In 2008, Ontario courts certified several consumer protection class proceedings, often for the purpose of settlement. Nevertheless, certification continues to be an insurmountable barrier for many consumer plaintiffs, particularly concerning the certification criteria of preferable procedure. The following provides an overview of several noteworthy consumer protection class action decisions for 2008.
Certified Consumer Protection Class Actions
In Waddell v. Apple Computer, Inc., Justice Perrell of the Ontario Superior Court of Justice approved class certification for the purpose of settlement. Class proceedings initiated in August 2005 alleged design and manufacturing defects in the batteries of certain iPod models: batteries required recharging after two or three hours despite advertisements suggesting that the devices would run from eight to twenty hours. Parallel proceedings were commenced in Québec in June 2005 and similar actions were commenced in Ontario and Alberta in September and October of that same year.
Apple Computer Inc. (Apple), the representative plaintiff and the Québec plaintiff reached a settlement agreement in which Apple agreed to provide each member of the class with a $45 store credit, provided that the September and October 2005 actions were discontinued. The settlement agreement was approved by Madam Justice Richler in June 2008 for the Québec proceedings and by Justice Perrell in August 2008.
The Ontario Superior Court of Justice also certified class proceedings in Dean v. Mister Transmission (International) Limited. The plaintiff initiated class proceedings alleging that Mister Transmission (International) Limited and its franchisees charged consumers for an estimate when repair work was ultimately performed in contravention of the Consumer Protection Act, 2002. Though the court certified the class, this case has yet to be heard on the merits.
In Wong v. Sony Corp., the plaintiffs sought certification on the basis that Sony Corporation and Sony of Canada Ltd. (Sony) breached the Consumer Protection Act, the Business Practices Act and the Sale of Goods Act by being negligent and making negligent representations about certain models of DVD players which had defective SYSTCON ROM chips. Sony consented to class certification for settlement purposes and a settlement agreement was approved on January 2, 2009.
In the settlement agreement, Sony agreed to provide class members with three options:
(1) reimbursement for out-of-pocket expenses related to chip repair or the replacement of DVD players which were no longer under warranty;
(2) if the class member purchased a replacement DVD player, a $40 voucher redeemable towards any product on Sony’s website or a refurbished DVD player; or
(3) if Sony identified a chip problem upon inspection of the DVD player, a $40 voucher redeemable towards any product on Sony’s website or a refurbished DVD player.
In Matoni v. C.B.S. Interactive Multimedia Inc., two representative plaintiffs successfully sought certification of a class proceeding against the Canadian Business College (CBC). They claimed that CBC made “false, misleading or deceptive representations” under the Consumer Protection Act, 2002 (CPA). The representative plaintiffs, who were enrolled in the dental hygienist program at CBC alleged that they were not adequately informed that:
(1) the college was not accredited by the professional body governing dental hygienists, so there was no guarantee of eligibility to write the necessary exams upon completion of the program; and
(2) if permitted to write the exam, graduates of non-accredited programs often must wait a considerable amount of time before they can practice as dental hygienists.
The court found that because the representative plaintiffs did not personally have a claim under the CPA and, thus, had no interest in the common issues, they were not the appropriate representative plaintiffs. Interestingly, failure to identify an appropriate representative plaintiff was not fatal to the motion; the court granted class certification, subject to the addition of an appropriate representative plaintiff.
Dismissed Actions for Certification
Despite several successful certification motions in 2008, class certification continues to be a difficult threshold for consumers to meet. In the recent Supreme Court of Newfoundland and Labrador (Trial Division) decision in Sparkes v. Imperial Tobacco Canada Limited, the court denied certification of a class action against Imperial Tobacco Canada Limited (Imperial Tobacco) relating to “Light” and “Mild” cigarettes. The plaintiff alleged that Imperial Tobacco had committed unfair trade practices under the Trade Practices Act by using the descriptors “Light” and “Mild” to deliberately mislead the public into believing that such cigarettes were less harmful than “regular” cigarettes.
Imperial Tobacco, represented by Deborah Glendinning of Osler, Hoskin & Harcourt LLP, succeeded on virtually every issue. The court held that:
(1) the plaintiff failed to establish a cause of action;
(2) the proposed class was too broad and over-inclusive;
(3) the common issues required individual proof of reliance and were not amenable to class certification; and
(4) a class action was not the preferable procedure, due to the abundance of individual issues.
This decision is particularly noteworthy, given that certification was granted by both the British Columbia Supreme Court and Court of Appeal under similar circumstances in Knight v. Imperial Tobacco Ltd., 2006 BCCA 235; 2005 BCSC 172.
A denial of certification was upheld by the Federal Court of Appeal in Bedard v. Kellogg Canada Inc. In 2007, the plaintiff alleged that Kellogg Canada Inc. had contravened s.52 of the Competition Act by engaging in materially false or misleading claims regarding the calorie content of its “Frosted Flakes 1/3 Less Sugar” and “Fruit Loops 1/3 Less Sugar” cereals. The cereal boxes stated “1/3 Less Sugar than Original,” which statement the plaintiff alleged should translate to nutritional benefits with respect to calorie content.
The Federal Court refused to certify the action as a class action primarily because the plaintiff failed to establish that a class action was the preferable procedure and did not fairly and adequately represent the interests of the proposed class. The Federal Court stated that as the purpose of the plaintiff’s action was to penalize the allegedly reprehensible conduct, rather than to compensate consumers, alternate routes to justice were preferable and access to justice would not be threatened by denying the certification motion.