The Supreme Court of Canada has agreed to hear appeals in two B.C. class-action cases launched against corporate giants on behalf of consumers who allegedly overpaid for computers and soft drinks, in an effort to settle contradictory judgments from lower courts on a key legal issue.
The court will weigh in on the question of whether “indirect purchasers,” or consumers who bought computers or soft drinks from retailers, not from manufacturers directly, can sue over price-fixing allegations.
One of the cases, launched on behalf of individual B.C. consumers and a company called Pro-Sys Consultants Ltd., accuses Microsoft Corp. of wrongly driving up prices for the software that comes preinstalled on computers. The plaintiffs’ lawyers say the case could be worth hundreds of millions of dollars.
The other case, launched on behalf of individual B.C. purchasers as well as by Sun-Rype Products Ltd., is a fight with several agribusiness giants, including Archer Daniels Midland Co. over allegations they fixed the price for the high-fructose corn syrup used to sweeten soft drinks and foods.
Earlier this year, the B.C. Court of Appeal reversed lower-court rulings and declined to certify the lawsuits as class actions, ruling that “indirect purchasers” could not sue manufacturers with whom they had not done business directly.
But courts across Canada have been divided on the issue. The most recent contradiction came from the Quebec Court of Appeal just weeks ago. In a similar class-action case against a computer-chip manufacturer, it ruled indirect purchasers could sue.
On Thursday, the Supreme Court said it will hear appeals in the Microsoft and ADM cases, which are being keenly watched by competition lawyers. Other potential multimillion-dollar lawsuits against companies alleging price-fixing conspiracies are on hold or in the wings and awaiting a result.
LawyerJ.J. Camp, whose Vancouver firm Camp Fiorante Matthews represents the plaintiffs in both cases, said the issues at stake are big ones for consumers, who would be allowed to join class actions over price-fixing if the appeal succeeds.
“If you bought a computer, [in the Microsoft lawsuit] we allege that you paid an embedded charge of about $20 more than you should have for the programs and applications that came with your computer,” Mr. Camp said. “Microsoft drove everybody out of business and then hiked up their prices.”
He said he was not surprised at the decision, given the Quebec Court of Appeal decision that contradicted the rulings against his clients in B.C.: “That obviously puts the cat amongst the pigeons with differing courts of appeal across the country going in different directions.”
Microsoft and its lawyers declined to comment, as did ADM. Microsoft has settled similar lawsuits across the United States over price-fixing allegations for a total of $2.5-billion (U.S.), including $1-billion in California alone, and the company has faced investigations and fines from antitrust watchdogs in the U.S. and Europe.
The case against ADM and the other agribusiness defendants is related to the massive bust by U.S. investigators of a price-fixing scheme for other food additives in the 1990s, dramatized in the 2009 Hollywood film The Informant, starring Matt Damon.
ADM and the others did not face prosecution from regulators over corn syrup, but the company paid $400-million (U.S.) to settle a U.S. price-fixing class-action over allegations related to corn syrup price-fixing in 2004.