CITATION: Shah v. LG Chem, Ltd., 2017 ONSC 7206
COURT FILE NO.: CV-13-483540
DATE: 20171205
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
KHURRAM SHAH and ALPINA HOLDINGS INC.
Plaintiffs
– and –
LG CHEM, LTD., LG CHEM AMERICA, INC., PANASONIC CORPORATION, PANASONIC CORPORATION OF NORTH AMERICA, PANASONIC CANADA, INC., SANYO ELECTRIC CO., LTD., SANYO NORTH AMERICA CORPORATION, SANYO ENERGY (U.S.A.) CORPORATION, SONY CORPORATION, SONY ENERGY DEVICES CORPORATION, SONY ELECTRONICS, INC., SONY OF CANADA LTD., SAMSUNG SDI CO., LTD., SAMSUNG SDI AMERICA, INC., SAMSUNG ELECTRONICS CANADA INC., HITACHI LTD., HITACHI MAXELL, LTD., MAXELL CORPORATION OF AMERICA, MAXELL CANADA, GS YUASA CORPORATION, NEC CORPORATION, NEC TOKIN CORPORATION, NEC CANADA, TOSHIBA CORPORATION, TOSHIBA AMERICA ELECTRONIC COMPONENTS, INC. and TOSHIBA OF CANADA LIMITED
Defendants
Jean-Marc Leclerc for the Plaintiffs
Maureen Littlejohn, for the Defendants LG Chem, Ltd. and LG Chem America, Inc.
Emrys Davis, for the Defendants Panasonic Corporation, Panasonic Corporation of North America, Panasonic Canada, Inc., Sanyo Electric Co., Ltd., Sanyo North America Corporation and Sanyo Energy (U.S.A.) Corporation
Fahad Siddiqui, for the Defendants NEC Corporation and NEC Tokin Corporation
Litsa Kriaris for the Defendants Samsung SDI Co., Ltd. and, Samsung SDI America, Inc.
D.M. Peebles for the Defendants Sony Corporation, Sony Energy Devices Corporation, Sony Electronics, Inc., and Sony of Canada Ltd.
Kelly Friedman for the Defendants Hitachi Maxell, Ltd., and Maxell Corporation of America
Proceedings under the Class Proceedings Act, 1992
HEARD: December 5, 2017
PERELL, J.
REASONS FOR DECISION
1. Introduction
[1] In this already certified competition law class action, settlements have been reached against two groups of Defendants; namely: (1) NEC Corporation and NEC Tokin Corporation, (collectively “NEC”); and (2) Samsung SDI Co., Ltd. and Samsung SDI America, Inc. (collectively, “Samsung”).
[2] The Plaintiffs, Khurram Shah and Alpina Holdings Inc., now move for a consent certification for settlement purposes and for approval of a plan for disseminating the Notice of Hearing for the settlement approval.
2. Background to the Class Action
[3] Pursuant to the Class Proceedings Act,[^1] the Plaintiffs, Khurram Shah and Alpina Holdings Inc., brought a competition law class action. The action is brought on behalf of direct and indirect purchasers in two distribution channels in the marketplace for rechargeable Lithium Ion Battery Cells (“LIBs”).
[4] The 26 Defendants are: LG Chem, Ltd., LG Chem America, Inc., Panasonic Corporation, Panasonic Corporation of North America, Panasonic Canada, Inc., Sanyo Electric Co., Ltd., Sanyo North America Corporation, Sanyo Energy (U.S.A.) Corporation, Sony Corporation, Sony Energy Devices Corporation, Sony Electronics, Inc., Sony of Canada Ltd., Samsung SDI Co., Ltd., Samsung SDI America, Inc., Samsung Electronics Canada Inc., Hitachi Ltd., Hitachi Maxell, Ltd., Maxell Corporation of America, Maxell Canada, GS Yuasa Corporation, NEC Corporation, NEC Tokin Corporation, NEC Canada, [Inc.], Toshiba Corporation, Toshiba America Electronic Components, Inc., and Toshiba of Canada Limited.
[5] The action was discontinued or dismissed as against five Defendants, Hitachi Ltd., Maxell Canada, NEC Canada, Inc., Toshiba of Canada Limited (all discontinuances), and GS Yuasa Corporation (dismissal).
