In a recent case handed down by the Ontario Superior Court of Justice, in Rebuck v. Ford Motor Company, the Court confirmed the key requirements for commencing Competition Act misleading advertising based class actions in Ontario under sections 52 and 36 of the Competition Act.
In this case, the plaintiff moved for, and obtained, certification for a class action against Ford Motor Company and its Canadian subsidiary (as well as a dealer) for allegedly misleading purchasers of 2013 and 2014 Ford vehicles in relation to fuel consumption marketing claims.
In particular, the plaintiff claimed that the defendants advertised intentionally understated fuel consumption ratings and that they also failed to disclose material facts relating to the fuel consumption ratings – specifically, that they were based on an older testing method that was being phased out and that did not accurate reflect real world driving conditions. The plaintiff also claimed that the defendants’ fuel consumption marketing created the false general impression that their stated ratings were government-certified and met regulatory requirements.
In approving the plaintiff’s certification motion, the Court discussed the key elements for bringing private actions under sections 52 and 36 of the Competition Act. (Section 52 is the criminal misleading advertising provision; and section 36 is the private action provision, under which Competition Act law private and class actions are commenced). In doing so, the Court summarized the requirements to prove both an intentional false or misleading claim under section 52 of the Competition Act and actual damages suffered as a result of a breach, which is a key requirement of section 36.
In addition, however, the Court also confirmed the lower causation requirement for commencing civil actions based on section 52. In this respect, the Court held, relying on earlier case law, that to satisfy the “double-barreled” requirement to establish both a breach of section 52 and damages, private plaintiffs must also show a causal connection between the breach (i.e., false or misleading claim) and the damages suffered.
The Court clarified that, unlike, for example, the reliance in the usual sense of a common law misrepresentation claim, all that is required for a civil misleading advertising claim under the Competition Act is for the plaintiff to show that a false or misleading claim caused them to acquire less value that they expected to acquire. This lower causation burden allows, for example, damages to be calculated on an aggregate rather than an individualized basis.
Overall, this case is a good general summary of the requirements to obtain certification for Competition Act class actions in Ontario. It is also a reminder that in addition to other provisions of the Competition Act – most commonly, the price-fixing and other conspiracy offences under section 45 – false or misleading advertising claims can also form the basis for civil and class actions.
____________________
SERVICES AND CONTACT
I am a Toronto competition/antitrust lawyer and advertising/marketing lawyer who helps clients in Toronto, Canada and the US practically navigate Canada’s advertising and marketing laws and offers Canadian advertising/marketing law services in relation to print, online, new media, social media and e-mail marketing.
My Canadian advertising/marketing law services include advice in relation to: anti-spam legislation (CASL); Competition Bureau complaints; the general misleading advertising provisions of the federal Competition Act; Internet, new media and social media advertising and marketing; promotional contests (sweepstakes); and sales and promotions. I also provide advice relating to specific types of advertising issues, including performance claims, testimonials, disclaimers, drip pricing, astroturfing and native advertising.
For more information about my services see: services
To contact me about a potential legal matter see: contact
For more regulatory law updates follow me on Twitter: @CanadaAttorney
