Court File and Parties

Court File No.: CV-09-390846-00CP Date: 2018-09-06 Superior Court of Justice - Ontario

Re: Maria Micevic, Plaintiff – AND – Johnson & Johnson, Ortho-McNeil-Janssen Pharmaceuticals Inc., Johnson & Johnson Inc., Janssen-Ortho Inc., Colbar Lifescience Ltd., and Canderm Pharma Inc., Defendants

Before: E.M. Morgan J.

Counsel: Bryan McPhadden, for the Plaintiff (Ontario) Eric Stanger, for the Plaintiff (British Columbia) Nicole Henderson, for the Johnson & Johnson defendants (Ontario) Robin Reinertson, for the Johnson & Johnson defendants (British Columbia) Mirilyn Sharp, for Canderm Pharma Inc.

Heard: September 4, 2018

Certification Order and Settlement Timetable

[1] This motion has been brought by the Plaintiff (Ontario) to finalize the terms of the certification Order and to set a timetable for a settlement approval hearing. In the process, Ms. Sharp, for the Defendant, Canderm Pharma Inc. (“Canderm”), seeks an Order for payment of her costs incurred since the previous hearing in this matter on March 21, 2018; and, in response, Mr. McPhadden, for the Plaintiff (Ontario) and Mr. Stanger, for the Plaintiff (British Columbia), each seek their costs against Canderm.

[2] On March 21, 2018, all counsel appeared before me (British Columbia counsel by teleconference) for a certification hearing. In my endorsement of that date I approved the certification of this matter for settlement purposes. A tentative settlement has been reached between the Plaintiffs in both Ontario and British Columbia and the Johnson & Johnson Defendants (“J&J”) in each of those jurisdictions. Canderm is not a party to the settlement agreement, but as a Defendant in the action has an interest in seeing the settlement between the other parties approved.

[3] Although they are in substantive agreement, the parties have not been able to agree on all of the terms of the formal Order. More precisely, the Plaintiff and Canderm have not been able to agree on the terms. It appears that J&J’s counsel in both jurisdictions are in agreement with the draft Order and schedules produced by Mr. McPhadden.

[4] As Mr. McPhadden points out, it is somewhat unusual that Ms. Sharp, representing a client with only an indirect interest in the settlement rather than one that is actually party to the settlement, should be taking a lead role in objecting to the Order. After all, this is the Order that certifies the proceeding and sets the stage for implementing the settlement between the Plaintiff and J&J. The terms of the Order on which Ms. Sharp has offered her input are for the most part aimed at the settlement and have nothing to do with her client.

[5] As Ms. Sharp explains it, she does not so much object to the Order in substance as she wants it to be correct in form. Since Canderm is not a party to the settlement, the substantive content of the Order (or, at least, those parts of the Order in issue here) is not particularly relevant to it. However, Ms. Sharp is of the view that it is very much in her client’s interest to ensure that the litigation between the Plaintiff/class and J&J comes to an end, as that will reduce her client’s exposure in what remains of the action. She has therefore been highly attentive to the form of documentation designed to implement the settlement, in an effort to maximize the effectiveness of the settlement.

[6] As a prime example of the difficult relationship that this dynamic has produced, Mr. McPhadden points out that Ms. Sharp took it upon herself immediately after the last hearing before me in March 2018 to call the claims administrator named in the settlement agreement. She apparently wanted to ensure that they were still on board with this matter and that their address and contact information were correct. Mr. McPhadden submits that this was not her task to do, and that her client, as a stranger to the settlement which the claims administrator will be administering, had no relationship with the claims administrator and that Ms. Sharp had no business making such a phone call. He says that it was an unnecessary step as he would have eventually made the same call himself, and that Ms. Sharp’s intervention inserted some awkwardness in the relationship between class counsel and the claims administrator.

[7] As it turns out, much as Ms. Sharp may have been a tad too eager to ensure that this detail of the Order is tidily in place, she did in fact discover that the address the Plaintiff had inserted for the claims administrator was incorrect. That has now been fixed in the documentation. The incident, however, is emblematic of the proceedings here. Mr. McPhadden produced documentation with a clerical-type error, Ms. Sharp instantly caught it before anyone else, and now it is fixed. As discussed below, this dynamic has led to requests from Mr. McPhadden and his British Columbia colleague, Mr. Stanger, for costs against Canderm, and to requests from Ms. Sharp for costs against the Plaintiffs in both Ontario and B.C.

