Court File and Parties
COURT FILE NO.: 3795/14CP DATE: 20181113 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Cygnus Electronics Corporation and Sean Allott, Plaintiffs AND: Panasonic Corporation, Panasonic Corporation of North America; Panasonic Canada Inc.; Sanyo Electric Co. Ltd.; NEC Tokin Corporation; NEC Tokin America Inc.; Kemet Corporation; Kemet Electronics Corporation; Nippon Chemi-Con Corporation; United Chemi-Con Corporation; Hitachi Chemical Co. Ltd.; Hitachi Chemical Company America, Ltd.; Hitachi Canada; Nichicon Corporation; Nichicon (America) Corporation; AVX Corporation; Rubycon Corporation; Rubycon America Inc.; Elna Co. Ltd.; Elna America Inc.; Matsuo Electric Co. Ltd.; Toshin Kogyo Co. Ltd.; Samsung Electro-Mechanics; Samsung Electro-Mechanics America Inc.; Samsung Electronics Canada Inc.; Rohm Co. Ltd.; Rohm Semiconductor U.S.A., LLC.; Hitachi AIC Inc.; Hitachi Chemical Electronics Co., Ltd.; FPCAP Electronics (Suzhou) Co.; Fujitsu Ltd.; Fujitsu Canada, Inc.; Holy Stone Enterpise Co., Ltd.; Vishay Polytech Co. Ltd. f/k/a HolystonePolytech Co., Ltd.; Milesone Global Technology, Inc. d/b/a Holystone International; and Holy Stone Holdings Co., Ltd., Defendants
BEFORE: Justice R. Raikes
COUNSEL: Jonathan Foreman, Counsel, for the Plaintiffs Katherine Kay, Counsel, for the Hitachi Chemical Defendants Counsel, for other Defendants – See Schedule “A”
HEARD: November 5, 2018
ENDORSEMENT – Directions re Scheduling
[1] A significant majority of the defendants seek directions pursuant to s. 12 of the Class Proceedings Act, 1992 (“CPA”) regarding the certification and jurisdiction motions which are presently scheduled to be heard together for five days commencing March 18, 2019. More specifically, the moving defendants ask that I direct a “pause” in this proceeding pending release of the Supreme Court of Canada’s decision in two cases scheduled to be heard together on December 11, 2018.
[2] This action is a price fixing case. The plaintiffs seek to certify the action as a class proceeding for all persons and corporations in Canada, excepting those in Quebec and British Columbia, who directly purchased electrolytic capacitors or indirectly did so by purchasing products containing such capacitors manufactured by the named defendants (“direct and indirect purchasers”). The proposed class definition also includes anyone who purchased directly or indirectly an electrolytic capacitor manufactured by any other company (“umbrella purchasers”).
[3] The causes of action asserted include claims under s. 36 of the Competition Act, R.S.C. 1985, c. C-34 for breaches of ss. 45 and 46, civil conspiracy, unlawful means tort and unjust enrichment.
[4] The notice of motion for certification indicates that the plaintiffs seek to certify, inter alia, the following common issues:
• Did the defendants, or any of them, breach ss. 45 or 46 of the Competition Act thereby giving rise to liability under s. 36?
• Did class members suffer injury as a result?
• Are the defendants, or any of them, liable in tort for conspiracy to fix the price of Capacitors?
• Did the defendants, or any of them, take affirmative or fraudulent steps to conceal the conspiracy?
• Can damages be measured on an aggregate basis and, if so, what are the aggregate damages for the Class?
[5] On December 11, 2018, the Supreme Court of Canada will hear argument in two price fixing cases from British Columbia: Pioneer Corporation et al. v. Godfrey and Toshiba Corporation et al. v. Godfrey (together “Godfrey”). The appeals will address issues directly relevant to the law applicable to the certification motion in this matter. For example, the Supreme Court will hopefully settle once and for all whether umbrella purchaser claims are justiciable, whether the discoverability principle applies to postpone the two year limitation period in the Competition Act, and whether common law and equitable claims can be grounded in a breach of that Act.
[6] Equally important to this motion, the Supreme Court will also have the opportunity to comment upon and provide direction as to the applicable standard of proof necessary to establish harm from the alleged conspiracy for the purpose of determining whether harm is a common issue. The Court will consider whether lower courts have correctly applied the broad principles set forth in the 2013 trilogy which included Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57, [2013] 3 S.C.R. 477.
