Canada: Roadblocks To Certification Of Consumer Class Actions In B.C.?

On October 8, 2014, the B.C. Supreme Court refused to certify a proposed consumer class action relating to the sale of bottled beverages sold under the trade name "Vitaminwater" to B.C. consumers. ¹

The plaintiff alleged that the defendants, Energy Brands Inc. and Coca-Cola Ltd., marketed Vitaminwater products in a manner which had the "capability, tendency or effect of deceiving or misleading a consumer" into concluding that Vitaminwater is a healthy beverage with a minimal amount of sugar. The plaintiff claimed that this constituted a "deceptive act or practice" in violation of the B.C. Business Practices and Consumer Protection Act ("BPCPA").

The Court refused to certify on the basis that the identifiable class, common issues and preferability requirements of the Class Proceedings Act were not made out.

This case, following on the heels of other certification refusals this year including Ileman v. Rogers Communications Inc.², Wakelam v. Wyeth Consumer Healthcare/Wyeth Soins de Sante Inc.³ and Ladas v. Apple Inc.⁴, continues a recent line of authority in which B.C. judges appear willing to apply the certification criteria more robustly than has historically been the case.

The case is also encouraging for defendants in consumer class actions for three reasons:

1. Narrowing of available relief under the BPCPA: Following Ileman and Wakelam, the plaintiff abandoned its claim under s. 172 of the BPCPA for restoration of money received by the defendants given that a "proprietary nexus" was required. The plaintiff restricted his claim of monetary relief to his "premium price" theory of loss, i.e. that the members of the class paid more for Vitaminwater than they otherwise would have paid.
2. Evidentiary basis is required for BPCPA damages claim: The Court held that there was no evidentiary basis to support the plaintiff's premium price theory of loss, in particular there was no evidence of the price paid for the product or how the price compared with the price of other products, sugary or otherwise. The Court concluded that the plaintiff's assertion that evidence "might" be obtained on discovery of the defendants to support the theory was untenable and refused to certify the action for damages under the s. 171 of the BPCPA.
3. The effect of the deceptive act or practice matters: The Court held that the issue as framed by the plaintiff did not distinguish between representations that had the "capability" or "tendency" of misleading a consumer and those that actually had that effect. For potential remedy, it is the "effect" that matters. The Court held that the motivations behind the multitude of consumer transactions at issue were almost "endlessly variable" so reliance could not reasonably be inferred.

Although popular, proposed class actions under the BPCPA may be becoming more difficult to certify.

Footnotes

1. Clark v. Energy Brands Inc., 2014 BCSC 1891