Godfrey v Sony: Supreme Court protects victims of price-fixing conspiracies

On September 20, 2019, the Supreme Court of Canada issued a decision in Godfrey v Sony Corp., a class action related to alleged price-fixing in the market for optical disc drives (“ODDs”). The decision provides clarity on four significant issues in price-fixing litigation. The Court held that:  

1. Section 36(1) of the Competition Act is not a complete code that functions to bar common law and equitable claims. Moreover, a breach of s. 45(1) of the Competition Act can supply the “unlawful” element in a claim for unlawful means conspiracy;
2. Umbrella Purchasers have a cause of action under s. 36 of the Competition Act. Umbrella Purchasers are persons who purchased products that were neither manufactured nor supplied by the defendants. The theory behind the inclusion of Umbrella Purchasers is that the defendants’ cartel behaviour created an “umbrella” of supra-competitive prices in the market such that even non-conspirators raised their prices;  
3. The discoverability rule applies to the limitation period in s. 36(4)(a)(i) of the Competition Act. The limitation period only begins to run when the material facts on which the plaintiff’s claim is based are discovered or ought to have been discovered by the plaintiff. In the alternative, it was not plain and obvious that the doctrine of fraudulent concealment did not apply to delay the running of the limitation period. Whether the defendants’ conduct amounted to fraudulent concealment would need to be determined by the trial judge; and
4. The plaintiff  had proposed a viable methodology for determining commonality of harm for indirect purchasers. It was not necessary for the plaintiff’s experts’ methodology to establish that each and every class member suffered a loss, nor was it necessary to identify which class members suffered loss. The methodology only needed to be capable of establishing some loss at each purchaser level.

This Supreme Court decision represents an important outcome from an access to justice perspective. The decision provides clarity on who can assert a claim based on price-fixing and what claims can be brought. Importantly, the decision allows all persons who overpaid for their price-fixed products to bring a claim for damages. It also ensures that defendants will not be shielded from their wrongdoing by hiding their behaviour until after the limitation period expires.