[7] The expert economist employed by the plaintiffs in this action is the same economist used in the Godfrey actions: Dr. Reutter. His approach was accepted by the lower courts in Godfrey. The methodology, approach and conclusions reached by Dr. Reutter in his reports filed on the certification motion in this matter are comparable in some aspects to that in Godfrey.
[8] I have carefully reviewed the material filed by counsel on this motion including the case law which goes both ways in terms of whether to pause or proceed. All counsel agree that this is a matter of discretion under the broad case management powers set out in s. 12 of the CPA.
[9] I note that the wrongdoing alleged is not pleaded to be ongoing. Damages, if any, have already crystallized. This is not a case where delay works ongoing and increased harm to the plaintiffs beyond that already suffered.
[10] Further, the action has moved slowly to this point. I do not fault any party or side for that fact. This is high stakes litigation involving a large number of defendants, most of whom are foreign companies who had to be served and retain counsel.
[11] A schedule was established between counsel to complete cross-examinations in preparation for the certification and jurisdiction motions. Most of those cross-examinations have been completed. One notable omission to date is the cross-examination of Dr. Reutter, the plaintiffs’ expert economist. Defence counsel wish to defer his cross-examination until after the Supreme Court decision is known. They are prepared to complete all other cross-examinations.
[12] Plaintiffs’ counsel is understandably concerned that having already cross-examined the defence economist and defence witnesses, he may be met with opposition if he decides that it is necessary to file additional evidence to meet the potentially new legal landscape after the Supreme Court decision is known. That issue seems to me one best addressed when the parties know whether the landscape has changed and how.
[13] Plaintiffs’ counsel proposed in the alternative that the jurisdiction motions go ahead in March in any event. That suggestion was opposed by defence counsel for at least one of the affected defendants. I previously directed that the jurisdiction motion and certification motions be heard together on consent of all counsel.
[14] In my view, there is a real danger that proceeding with the jurisdiction motions risks even greater delay to the rest of the action. For example, if I dismiss the claims against those defendants, the plaintiffs may appeal to the Court of Appeal from that final order. If the Supreme Court of Canada decision in Godfrey is released and the path forward to certification is cleared, the certification motion might have to await the outcome of the appeal because if the plaintiffs are successful on the appeal, the defendants affected by that decision are entitled to participate in the certification motion.
[15] In short, it does not make sense to de-couple the motions and thereby risk the timing of appeals interfering with efficient progress of the action as a whole.
[16] I agree with the approach and rationale taken by Leitch J. in Airia Brands Inc. v. Air Canada, 2012 CarswellOnt 4773 at para. 15. It makes sense to await the decision of the Supreme Court in Godfrey from the point of view of efficiency and the allocation of time and resources.
[17] I am not prepared, however, to simply vacate the dates already scheduled at this point. There are many counsel in this case and finding agreeable hearing dates, especially five days, is very challenging, to say nothing of the difficulties from a court scheduling perspective. Although unlikely, the Supreme Court may signal its decision on December 11 or very soon after.
[18] I direct as follows:
Counsel shall hold open the March 18-22, 2019 dates for the certification and jurisdiction motions pending further direction from me.
The remaining cross-examinations, save that of Dr. Reutter, shall be completed as soon as practicable with a view to holding and using the March 2019 motion dates.
The parties will arrange a mutually agreeable date(s) for Dr. Reutter’s cross-examination after December 11, 2018 again with a view to holding and using the March 2019 dates as intended.
If the Supreme Court of Canada reserves its decision, a case conference will be held by telephone on or before January 15, 2019. A case conference in December 2018 is preferable if counsel can agree on a date and time.
If the Supreme Court of Canada reserves its decision and it is likely that the decision will not be released imminently, the March 2019 dates will be vacated. Whether a new schedule should be set and the timing of same will be discussed during the case conference.
If there are motions arising from the cross-examinations related to the jurisdiction motions, they may be scheduled through the Trial Coordinator in any event.
The jurisdiction motions will be heard together with the certification motion as previously directed.
[19] Costs of the motion will be an agenda item for the case conference call to be scheduled. Counsel are asked to provide call in particulars to me in advance of the call.
Justice Russell Raikes
Date: November 13, 2018.