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Fuel Surcharge Class Action for International Tickets Certified

View PDF: 2017-01 (Feb 23-17)

At the end of January 2017, the Quebec Superior Court authorized a class action brought against Air Canada seeking reimbursement of amounts paid to the carrier as a fuel surcharge when purchasing tickets for international carriage and other damages.

Robert Choquette, the representative plaintiff, travelled from Montreal to Paris in September 2014 for a two-week stay. He purchased his return ticket online and paid, as part of the purchase price, an amount identified by Air Canada as a fuel surcharge. He alleges that the fuel surcharge he paid amounted to more than 51% of the total ticket price charged.

By his own admission, Mr. Choquette paid no mind to the price he paid for his ticket, or to the amount of the fuel surcharge, until he returned to Canada after his holiday in France. Back home, after speaking to a friend, he decided to look into the actual cost of fuel. After doing some research, he consulted a lawyer and, as sometimes happens after a lawyer is consulted, a legal proceeding was commenced.

The essential allegations put forward by Mr. Choquette are as follows:

  1. Air Canada violated Quebec’s Consumer Protection Act (“CPA”) in making false or misleading representations relating to the fuel surcharge it charged to members of the class;
  2. Air Canada violated the CPA in charging fees so disproportionate as to amount to exploitation;
  3. The fuel surcharge formed an integral part of Air Canada’s contracts of carriage for international flights;
  4. The fuel surcharge constituted a significant proportion of the total price of tickets sold; and
  5. Air Canada’s false and misleading representations regarding the fuel surcharge related to an important or essential element of the contracts entered into by all members of the class.

Air Canada resisted the certification or authorization motion on two main grounds. First, it argued that the Superior Court does not have jurisdiction to hear Mr. Choquette’s case because Parliament had granted exclusive jurisdiction to do so to the Canada Transportation Agency (the “Agency”). Second, Air Canada submitted that Mr. Choquette had not met any of the requirements for certification.

The Superior Court’s Jurisdiction

In Canada, the superior courts of each province are courts of inherent and original general jurisdiction. By default, they may hear a legal dispute. In Quebec, this constitutional principle has been codified in the Code of Civil Procedure (“CPC”):

  1. The Superior Court is the court of original general jurisdiction. It has jurisdiction in first instance to hear and determine any application not formally and exclusively assigned by law to another court or to an adjudicative body.

It has exclusive jurisdiction to hear and determine class actions and applications for an injunction.

As article 33 reflects, in Canadian law it is possible for the legislature to remove certain matters from the jurisdiction of a superior court, but only where that jurisdiction has been assigned formally and exclusively to another court or tribunal.

In this case, Air Canada argued that Parliament had formally and exclusively assigned the jurisdiction to adjudicate matters in the nature of Mr. Choquette’s claim to the Agency.

In passing, it is to be noted that the second paragraph of article 33 of the CPC provides that the Superior Court has exclusive jurisdiction to hear and determine class actions. However, a class action is a procedural vehicle for hearing and determining disputes only, so this provision (and others relating to class proceedings) do not have the effect of conferring any sort of substantive jurisdiction on the court. If the court were satisfied that Mr. Choquette’s claim came under the exclusive jurisdiction of the Agency, his proposed class action (or even an individual action) could not proceed in the Superior Court.

Justice Duprat set out numerous provisions of the Canada Transportation Act and the Air Transportation Regulations articulating the Agency’s powers and responsibilities before holding that the question of the Superior Court’s jurisdiction had already been determined by the Quebec Court of Appeal in its decision in WestJet c. Chabot, 2016 QCCA 584. In that earlier case, the certification of a class action against WestJet seeking reimbursement and damages relating to its policy of charging passengers for an extra seat needed for reasons relating to disabilities was upheld.

In Chabot, it was held that while only the Agency has the jurisdiction to regulate carriers—the courts have no such power—the Canada Transportation Act did not contain any formal or express provision granting the Agency exclusive jurisdiction to hear disputes of the kind raised by the plaintiffs in that case. While the Agency could adjudicate a dispute relating to one passenger one fare policies (and had in the past), it had not been granted exclusive jurisdiction to do so.

