Court File and Parties

COURT FILES NO.: CV-06-316859 CV-08-365112 DATE: 20160419 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: IPEX Inc., Plaintiff / Responding Party AND: AT Plastics Inc., Defendant / Moving Party AND: Lubrizol Advanced Materials Canada Inc., and Lubrizol Advanced Materials Inc., Defendants / Moving Parties

BEFORE: Justice Edward P. Belobaba

COUNSEL: Lawrence G. Theall, Jeffrey Brown and Melissa Wright for AT Plastics / Moving Party Peter E.J. Wells and Joanna Vatavu for Lubrizol / Moving Parties Benjamin Zarnett, Jessica Kimmel and Suzy Kaufman for IPEX / Responding Party

HEARD: March 16 and 17, 2016

MOTIONS FOR PARTIAL SUMMARY JUDGMENT

[1] These motions for partial summary judgment explore the intersection of two lines of authority: one that provides for the recoverability of a reasonable settlement from a non-settling defendant and the other that requires proof of causation in order to establish liability.

Overview

[2] Facing numerous class actions alleging that its product was defective, the plaintiff manufacturer settled the class proceedings with a multi-million dollar payment. The plaintiff now seeks to recover the settlement amount as a reasonable measure of damages from two suppliers that allegedly provided defective raw material that caused the product to fail prematurely.

[3] The two defendant-suppliers bring these motions for partial summary judgment asking that the plaintiff’s claim to recover all or part of the class action settlement amount be dismissed because, amongst other things, the plaintiff cannot prove causation and without causation there can be no liability.

[4] For the reasons set out below, the defendants’ motions for partial summary judgment are dismissed. In my view, the defendants misunderstand the plaintiff’s breach of contract claim, the nature and extent of the class action settlement, the application of the causation requirement and the bounds of what can be summarily decided on these motions.

Background

[5] For many years, IPEX manufactured a composite thermoplastic Kitec Pipe that was used in plumbing and heating applications in thousands of residential and commercial premises across Canada and the U.S. The pipe was made in five layers – an inner layer of polyethylene or cross-linked polyethylene, a layer of adhesive, a layer of aluminum, another layer of adhesive and an outer layer of polyethylene or cross-linked polyethylene. Brass fittings were then added for connection purposes.

[6] AT Plastics (“ATP”) and Lubrizol Advanced Materials (“LZAM”) supplied the bulk (about 80 per cent) of the resin for the inner layer. Other suppliers provided the adhesive, the aluminum, the brass fittings and the balance of the resin. More than 400 million feet of Kitec Pipe were sold in the U.S. and Canadian markets.

[7] When end-users began to complain that the Kitec Pipe was failing prematurely, causing water leaks and property damage, IPEX conducted its own investigations and concluded that the primary culprit was defective resin supplied by ATP and LZAM. The preliminary findings of Exponent, an outside polymer expert, also indicated that the pipe failures were caused by a deficiency in the antioxidant component in the resin supplied by ATP (and later by LZAM) resulting in the degradation of the inner resin layer and the premature failure of the piping in question.

[8] Given that ATP and LZAM supplied 80 per cent of the resin, IPEX sued each of them in turn for damages for breach of contract and indemnity under the Negligence Act [1], for all amounts that IPEX has paid or will have to pay end-users for losses arising out of the use of Kitec Pipe made with the defendants’ resin.

[9] IPEX was able to resolve many of the initial end-user complaints with individual payments, but the complaints continued to mount and IPEX was soon facing 29 multi-million dollar class actions across the U.S. and Canada, all alleging piping or fittings failures. Fearing what it believed was an enormous financial exposure, IPEX agreed to mediation and eventually settled the class actions for $125 million. [2] The Class Action Settlement has been judicially approved in both the U.S. and Canada. [3]

[10] Under the terms of the Class Action Settlement, IPEX paid $100 million into a settlement fund to cover class member compensation claims [4] and $25 million to class counsel for legal fees. The claims period was set at eight years. Whatever remains in the Class Action Settlement fund at the end of the eight years (that is, by January, 2020) will be returned to IPEX. Thus the Class Action Settlement amount, strictly speaking, is the amount that is actually paid out by the 2020 deadline. [5]

[11] The claims process requires class members to fill out and submit a detailed pre-printed claims form to the claims administrator. They are also required to forward a sample of the impugned piping or brass fitting. The claims administrator reviews the claim and in due course compensates the class member for all losses sustained regardless of cause. In other words, class members are entitled to compensation for replacement costs and property damage whether the failure was caused by defective resin, bad adhesives or aluminum, bad fittings, negligent manufacturing or installation or even end-user error. The terms of the Class Action Settlement make clear that all of the individual claims information must remain confidential and cannot be disclosed to anyone other than the claims administrator without leave of the court.

