On June 11, 2014, the Quebec Superior Court rendered an important class action decision in the matter of Wilkinson c. Coca-Cola Ltd., dismissing a motion for authorization to institute a class action against Coca-Cola Ltd. and Energy Brands Inc., who were accused of making false representations regarding the contents and benefits of vitaminwater® beverages.
The petitioner, Joshua Wilkinson, sought to be named the representative of a class of consumers and to be authorized to institute a class action against Coca-Cola and Energy Brands (Respondents). He claimed that the Respondents made false representations and misled consumers regarding the quantity of sugar and the benefits associated with the nutrients and vitamins in vitaminwater® beverages.
Wilkinson sought to act on behalf of a class of health-conscious consumers who he claimed would not have purchased vitaminwater® products, or would not have paid the price they paid, had they been aware of the quantity of sugar in these beverages. The proposed class action sought the reimbursement of the entirety or a portion of the price paid by consumers for the product, the latter being the difference (qualified as the “premium”) between the price paid for vitaminwater® products and the price of a soft drink, as well as payment of punitive damages and the issuance of an injunction that would have forced the Respondents to change representations made in their advertising.
REASONS FOR JUDGMENT
The Superior Court refused to authorize the class action proposed by Mr. Wilkinson. Firstly, he failed to show, even on a prima facie basis, that the Respondents’ representations were untrue or that the Respondents had committed any error whatsoever pursuant to the Consumer Protection Act, the Competition Act or the Civil Code of Québec. Furthermore, the court concluded that no prejudice had been demonstrated and that nothing justified the issuance of the injunction that was sought. Finally, the court found that the representative was not in a position to adequately represent the members of the proposed class.
Allegations of Fact Constituted Unsupported Hypotheses and Conclusions
The court dismissed the motion for authorization to institute a class action primarily because the facts alleged by Mr. Wilkinson did not seem to justify the conclusions sought, and the proposed class action therefore did not satisfy the criteria of article 1003(b) of the Code of Civil Procedure (CCP).
Mr. Wilkinson alleged, notably, that vitaminwater® beverages are nothing but “fortified snack foods,” that the sugar contained therein causes negative health consequences to consumers, and that the Respondents falsely represented that these beverages were a healthy alternative to soft drinks. Mr. Wilkinson concluded that health-conscious consumers would not have purchased or would not have paid such a high price for vitaminwater® beverages if they had been aware of the quantity of sugar therein.
The Superior Court rejected each of these allegations, ruling that they constituted unsupported hypotheses and conclusions. The court also recognized that the Respondents’ practices were in conformity with the applicable laws and regulations, and that they had therefore not committed any breach. The court also noted that Mr. Wilkinson was not able to establish the existence of any prejudice that he or any other member of the class would have suffered.
An Inadequate Representative
The court concluded that the representative was not in a position to ensure adequate representation of the class as required by article 1003(d) CCP.
Relying on the evidence, the court was of the opinion that Mr. Wilkinson had not undertaken a reasonable and sufficient investigation of the complaints made against the Respondents. The court also found that contradictions in Mr. Wilkinson’s testimony undermined his competence and showed that he could not adequately represent the members of the proposed class.
Quebec Court’s Lack of Jurisdiction over a National Class
The class proposed by Mr. Wilkinson included all residents of Canada having purchased vitaminwater® beverages, excluding residents of British Columbia and Alberta who are already included in other class action proceedings. Pursuant to the rules of private international law, the Superior Court declined jurisdiction over the non-residents of Quebec.
Following the recent decisions of the Supreme Court of Canada regarding class actions in Infineon Technologies AG v. Option consommateurs and Vivendi Canada Inc. v. Dell’Aniello, many predicted a trend towards easy authorization of class actions in Quebec. (For more details, see our January 2014 Blakes Bulletin: Supreme Court Defines Criteria for Identical Questions of Fact and Law in Class Action Matters under Quebec Law.)
This decision shows, however, that the filtering process that takes place at the authorization stage is real and requires a serious analysis of the allegations and evidence. Furthermore, we can see that the Supreme Court’s requirement to have “supporting evidence” for allegations was determinant in this matter. Finally, the court reiterated that the class representative must be sufficiently involved and must show evidence of honesty and transparency.