Boeing and Securities Class Certification: Trends in the United States and Canada

On July 20, 2026, a United States appeals court unanimously overturned certification of a securities class action against The Boeing Company (Boeing), holding that plaintiffs must establish a workable, class-wide methodology for calculating damages at the certification stage. Boeing underscores that class certification is a meaningful screening mechanism, not a rubber stamp — a message that could resonate with Canadian courts confronting similar issues.

The Fourth Circuit’s Decision in Boeing

In the proposed class action, the plaintiffs claimed that Boeing misrepresented its commitment to safety following two incidents involving Boeing’s 737 MAX aircraft. The plaintiffs alleged that safety misrepresentations inflated the price of Boeing’s stock over a three-year period. In moving for certification, the plaintiffs submitted an expert report that described a generic “out-of-pocket” measure of damages and did not commit to a specific methodology for the calculation of the alleged share price inflation.

The U.S. Court of Appeals for the Fourth Circuit unanimously held that this approach was insufficient under the precedent established by the U.S. Supreme Court in Comcast Corp. v. Behrend. The Court explained that class plaintiffs must provide a concrete damages methodology, consistent with the specific liability theory advanced and supported by evidence.

Leave and Certification in Canadian Securities Class Actions

Secondary-market securities class actions in Canada are generally subject to dual screening mechanisms: a leave requirement and class certification. Although Canadian courts apply different screening mechanisms, parallels can be drawn to the Fourth Circuit’s heightened standard for class certification. In recent cases, Canadian courts have emphasized that these mechanisms create a meaningful threshold for plaintiffs, who must provide more than bare allegations before obtaining leave or certification.

Class Certification

While nuances exist across provincial class certification regimes, in most Canadian provinces, a plaintiff seeking to proceed with a class action must first obtain a certification order. The applicable test generally requires plaintiffs to demonstrate that:

1. They have alleged a viable cause of action
2. There is an identifiable class
3. They have raised common issues
4. A class proceeding would be the preferable procedure
5. There is a representative plaintiff who could fairly and adequately represent the interests of the class

It can be observed, however, that certification in Canada is more procedural in nature than in the U.S. and is subject to a lower evidentiary threshold. Plaintiffs in Canada are generally required to provide evidence to demonstrate that there is “some basis in fact” for the existence and commonality of their proposed common issues. In ProSys Consultants Ltd. v. Microsoft Corporation, the Supreme Court of Canada held that, to certify a damages common issue, plaintiffs must provide an “expert methodology [that is] sufficiently credible or plausible to establish some basis in fact for the commonality requirement.” This standard requires “a workable methodology for determining such issues on a class-wide basis.”

Leave Requirement

While certification operates as a general screening mechanism for class actions in Canada, an additional leave requirement applies to secondary-market class actions. The leave requirement is substantive and raises the threshold that plaintiffs must meet.

To obtain leave, plaintiffs must demonstrate that their class action has been brought in good faith and that there is a reasonable possibility of success at trial. This preliminary merits test was recently confirmed by the Supreme Court of Canada, which held that a leave motion requires the plaintiffs to “offer both a plausible analysis of the applicable legislative provisions, and some credible evidence in support of the claim.” The Court emphasized that the test at the leave stage is “more stringent than the test for authorization or certification of a class action,” reflecting a view that the certification threshold alone was not sufficient to safeguard against unmeritorious actions relating to the disclosure obligations of securities issuers. Accordingly, courts are empowered to undertake a reasoned consideration of the evidence in that context.

The engagement by Canadian courts with evidence at the leave stage brings the approval of secondary- market class actions into closer alignment with the class certification threshold applicable in the U.S. that was recently reinforced in Boeing. Parallels to Boeing can be drawn, for example, in an Ontario Superior Court of Justice decision in which a motion for leave was dismissed on the basis that the plaintiffs’ expert evidence was inadmissible and lacked credibility. More recently, the Supreme Court of British Columbia denied leave to commence a secondary-market class action in Larouche v. PGM ResidualCo Holdings Inc., holding that the statutory leave requirements were not met for several reasons, including that the pleadings were insufficient, the supporting evidence was deficient, and there was no reasonable prospect of success.

Conclusion

Boeing reinforces a trend towards greater rigour in American securities class action litigation — a trend that is also prevailing in Canada. While Canadian courts operate under a different framework, many of the issues relevant to class screening mechanisms are similar, including the need for plaintiffs to commit to a specific theory of liability supported by evidence that bears reasonable scrutiny. In both the U.S. and Canada, plaintiffs are required to provide more than generic assertions about liability and loss before proceeding to the merits stage.

For more information, please contact the authors or any member of our Securities Litigation group.