[12] IPEX explains that it did not add ATP and LZAM as third parties to any of the class actions because it had already commenced actions against these defendants.

[13] The two actions that IPEX commenced against ATP and LZAM are now proceeding to trial. IPEX’s damages claim has two components: the approximately $5 million that IPEX has paid out to individual claimants separate and apart from the class action settlement; and the $125 million Class Action Settlement (i.e. the amount that will actually be paid out by January 2020.)

The motions for partial summary judgment

[14] ATP and LZAM bring these motions for partial summary judgment to dismiss the Class Action Settlement claim because, in their submission, IPEX cannot establish now or at trial, whether in contract or in tort, that any part of the settlement loss was caused by either of the defendants. And absent causation, there can be no liability.

[15] The only way that IPEX can prove causation (and thus liability), say the defendants, is by showing that the damage sustained by the individual class members and the resulting compensation payment made by IPEX to each of the individual class members were caused by the resin supplied by ATP and LZAM (rather than by the several other possible causes.)

[16] According to the defendants, IPEX cannot establish the connection between the defendants’ resin and the damage sustained without the individual claims data. But the disclosure of the individualized claims information is prohibited under the settlement agreement and is available only with leave of the court.

[17] The defendants point out that IPEX has taken the position that it does not need any of the individualized claims information to recover on the Class Action Settlement. Indeed, ATP’s Notice of Motion put the reliance on individual causation squarely in issue:

IPEX does not intend to and in fact cannot prove any of the individual losses suffered by class members who receive payments from the settlement fund were caused solely attributable to ATP’s product. Instead, IPEX claims that it is entitled to damages for the entire $125,000,000 settlement, and all defence costs, regardless of whether the individual claims are for fitting failures or IPEX’s own manufacturing and design defects, because the settlement was a fraction of an allegedly massive potential exposure that IPEX claims was solely attributable to deficiencies in ATP’s product.

[18] If IPEX had disagreed with this characterization of their claim, they could have said so. Instead, in its factum, IPEX confirmed the defendants’ understanding that the Class Action Settlement claim “does not depend on individual by individual proof about the cause of each piece of leaky Kitec Pipe”. Absent the individual claims data, the defendants’ liability for any part of the Class Action Settlement, argue the defendants, cannot be established now or at trial and thus the recoverability of the Class Action Settlement is not a genuine issue for trial. It follows, say the defendants, that the Class Action Settlement claim should be dismissed.

[19] Not surprisingly, IPEX rejects the defendants’ submissions and says that it can establish the defendants’ liability without the individualized claims information; that on the evidence presented the recoverability of the Class Settlement Claim raises a genuine issue requiring trial; and that the defendants’ motions for partial summary judgment should thus be dismissed with costs.

[20] There is a further nuance that complicates the summary judgment request: the defendants have stipulated that the “causes of failure” are not before me on these motions. What caused the Kitec Pipe to fail prematurely – whether defective resin, bad adhesive or fittings, or something else altogether - will be decided (with extensive expert evidence) at trial. This stipulation will understandably have an impact on the availability of summary adjudication on the facts herein.

The applicable law is not in dispute

[21] As I have already noted, these motions explore the intersection of two lines of authority: one, relatively recent, that provides for the recoverability of a reasonable settlement from a non-settling defendant; and the other, more fundamental, that requires proof of causation in order to establish liability.