[6] Two Japanese corporations, NEC Corporation and NEC Tokin Corporation were successful in having the action dismissed on jurisdictional grounds.[^2]
[7] Related class proceedings with a consortium of Class Counsel are proceeding in British Columbia and Quebec. NEC was not named in the Quebec or British Columbia proceedings.
[8] The Plaintiffs allege that the 19 remaining Defendants (represented by seven separate lawyers of record) conspired to fix the price of LIBs manufactured and sold in Canada for the 11 years between January 1, 2000 and December 31, 2011.
[9] The Plaintiffs claim general and special damages of $75 million and punitive and exemplary damages of $10 million for conspiracy, interference with economic relations, unjust enrichment, and conduct that is contrary to Part VI of the Competition Act.[^3] The Statement of Claim alleges that the price-fixing conspiracy caused damages in Canada because the prices of LIBs sold directly or indirectly to the Plaintiffs and other proposed Class Members in Canada were at artificially inflated levels and the proposed Class Members paid more for LIBs and products containing LIBs than they would have in the absence of the wrongful conduct.
[10] In 2015, I certified the action as a class action under the Class Proceedings Act, 1992.[^4] More precisely, I certified the statutory cause of action (s. 36 of the Competition Act) for conduct that is contrary to s. 45 of the Competition Act, and I certified the associated common issues. In the class definition, I removed what the parties called the “Unconnected Purchasers” or “Umbrella Purchasers” from class membership. I do not certify the Plaintiffs’ causes of action for: unlawful means conspiracy and unjust enrichment based on a contravention of the Competition Act. I conclude that these causes of action, while they exist, have been precluded by the statutory cause of action. I did not certify the predominant purpose conspiracy and the interference with economic relations tort claim.
[11] The result was a national class action with the following class definition:
All persons in Canada who, between January 1, 2000 and December 31, 2011 (the "Class Period"), purchased a Lithium Battery* manufactured by the Defendants and/or any of the following products containing a Lithium Battery manufactured by the Defendants: (1) notebook computer**; (2) cell phones, including smartphones***; (3) tablet computers; (4) e-book readers; (5) MP3 players; (6) personal digital assistants; (7) handheld GPS; (8) handheld video players; and/or (9) lithium ion battery packs (collectively "LIB Products"). Excluded from the class are the Defendants and the Defendants' present and former parents, predecessors, subsidiaries and affiliates, and any person who timely and validly opts out of the proceeding.
*a Lithium Battery is a rechargeable battery cell which uses lithium-ion technology.
**for greater certainty, a notebook computer includes a laptop computer.
***excluding cell phones acquired as part of a cellular phone service contract.
[12] In January 2016, the Plaintiffs and Defendants sought leave to appeal the Certification Order. Both motions for leave were heard by the Divisional Court in August 2016, with the Plaintiffs being granted leave and the Defendants being denied leave. The Divisional Court subsequently allowed the Plaintiffs’ appeal as it related to the claim for the tort of unlawful means conspiracy, but did not allow the appeal as it related to umbrella purchaser claims.[^5] The Plaintiffs were granted leave to appeal to the Ontario Court of Appeal on the umbrella purchaser issue.
[13] In June 2017, the Quebec action was authorized on behalf of persons in Quebec. The Defendants’ motion for leave to appeal to the Quebec Court of Appeal was denied.
[14] Following the resolution of the certification appeal in the Ontario action, the Plaintiffs plan to amend the Ontario class definition to exclude Quebec residents.
[15] Following arm’s length settlement negotiations, Class Counsel have reached settlement agreements with NEC and Samsung.
3. Background to the Settlements
[16] On October 15, 2015, the Plaintiffs entered into a settlement agreement with NEC whereby NEC agreed to pay a total of $50,000. The NEC Settlement Agreement was amended on September 15, 2017 to take into account, among other things, the fact that the representative plaintiff in Quebec changed following execution of the October 15, 2015 agreement.
[17] On November 21, 2017, the Plaintiffs entered into a settlement agreement with Samsung whereby Samsung agreed to pay a total of U.S. $2,200,000.
