Am I Part of the Class? An Issue Rype for the Supreme Court of Canada

This post was written prior to our January 2017 merger, under our previous firm name, MacPherson Leslie & Tyerman LLP.

Establishing that two or more people share a claim is not as straightforward as some counsel argue.  Sun-Rype Products Ltd. v. Archer Daniels Midland Company, 2013 SCC 58 is one such example. Here, the Supreme Court of Canada stressed that when considering certification evidence an underlying purpose of the identifiable test cannot be overlooked, that of allowing proposed class members to reasonably identify themselves as part of the class.

The case involved allegations that certain manufacturers had engaged in price fixing regarding high fructose corn syrup (“HFCS”) – a sweetener used in many types of food products including soft drinks and baked goods.  The plaintiffs (appellants) sought to have the action certified as a class action.  A strong seven justice majority of the Supreme Court dismissed the plaintiffs’ appeal, refusing to certify the action as a class action, reasoning that “there [was] insufficient evidence to show some basis in fact that two or more persons [would] be able to determine” they were part of the class.

In Sun-Rype, the class definition was “all persons resident in British Columbia and elsewhere in Canada who purchased HFCS or products containing HFCS manufactured by the defendants.”  Notably, the majority specifically stated that it did not take issue with the class definition itself.  The definition contained objective criteria, was not overly broad, and did not depend upon the merits of the action. However,  the majority did take issue with the definition and its implications for an identifiable class when it took into account the purposes of a class definition,  one of which is to provide an objective means by which individuals can identify as being part of the class.  To this purpose, the majority reiterated that there must be sufficient evidence to establish some basis in fact that individuals will be able to identify that they are class members.

The fatal issue for the plaintiffs in Sun-Rype came down to an evidentiary inability to establish a basis in fact that individuals would be able to identify  they purchased a product that contained HFCS.  The evidence provided by the plaintiffs established that there were actually two types of sweeteners used during the relevant time period, HFCS and liquid sugar, but labeling requirements at the time did not require the two to be distinguished.  Therefore, even if a potential member were to know of various products that used sweeteners, he or she would not be able to identify whether the product actually contained HFCS – it may have contained either HFCS or liquid sugar. It followed that no individual would be able to identify as being part of the class.  A purposive interpretation of the class definition led to an unidentifiable class and, ultimately, a refusal to certify the action as a class action.

Notably, the Court made this finding even though the Plaintiffs argued an overall loss to a class could be determined. The Court concluded, in essence, that such an approach would put the cart before the horse. The notion of a class without the foundation of identifiable individuals with a claim for a loss belies the purposes of a class action.  “Some basis in fact indicating that at least two persons can prove they incurred a loss” will be necessary in all cases and “no amount of expert evidence establishing that the defendants have harmed the class as a whole” does away with the purposive requirement to demonstrate that at least two individuals fit within the class definition and can advance a claim for loss. In light of the reasoning in Sun-Rype, both plaintiff and defendant counsel ought to take careful note of the implications of the Court’s purposive interpretation of an identifiable class.