[22] There is no real dispute about the first proposition. Both sides agree that A can settle with B and then claim the settlement as against C as a fair measure of A’s damages provided that the settlement with B was reasonably foreseeable by C and falls within a range of reasonable settlements at the time that it was made. [6] The parties also agree that in assessing the reasonableness of the settlement, the court can affirm or reduce the settlement amount as it deems appropriate and can also apportion liability as between the defendants for all or part of the judicially approved damages amount. [7] The reasonableness of the settlement is assessed at the date of the settlement. The circumstances that are taken into account in assessing reasonableness include the strength of the claim, whether the settlement was the result of legal advice, the uncertainties and expenses of litigation, and the benefits of settlement rather than continued litigation. [8]

[23] There is also no real dispute about the causation proposition. That is, the causation requirement itself is not in dispute. Causation is a well-understood prerequisite for a damages claim, whether in contract or tort. [9] Causation is also the first “stage” or step in the ‘recoverability of a reasonable settlement’ claim. [10] Before A can claim from C the settlement that it made with B, A must show that C caused all or part of the loss that led to the settlement and is therefore liable in damages to A. Causation cannot be assumed; it must be proven. The underlying policy rationale is obvious: just because A settles with B does not make C automatically liable; A must show that C has caused at least part of the loss that led to the settlement. In other words, IPEX must show that the actions of ATP or LZAM were a cause of P’s loss. Not the sole cause or the entire cause but a cause. [11]

[24] The dispute about causation is a dispute about the application of the causation requirement on the facts herein.

[25] I can now turn to the analysis of the issues that are before me.

Analysis

[26] The defendants say IPEX cannot show, now or at trial, that the defendants’ resin (even if it was defective) was a cause of the piping failures without relying on the individualized (and unavailable) claims information. The defendants also make three further submissions in support of their motions for partial summary judgment. The additional submissions focus on the reasonableness of the Class Action Settlement, the assignment language in the class member releases and the plaintiff’s eleventh-hour “reversal of position”.

[27] For the reasons set out below, none of the submissions succeed. I will deal with each of them in turn.

(1) The causation argument

[28] In my view, IPEX has shown that it can plausibly establish causation and the recoverability of the Class Action Settlement without relying on the individual claims data. It has done so by focussing on its breach of contract claim, including breach of the implied condition of fitness for purpose under s. 15 of the Sale of Goods Act [12], and showing that the defendants’ resin was at least a cause of the pipe failures.

[29] IPEX has presented evidence that ATP and LZAM supplied defective resin that has caused or will cause all of the Kitec Pipe manufactured using this bad resin to fail prematurely – specifically, the findings of its internal task force and the preliminary findings of Exponent, its outside polymer expert, that the defendants’ resin contained insufficient antioxidant protection that has resulted or will result in the degradation of the inner resin layer and the premature failure of the pipe. Exponent predicted that some 4500 to 7600 Kitec Pipe installations would fail within the product’s warranty period.

[30] IPEX concedes that there have been and will be Kitec Pipe failures that at least initially can be attributed to causes other than the defendants’ resin, but maintains that it is the defective resin that has rendered all Kitec Pipe (made with the defective resin) prone to premature failure and requiring replacement. I note that IPEX commenced but then discontinued claims against the other resin suppliers because the trend of antioxidant failures related to the Kitec Pipe that was made with ATP (and later LZAM) resin, not other suppliers’ resin.

[31] If the defendants’ resin was indeed defective, and thus not fit for the purpose for which it was intended, then IPEX may well have a viable breach of contract claim by arguing the implied fitness for purpose condition under the Sale of Goods Act [13]. The law is clear that where a seller of goods breaches the conditions of supply, and the purchaser is subjected to claims from third parties to whom it sold goods containing the seller’s material, the purchaser has a breach of contract claim against the seller. The damages can include the amounts which the purchaser paid to resolve the third parties’ claims. [14]

[32] IPEX has shown by largely uncontroverted evidence that the defendants’ resin was at least a cause of the losses that led to the Class Action Settlement. Having cleared the “first stage” liability hurdle required by the Biggin-Siemens line of authority, [15] IPEX can now legitimately advance its contractual claim for the recovery of the Class Action Settlement.

[33] It is clear to me that the contractual claim raises a genuine issue for trial. And it is equally clear that I cannot decide the contractual claim for the recoverability of the Class Action Settlement without considering, amongst other things, the causes of failure. But, as the defendants have acknowledged, the causes of the failure can only be decided at trial. Therefore, IPEX’s contract claim for recovery of the Class Action Settlement cannot be dismissed summarily. And the defendants have not succeeded in showing otherwise.