[8] The other issue which has permeated the finalizing of the Order is the fact that there is a parallel Order to be issued in the British Columbia Supreme Court. The certification hearing has already been heard and certification has been granted by Voith J. of that court, although for scheduling and other reasons of which I am only vaguely aware the formal certification Order has not yet been taken out. I understand from Mr. Stanger that he is in the process of making that arrangement, and that the he is waiting for the specific dates referenced in the Ontario Order and appended Notices to be finalized so that he can insert them into the B.C. Order as well. Apparently, the B.C. court has been presented with a draft Order containing one or two placeholders for dates to be filled in; Mr. Stanger proposes that once those placeholders are removed and the proper dates are inserted, the B.C. Order can be re-presented to Justice Voith for signature.

[9] Mr. Stanger is particularly concerned that the two Orders contain parallel language and information. He would therefore like to make as few changes as possible in the draft Order that Mr. McPhadden has circulated and submitted to me, as that Order mirrors the one that was also submitted to the B.C. court (absent the dates that are still left to be filled in for the B.C. Order).

[10] The problem, from the point of view of Plaintiff’s counsel in both jurisdictions, is that Ms. Sharp keeps catching errors or corrections that should be made in the draft Ontario Order that are beyond the few placeholders that were inserted in the draft Order presented to the British Columbia court. Messrs McPhadden and Stanger are of the view that if an error does not absolutely need to be fixed I should leave it as is, since to fix an error in Ontario means flagging yet one more change for the B.C. court to make as well. Ms. Sharp is of the view that an error is an error, and that there is no justification for this court to issue an Order that contains clerical errors that can be fixed right now.

[11] As indicated, Ms. Sharp’s approach may seem a bit punctilious, but it also has merit. A typo in an address, a failure to mention a specific date for a deadline, an omission of the names of the specific newspapers in which the notices will be published, etc., may arise as clerical errors, but may cause substantive problems down the road. A class member not as familiar with the proceedings as counsel are may well be confused by erroneous or missing information.

[12] As an overall approach to the Order, I tend to agree with Ms. Sharp. Even if a bit of incorrect or missing information in question is a small detail, it is at this stage worth going to the effort to fix it once it has been identified. This court should not be issuing an Order or approving notices with clerical errors, and I am more than sure that the British Columbia court will likewise appreciate any clerical errors in its parallel Order being fixed. When B.C. counsel bring the Order back to Voith J. for final sign-off, it is obviously preferable for them to present him with a form of Order that has all of its detailed information correct. Like me, Voith J. will not automatically know the correct mailing address of the claims administrator, but will be relying on counsel to have drafted the documentation with the correct address inserted in it.

[13] Having said all of that, Mr. McPhadden and Ms. Sharp have managed to agree on the majority of errors drafting changes proposed by Ms. Sharp. Those that remain are to be resolved as follows:

(a) The Order is to be dated March 21, 2018, as drafted. That is the date on which the certification hearing was held, and the essence of the Order is that it is a Certification Order for the class. Further, the Order should not, as suggested by Ms. Sharp, be entitled “Amended Order”, as that implies that an Order already issued and entered has now been varied or amended, which is not the case. Rather, to be completely accurate, the preamble of the Order should simply reference the further submissions made by all counsel on September 4, 2018. I would recommend ending the first preambular paragraph of the Order by inserting the words that I have underlined and bolded:

“…was initially heard this day, with further submissions by all counsel on September 4, 2018, at the Court House, 130 Queen Street West, Toronto, Ontario.”

(b) Paragraph 15 states that any class member opting out of the settlement must deliver an Opt Out Form within 60 days of the Notice of Publication Date, but fails to indicate the date. Likewise, paragraph 19 states that any class member objecting to the settlement must file written notice of that objection within 60 days of the Notice of Publication Date, but fails to indicate the date. The Notice of Publication Date is September 13, 2018. The date should be inserted in these two paragraphs after the respective references to the Notice of Publication Date, as follows:

“…no later than sixty (60) days following the Notice Publication Date of September 13, 2018.”

