CITATION: Drew v. Walmart Canada Inc., 2017 ONSC 3308
COURT FILE NO.: CV-15-532271-00CP
DATE: 20170530
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HEATHER DREW
Plaintiff
- and -
WALMART CANADA INC. and PNI DIGITAL MEDIA INC.
Defendants
Sean A. Brown for the Plaintiff
David Byers, and Vanessa Voakes for the Defendant PNI Digital Media Inc.
John Laskin and Molly Reynolds for the Defendant Walmart Canada Inc.
Proceeding under the Class Proceedings Act, 1992
HEARD: May 30, 2017
PERELL, J.
REASONS FOR DECISION
1. Factual and Procedural Background
[1] Pursuant to the Class Proceedings Act, 1992, S.O. 1992, c. 6, this is a motion for approval of a settlement and for approval of Class Counsel’s fee request.
[2] Heather Drew brought a proposed class action against Walmart Canada Inc. and PNI Digital Media Inc. Class Counsel were retained under a contingency fee agreement that stipulated a counsel fee of 30% of the value of any award to the Class.
[3] The parties settled the litigation, and, on consent, they moved for and were granted certification for settlement purposes. See Drew v. Walmart Canada Inc., 2016 ONSC 8067.
[4] The background facts are that on May 5, 2015, Ms. Drew created an account on Walmart Canada Inc.’s online photocentre website, and to do so, she provided personal and financial information including her name, address, telephone number, and credit card information.
[5] Walmart is the well-known big-box store merchant of goods and services. Its head office is in the City of Toronto, and it operates more than 400 locations nationwide. Its website indicates that it serves more than 1.2 million customers every day.
[6] In 2014, Walmart retained PNI Digital Media, a company incorporated in British Columbia, to supply the software platform that is used by Walmart to provide online photo printing services to Walmart customers.
[7] Unfortunately, there was a data breach in the online system, and third parties had access to Walmart’s customers’ personal and financial information. Ms. Drew was advised about the data breach by email messages from Walmart on July 15, 2015 and October 30, 2015.
[8] After being advised of the data breach, Ms. Drew commenced this class action. In her Statement of Claim, she advanced claims of: (a) breach of contract; (b) negligence; (c) breach of fiduciary duty; (d) breach of confidence and violation of privacy; (e) instruction upon seclusion; (f) breach of statutory duty including but not limited to the Personal Information and Protection of Electronic Documents Act, S.O. 2000, c. 5; and (g) waiver of tort and claims for restitution, unjust enrichment, and disgorgement of profits.
[9] In the class action, Ms. Drew is the Representative Plaintiff for the following Class:
All persons resident or situated in Canada who used Wal-Mart Canada Corp.’s Photocentre website www.walmartphotocentre.ca (the “Website”) during the period from June 1, 2014 to July 10, 2015.
[10] After Ms. Drew delivered her material for a contested certification, the parties engaged in settlement negotiations and they reached a settlement. The main terms of the settlement are as follows:
a. The Defendants make no admission of liability.
b. The Defendants will pay for a one-year Equifax Complete Premier Plan, or reasonably equivalent credit monitoring plan, selected by the Defendants with approval of Class Counsel, for any Class Member who makes a valid claim within the Claim Period and will reimburse any Class Member who can demonstrate that he or she subscribed to a credit monitoring and/or identity theft monitoring program after being notified of the Data Security Incident for which he or she has not already been reimbursed by any other source, provided the claim for reimbursement is valid as determined by the Claims Administrator and made within the Claim Period.
c. The maximum cumulative total available under the Settlement Agreement for Credit Monitoring is $350,000.00, to be distributed in the order in which the claims were made.
