Supreme Court Clears Way for Price-Fixing Lawsuit Against Air Canada

Supreme Court Clears Way for Price-Fixing Lawsuit Against Air Canada

By Christopher Reynolds, The Canadian Press

Air Canada
A model airplane is seen in front of the newly revealed Air Canada Boeing 787-8 Dreamliner aircraft at a hangar at the Toronto Pearson International Airport in Mississauga, Ont., on February 9, 2017. The Supreme Court of Canada has cleared the way for a class-action lawsuit against Air Canada and British Airways to proceed, dismissing an appeal by Canada’s largest airline. Air Canada had sought to overturn an October 2017 Ontario Court of Appeal ruling that the class action could include foreign claimants despite playing out in Ontario courts. (THE CANADIAN PRESS/Mark Blinch)

The Supreme Court of Canada has cleared the way for a class-action lawsuit against Air Canada and British Airways to proceed by dismissing an appeal by Canada’s largest airline.

Air Canada had sought to overturn a 2017 Ontario Court of Appeal ruling that provincial courts could hear the class-action case even though it includes foreign claimants.

The decade-old lawsuit from three companies alleges price fixing on international cargo shipments by major airlines between 2000 and 2006.

Linda Visser, a lawyer for the plaintiffs, says they have reached settlements totalling more than $29 million with all 14 defendants except Air Canada and British Airways.

“From an access to justice perspective it’s a significant decision, because there are few jurisdictions that actually have class action regimes. And often these types of claims are not economical to bring on an individual basis,” Visser said.

The lawsuit involves up to tens of thousands of class members, many of them exporters and freight forwarders that handle shipments ranging from flowers to fruits to zoo animals, she said.

The plaintiffs are Ontario’s Airia Brands Inc., Britain’s StarTech.com Ltd. and Germany’s Quick Cargo Service.

Air Canada declined to comment, saying the case is before the courts.

“The case confirms that the Ontario courts are a place where foreign claimants from around the world can come and start class actions,” said Ranjan Agarwal, a class-action defence lawyer at Bennett Jones.

“It’s been going on a long time, and it could still go on a lot longer. But now that the defendants have lost their big fight over jurisdiction, and given that the case has been certified” — greenlighted by a lower court judge — “most people would believe that this would lead to a settlement.”

In 2012, Air Canada paid $8 million in a U.S. class-action settlement agreement following allegations of anti-competitive air freight pricing, though the company did not admit liability.

In March 2017, the European Commission fined Air Canada $30 million — 11 airlines were fined about $1.2 billion in total — for allegedly running a price-fixing cartel on cargo fuel and security surcharges between 1999 and 2006.

An appeal to the General Court of the European Union is pending.

Investigations by the U.S. Department of Justice and Canada’s Competition Bureau into alleged price fixing wrapped up without charges.

As of Dec. 31, 2016, Air Canada had set aside $17 million “relating to outstanding claims,” according to a management document on the company’s finances.

“This provision is an estimate based upon the status of investigations and proceedings at this time and Air Canada’s assessment as to the potential outcome for certain of them,” the document states.

Thursday’s dismissal by the Supreme Court orders Air Canada and British Airways to pay the three respondents’ costs.

Of the defendants that have settled, Air France–KLM and Deutsche Lufthansa AG paid the most, shelling out $6.5 million and $6.2 million respectively, according to Siskinds law firm, which represents the plaintiffs.

Appeal court justice Sarah Pepall’s ruling from October of last year states Ontario courts have jurisdiction in the class action because there is a “substantial connection” between the claims and the province and the “absent foreign claimants” share “common issues” with the plaintiffs.

CP - The Canadian Press

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