ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-08-0035836800CP
DATE: 20151211

BETWEEN:

DAVID BRATTON
Plaintiff

– and –

SAMSUNG ELECTRONICS CO. LTD., SAMSUNG SEMICONDUCTOR, INC.,
SAMSUNG ELECTRONICS CANADA INC., HYNIX SEMICONDUCTOR, INC., HYNIX SEMICONDUCTOR AMERICA, INC., MICRON TECHNOLOGY, INC., MICRON SEMICONDUCTOR CANADA, MICRON SEMICONDUCTOR PRODUCTS, INC., NEC CORPORATION, CYPRESS SEMICONDUCTOR, CORPORATION, CYPRESS SEMICONDUCTOR, INC., ALLIANCE SEMICONDUCTOR CORPORATION, ALLIANCE MEMORY, INC., FUJITSU LTD., FUJITSU CANADA, INC., FUJITSU AMERICA, INC., ETRON TECHNOLOGY AMERICA, INC., GSI TECHNOLOGY, INC., HITACHI LTD., HITACHI CANADA, LTD., HITACHI AMERICA LTD., INTERNATIONAL BUSINESS MACHINES CORPORATION, IBM CANADA LTD., INTEGRATED DEVICE TECHNOLOGY, INC., INTEGRATED SILICON SOLUTION, INC., MITSUBISHI ELECTRIC CORPORATION, MITSUBISHI ELECTRIC SALES CANADA INC., MITSUBISHI ELECTRIC & ELECTRONICS USA, INC., SEIKO EPSON CORPORATION, EPSON CANADA, LIMITED, EPSON AMERICA, INC., EPSON ELECTRONICS AMERICA, INC., RENESAS ELECTRONICS CORPORATION fka RENESAS TECHNOLOGY CORPORATION, RENESAS ELECTRONICS CANADA LIMITED fka RENESAS TECHNOLOGY CANADA LIMITED, RENESAS ELECTRONICS AMERICA INC. fka RENESAS TECHNOLOGY AMERICA, INC. fka NEC ELECTRONICS AMERICA INC., SHARP CORPORATION, SHARP ELECTRONICS CORPORATION, SHARP ELECTRONICS OF CANADA LTD., SONY CORPORATION, SONY OF CANADA LTD., SONY CORPORATION OF AMERICA, SONY ELECTRONICS, INC., STMICROELECTRONICS N.V., STMICROELECTRONICS INC, STMICROELECTRONICS, INC, TOSHIBA CORPORATION, TOSHIBA OF CANADA LIMITED, TOSHIBA AMERICA INC., TOSHIBA AMERICA ELECTRONIC COMPONENTS, INC., and WINBOND ELECTRONICS CORPORATION AMERICA, INC.

Defendants

Heather Rumble Peterson for the Plaintiff

John P. Brown for the Defendants, Hynix Semiconductor, Inc., and Hynix Semiconductor America Inc.
Scott Kugler for the Defendants Cypress Semiconductor, Corporation and Cypress Semiconductor, Inc.
Donald B. Houston for the Defendant Etron Technology America, Inc.
Susan E. Friedman for the Defendants Mitsubishi Electric Corporation, Mitsubishi Electric Sales Canada Inc., Mitsubishi Electric & Electronics USA, Inc., Renesas Electronics Corporation fka Renesas Technology Corporation, Renesas Electronics Canada Limited fka Renesas Technology Canada Limited, Renesas Electronics America Inc. fka Renesas Technology America, Inc. fka NEC Electronics America Inc.
Laura Cooper and Zohaib Maladwala for the Defendants Toshiba Corporation, Toshiba of Canada Limited, Toshiba America Inc., Toshiba America Electronic Components, Inc.
Sonja Pavic for the Defendants NEC Corporation and NEC Electronics America, Inc.

HEARD: December 11, 2015

Proceeding under the Class Proceedings Act, 1992

PERELL, J.