[18] The Settlement Agreements provide the following, among other things:
• the Settlement Amounts will be held in an interest-bearing trust account for the benefit of Settlement Class Members;
• the costs of disseminating the Notice of Certification and Settlement Approval Hearings are to be paid by Class Counsel from the Settlement Amounts;
• there is a right to opt-out of the proposed Settlement Agreements, specifying a procedure for doing so; and
• the Settling Defendants agree to provide reasonable cooperation to the plaintiff class in order to assist in the continued prosecution of this action against the non-settling defendants.
[19] The NEC Settlement Agreement is conditional upon approval of the Ontario Court. The Samsung Settlement Agreement is conditional upon approval of the Ontario and Quebec Courts.
4. The Reconfigured Motion for Certification for Settlement Purposes
[20] Although this action has already been certified after a contested certification motion, the Plaintiffs now seek certification for settlement purposes.
[21] For the consent certification motion, the Plaintiffs submit that in satisfaction of s. 5(1)(a) of the Class Proceedings Act, 1992, their amended Statement of Claim disclose a cause of action; namely (a) a breach of s. 45 of Part VI of the Competition Act, giving rise to damages under s. 36(1); and (b) the tort of civil conspiracy.
[22] With respect to the identifiable class criterion of s. 5(1)(b) of the Class Proceedings Act, 1992, the NEC Settlement Agreement contains a broader Ontario Settlement Class than the Samsung settlement. For the purposes of the NEC Settlement Agreement, the proposed Ontario Settlement Class is defined as:
All persons in Canada who purchased *Lithium Batteries and/or **Lithium Battery Products in Canada during the ***Class Period, except the ****Excluded Persons.
- Lithium Batteries means lithium-ion rechargeable batteries
** Lithium Battery Products means any products containing Lithium Batteries
*** Class Period means January 1, 2000 to December 31, 2011
**** Excluded Persons means each Defendant, the directors and officers of each Defendant, the subsidiaries or affiliates of each Defendant, the entities in which each Defendant or any of that Defendant’s subsidiaries or affiliates have a controlling interest and the legal representatives, heirs, successors and assigns of each of the foregoing, and those Persons who validly and timely opt-out of the Proceedings in accordance with the orders of the applicable Court.
[23] As the litigation progressed, Class Counsel developed a clearer understanding of the affected product and limited the claims to relate only to certain products containing LIB. As a result, the Samsung Settlement Agreement contains a more refined product definition. The Class Period contained in the Samsung Settlement Agreement is also one day longer than the NEC Class Period. This aligns with the allegations made in the British Columbia proceeding.
[24] For the purposes of the Samsung Settlement Agreement, the Ontario Settlement Class is defined as follows:
All Persons in Canada who purchased *Lithium Batteries and/or **Lithium Battery Products in Canada during the ***Class Period, except the ****Excluded Persons and Persons who are included in the Quebec Settlement Class.
*Lithium Batteries means lithium-ion rechargeable batteries, excluding lithium-ion rechargeable batteries designed for use in automobiles or other vehicles.
**Lithium Battery Products means the following products that contain Lithium Batteries: notebook or laptop computers, cellular phones including smartphones (excluding cellular phones acquired as part of a cellular phone service contract), tablet computers, e-book readers, MP3 players, personal digital assistants, handheld GPS, handheld video players and/or lithium ion battery packs.
***Class Period means January 1, 2000 to January 1, 2012.
**** Excluded Persons means each Defendant, the directors and officers of each Defendant, the subsidiaries or affiliates of each Defendant, the entities in which each Defendant or any of that Defendant’s subsidiaries or affiliates have a controlling interest and the legal representatives, heirs, successors and assigns of each of the foregoing, and those Persons who validly and timely opt-out of the Proceedings in accordance with the orders of the applicable Court.
[25] The Ontario Settlement Class in the Samsung Settlement Agreement is slightly different than the class certified by this court in its certification decision. Specifically, the Samsung settlement class includes umbrella purchasers (i.e., purchases from non-defendants). As noted above, whether or not umbrella purchasers should be part of the certified class is the subject of an appeal.
[26] Turning to the common issues criterion of s. 5(1)(c) of the Class Proceedings Act, 1992, the common issues set out in the Settlement Agreements vary slightly. For the purposes of the NEC Agreement, the Plaintiffs propose that this action be certified for settlement purposes only, on the basis of the following common issue:
Did the Settling Defendants conspire to fix, raise, maintain, and/or stabilize the price of Lithium Batteries and/or Lithium Battery Products directly or indirectly in Canada during the Class Period? If so, what damages, if any, did Settlement Class Members suffer?
