On September 20, 2019, the Supreme Court of Canada ("SCC") issued a landmark antitrust class action decision in Pioneer Corp. v Godfrey which clarified several procedural questions relating to class actions. Notably, the Godfrey decision addressed the following three important points:
Loss as a common issue. For a class action to succeed, there must be a showing that the class members were injured, but the level or even fact of injury can vary. Godfrey considered the burden to make this showing.
Application of the limitation period. The statute of limitations puts a time limit on when claims can be brought, but there is often a dispute about when the clock started ticking.
Umbrella purchaser claims. Umbrella damages are claims
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for purchases from noncartelists whose prices may have been inflated because of the impact of the cartel on the overall market.
This article examines the difference and commonality in approach currently taken by the courts in Canada, the U.S. and the UK on each of these issues.
More generally, the Godfrey decision is important not just for Canada but potentially for the development of private antitrust damages actions globally. In the EU, private damages regimes developed somewhat slowly,1 but the volume of cases has been growing rapidly over the past few years and this trend is expected to continue. In particular, while collective action regimes at EU Member State level, if they exist, are mostly still in their infancy, there are now a few notable exceptions. The UK has the most mature collective action regime in the EU: forms of
representative, group, and multiparty litigation procedures have long been integral to the legal system, and a collective action regime for damages claims for breaches of antitrust law was introduced in 2015. We believe that other non-EU countries may well follow the lead of the EU in developing their private antitrust damages systems, as they have done in developing their antitrust regimes.
In turn, the EU Member States (and, in particular, the UK) have looked to Canada for precedent on how to develop their private damages systems. Indeed, in Dorothy Gibson v Pride Mobility Products Ltd, the UK Competition Appeal Tribunal ("CAT") considered that "appropriate guidance" regarding the certification of claims could be derived from the position in Canada and, more importantly, that the SCC's approach in Pro-Sys Consultants Ltd v Microsoft Corp. to
expert evidence on the overcharge should similarly apply under the UK regime when determining whether to certify a class action. In doing so, the CAT expressly dismissed the relevance of U.S. authorities.2. Similarly, in Merricks v Mastercard Incorporated the UK Court of Appeal evaluated the Canadian jurisprudence on certification and accepted that, albeit not binding on the CAT or the Court of Appeal itself, this jurisprudence perhaps provided the "most useful and proximate model for the UK regime" and the CAT was right to treat it as informing its approach.3.Given the UK courts' degree of deference to Canadian jurisprudence, the Godfrey precedent is of interest to European companies also.
John Roberti, Francesca Miotto and Jana Steenholdt
1 Private enforcement of European Union (EU) competition law has been very significantly boosted by the Damages Directive (Directive 2014/104/EU of November 26, 2014), which has now been implemented in all EU Member States. However, due in part to concerns about the potential for U.S.-style class actions, a consensus was not reached on this subject, and provision for collective redress was not included within the Damages Directive. Whilst the European Commission has issued a non-binding Recommendation on collective redress mechanisms for breaches of citizens' rights granted under EU law, the availability of collective redress mechanisms in the EU is still limited.
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2 Dorothy Gibson v Pride Mobility Products Ltd  CAT 9, paras. 102 105
3 Merricks v Mastercard Incorporated & Anor  EWCA Civ 674, paras. 38 55 allenovery.com
What is required to For certification, loss-related questions
prove commonality need only be sufficiently credible or
of injury at certification?
plausible but actual suffered loss must be proved at trial to recover damages.
The SCC stated that "a plaintiff's expert's
methodology need only be sufficiently
credible or plausible to establish that loss
reached the requisite purchaser level."4
This means that the methodology need not
prove every class member suffered a loss
or be able to distinguish those who did.
This is a low bar.
A rigorous analysis showing that all class On this issue, the UK position reflects the
members have suffered the same injury with Canadian approach.
a common contention is required.5
Commonality of injury was a central issue in
The hot issue in this area in the U.S. is how Merricks v. Mastercard, in which the Court of
many uninjured class members are too many Appeal recently confirmed that pass-on to
for class certification. No bright line rule consumers will generally satisfy the test of
exists for how many uninjured class
commonality of issue necessary for
members are too many, but these recent cases certification.7
show a growing trend in some circuits to rigorously analyze the de minimis standard.6
In particular, the Court of Appeal noted that the CAT should only have evaluated whether
the expert methodology was capable of
assessing the level of pass-on to the class and
whether there was, or was likely to be, data
available to operate the methodology. In
doing so, the Court of Appeal endorsed the
view that the proposed expert methodology
must be simply a suitable and effective means
of calculating loss to the class as a whole.8
This is in line with the CAT's view that the
Canadian approach to expert evidence9 should
be applied similarly in the UK.