A. SETTLEMENT APPROVAL HEARING

[1] In the class action, under the Class Proceedings Act, 1992, S.O.1992, c. C.6, David Bratton sues Samsung Electronics Co. Ltd., Samsung Semiconductor, Inc., Samsung Electronics Canada Inc., Hynix Semiconductor, Inc., Hynix Semiconductor America, Inc., Micron Technology, Inc., Micron Semiconductor Canada, Micron Semiconductor Products, Inc., NEC Corporation, NEC Electronics America, Inc., Cypress Semiconductor, Corporation, Cypress Semicondutor Inc., Alliance Semiconductor Corporation, Alliance Memory, Inc., Fujitsu Ltd., Fujitsu Canada, Inc., Fujitsu America, Inc. Etron Technology America, Inc., GSI Technology, Inc., Hitachi Ltd., Hitachi Canada Ltd., Hitachi America Ltd., International Business Machines Corporation, IBM Canada Ltd., Integrated Device Technology, Inc., Integrated Silicon Solution, Inc., Mitsubishi Electric Corporation, Mitsubishi Electric Sales Canada Inc., Mitsubishi Electric & Electronics USA, Inc., Seiko Epson Corporation, Epson Canada, Limited, Epson America, Inc., Epson Electronics America, Inc., Renesas Technology Corporation, Renesas Technology Canada Limited, Renesas Technology America, Inc., Sharp Corporation, Sharp Electronics Corporation, Sharp Electronics of Canada Ltd., Sony Corporation, Sony of Canada Ltd., Sony Corporation of America, Sony Electronics, Inc. Stmicroelectronics N.V., Stmicroelectronics Inc., Stmicroelectronics, Inc., Toshiba Corporation, Toshiba of Canada Limited, Toshiba America Corporation, Toshiba of Canada Limited, Toshiba America Corporation, Toshiba America Electronic Components, Inc., Winbond Electronics Corporation America, Inc.

[2] Mr. Bratton’s action relates to alleged price fixing in the Static Random Access Memory (“SRAM”) industry. Similar actions are proceeding concurrently in British Columbia and Québec.

[3] Mr. Bratton pleads claims for: breach of Part VI of the Competition Act, R.S.C. 1985, c C-34, civil conspiracy; and, tortious interference with economic interests.

[4] Sutts Strosberg LLP and Siskinds LLP, counsel in the Ontario Action, are working with Camp, Fiorante Matthews Mogerman (“CFM”) in the British Columbia action and Siskinds, Desmeules s.e.n.c.r.l., counsel in the Québec action to prosecute the actions.

[5] The action was certified as a class action for settlement purposes against the Defendants Micron Technology, Inc., Micron Semiconductor Canada, and Micron Semiconductor Products, Inc. See David Bratton v. Samsung Electronics Co. Ltd., 2012 ONSC 5231. The settlement with the Micron Defendants was approved in February 2013. See Bratton v. Samsung Electronics Co. Ltd., 2013 ONSC 939. Notice of the Micron Settlement Agreement was published on December 12, 2012. The deadline for opting out of the Proceedings was February 13, 2013. No one opted out. Under the Micron Settlement Agreement, Micron paid $300,000 to CFM in trust for the benefit of the Settlement Class Members.

[6] On September 10, 2013, the action was certified for settlement purposes as against the Defendants Samsung Electronics Co. Ltd., Samsung Semiconductor, Inc., Samsung Electronics Canada Inc., and the settlement was subsequently approved; see: Bratton v. Samsung Electronics Co. Ltd., 2013 ONSC 7383. Samsung paid $1,500,000 to CFM in trust for the benefit of the Settlement Class Members.

[7] On this motion, Mr. Bratton seeks: (a) approval of five settlement agreements with additional defendants totalling $3,050,000 dollars; (b) dismissal of the action against NEC Corporation; (c) approval of the Distribution Protocol and the Administration Protocol which provide for the delivery of the settlement benefits to Class Members; (d) appointment of RicePoint Administration Inc. as Claims Administrator; (e) approval of the Notices and Plan of Dissemination; (f) approval of an honorarium for the representative plaintiff; (g) approval of the fee request of Class Counsel in the amount $784,416.86 plus applicable taxes; and (h) approval of the disbursements incurred by Class Counsel in the amount of $103,764.62 and $497.51 (US), plus applicable taxes.

[8] The Settlement Agreements are national in scope and subject to court approval in Ontario, British Columbia and Quebec. The Settling Defendants have made no admission of liability in agreeing to settle, but have agreed to pay settlement benefits in the amount of $3,050,000. The Settlement Agreements will resolve the Proceedings in their entirety, save as against the one defendant in respect of which a dismissal is sought.

[9] On October 23, 2014, Mr. Bratton entered into a settlement with Mitsubishi Electric Corporation, Mitsubishi Electric Sales Canada Inc., Mitsubishi Electric & Electronics USA, Inc., Renesas Electronics Corporation fka Renesas Technology Corporation, Renesas Electronics Canada Limited fka Renesas Technology Canada Limited, Renesas Electronics America Inc. fka Renesas Technology America, Inc. fka NEC Electronics America Inc. for $1,750,000.