Justice Duprat held that the same was true in the case of Mr. Choquette’s fuel surcharge claim under the CPA.

Criteria for Class Action Authorization

Article 575 of the CPC sets out the four criteria a representative plaintiff must meet to have a class action certified. They are as follows:

  1. The claims of the members of the class raise identical, similar or related issues of law or fact;
  2. The facts alleged appear to justify the conclusions sought;
  3. The composition of the class makes it difficult or impracticable to apply the rules for mandates to take part in judicial proceedings on behalf of others or for consolidation of proceedings; and
  4. The class member appointed as representative plaintiff is in a position to properly represent the class members.

With respect to the first requirement, Air Canada argued that even if one were to accept that the first issue proposed by the plaintiff—whether the CPA applies to Air Canada—is common, the proceeding would only result in a multitude of mini-trials. This, according to the carrier, is because each member’s claim would have to be analyzed on an individual basis: was an individual passenger even aware of the fuel surcharge? In addition, many factors go into any analysis relating to each passenger’s claim, such as the route flown, the combination of flights taken, the type of aircraft and the variation of the price of fuel from one period to the next.

The court held that the questions raised by Air Canada were not the right ones. Following another decision of the Quebec Court of Appeal, Justice Duprat noted that an authorization judge is not to overemphasize variation between members; rather, the question is whether members are in “a sufficiently similar situation such that a common question for which the class action seeks answers can be identified.” Here, the central questions of whether the CPA applies to Air Canada and whether Air Canada contravened that act are sufficiently common across the class to meet this criterion.

The court then analyzed the evidence put forward by Mr. Choquette and his lawyers in support of the proposed action. According to the decision, the plaintiff had included data and tables that appeared to demonstrate that in some cases, the amount charged to passengers for fuel exceeded the actual cost of fuel. In addition, there was evidence that fluctuations in the cost of fuel did not always bear any relationship with increases in the surcharge. As well, there was evidence that for a given type of aircraft used to fly to various destinations, the fuel surcharge made up highly variable proportions of the actual fuel price—from 7% to 150% or more.

Air Canada objected to this evidence and the plaintiff’s calculations and analysis, while also citing the Agency’s findings that its fuel surcharge fees were not unjust or unreasonable. However, Justice Duprat held that these arguments went to the heart of the litigation, not to the question of certification, where the plaintiff only needs to show that he has a prima facie case. A plaintiff must only show that he has an arguable case to make on behalf of the class and, in the court’s view, Mr. Choquette had done enough to show that the fuel surcharge appeared abusive and contrary to the CPA for the purpose of authorization.

Air Canada argued that the third criterion had not been met because Mr. Choquette had not provided the size of the proposed class. The court held that it is not the plaintiff’s obligation at the certification stage to demonstrate the number of class members there would be; instead, it is enough to show that several others are in a similar or identical situation. In this case, it was relatively obvious that a large number of people in Quebec had bought a ticket for international travel from Air Canada since February 2012.

Finally, the court did not accept Air Canada’s arguments that Mr. Choquette was not able to represent the class. In part, the carrier objected on the basis that Mr. Choquette had had little to do with preparing the calculations on which the action was based, had no knowledge of Air Canada’s tariff or the regulatory scheme applicable to it, had no familiarity with the Agency and had not attempted to contact any other members of the proposed class. Justice Duprat followed other decisions  that had held that the representative plaintiff’s levels of interest in and knowledge of the particulars of the claim need not meet the levels Air Canada advocated for. The court was satisfied that Mr. Choquette understood that he was subject to false or misleading representations and required to pay an unreasonable amount.

As a result, the class action will proceed to the next stage. The authorized class includes all individuals in Quebec who purchased tickets for international travel (with the exception of travel to the United States) from Air Canada on or after February 8, 2012— including on flights operated by other members of the Star Alliance—and who were charged by and paid Air Canada a fuel surcharge.

Choquette c. Air Canada,
2017 QCCS 234