(c) Paragraphs 15 and 19 provide the mailing address for the claims administrator, iDMed-Solutions Inc., but the province has been omitted from the address. “Ontario” should be inserted in the address at the appropriate spot in each of these paragraphs.

(d) Paragraph 5 of Schedule D to the Order states that the short form notice is to be published in “an approved daily newspaper” and paragraph 6 states that the short form notice is to be published in a “French-language newspaper”. Counsel advise that the two newspapers are, respectively, the Toronto Star and the Journal de Montréal. These newspapers should be specifically named in paragraphs 5 and 6.

(e) The short form notice references the right to object to the settlement in writing, but fails to mention that an objector will also have a right to state their objection in person at the settlement approval hearing. Although this information is contained in the long form notice, for greater certainty it should be added to the short form notice as well. The third bullet point in the short form notice should therefore state:

“● object to the settlement in writing by Monday, November 12, 2018 and attend at the settlement approval hearing to state their objection provided that they delivered a written objection by November 12, 2018.”

[14] The following schedule of proceedings has now been agreed upon by all counsel:

September 13, 2018 Notice of Publication Date

November 12, 2018 Opt Out deadline and deadline to file an objection to the settlement

November 22, 2018 Report to be delivered on or before this date by the Claims Administrator concerning Opt Outs. (The Administrator may deliver the Report earlier, in which case the J&J notice of termination date will be earlier as such notice is to be delivered within 30 days of the Opt Out Report.)

December 5, 2018 1-hour case conference (Ontario)

December 6, 2018 Assuming the settlement termination provision is not triggered, Plaintiff to serve Ontario settlement approval motion materials, including factum

December 20, 2018 Assuming the settlement termination provision is not triggered, Defendants to serve Ontario settlement approval motion materials, including factums

December 31, 2018 Plaintiff to serve Ontario settlement approval Reply materials, if any

January 9, 2019 Ontario settlement approval hearing

January 11, 2019 Mr. Stanger advises that this is the last day to file materials for the B.C. settlement approval motion

February 1, 2018 Mr. Stanger advises that this is the date of the B.C. settlement approval motion

[15] As stated above, Mr. McPhadden and Mr. Stanger on behalf of the Plaintiff in each jurisdiction have sought costs against Canderm, and Ms Sharp has sought costs against the Ontario and B.C. Plaintiffs. Each of these respective counsel feels strongly about their position, and each is of the view that they were put to unnecessary expense by the actions of the other.

[16] As is well known, costs are discretionary under section 133 of the Courts of Justice Act. In British Columbia (Minister of Forests) v Okanagan Indian Band, 2003 SCC 71, [2003] 3 SCR 371, at para 20, the Supreme Court of Canada characterized costs as, first and foremost, “an award to be made in favour of a successful or deserving litigant, payable by the loser.” Generally speaking, “[t]he successful party is the plaintiff who establishes liability under a cause of action and obtains a remedy, or a defendant who obtains a dismissal of the plaintiff’s case”: Loft v Nat, 2014 BCCA 108, at para 46. A similar approach applies to costs on a motion, whereby the costs are typically awarded to the party that succeeds in obtaining the order sought.

[17] The primary rationale for costs does not apply to the proceedings here. No one won or lost this motion. Neither do any of the other standard policy reasons for awarding costs apply – i.e. encouragement of settlement, discouragement of unnecessary steps in proceedings, and prevention of vexatious litigation. Although the matter has become somewhat contentious, the fact is that counsel engaged in a mutual effort to obtain a properly drafted certification Order. The case has been long outstanding, and there were many details to iron out. All counsel had a role to play in protecting their clients’ interests and advancing this cause.

[18] I appreciate Ms. Sharp’s input and have adopted a number of her suggestions. That said, she approached her role with a form of zealous advocacy that, while providing excellent service to her client, entails costs that cannot imposed on the Plaintiff in either jurisdiction. Similarly, I appreciate that Mr. McPhadden and Mr. Stanger may have been put to considerable effort by Ms. Sharp’s enthusiastic efforts in reviewing documentation in respect of a settlement in which her client plays no part. That said, the result is a positive one for the Plaintiff class in that they have obtained an Order with fewer errors. Canderm does not have to pay class counsel in either jurisdiction for having helped them obtain that good result.

[19] Accordingly, I am not inclined to award costs for or against any party.

Morgan J.

Date: September 6, 2018