[10] On October 23, 2014, Mr. Bratton entered into a settlement with Hynix Semiconductor Inc. and Hynix Semiconductor America Inc. for $275,000.

[11] On December 8, 2014, Mr. Bratton entered into a settlement with Cypress Semiconductor Corporation for $400,000.

[12] On March 19, 2015, Mr. Bratton entered into a settlement with Toshiba Corporation, Toshiba of Canada Limited (aka Toshiba du Canada Ltée), Toshiba America Inc., and Toshiba America Electronic Components, Inc. for $475,000.

[13] On April 1, 2015, Mr. Bratton entered into a settlement with Etron Technology, Inc. and Etron Technology America, Inc. for $150,000.

[14] The settlement proceeds in the earlier Micron and Samsung settlements net of fees and disbursements awarded by the Courts and the settlement proceeds from the current Settlement Agreements, except Hynix, are being held by CFM in an interest bearing trust account for the benefit of Class Members. Hynix has agreed to pay the settlement amount to CFM within sixty days after the date on which the Hynix Settlement Agreement is approved by the Courts.

[15] Having regard to all of the information available, Class Counsel believe that the settlement amount is appropriate in relation to the Canadian SRAM market; the US SRAM market; the Settling Defendants’ market shares in Canada and the United States, respectively.

[16] Class Counsel as well as Mr. Bratton recommend the Settlement Agreements to the Courts for approval.

[17] The motions for approval of the Settlement Agreements were heard in British Columbia on October 19, 2015 and in Quebec on November 11, 2015. The Settlement Agreements were approved by the Courts in both jurisdictions.

[18] NEC Corporation is the sole remaining defendant in the Ontario Action. NEC Corporation was also a defendant in the Quebec Action but not in the British Columbia Action.

[19] The defendant NEC Electronics Corporation is responsible for any remaining SRAM liabilities of the NEC Electron division of companies and the defendant Renesas Electronics America, Inc. is responsible for all remaining liabilities of NEC Electronics Corporation. The defendant Renesas Electronics America, Inc. is one of the Settling Defendants to the Mitsubishi/Renesas Settlement Agreement.

[20] The proposed Distribution Protocol divides the Settlement Fund into three funds: (a) End User’s Fund – 25%; (b) Manufacturers Fund – 50%; and (c) Distributors/Resellers Fund – 25%.

[21] A Class Member with sufficient eligible purchases of SRAM or Eligible SRAM Products may claim in any Fund for which they qualify, and may claim in more than one Fund. The proposed Distribution Protocol provides a method for estimating the dollar value of SRAM purchased by a Settlement Class Member. There is no reversion to the defendant in any of the settlements. There could be a cy-pres distribution.

[22] A Settlement Class Member’s Total SRAM Sum is equal to the dollar value of “raw” SRAM purchased by the Settlement Class Member within the class period plus a specified amount for every “Eligible SRAM Product” purchased by the Settlement Class Member within the class period.

[23] The amount per Eligible SRAM Product is calculated by multiplying the estimated cost of SRAM in products of that type by the fraction of products of that type that contain SRAM. For example, 45% of desktop computers contain SRAM, and those that do contain an average of $11.24 of SRAM. Thus, each desktop computer purchased in the class period adds $5.06 ($11.24 multiplied by 0.45) to a Settlement Class Member’s Total SRAM Sum.

[24] Under the Distribution Plan, the sum payable to each Class Member is his, her, or its Total SRAM Sum, subject to the following: (a) only shares of $25 or more will be paid out; (b) End User Claims are restricted to end users with Total SRAM Sums of $100 or more; Manufacturer Claims are limited to “raw” SRAM purchases and do not include amounts for Eligible SRAM Products; (c) Settlement Class Members’ shares will be prorated so that the aggregate amount payable is equal to the amount in the applicable Fund (for Manufacturer and Distributor/Reseller Claims) and, for End User Claims, the amount in the End Users Fund after deduction of $80,000 for cy près distribution; and (d) the amounts due to Quebec Settlement Class Members will be subject to deduction in the amounts payable to the Fonds d’aide aux recours collectifs.

[25] Mr. Bratton and Class Counsel recommend the Distribution Protocol for approval.

