competition law class action raising an allegation of price-fixing conspiracy. They further claim thatthere are no meaningful differences between this case and a previous DRAM case where certification was confirmed by the SupremeCourt of Canada (S.C.C.) in Infineon, and that there is no reason to depart from this binding precedent. [37] With respect, I disagree with the plaintiffs.

(1) This is a supply suppression case [38] First, this proposed competition law class action differs significantly from the usual price-fixing class actions brought beforeCanadian courts under the conspiracy provision of the Act (i.e.

section 45 and its predecessors). Despite the repeated attempts by counselfor the plaintiffs to portray it as such, the conspiracy alleged by the plaintiffs in this case is not a typical price-fixing conspiracy undersection 45 of the Act; it is instead an alleged conspiracy to suppress the supply of DRAM, which has allegedly resulted in an increase inprices for DRAM.

When the Statement of Claim is read in context and in its entirety, it is clear that the plaintiffs’ core allegation of conspiracy is about supply suppression.[3] In fact, in the last iteration of their Statement of Claim, the plaintiffs systematically replacedthe references to a “price-fixing conspiracy” or to a “conspiracy to fix the price of DRAM” by references to a “conspiracy to suppress theglobal supply of DRAM and increase the price of DRAM”.

In my view, on any fair reading of the pleadings, the plaintiffs’ claim doesnot describe any standalone, independent price-fixing conspiracy, but rather an alleged conspiracy to restrict output, the allegedconsequence of which was an increase in DRAM prices. [39] This is a distinctive feature of this case, and I am aware of no precedent where the primary focus of a competition law classaction alleging a breach of

section 45 of the Act was output suppression as it is here.

(2) The alleged conspiracy is in dispute [40] Second, this competition law class action is a rare case where the very existence of the alleged conspiracy at the source of theclaim for loss and damages under

section 36 of the Act is disputed and challenged at the certification stage. A review of the Canadiancase law on competition law class actions involving price-fixing and other competition-related conspiracies under

section 45 and itspredecessors reveals that the existence of an alleged conspiracy is typically not an issue in such class actions. In fact, the battleground isusually beyond the allegation of an illegal agreement and focuses on whether the harm or loss allegedly resulting from the actionableconspiracy is common to the class members. [41] This has been the situation for various reasons. In some instances, there were express agreements, rules or contracts at the sourceof the impugned unlawful conspiracy.

In other matters, there were admissions on the conspiracy element of the impugned conduct, orguilty pleas had been previously entered by the defendants in related criminal proceedings in Canada or abroad. In yet other cases, therewas an existing criminal investigation by the Canadian competition authorities or by foreign authorities (and affecting Canada).

All ofthese situations meant that there were not only ample material facts supporting the conspiracy allegations made in the pleadings but alsothe minimal required evidentiary basis (i.e. some basis in fact) for the proposed common issues relating to the alleged wrongful conduct. [42] Save for one exception (to which I will turn in a moment), this is indeed what the various precedents cited by the plaintiffs in thiscase actually reflect. Examples of competition law class actions where there were express agreements, rules or contracts anchoring thealleged conspiracy include Prokuron Sourcing Solutions Inc. v.

Sobeys Inc. and Lexmark Canada Inc., 2019 ONSC 7403 , 314A.C.W.S. (3d) 724 (Prokuron); Watson v. Bank of America Corporation, 2014 BCSC 532 , 242 A.C.W.S. (3d) 775 (Watson),var’d 2015 BCCA 362 , 389 D.L.R. (4th) 577 (Watson C.A.); 2038724 Ontario Ltd. v. Quizno’s Canada Restaurant Corp.(2009), 96 O.R. (3d) 252, , [2009] O.J. No. 1874 (QL) (Div. Ct.), affd (2010), 100 O.R. (3d) 721, 2010 ONCA 466; and Axiom Plastics Inc. v. E.I. DuPont Canada Co., (ON SC), 87 O.R. (3d) 352, [2007] O.J. No. 3327(QL) (S.C.J.).

