DANIEL THOUIN AND APA VS ULTRAMAR LTD AND OTHERS
Case no. 200-06-000135-114.
Update on the APA’s Class Actions over price fixing in the retail sale of gasoline
In September 2012 Justice Dominique Bélanger authorized a new class action to cover price fixing in the sale of gasoline in Quebec. The decision significantly expands the existing case filed by the APA and members Marcel Lafontaine and Simon Jacques in 2008. The complete decision written in French is available on the APA website. (PDF) The new action covers extensive areas in Eastern Quebec including Quebec City. A rough estimate of the overcharges involved amounts to a claim for many million dollars over the four years during which the price fixing is alleged to have occurred. If the case is successful, this would be the largest class action in APA’s history. An earlier attempt by the Association to file a class action against the oil companies over their fuel retailing practices was dismissed by the Superior Court of Quebec in 1980.
Ever since the cartel came to light, the APA has believed that the scheme was too elaborate and far too active to have limited its activities to the four communities of Sherbrooke, Magog, Victoriaville and Thetford Mines identified by the Competition Bureau. (See below for the list of the areas covered.) This time, APA’s lawyers were able to convince the Court that new evidence showed that the fuel retailers involved acted in a much larger area covering 22 regional and local markets.
Justice Bélanger accepted some of the wiretap evidence gathered by the Competition Bureau to support the second, larger authorization. She also relied on studies by leading-edge Economics Professors Robert Clark of the University of Montréal’s business school (H.É.C.) and Professor Jean-François Houde of the University of Wisconsin. The studies revealed that in 14 of 26 weeks the prices in several markets for all three grades of gasoline were identical to the tenth of a penny in Sherbrooke and Quebec City. Possible finding: the price in Quebec City, and not the free market, determined what to charge in other markets. The judge also accepted findings from Professors Clark and Houde that showed margins dropped by 2.3 cents a litre in the cartel markets after the Competition Bureau went public in June 2008. Margins stayed the same in markets where there was no proof of price fixing.
The APA’s lawyers had asked for up to $500 in punitive damages for each claimant who purchased fuel in a market where prices were fixed. The court rejected APA’s claim for punitive damages, holding that in Quebec, they are the exception to the rule and not possible in this type of case. (However, the real economic damages, if we are able to prove them, will be very substantial.)
Where APA and Mr. Thouin go from here
A class action authorization in Quebec cannot be appealed by the defendants; however the judges’ permission to allow wiretap evidence is being appealed by them. Justice Bélanger has recently been appointed to the Quebec Court of Appeal, so a new judge will have to be named to hear the trial.
APA has been told that if the case goes to trial, it will last for months. Experience in auto class actions, which are much simpler cases, usually with only one defendant, leads the APA to expect a 10 year delay from the beginning of the case (June 2008 in this case) to when compensation is awarded. Conservatively then, if the action goes to trial and succeeds, it will be 2018 or later before consumers in Quebec see any compensation. The legal bills for the two class actions in this file have been very hefty – in the millions on the APA side, and many millions for all the defendants (fortunately, our lawyers are acting on contingency).
The Competition Bureau is continuing its criminal prosecutions, with guilty pleas and settlements worth over 3 million dollars to date. Jail time mentioned in the Bureau’s news releases is actually house arrest, because the defendants are not habitual criminals. So far, all the Bureau’s charges have been limited to the original four small markets in Quebec. Recently the Bureau made public an investigation into price fixing in a local market near Kingston Ontario.
What you can do
If you’re not already registered, sign up to be included in one of the Groups on one of the two websites belonging to the law firms.
In Montreal, Paquette Gadler Inc.
In Quebec City, LeBel Avocats
If you have a gas card or records for the period prior to June 30, 2006 and purchased fuel in one of the markets covered by the cases to date, keep your receipts or billing records. Registration data indicating what you drove and where you lived could also come in handy if you lived in one of the 26 markets covered by both class actions. They may come in handy eventually, if the Court orders a reimbursement. Using a rough back-of-the-envelope calculation, at 2,000 litres of fuel purchased a year to drive a typical compact car and a conservative 2 cents a litre of overcharges, you’re looking at about $40 in overpayments per vehicle user annually. Over the four years covered by the authorisation, that could amount to over 150 $ a person.
List of regional markets which the Superior Court of Quebec has accepted for inclusion in the price fixing class actions involving the APA