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Contested Price-Fixing Class Action Including Indirect Purchasers Certified For First Time By A Canadian Court.

Article Excerpt
On September 28, 2009, the Ontario Superior Court of Justice issued the first decision by a Canadian court in a contested case certifying a price-fixing class action on behalf of a class which includes indirect purchasers. In Irving Paper Limited et al. v. Atofina Chemicals Inc. et al., The Honourable Madam Justice Rady certified under the Ontario Class Proceedings Act (the "CPA") a class action on behalf of all persons in Canada (excluding the defendants) who purchased hydrogen peroxide, products containing hydrogen peroxide or products using hydrogen peroxide in Canada between January 1, 1994 and January 5, 2005. If left undisturbed on appeal, the decision could significantly broaden the scope in Ontario for indirect purchaser, price-fixing class actions. It could also mean that class action law in Ontario will be inconsistent with the law and practice in other Canadian jurisdictions (such as British Columbia) where courts have refused to certify proposed indirect purchaser price-fixing class actions and with U.S. federal law which bars indirect purchasers from making damages claims.

The Claim In Irving Paper, the plaintiffs allege that the defendants conspired to, and did in fact, allocate markets, restrict supply and increase the price of hydrogen peroxide in Canada over an 11-year period. The plaintiffs have asserted claims for general and punitive damages based on the common law tort of conspiracy, the statutory cause of action for damages under section 36 of the Competition Act (Canada) and the tort of intentional interference with economic interests. The last of these three causes of action was not pursued at certification.

Hydrogen peroxide is an inorganic chemical, differentiated in grade and concentration, that is used in many different applications as a bleaching or oxidizing agent. The pulp and paper industry, which uses hydrogen peroxide in the pulp bleaching process, is the largest North American consumer of the chemical. Hydrogen peroxide is also used in a wide...