Examples where the underlying criminal investigation left no doubt about the existence of an alleged conspiracy in Canadainclude Watson; Airia Brands v. Air Canada, 2015 ONSC 5352 , 257 A.C.W.S. (3d) 530 (Airia); and Mancinelli v. Royal Bankof Canada, 2020 ONSC 1646 , 320 A.C.W.S. (3d) 547 (Mancinelli). Examples where there was an underlying criminalinvestigation and either guilty pleas or admissions had been made by the defendants regarding the alleged conspiracy include PioneerCorp. v. Godfrey, 2019 SCC 42, [2019] 3 S.C.R. 295 (Godfrey); Infineon; Pro-Sys Consultants Ltd. v.

Infineon Technologies AG, 2009BCCA 503 , 312 D.L.R. (4th) 419; Ewert v. Nippon Yusen Kabushiki Kaisha, 2017 BCSC 2357 , 287 A.C.W.S. (3d)21, revd on other grounds 2019 BCCA 187 , 305 A.C.W.S. (3d) 706; Shah v. LG Chem, Ltd., 2015 ONSC 6148 , 390D.L.R. (4th) 87 (Shah), affd 2018 ONCA 819 , 429 D.L.R. (4th) 514; Fanshawe College v. LG Philips LCD Co., 2011 ONSC2484 , 201 A.C.W.S. (3d) 897 (Fanshawe); Irving Paper Ltd. v. Atofina Chemicals Inc., (ON SC), 99 O.R.(3d) 358, [2009] O.J. No. 4021 (QL) (S.C.J.), leave to appeal ref’d 2010 ONSC 2705 , 103 O.R. (3d) 296 (Div. Ct.) (IrvingPaper); Ford v. F.

Hoffman-La Roche Ltd. (2005), (ON SC), 74 O.R. (3d) 758, sub nom. Vitapharm Canada Ltd. v. F.Hoffman-La Roche Ltd., [2005] O.J. No. 1118 (QL) (S.C.J.); and Alfresh Beverages Canada Corp. v. Hoechst AG, [2002] O.J. No. 79(QL), 111 A.C.W.S. (3d) 413 (Alfresh). [43] The present case is definitely different from all these precedents, as the formation and existence of the alleged conspiracy at thesource of this proposed class action is not admitted or unchallenged, but is rather strongly disputed by the defendants.

In fact, this is themain battleground between the parties with respect to both the viable cause of action requirement and the common issues requirement.The above list of precedents is by no means exhaustive, but it illustrates the highly exceptional nature of the proposed class actionadvanced by the plaintiffs in this matter. [44] I pause to add one comment.

Contrary to what the plaintiffs argued, the fact that some of these prior price-fixing class actions(such as Mancinelli, Shah or Watson) may have involved cases certified by the courts in concentrated industries and oligopolies does nothave much relevance in the case at bar and to the main issue raised by the plaintiffs’ certification motion, namely the existence of thealleged conspiracy and wrongful conduct. The reason is simple.

In every single case cited by the plaintiffs where price-fixing classactions have been certified in oligopolistic industries, the issue of the existence of the alleged conspiracy was simply not in dispute.

[45] The only notable exception, heavily relied on by the plaintiffs in their written and oral submissions before this Court, is theCrosslink case (Crosslink v. BASF Canada, 2014 ONSC 1682 , 238 A.C.W.S. (3d) 547 (Crosslink 1), affd 2014 ONSC 4529, 244 A.C.W.S. (3d) 780 (Crosslink 2)). In Crosslink, as in the current case, the alleged conspiracy was challenged by thedefendants on the basis that the plaintiffs had failed to plead material facts to support a claim of conspiracy and omitted to provide thesufficient basis in fact for the alleged conspiracy.