[27] For the purposes of the Samsung Settlement Agreement, the Plaintiffs propose that this action be certified for settlement purposes only, on the basis of the following common issue:
Did the Settling Defendants conspire to fix, raise, maintain, and/or stabilize the price of Lithium Batteries and/or Lithium Battery Products in Canada during the Class Period? If so, what damages, if any, did Settlement Class Members suffer?
[28] The proposed common issues are very similar to the common issues already certified by this court, which ask:
“[…] did the defendants and/or any unnamed co-conspirators conspire, agree or arrange with each other to fix, maintain, increase or control the price of Lithium Batteries? Did Class Members suffer loss or damage as a result?”
[29] On the contested certification motion, I determined that a class action was the preferable procedure to provide access to justice, behaviour modification, along with judicial economy. I also determined that the Plaintiffs satisfied the representative plaintiff’s criterion for certification.
[30] The Plaintiffs and the Settling Defendants have agreed on the form and content of the Notices of Hearing and on the plan of dissemination of the various notices.
5. Analysis and Conclusion
[31] The court is required to certify the action as a class proceeding where the following five-part test in s. 5 of the Class Proceedings Act, 1992 is met: (a) the pleadings disclose a cause of action; (b) there is an identifiable class of two or more persons that would be represented by the representative plaintiff; (c) the claims of the class members raise common issues; (d) a class proceeding would be the preferable procedure for the resolution of the common issues; and (e) there is a representative plaintiff who: (i) would fairly and adequately represent the interests of the class; (ii) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and (iii) does not have, on the common issues for the class, an interest in conflict with the interests of other class members.
[32] The fact that an action is certified on consent for settlement purposes does not dispense with the need to meet the certification criteria but they may be less rigorously applied in a settlement context.[^6]
[33] In the present case, I am satisfied that all of the criteria for certification have been satisfied and that the incidental relief should be granted.
[34] Accordingly, I grant the Plaintiffs’ motion.
Perell, J.
Released: December 5, 2017
CITATION: Shah v. LG Chem, Ltd., 2015 ONSC 6148
COURT FILE NO.: CV-13-483540
DATE: 20171205
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
KHURRAM SHAH and ALPINA HOLDINGS INC.
Plaintiffs
– and –
LG CHEM, LTD., LG CHEM AMERICA, INC., PANASONIC CORPORATION, PANASONIC CORPORATION OF NORTH AMERICA, PANASONIC CANADA, INC., SANYO ELECTRIC CO., LTD., SANYO NORTH AMERICA CORPORATION, SANYO ENERGY (U.S.A.) CORPORATION, SONY CORPORATION, SONY ENERGY DEVICES CORPORATION, SONY ELECTRONICS, INC., SONY OF CANADA LTD., SAMSUNG SDI CO., LTD., SAMSUNG SDI AMERICA, INC., SAMSUNG ELECTRONICS CANADA INC., HITACHI LTD., HITACHI MAXELL, LTD., MAXELL CORPORATION OF AMERICA, MAXELL CANADA, GS YUASA CORPORATION, NEC CORPORATION, NEC TOKIN CORPORATION, NEC CANADA, TOSHIBA CORPORATION, TOSHIBA AMERICA ELECTRONIC COMPONENTS, INC. and TOSHIBA OF CANADA LIMITED
Defendants
REASONS FOR DECISION
PERELL J.
Released: December 5, 2017.
[^1]: 1992, S.O. 1992, c. 6. [^2]: See Shah v. LG Chem, Ltd., 2015 ONSC 2628. [^3]: R.S.C. 1985, c. C-34. [^4]: Shah v. LG Chem, Ltd., 2015 ONSC 6148, leave to appeal granted 2016 ONSC 4670 (Div. Ct.), var’d 2017 ONSC 2586 (Div. Ct.). [^5]: Shah v. LG Chem, Ltd., 2017 ONSC 2586 (Div. Ct.). [^6]: Osmun v. Cadbury Adams Canada Inc., [2009] O.J. No. 5566 at para. 21 (S.C.J.).