DATE: 20180619
SUPERIOR COURT OF JUSTICE - ONTARIO
Automatic Transmission Fluid Warmers Sheridan Chevrolet Cadillac Ltd. et al v T.Rad Co., Ltd. et al. CV-14-506644-CP
Automotive Wire Harness Systems Urlin Rent A Car Ltd. et al v Furukawa Electric Co. Ltd. et al. CV-12-446737-CP
Radiators Sheridan Chevrolet Cadillac Ltd., et al v Denso Corporation et al. CV-13-478182-CP
Proceeding under the Class Proceedings Act, 1992
BEFORE: Justice Edward P. Belobaba
COUNSEL: Jean-Marc Leclerc, David Sterns, Charles M. Wright, Linda Visser and Kerry McGladdery Dent for the Plaintiffs
Susan Friedman, Kevin Wright, Todd Shikaze and David Neave for the Defendants T. Rad Co., Ltd. and T. Rad North America Inc. and for the Defendants Furukawa Electric Co. Ltd., and American Furukawa Inc.
Michael L. Binetti for the Defendants Calsonic Kansei Corporation and Calsonic North America, Inc.
Sandra Forbes, Chantelle Spagnola, Maureen Littlejohn and Nate Read-Ellis for the Defendants Denso Corporation, Denso International America, Inc., Denso Manufacturing Canada, Inc. and Denso Sales Canada, Inc.
Jessica Kimmel, Benjamin Zarnett, Suzy Kauffman and Dan Block for the Defendants Fujikura Ltd., Fujikura America Inc. and Fujikura Automotive America LLC
Trisha Jackson, Linda Plumpton and James Gotowiec for the Defendants Leoni AG, Leoni Kabel GMBH, Leoni Bordnetz-System GMBH, Leoni Wiring Systems, Inc., Leonische Holding, Inc., Leoni Wire Inc., and Leoni Elocab Ltd.
Katherine Kay, Danielle Royal and Eliot Kolers for the Defendant S-Y Systems Technologies Europe, GMBH
Neil Campbell and Lindsay Lorimer for the Defendants Sews Canada Ltd., Sumitomo Electric Industries Ltd., Sumitomo Wiring Systems, Ltd., Sumitomo Electric Wiring Systems, Inc. and Sumitomo Wiring Systems (U.S.A.), Inc.
Paul Martin and Laura Cooper for the Defendants G.S. Electech Inc., G.S.W. Manufacturing Inc., and G.S. Wiring Systems Inc.
F. Paul Morrison, Eric S. Block and Gillian Kerr for the Defendant Lear Corporation
Monique Jilesen for the Defendant Kyungshin-Lear Sales and Engineering, LLC
Robert Kwinter and Randall Hofley for the Defendants Yazaki Corporation and Yazaki North America Inc.
David Kent for the Defendants Chiyoda Mfg. Co. Ltd and Chiyoda USA Corporation
HEARD: In writing
T.Rad and S-Y Systems Settlement and Fee Approvals
[1] I am currently case-managing some 33 class actions alleging price-fixing in the world-wide automotive parts industry. The actions are at various stages of litigation and involve a variety of auto parts such as automotive wire harness systems, automotive transmission fluid warmers and radiators.
[2] The class actions materialized in the aftermath of high-profile criminal and regulatory investigations and prosecutions in the United States, Canada and Europe.
[3] There are two settlements before me for judicial approval. First, the settlement agreements with T.Rad Co. Ltd. and T.Rad North America Inc. (together “T.Rad”) dated July 20, 2017. Under the two settlement agreements, T.Rad has paid C$1,167,452 into trust allocated as follows: $113,476.33 for Automatic Transmission Fluid Warmers and $1,053,975.67 for Radiators.
[4] Second, the S-Y Systems settlement with Yazaki Systems Technologies GmbH (formerly S-Y Systems Technologies Europe GmbH) dated June 27, 2017 in the Automotive Wire Harness Systems action. S-Y Systems has paid C$50,000 into trust.
[5] The actions were certified for settlement purposes as against the settling defendants when the notices were approved. The courts in British Columbia and Quebec have approved the settlement agreements (other than Automatic Transmission Fluid Warmers because there is no such claim in B.C. and Quebec).
[6] The applicable law on settlement approval in Ontario is well established. The Court must be satisfied that the proposed settlement is fair, reasonable and in the best interests of the class. The key question for the court is whether the settlement falls within a zone of reasonableness.[^1]
[7] I am satisfied that the proposed settlements should be approved. My reasons follow.
The T.Rad Settlements
[8] Settlement discussions with T.Rad began in mid-2016. Agreements in principle were reached in January 2017 and the final agreements were executed on July 20, 2017.
[9] I am satisfied that the C$1.167 million settlement falls within a zone of reasonable for the following reasons:
• T.Rad settled the U.S. end-payor and auto dealer actions relating to Radiators for US$8,802,220 and Automotive Transmission Fluid Warmers for US$947,780 for a total of US$9.75 million. There has not yet been a similar settlement between T.Rad and the direct purchasers in the U.S. The $1.167 million Canadian settlement reflects the appropriate fraction as based on the Canada-U.S. population comparison;
• T.Rad had no potentially relevant direct Canadian sales. The parts in question were likely installed in vehicles manufactured in other parts of the world, then sold in Canada. The U.S. Department of Justice treated all commerce by T.Rad in North America, whether it was with American or Canadian entities, as “U.S. Commerce.” T.Rad’s counsel further disclosed that it did not have Volume of Commerce (“VOC”) information specific to Canada. As a result, Class Counsel inferred Canadian VOC based on T.Rad’s U.S. VOC.
The S-Y Systems Settlement
[10] Settlement discussions with S-Y Systems’ Canadian counsel began around November 2016. Agreements in principle were reached in early 2017 and the final agreement was executed in June 2017.
[11] The nominal $50,000 settlement amount is approved:
• In the U.S., the direct purchaser, end-payor and auto dealer actions against S-Y Systems relating to the Automotive Wire Harness System were dismissed, either voluntarily or by order of the court;
• S-Y Systems did not sell product to any of the relevant OEMs identified in the plaintiffs’ certification motion record; and
• S-Y Systems was not identified as a participant in the price-fixing conspiracy through any of the evidentiary proffers from settled defendants.
[12] The T.Rad and S-Y System settlements described herein are approved as fair and reasonable and in the best interests of the class.
[13] The legal fees are approved as requested.
[14] Orders to go as signed today.
Justice Edward P. Belobaba
DATE: June 19, 2018
[^1]: Dabbs v. Sun Life Assurance, 1998 CanLII 14855 (ON SC), 40 O.R. (3d) 429 (Gen. Div.), aff’d 1998 CanLII 7165 (ON CA), 41 O.R. (3d) 97 (C.A.), leave to appeal to S.C.C. refused Oct. 22, 1998; Parsons v. Canadian Red Cross Society, [1999] O.J. No. 3572 (S.C.J.).