d. The Defendants will pay for valid claims made during the Claim Period for reimbursement made by Class Members for out-of-pocket losses, unreimbursed charges and time spent remedying issues fairly traceable to the Data Security Incident on the following basis:
i. any Class Member making a claim must attest that he or she has not already been compensated, in part or in full, for any asserted loss, by insurance, an employer, a financial institution or in any other manner;
ii. the total amount eligible to be received by any one Class Member is a maximum of $5,000.00; and
iii. any Class Member making a claim for out-of-pocket losses or unreimbursed charges may receive $15/hr. for up to five hours of time spent remedying those losses or charges, if he or she can provide documented evidence of such losses; if he or she cannot provided documented evidence of such losses, the Class Member may receive $15/hr. for up to two hours of time spent remedying the losses or charges.
e. The maximum cumulative total available under the Settlement Agreement for the Recovery of Expenses is $400,000.00 to be distributed to Class Members who are eligible and submit a valid claim, in the order in which claims are made. The funds are to be distributed to claimants on a pro rata basis if the maximum cumulative available total is reached.
f. Class Members can receive both credit monitoring and recovery of expenses, where eligible.
g. The Claim Period is 90 days. Payments will be made after the close of the Claims Period on first-come, first-served basis.
h. Notice of the settlement was by an email notice program to the personal email addresses of Class Members.
i. There is an on-line Claims Process set out in the Plan of Distribution and administered by the Claims Administrator.
j. In total, the exposure of the Defendants under the settlement is $1.25 million.
[11] The Settlement Agreement stipulates that the Defendants shall pay Class Counsel’s fees of $250,000, inclusive of taxes and disbursements. This amount represents a fee award of approximately $215,000, which is essentially equal to the time spent to date by counsel, as well as further time that will be required until the claims process is complete. Class Counsel has waived its claim for a contingency fee and for any future disbursements in completing the settlement.
[12] Class Counsel and Ms. Drew recommend approval of the settlement.
[13] Deloitte LLP was appointed Claims Administrator and oversaw the notice of certification and the settlement approval hearing. Although there would be come duplicate or redundant email addresses, the Administrator sent out over 650,000 email notices of which only 6% were returned.
[14] As of May 15, 2017, there were 3 objections to the settlement of which it is not clear that 2 of the objectors were Class Members. Two objectors did not explain their objection and the the third objector said objected that their objection was no bodies business to know. There was thus no meaningful objection to the settlement from Class Members.
[15] There is a parallel proposed class action in Saskatchewan, Banadyga v. Wal-Mart Canada Digital Media Inc., (Court File No. QBG 2015 of 2015), in which the Merchant Law Group was Class Counsel. The settlement in the immediate case was conditional upon the defendants obtaining a stay of the Saskatchewan proceeding. In those proceedings, the Defendants moved for a stay and did not oppose a condition that the Merchant Law Group be paid fees of $250,000. On April 7, 2017, Justice Schwann of the Saskatchewan Queen’s Bench granted a stay and approving the fee request. Justice Schwann’s order is contingent upon the approval of this court of the Settlement Agreement.
2. Settlement Approval
[16] 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.
[17] 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 the 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.
[18] In determining whether to approve a settlement, the court, without making findings of fact 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.
[19] In the immediate case, having regard to the various factors that the court must consider in approving or rejecting a settlement, I conclude that the settlement is fair, reasonable, and in the best interests of the Class Members. I approve the settlement.
3. Fee Approval
[20] 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.
[21] 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; Fischer v. I.G. Investment Management Ltd., supra, at para. 28.
[22] In my opinion, having regard to the various factors used to determine whether to approve the fees of class counsel, the fee request in the immediate case should be approved.
4. Conclusion
[23] Orders accordingly.
Perell, J.
Released: May 30, 2017
CITATION: Drew v. Walmart Canada Inc., 2017 ONSC 3308
COURT FILE NO.: CV-15-532271-00CP
DATE: 20170530
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
heather drew
Plaintiff
- and -
WALMART CANADA INC. and PNI DIGITAL MEDIA INC.
Defendants
REASONS FOR DECISION
PERELL J.
Released: May 30, 2017