(2) If the contract claim is going to trial, so too must the tort claim

[34] Recall that IPEX is advancing two claims, one in contract and the other in tort. As the Supreme Court of Canada noted in Burrard Drydock Co. Ltd. v. Canadian Union Line Ltd. [16], a claim in breach of contract differs fundamentally from a claim for contribution and indemnity under the Negligence Act, even where the object of both claims is to recover what was paid to third parties to settle their claims. [17] The Court of Appeal made the same point in Canaccord Capital Corp. v. Roscoe [18] - that indemnity can be claimed on different bases, contract being one and the Negligence Act being another. [19]

[35] Given that the breach of contract claim is going to trial, the contribution and indemnity claim under the Negligence Act must also proceed to trial. It would be neither sensible nor appropriate to bifurcate the two claims and decide one of them summarily. Where there are two pleaded causes of action that raise the same basic issues and rely on the same evidence (here, one in contract and the other for contribution and indemnity under the Negligence Act) and one will proceed to trial, partial summary judgment on the other is not appropriate. It raises the risk of duplicative proceedings and inconsistent findings of fact and is not in the interests of justice. [20]

[36] On the facts of this case, the goals of proportionality, timeliness and affordability will be better served if the entire case is before the fact finder. [21] A staged summary judgment process or what some have called “litigation by slices” [22] is neither sensible nor appropriate. I note that the defendants raise a number of defences to the indemnity claim, including pleading deficiencies and limitation periods, but they will have every opportunity to make these submissions as they pertain to the tort claim at trial.

(3) The reasonableness of the settlement

[37] The defendants submit that IPEX cannot recover the Class Action Settlement because it was unreasonable when it was made. ATP, in particular, criticizes the $25 million legal fees payment and questions how the $100 million in class member compensation was calculated.

[38] IPEX reminds ATP that the Class Action Settlement was approved by judges in both the U.S. and Canada. Nonetheless, IPEX goes on to explain how it came to agree to the $125 million settlement amount. It first considered the potential damage claims just for replacement costs. A conservative estimate, based on information supplied by Exponent, predicted replacement costs approaching $90 million. When one added consequential losses (leaking pipes causing property damage) the company’s financial exposure became many times larger.

[39] Indeed, as the plaintiff’s counsel explained on discovery, IPEX concluded that the settlement amount of $125 million was only “the tip of the iceberg in terms of potential failures down the road” and a “fraction” of a “very massive” financial exposure that was entirely attributable to the defendants’ defective resin.

[40] Even if it is true that the Class Action Settlement is compensating end-users for losses ostensibly caused by problems other than defective resin, such as, for example, losses caused by bad fittings, that does not matter says IPEX. What matters is that the defendants’ allegedly defective resin rendered the Kitec Pipe made with the impugned material prone to premature failure that could cause extensive damage and required immediate replacement.

[41] I agree with IPEX that the reasonableness of the Class Action Settlement cannot be decided summarily because one of the key determinants – the causes of failure –will only be decided at trial. The trial judge’s decision about the causes of the piping failure will not only address the “first stage” causation/liability issue but will also inform the court’s assessment of the overall reasonableness of the settlement. [23]

[42] The reasonableness of the Class Action Settlement will no doubt be contested by the defendants at trial. And it is their right to do so. But on the record before me and given the defendants’ stipulation that the causes of failure will be determined at trial, there is no basis for partial summary judgment on the reasonableness point.

(4) The assignment argument

[43] Under the Class Action Settlement, the class members released IPEX and its downstream distributors, retailers and installers (plumbers, home builders etc.) from any further claims and assigned to IPEX the (tort) claims that the class members had or may have against IPEX’s upstream suppliers of the materials or components used to make the piping. As the assignee of the class members’ tort claims against the upstream suppliers, IPEX can still sue the latter if it wishes to do so, for any additional damages caused by these defendants over and above the amount the class members have received under the Class Action Settlement.

[44] LZAM, however, argues that all of the losses caused by the two defendants (and indeed by the other upstream suppliers) were “carved out of the Settlement.” I do not agree.

[45] On a plain reading of the settlement agreement, it is obvious that in exchange for the monetary payment, IPEX settled the class members’ claims against IPEX and the downstream suppliers and, in turn, was assigned the class members’ tort claims (for additional compensation, if any) as against IPEX’s upstream suppliers. The only claims that were “carved out” were the class members’ tort claims against the upstream suppliers which were assigned to IPEX. The company’s own claims in contract and tort as against ATP and LZAM remain alive and well and provide the basis for the actions herein.

