Federal Court of Appeal Dismisses Class Action Certification Due To Unavoidable Individualized Inquiries

Written By Ethan Schiff and Mehak Kawatra

In Voltage Pictures v Robert Salna, 2025 FCA 131, the Federal Court of Appeal addressed the preferable procedure criterion in the context of a defendants’ class proceeding. The plaintiffs sought to certify an action against a class of defendants and, despite objection, impose the burden on Mr. Salna to represent the interests of the defendant group (the representative defendant). These “reverse class actions” are uncommon and, despite that unique context, the decision carries implications for class actions generally.

The plaintiffs were motion picture production companies forming part of the Voltage Pictures film studio. They sought to certify a reverse class proceeding alleging copyright infringement through online downloads involving BitTorrent. The approximately 874 members of the proposed defendant class were individuals whose internet accounts had been detected by the plaintiffs’ forensic software as offering to upload the plaintiffs' films during a prior six-month period. Mr. Salna, in particular, owned three rental units in a property where he also provided internet access to his tenants. The plaintiffs asserted that the films at issue had been downloaded and offered for uploading via BitTorrent through Mr. Salna's IP address during the class period.

The Federal Court of Appeal held that a reverse class action was not the preferable procedure because the resolution of the proposed common issues would not advance the litigation. Here, “the mere fact that a class member was an internet subscriber whose account was used to download the films via BitTorrent was not enough to establish infringement.” Rather, the plaintiffs would be required to prove the content of each class member's specific involvement with any BitTorrent file sharing activities before copyright infringement or liability could be established. This inquiry would inevitably require individual fact-finding, and those individual issues would “swamp whatever common issues there might be.”

Despite acknowledging that common questions need not predominate over the individual issues, the Federal Court of Appeal found that the common issues had minimal importance in relation to the claim as a whole “and thus do virtually nothing to advance the claim.” Accordingly, the Court concluded that a class action would not be the preferable procedure.

The Federal Court of Appeal's decision to deny certification on account of the many individual issues emphasizes the importance of judicial economy and access to justice—two goals which underlie the preferable procedure criterion of the certification test.

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• To balance the equities in the context of reverse class proceedings, the Federal Court of Appeal has clarified the scope and application of the certification requirement regarding evidence of funding arrangements. In particular, the certification criteria in the Federal Court Rules are subject to three “necessary” modifications for reverse class proceedings: (i) references to “plaintiff or applicant” must be replaced with “defendant or respondent;” (ii) the representative defendant bears the burden of filing evidence for funding arrangements; and (iii) inadequate funding arrangements for class counsel should not be an absolute bar to certification (given that, otherwise, the proposed defendant class may be easily able to defeat certification by intentionally failing to find adequate funding arrangements).
• The Court held that it is improper to refuse certification on the basis of an inadequate or deficient litigation plan where that litigation plan can be amended to address those inadequacies or deficiencies.

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