[26] The Quebec Court approved the Distribution Protocol. The BC Court held that it was premature to approve any cy près award pending completion of the claims process and accordingly approved the Distribution Protocol with the exception of the cy près.

[27] The Administration Protocol is intended to provide guidelines to the Claims Administrator for the administration of the Distribution Protocol and claims process. It provides, among other things, for: (a) the information and proof of purchase that claimants will be required to provide; (b) the Claims Administrator’s use of the defendant customer information to provide notice as for prima facie proof of the claim; and (c) the duties and responsibilities of the Claims Administrator, including notice, the claims process, reporting, cash management, audits of claims, and payment of approved claims.

[28] The Administration Protocol has been approved by the other Courts.

[29] Class Counsel recommends that RicePoint Administration Inc. be appointed as Claims Administrator. RicePoint Administration Inc. has bilingual capabilities and has been appointed claims administrator in numerous other Canadian class actions, including other price-fixing conspiracy cases such as DRAM and LCD Actions which had a similar distribution/claims structure as is recommended for this matter.

[30] RicePoint Administration Inc. has been appointed the Claims Administrator by the other Courts.

[31] The Notices and Plan of Dissemination have been approved by the other Courts.

[32] Mr. Bratton has played an active role in the prosecution of the Ontario Action for over eight years. His purchases of SRAM Products were not large and, as such, he is unlikely to receive compensation from the distribution process, or to receive the minimum amount of $25.00. He has diligently discharged his responsibilities as a representative plaintiff and has incurred burdens for the benefit of the Class that he would not have been required to bear had he chosen to leave it to others to advance this action as representative plaintiff.

[33] An honourarium of $3,000 was awarded by the BC Court to the representative plaintiff in the BC Action.

[34] A Class Counsel fee of 25% of the recovery inclusive of interest is requested. By agreement, 7.2% of Class Counsel fees will be allocated to Quebec Counsel.

[35] Taken together, the value of all settlements is $4,850,000, with accrued interest of $111,917.46, for a total value of $4,961,917.46. An interim fee in the amount of $450,000 and disbursements of $172,380.69 were awarded at the earlier settlement approvals.

[36] If the 25% fee requested on these settlement amounts ($784,416.86) is granted, the total Class Counsel fee recovery would be $1,234,416.86.

[37] Excluding the time and fees to be paid to Quebec Counsel, the multiplier on the time incurred by Ontario and BC Counsel is 1.38113.

[38] Class Counsel has incurred an additional $103,764.62 and $497.51 (US) in disbursements from the award of disbursements at the time of the Samsung approval.

[39] The representative plaintiffs/petitioner support Class Counsel’s fees and disbursements request.

[40] The motions for approval of Class Counsel fees and disbursements have been granted in Quebec and British Columbia.

[41] Notice of the approval hearings was published beginning September 21, 2015. The deadline for objecting to the Settlement Agreements was October 14, 2015. No objections to the Settlement Agreements were received by Class Counsel.

B. SETTLEMENT APPROVAL

[42] Section 29(2) of the Class Proceedings Act, 1992 provides that a settlement of a class proceeding is not binding unless approved by the court. To approve a settlement of a class proceeding, the court must find that, in all the circumstances, the settlement is fair, reasonable, and in the best interests of the class: Fantl v. Transamerica Life Canada, [2009] O.J. No. 3366 (S.C.J.) at para. 57; Farkas v. Sunnybrook and Women’s Health Sciences Centre, [2009] O.J. No. 3533 (S.C.J.) at para. 43; Kidd v. Canada Life Assurance Company, 2013 ONSC 1868.

[43] In determining whether a settlement is reasonable and in the best interests of the class, the following factors may be considered: (a) the likelihood of recovery or likelihood of success; (b) the amount and nature of discovery, evidence or investigation; (c) the proposed settlement terms and conditions; (d) the recommendation and experience of counsel; (e) the future expense and likely duration of litigation; (f) the number of objectors and nature of objections; (g) the presence of good faith, arm’s-length bargaining and the absence of collusion; (h) the information conveying to the court the dynamics of, and the positions taken by, the parties during the negotiations; and, (i) the nature of communications by counsel and the representative plaintiff with class members during the litigation. See: Fantl v. Transamerica Life Canada, supra, at para. 59; Corless v. KPMG LLP, [2008] O.J. No. 3092 (S.C.J.) at para. 38; Farkas v. Sunnybrook and Women’s Health Sciences Centre, supra, at para. 45; Kidd v. Canada Life Assurance Company, supra.