[46] Put simply, IPEX is not suing ATP or LZAM as an assignee of the class member’s tort claims. IPEX is suing the defendants in contract, tort and warranty in its own capacity to recover the damages that IPEX itself sustained in making the $5 million or so in direct payments to unhappy end-users and the (up to) $100 million that may be paid out under the Class Action Settlement.

[47] There is no merit in the assignment argument.

(5) The “reversal of position” argument

[48] As the hearing of these motions was concluding, there was a heated skirmish between counsel about whether IPEX had “reversed its position” about not relying on the individual claims data to establish causation. ATP and LZAM had understood that IPEX would not try to establish liability on the part of the defendants by leading evidence of individual causation from the (confidential and unavailable) claims files. Rather the plaintiff would simply rely on the fact of the Class Action Settlement and the “defective resin” evidence that has been presented.

[49] As the hearing was ending, IPEX made several statements that appeared to undermine this understanding. First, that the claims administrator was routinely delivering the impugned pipe and fittings samples provided by the class members as part of the claims process to Exponent for testing. Second, that it was scientifically possible to determine from an examination of the pipe samples which supplier had provided the resin. [24] And third, that IPEX was not ruling out the possibility that it may apply to the appropriate court for leave to obtain the individual claims data. The defendants, not unreasonably, decried this “reversal of position.”

[50] I invited and received further written submissions on this point. However, I do not have to decide this question. I have already concluded that IPEX may well be able to claim the entirety of the Class Action Settlement without relying on the individual claims data. There is no therefore need to decide the “reversal of position” allegation and speculate about what would happen if IPEX abandoned its Class Action Settlement claim and proceeded instead to prove each loss with the pipe sample tests and the individual claims data. If IPEX reversed course and decided to prove damages based on individual claims data, this would obviously be a very different case from the Class Action Settlement claim that is before me on these motions.

Conclusion

[51] The defendants’ have failed to show that the recoverability of the Class Action Settlement as a fair measure of the plaintiff’s damages is not a genuine issue requiring trial and can be decided summarily. For the reasons set out above, the recoverability of the Class Action Settlement must go to trial. The defendants will have every opportunity at the trial to lead evidence as to whether it was their resin that caused all or part of the damage that led to the Class Action Settlement, the extent to which liability for such damage should be apportioned between them, and the overall reasonableness of the settlement at the time that it was made. But all of this must be done at trial and not by way of partial summary judgment.

Disposition

[52] The defendants’ motions for partial summary judgment are dismissed with costs.

[53] I have reviewed the costs outlines filed by counsel. IPEX asks for $335,199 inclusive of disbursements and taxes. Had ATP prevailed it would have sought $180,065 and LZAM would have sought $112,685. Together the defendants would have asked for about $292,750.

[54] These were complex motions. The material filed with the court was, to say the least, voluminous. In my view, a costs award in the range of $300,000 would not be unreasonable. Having considered the factors set out in Rule 57.01(1) and mindful of my obligation to make a costs award that is fair and reasonable to the losing parties, I fix costs at $290,000 all-inclusive, with ATP and LZAM each paying $145,000 to IPEX forthwith.

[55] Order to go accordingly.

Belobaba J. Date: April 19, 2016

Footnotes:

[1] Negligence Act, R.S.O. 1990, c. N.1, s. 2 provides: “A tortfeasor may recover contribution or indemnity from any other tortfeasor who is, or would if sued have been, liable in respect of the damage to any person suffering damage as a result of a tort by settling with the person suffering such damage, and thereafter commencing or continuing action against such other tortfeasor, in which event the tortfeasor settling the damage shall satisfy the court that the amount of the settlement was reasonable, and in the event that the court finds the amount of the settlement was excessive it may fix the amount at which the claim should have been settled.”

[2] All dollar amounts are in U.S. dollars.

[3] See In Re Kitec Plumbing System Product Liability Litigation (November 17, 2011, N.D.Texas, Court File No. 09-MD-2098,); Rosati et al v. P LLC and P Inc., (November 29, 2011, Ont. Sup. Ct. File No. CV-09-13459); and Cooke v. P Inc., (Que. Sup. Ct. File No. 200-06-000121-098).