In that matter, the Ontario Superior Court of Justice found that the requirements forcertification were met for both the reasonable cause of action and the existence of some basis in fact for the common issues (Crosslink 1,at paragraph 71; Crosslink 2, at paragraph 51). As will be discussed in detail later, I respectfully conclude that the facts in the case at barare distinguishable from the Crosslink matter, and thus lead me to a different conclusion.

(3) This case differs from Infineon [46] The plaintiffs also claim that there are no meaningful differences between this case and the Infineon case decided by the S.C.C.in 2013, and that there are no reasons to depart from this binding precedent at this certification stage. In Infineon, the S.C.C. dealt with aQuebec class action involving the DRAM industry, the same products, the same types of claims, some of the same defendants and thesame types of indirect purchasers of electronic goods containing DRAM.

In that matter, the S.C.C. affirmed the “authorization” (as thecertification process is known in Quebec) of a very similar action brought by indirect purchasers of products containing DRAM. [47] However, this precedent cannot predetermine the result of the present certification motion as there is a fundamental differencebetween the current case and the S.C.C. decision in Infineon. This difference, once again, relates to the issue of the alleged conspiracy.

InInfineon, the alleged conspiracy was to fix the prices of DRAM and it was not in dispute at all, since the international price-fixingconspiracy had in fact been admitted by the defendants in that case (Infineon, at paragraph 5; Option Consommateurs v. InfineonTechnologies AG, 2011 QCCA 2116 , 213 A.C.W.S. (3d) 557, at paragraph 16).

Moreover, there was some evidence,originating directly from the U.S. and European competition agencies involved, relating to the existence of the alleged global conspiracy,the ongoing investigations by these government authorities, and the plea agreements entered into by the defendants (Infineon, atparagraphs 80–139). Here, to reiterate, the very existence of the alleged conspiracy to suppress DRAM supply is the main battlegroundbetween the parties, and the Infineon precedent therefore does not shed any useful light on the main issue in dispute. III.

Legal framework for certification [48] Against that background, the legislative framework and general principles governing the certification of class actions in thisCourt can be summarized as follows. A. Legislative framework [49]

Part 5.1 of the Rules sets out the framework for establishing and managing class proceedings before this Court. Subsections334.16(1) and (2) and rule 334.18 are the main provisions governing the certification of class proceedings. They are reproduced in theirentirety in Annex A of these Reasons. [50] Subsection 334.16(1) prescribes that a class action shall be certified if the following five conditions are met: (

i) the pleadingsdisclose a reasonable cause of action; (ii) there is an identifiable class of two or more persons; (iii) the claims raise common questions oflaw or fact; (iv) a class proceeding is the preferable procedure for the just and efficient resolution of those common questions; and (v)there is an appropriate representative plaintiff.

The first condition echoes a requirement applicable to all actions brought by a plaintiff.The other four conditions are more specific to class proceedings. [51] Subsection 334.16(1) uses mandatory language, meaning that the Court shall grant certification where all five elements of the testare satisfied. Since the test is conjunctive, if a plaintiff fails to meet any of the five listed criteria, the certification motion must fail (Linv. Airbnb, Inc., 2019 FC 1563, 315 A.C.W.S. (3d) 642 (Airbnb), at paragraph 21; Buffalo v.

Samson First Nation, 2008 FC 1308, [2009]4 F.C.R. 3 (Buffalo), at paragraph 35, affd 2010 FCA 165, [2010] 3 F.C.R. D-15, at paragraph 3). Conversely, the Court may not exercisediscretion and refuse to award certification if all the criteria are met (Airbnb, at paragraph 21). [52] Rule 334.18 describes factors which cannot by themselves, either singly or combined with the other factors listed, provide asufficient basis to decline certification (Airbnb, at paragraph 22; Kenney v. Canada (Attorney General), 2016 FC 367, 265 A.C.W.S. (3d)851 (Kenney), at paragraph 17; Buffalo, at paragraph 37).