4 Pioneer Corp. v. Godfrey, 2019 SCC 42. 5 Wal-Mart Stores, Inc. v Dukes, 131 S. Ct. 2541, 2549 (2011). See also Behrend v. Comcast Corp., 264 F.R.D. 150, 165-81 (E.D. Pa. 2010) (applying the predominance criteria and pointing to the
disjunction between plaintiff's theory of injury and basis for claiming damages). 6 See In re Asacol Antitrust Litig.,907 F.3d 42 (1st Cir. 2018) (rejecting the notion that uninjured class members could be removed in the post-judgment claims administrative process, instead holding that
certifying a class with uninjured persons would deny defendants' rights to challenge whether a plaintiff has suffered an antitrust injury. The court did not go as far as to require every class member to demonstrate standing, but rather only the presence of a de minimis number (here 10% was not considered de minimis); In re Rail Freight Fuel Surcharge Antitrust Litig., 725 F.3d 244 (D.C. Cir. 2013) (holding that the class included too many uninjured members (12.7%) and meant that plaintiffs had failed to satisfy Rule 23's predominance requirement). 7 See In re Asacol Antitrust Litig.,907 F.3d 42 (1st Cir. 2018) (rejecting the notion that uninjured class members could be removed in the post-judgment claims administrative process, instead holding that certifying a class with uninjured persons would deny defendants' rights to challenge whether a plaintiff has suffered an antitrust injury. The court did not go as far as to require every class member to demonstrate standing, but rather only the presence of a de minimis number (here 10% was not considered de minimis); In re Rail Freight Fuel Surcharge Antitrust Litig., 725 F.3d 244 (D.C. Cir. 2013) (holding that the class included too many uninjured members (12.7%) and meant that plaintiffs had failed to satisfy Rule 23's predominance requirement). 8 The Court of Appeal thus overturned the CAT's refusal to issue a collective proceedings order, because, the latter held, it was not possible to determine the exact degree of the interchange fee passed on to consumers across all retailers. In particular, the amounts passed on to individual consumers would vary to a great extent and, hence, this would not be a common issue to all members of the class. The Court of Appeal decision has been appealed to the UK Supreme Court, and the appeal is listed to be heard in May 2020. 9 Where it is sufficient that the calculation of global loss is methodologically sound and not using the language in Pro-Sys Consultants Ltd v Microsoft Corp. "purely theoretical or hypothetical". The Court of Appeal thus endorsed the view also expressed in Canadian jurisprudence, most notably Pro-Sys Consultants Ltd v Microsoft Corp.
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Are limitation periods subject to discovery?
Are umbrella damages available?
Statutory limitation periods do not start to There is inconsistent application within the As in Canada, the limitation period is subject
run until the violation is discovered.
U.S. but class periods are typically expanded to discovery (see below). In the UK, it is also
Section 36 of the Competition Act imposes during the discovery period without much a two-year limitation period for private scrutiny, generally by arguing fraudulent actions that runs from the day on which the concealment and continuing violation.
suspended during the competition authority's
investigation (until one year after the decision of the competition authority).
conduct was engaged in or the day on
An antitrust action must be commenced
The limitation period is six years from the
which criminal proceedings were disposed "within four years after the cause of action later of (a) the date on which the infringement
of, whichever is later. However, in
accrued" (15 U.S.C. 15b). However, there of competition law ceases, or (b) the first date
Godfrey, the SCC held that the limitation are some exceptions to this rule, such as the on which the claimant knew, or could
period "begins to run only when the
continuing violation doctrine. The entire reasonably be expected to have known, of (i)
material facts on which [the] claim is
limitation period is expanded by continuing the infringer's behavior, (ii) the fact that this
based were discovered... or ought to have violations whereby the plaintiff suffered
behavior constitutes an infringement of
been discovered". This means, at least in injury from a new and independent overt act competition law, (iii) that he/she has suffered
theory, that a conspiracy could be
within the statutory period. Each new
loss or damage arising from that infringement,
actionable many years even decades purchase of a price-fixed product is deemed and (iv) the identity of the infringer.
after it is terminated if it remains undiscovered.
to extend the limitations period. However, if a party withdraws from an agreement and it is not discovered, the statute of limitations will run. Note that some states may adopt a more liberal standard.