[44] In determining whether to approve a settlement, the court, without making findings of facts on the merits of the litigation, examines the fairness and reasonableness of the proposed settlement and whether it is in the best interests of the class as a whole having regard to the claims and defences in the litigation and any objections raised to the settlement: Baxter v. Canada (Attorney General) (2006), 2006 41673 (ON SC), 83 O.R. (3d) 481 (S.C.J.) at para. 10. An objective and rational assessment of the pros and cons of the settlement is required: Al-Harazi v. Quizno’s Canada Restaurant Corp. (2007), 49 C.P.C. (6th) 191 (Ont. S.C.J.) at para. 23.

[45] The case law establishes that a settlement must fall within a zone of reasonableness. Reasonableness allows for a range of possible resolutions and is an objective standard that allows for variation depending upon the subject-matter of the litigation and the nature of the damages for which the settlement is to provide compensation: Parsons v. Canadian Red Cross Society, [1999] O.J. No. 3572 (S.C.J.) at para. 70; Dabbs v. Sun Life Assurance Company of Canada, (1998), 1998 14855 (ON SC), 40 O.R. (3d) 429 (Gen. Div.). A settlement does not have to be perfect, nor is it necessary for a settlement to treat everybody equally: Fraser v. Falconbridge Ltd. (2002), 24 CPC (5th) 396 at para. 13; McCarthy v. Canadian Red Cross Society (2007), 158 ACWS (3d) 12 (Ont. S.C.J.) at para. 17.

[46] In my opinion, having regard to the various factors used to determine whether to approve a settlement, the Settlement Agreements in the case at bar should be approved. I share the view of the British Columbia court with respect to a cy-pres distribution but subject to that qualification, the ancillary relief associated with the settlements including the distribution plan, the appointment of the administrator, and the approval of the notice plan are also approved.

C. APPROVAL OF CLASS COUNSEL’S FEE

[47] The fairness and reasonableness of the fee awarded in respect of class proceedings is to be determined in light of the risk undertaken by the lawyer in conducting the litigation and the degree of success or result achieved: Parsons v. Canadian Red Cross Society, 2000 22386 (ON SC), [2000] O.J. No. 2374 (S.C.J.) at para. 13; Smith v. National Money Mart, 2010 ONSC 1334 at paras. 19-20, varied 2011 ONCA 233; Fischer v. I.G. Investment Management Ltd., [2010] O.J. No. 5649 (S.C.J.) at para 25.

[48] Factors relevant in assessing the reasonableness of the fees of class counsel include: (a) the factual and legal complexities of the matters dealt with; (b) the risk undertaken, including the risk that the matter might not be certified; (c) the degree of responsibility assumed by class counsel; (d) the monetary value of the matters in issue; (e) the importance of the matter to the class; (f) the degree of skill and competence demonstrated by class counsel; (g) the results achieved; (h) the ability of the class to pay; (i) the expectations of the class as to the amount of the fees; and (j) the opportunity cost to class counsel in the expenditure of time in pursuit of the litigation and settlement: Smith v. National Money Mart, supra, at paras. 19-20; Fischer v. I.G. Investment Management Ltd., supra, at para. 28.

[49] Having regard to these factors, I am satisfied that Class Counsel’s fees and disbursements request should be approved.

D. DISMISSAL AGAINST NEC CORPORATION

[50] NEC Corporation is the only remaining defendant in the Ontario Action as Settlement Agreements have been reached with all other remaining defendants.

[51] Court approval of the dismissal is required under s. 29 of the Class Proceedings Act, 1992, S.O. 1992, c. 6. In order to give approval of a dismissal, the court must be satisfied that the interest of the class will not be prejudiced: Frank v. Farlie, Turner & Co., LLC, 2011 ONSC 7137.

[52] Class Counsel are firmly of the view that the interests of the Settlement Class are not prejudiced by the dismissal of the Ontario Action against NEC Corporation.

[53] I agree and I approve the dismissal against NEC Corporation.

E. CONCLUSION

[54] Orders accordingly

Perell, J.

Released: December 11, 2015

COURT FILE NO.: CV-08-0035836800CP
DATE: 20151211

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

DAVID BRATTON
Plaintiff

– and –

SAMSUNG ELECTRONICS CO. LTD., et al.

Defendants

REASONS FOR DECISION

PERELL J.

Released: December 11, 2015