However, these factors may be relevant considerations on a motion forcertification, provided the overall conclusion underlying a potential refusal is based on other concerns as well (Airbnb, at paragraph 22;Kenney, at paragraph 17). [53] The certification criteria established in subsection 334.16(1) are akin to those applied by the courts in Ontario and BritishColumbia (Canada (Attorney General) v. Jost, 2020 FCA 212, 332 A.C.W.S. (3d) 25 (Jost), at paragraph 23; Canada v. John Doe, 2016FCA 191, 486 N.R. 223 (John Doe FCA), at paragraph 22; Buffalo v. Samson Cree National, 2010 FCA 165, [2010] 3 F.C.R.

D-15, atparagraph 8; Airbnb, at paragraph 23). It is therefore not uncommon to see this Court and the Federal Court of Appeal (F.C.A.) refer tocase law arising from these provinces in matters relating to class actions, as such case law is instructive in this Court. B. General principles [54] In L’Oratoire Saint-Joseph du Mont-Royal v.

J.J., 2019 SCC 35, [2019] 2 S.C.R. 831 (Oratoire), the S.C.C. reminded that theprocedural vehicle of class actions has several objectives, “namely to facilitate access to justice, to modify harmful behaviour and toconserve judicial resources” (Oratoire, at paragraph 6, citing Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 S.C.R. 158 (Hollick), atparagraph 15, Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46, [2001] 2 S.C.R. 534 (Dutton), at paragraphs 27-29, andVivendi Canada Inc. v. Dell’Aniello, 2014 SCC 1, [2014] 1 S.C.R. 3 (Vivendi), at paragraph 1).

The certification criteria mentionedabove should always be assessed while keeping in mind these three overarching purposes of class proceedings. First, foremostconsideration should be given to the fact that class actions serve judicial economy as this specific procedural method avoids unnecessaryduplication of fact-finding and legal analysis. Actions brought individually can indeed be less practical and less efficient than classproceedings (Rumley v. British Columbia, 2001 SCC 69, [2001] 3 S.C.R. 184 (Rumley), at paragraph 38).

Second, class actions improveaccess to justice by making it more economical to prosecute claims that any one class member would find too costly to initiate and bring

forward on his or her own (see, e.g., Crosslink 1, at paragraph 113).

Third, class actions serve efficiency and justice by ensuring thatwrongdoers modify their behaviour by taking full account of the harm that they have caused or might cause (Airbnb, at paragraph 25).By doing so, class actions serve important policy objectives such as deterrence of wrongful conduct (see, e.g., Alfresh, at paragraph 16). [55] Therefore, when interpreting class action legislation and applying it to a certification motion, it is “essential […] that courts [do]not take an overly restrictive approach to the legislation, but rather interpret [class action legislation] in a way that gives full effect to thebenefits foreseen by the drafters” and to the greater overarching purposes of this specific procedural mechanism (Hollick, at paragraph15; Dutton, at paragraphs 27-29; Condon v.

Canada, 2015 FCA 159, 474 N.R. 300 (Condon), at paragraph 10). [56] The main purpose of a certification motion is to determine whether a class action is the appropriate procedural means for theaction to proceed. As the S.C.C. noted in Hollick, the certification stage focuses on the form of the action, not on the substance andmerits of the actual claim. The question “is not whether the claim is likely to succeed, but whether the suit is appropriately prosecuted asa class action” (Hollick, at paragraph 16; Vivendi, at paragraph 37; Infineon, at paragraph 65).

In other words, the courts must view theapplication as a procedural means, and the objective of certification is to determine if, from a procedural standpoint, the action is bestbrought in the form of a class action (Hollick, at paragraph 16; Jost, at paragraph 27). [57] It is well established that the onus on a party seeking certification is not an onerous one, and the threshold for certification hasgenerally been described as low. That said, a plaintiff must nonetheless come forward with sufficient pleadings and with a sufficientevidentiary basis to support certification.

While certification remains a low hurdle, it is nonetheless a hurdle (Simpson v. Facebook, 2021ONSC 968 , 329 A.C.W.S. (3

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