[4] About $6 million has been allocated for the fees of the claims administrator, leaving just under $94 million for actual class member compensation.

[5] About 6000 claimants have registered to date. Less than $1 million has been paid out over the first four years of the claims period (2012 to 2016) but counsel for IPEX says that many claims are currently under review and others are still forthcoming and expects that millions more will be paid out by the 2020 deadline.

[6] See generally Biggin & Co. Ltd. v. Permanite Ltd. et al, [1951] 2 K.B. 314 (Eng. C.A.) and Siemens Building Technologies FE Ltd v. Supershield Ltd, [2009] 2 All E.R. 900 (Q.B.) , aff’d [2010] All E.R. 1185 (Eng. C.A.), Also see Bellissimo v. Alfano, 2013 ONCA 88 (Ont. C.A.); McCready Products Ltd. v. Sherwin-Williams Co. of Canada, 1985 CarswellAlta 489 (Alta. C.A.) ; and V.C.P. Homes Inc. v. Fast, 2002 CarswellBC 668 (B.C.S.C.)

[7] Ibid. Also see s. 2 of the Negligence Act , supra , note 1, and Renaissance Leisure Group Inc. v. Frazer, 189 OAC 72 (C.A.) at para. 48 (regarding apportionment) .

[8] Siemens, supra, note 6, at para. 80.

[9] McCamus, The Law of Contracts, (2 nd ed. 2012) at p. 908: “The party in default under an agreement is liable to the plaintiff only for such losses as have been caused by the breach.” The plaintiff must establish that “all or part of the loss has been caused by the defendant’s breach.” The causation requirement in contract law is reflected in the so-called “first branch” of the foreseeability rule in Hadley v. Baxendale, (1854) 9 Exch. 341 , 156 E.R. 145 that imposes liability for damages “arising naturally” from the breach of contract. As for causation in tort, see Linden and Feldthusen, Canadian Tort Law (8 th ed. 2006) at p. 115: “A defendant’s conduct must cause the plaintiff’s loss or else there is no liability.” These propositions are not in dispute.

[10] Siemens (Q.B.), supra, note 6 at paras. 62, 63, 76, 77, 80 and 120. Also see Royal Brompton Hospital National Health Trust v. Hammond, 66 Con. L.R. 42 (Q.B.) at para. 25(9) and 37: “[the plaintiff] must prove the liability of each defendant independently [and] the settlement … becomes relevant only if liability is first established.”

[11] Supra, note 9. Also see Royal Brompton Hospital, supra, note 10, at paras. 25(9) and 37.

[12] Sale of Goods Act , R.S.O. 1990, c. S.1, s. 15.

[13] Ibid.

[14] Waddams, The Law of Damages (2014 looseleaf ed.) at para. 1.2720: “The supply of defective goods often involves the plaintiff in liability to sub-buyers, and it has been frequently held that the plaintiff is entitled to recover compensation for such losses, and for the costs of reasonably defending legal proceedings.” Also see Kasler and Cohen v. Slavouski, [1928] K.B. 78 at 85-87, Bence Graphics International Ltd. v. Fasson U.K. Ltd., [1998] Q.B. 87 at 97-98, 100-101 and 102, and 106-107 (Eng. C.A.).

[15] Supra, note 6 and recall discussion above in para. 23.

[16] Burrard Drydock Co. Ltd. v. Canadian Union Line Ltd., [1954] S.C.R. 307.

[17] Ibid ., at 318-319.

[18] Canaccord Capital Corp. v. Roscoe, 2013 ONCA 378.

[19] Canaccord, supra, note 18, at paras. 28 to 32. Also Maynards v. Royal Bank, 2011 ONSC 2656 at paras. 29-32 .

[20] Hryniak v. Mauldin, 2014 SCC 7 at para. 60 .

[21] Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450 at paras. 33-37 .

[22] Greater Vancouver Water District v. Bilfinger Berger AG, 2015 BCSC 485 at para. 95 .

[23] Just as the court did in Siemens, supra, note 6 at paras. 99-105: finding that the “other causes” for the water damage, such as the blocked drains or the alarm or maintenance failures, were relevant to the ‘reasonableness of the settlement’ analysis.

[24] This second point may have been known to the defendants before the end-of-hearing skirmish.