However, for collective action proceedings concerning claims that arose before October 1, 2015, and that follow on from a decision of the European Commission or the Office of Fair Trading, the relevant limitation period is
two years from the date on which the relevant
decision becomes final.
Umbrella purchaser claims may be difficult to prove, but are allowed to proceed to trial.
In Godfrey, the SCC held that it was not "plain and obvious" that umbrella purchaser claims could not succeed. The burden of proof at trial remains unchanged and the SCC acknowledged that umbrella purchaser claims may be complex or difficult to prove.
In general, umbrella damages are not allowed in the U.S. But there is some precedent allowing them.
Typically, the umbrella damages rule precludes plaintiffs from seeking damages for transactions with parties who were not included in the alleged antitrust conspiracy. However, an influential appellate court (Third Circuit, covering mid-Atlantic states) recently permitted plaintiffs to pursue antitrust damages for products supplied by non-conspiring parties.10
English courts generally allow for the collection of umbrella damages.
Umbrella damages may be pleaded in collective proceedings. The plaintiff must demonstrate causation and quantify losses, but this can be accomplished with expert testimony.
10 Requiring the expert methodology only to be "sufficiently credible or plausible" to establish some basis in fact for the commonality requirement. Allen & Overy LLP 2019
About the authors
John is the partner in charge of Allen & Overy's Washington, D.C. Antitrust practice and a member of the firm's Investigations and Litigation practice. John focuses his practice on civil antitrust litigation and investigations. He provides strategic guidance to clients on all issues that relate to antitrust, and represents companies in court and before the agencies in their most important matters.
Partner - Washington, D.C Tel +1 202 683 3862 email@example.com
John is an alumnus of the FTC which, along with the experience developed in private practice, gives him insight into the workings of the FTC and the U.S. Department of Justice's (DOJ) Antitrust Division. He represents clients in all aspects of government investigations and private antitrust litigation, and has guided clients through complex merger and civil investigations involving a wide range of complex issues. John also has handled high-profile trials and litigation in both private practice and during his tenure with the FTC, and represents clients in high stakes class action litigation. John has particular experience in defending civil cartel cases.
Both Chambers USA and Legal 500 have recognized John as a leading antitrust lawyer for many years. Chambers reports that John provides "strategic mind and his practical, pragmatic advice" and is "fantastic at navigating tricky antitrust matters,". John is a leader in the American Bar Association Antitrust Law Section, and hosts the Section's weekly podcast on antitrust, consumer protection and privacy law and serves on two non-profit boards supporting children with special needs. He joined Allen & Overy in 2014.
Counsel - Brussels Tel +32 2 780 29 17 firstname.lastname@example.org
Francesca is Counsel in the antitrust team in Brussels and is a member of the firm's life sciences group. Francesca has 13 years' experience in providing strategic counsel on all aspects of EU competition law in a diverse range of sectors. She has particular experience in advising on complex multi-jurisdictional merger reviews and on some of the most complex investigations by the European Commission (EC) in recent years, including on abuse of dominance issues and cartel settlement procedures. In recent years, Francesca has developed a depth of experience in advising on private enforcement across the EU and beyond.
Francesca has also represented clients in appeal proceedings before the European courts in several high-profile cases.
Recent EU cases include advising major global banks in confidential and parallel antitrust investigations by various competition authorities, including the EC, and acting for Scania in the EC's trucks cartel investigation and related private damages claims, as well as in appeal proceedings before the General Court of the EU.
Francesca regularly publishes and speaks on competition law, private enforcement and life sciences topics. She is qualified in the UK and Belgium and has spent time working in both the London and Brussels antitrust teams, as well as in our Paris office. Francesca is noted is Who's Who Legal as a Future Leader, winning praise from peers as an `impressive follow-on damages expert' who provides `strong insights into the Commission's thinking and likely reactions' (WWL, 2019).
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Associate - Washington, D.C Tel +1 202 683 3865 email@example.com
Jana is an associate in the Investigations and Litigation practice group in the firm's Washington, D.C. office. Her practice includes supporting clients, namely large global financial services firms, in the conduct of multijurisdictional internal investigations, advocating for them in contentious regulatory proceedings, and advising them on regulatory and compliance matters. She also has experience on congressional inquiry matters. Prior to joining Allen & Overy, Jana worked for the U.S. Senate Committee on Banking, Housing, and Urban Affairs.
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