SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: 58276CP

DATE: 2014/01/24

RE: Urlin Rent-A-Car Ltd. (Plaintiff)

and -

Champion Laboratories Inc., Honeywell International Inc, Wix Filtration Products, Affina Group Inc., Cummins Filtration Inc., Cummins Filtration International Corp., Cummins Inc., The Donaldson Company, Baldwin Filters Inc., ArvinMeriotr Inc., ArvinMeritor Filters Operating Company LLC (f/k/a Purolator Products NA LLC, ArvinMeritor Holding Company (f/k/a Purolator Products Company LLC) and ArvinMeritor Canada (Defendants)

BEFORE: Justice H. A. Rady

COUNSEL:
C. Wright & K. McGladdery Dent, for the plaintiff

R. Kwinter, for the defendant Champion Laboratories Inc.

S. Forbes, for the defendant Honeywell International, Inc.

D. Kent, for the defendants Wix Filtration Products and Affina Group Inc.

P. Martin, for the defendants Cummins Filtration Inc., Cummins Filtration International Corp and Cummins Inc.

C. Chow, for the defendant Baldwin Filters Inc.

D. Houston (not present) for the defendants ArvinMeritor Inc., ArvinMeritor Filters Operating Company LLC (f/k/a Purolator Products NA LLC, ArvinMeritor Holding Company (f/k/a Purolator Products Company LLC) and ArvinMeritor Canada

HEARD: January 8, 2014

ENDORSEMENT

[1] The plaintiff seeks approval of a settlement it has reached with the defendants which resolves the litigation in its entirety.

[2] The claim alleges a price fixing conspiracy for aftermarket filters in Canada. Aftermarket filters are oil, air, fuel and transmission filters sold as replacement filters for automobiles, trucks and other vehicles. The claim was narrowed to include oil and air filters only, which account for the majority of the filters market. A parallel action is proceeding in Quebec and related claims have been made in the United States.

[3] The settlement reached is for $350,000 CDN. There is an agreed opt-out threshold, which if exceeded, will result in a termination of the settlement agreement.

[4] Under the distribution protocol, settlement class members must have eligible aftermarket filter purchases of at least $1,000,000 in order to qualify for direct settlement benefits. The remaining funds are to be allocated for cy-près distribution for the Automobile Protection Association, a Canadian not-for-profit organization working on behalf of consumers who drive automobiles. It has made plans for the use of the funds for a winter tire testing project.

[5] No objections to the proposed settlement have been made. NPT Ricepoint Class Action Services is the proposed claims administrator. It is experienced in the administration of settlements and it has developed a streamlined process designed to contain costs. Similarly, the notice of settlement approval and claims process are somewhat limited in an effort to minimize expense and maximize funds available for distribution.

[6] Mr. Wright made submissions respecting why this settlement, which is quite modest, is being recommended. I think it is fair to say that the prospect of a successful prosecution through trial is fraught with risk and difficulty. One of the important witnesses in the United States, a “whistleblower” who first raised the allegations of a conspiracy, has since pleaded guilty to a charge of perjury. This development clearly is of concern. Moreover, some of the documentary evidence obtained by counsel casts doubt on whether a conspiracy existed or if it was “successful” in the sense of affecting prices. Other risks included the possibility the claim might not be certified for indirect purchasers. An appeal respecting the rights of indirect purchasers was under reserve at the Supreme Court of Canada when this settlement was negotiated. These factors, as well as other general litigation risks, figured into counsel’s decision to recommend the settlement for approval.

[7] I am satisfied that the settlement should be approved as fair and reasonable and in the best interests of the class. The monetary recovery is modest and undoubtedly disappointing to the plaintiff and its counsel. However, class action litigation is not for the faint of heart. A careful analysis of risks and benefits must be undertaken before counsel pursue a claim through certification and trial. In this sense, class action litigation is like any other high stakes litigation. The risk of loss and the attendant cost consequences must be carefully weighed at each stage of the litigation process. I am satisfied that counsel has done precisely that in that case.

[8] The settlement is therefore approved. Similarly the fees and disbursements request is approved. There is a retainer agreement for a 25% contingency fee. Counsel has reduced their fee request to 19% so that when added to disbursements, the 25% level is not surpassed. This seems a reasonable approach to take in view of the results.

[9] I will await counsel’s advice following the opt-out deadline.

“Justice H. A. Rady”

Justice H. A. Rady

Date: January 24, 2014

COURT FILE NO.: 58276CP

DATE: 2014/01/24

ONTARIO