COURT FILE NO.: CV-09-390846-00CP

DATE: 20190306

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: Brian McPhadden, for the Plaintiff

Eric Stanger, for the Plaintiff (British Columbia)

Nicole Henderson, for the Johnson & Johnson defendants

Robin Reinertson, for the Johnson & Johnson defendants (British Columbia)

Mirilyn Sharp, for Canderm Pharma Inc.

HEARD: March 5, 2019

CASE CONFERENCE ENDORSEMENT

[1] Counsel attended before me yesterday (with B.C. counsel attending by teleconference) in order to settle the terms of the Order approving the Settlement and the Order approving the Distribution Protocol.

I. Settlement Order

[2] Counsel for the Johnson & Johnson defendants (“J&J”) and counsel for Canderm Pharma Inc. (“Canderm”) have each prepared versions of the Order approving the Settlement of this action. I will work here from the J&J draft and reference the paragraph numbers found therein.

[3] The J&J draft was already modified by agreement of counsel when handed up to me at the case conference. That draft, with its existing modifications, is approved with the following additional modifications. To the extent that other modifications proposed by counsel for Canderm are not referenced below, they have been determined by me not to be necessary or appropriate to be included in the Order.

[4] In para 11 of the Order, the term Canderm Defendants is to be pluralized and preceded by the phrase “any of”. While there is only one Canderm in the Ontario action, there are two Canderm-related defendants in the British Columbia action (i.e. Canderm and its employee or former employee, Anna Maria Duchon). The Settlement Agreement defines “Canderm Defendants” as including both of them, and the bar on further claims contained in this paragraph is applicable to both of them.

[5] In para 12, the term Canderm Defendants should again be pluralized. The second and third time this term is used in this paragraph it is to be preceded by the phrase “each of”.

[6] In para 13, “twenty (20) days notice” is to be changed to “fifteen (15) days notice”. That is a saw-off between J&J’s position and Canderm’s position on the notice period.

[7] The final sentence of para 13 referencing “costs and other terms it considers appropriate” is to be removed. The court’s discretion to award costs and other just terms goes without saying under the Courts of Justice Act and the Rules of Civil Procedure.

[8] Canderm seeks costs of the Ontario action. Its counsel submits that although her client was awarded $5,000 in costs of the settlement approval motion, my ruling on that motion did not address the question of costs of the action beyond the motion. The Ontario action is being permanently stayed as against Canderm, prompting Canderm to request costs of the overall action.

[9] Despite the fact that the stay is envisioned as a permanent one, I can see no reason to award costs of the action to Canderm. The action is being stayed not because Canderm was successful on the merits of the action but because of a settlement reached between the Plaintiff and J&J. The parallel action in B.C. remains alive as against Canderm. Costs are always discretionary under section 131 of the Courts of Justice Act, and I am inclined to exercise my discretion not to award any costs of the Ontario action to Canderm.

II. Distribution Protocol Order

[10] The Order approving the Distribution Protocol now contains the several amendments which I indicated in my previous judgment must be made. Schedule D to the Order now provides that claims for loss of income are to be assessed up to a maximum of $20,000 rather than the previous $5,000. Schedule E to the Order now provides that class counsel fees are fixed and approved at $78,875 rather than the previous $98,875. There are no objections to the Order as now drafted, and it appears to be correct in form and content.

III. Administering income loss claims

[11] The contentious issues with respect to the Distribution Protocol do not relate to the terms of the approval Order but rather to its implementation.

[12] Barbara Chute is a class member who appeared before me at the settlement approval hearing to object to the Settlement. Having actively participated in that hearing, she received notice of the case conference called to settle the Orders. In advance of the case conference I received email correspondence from her, and I understand that all counsel received correspondence from her as well.

[13] After hearing Ms. Chute’s compelling submissions when she attended at the settlement approval motion, I modified the Distribution Protocol to increase the amount available for class members with loss of income claims. I observed in my judgment that she appeared to be a representative of an undercompensated sub-class of claimants: Micevic v Johnson & Johnson, 2019 ONSC 665, at para 23.

[14] Ms. Chute has now written to counsel and to me indicating that the claims administrator has already told her that her income loss claim will likely be denied. In her correspondence she alleges that the administrator has pre-judged her claim, has expressed some animosity toward her objection to the settlement, and has suggested without seeing any documents that her income loss claim is unlikely to succeed.

[15] The claims administrator has responded to her correspondence with a communication of his own addressed to class counsel. That letter dated February 8, 2019 was also put before the Court. In his letter, the administrator declares that “Ms. Chute has a flare for exaggeration.” He then advises that he confirmed with her that prior to my settlement approval ruling she had indicated that she was not pursuing an income loss claim. This apparent change in position is a matter of some concern to the administrator. As he put it in his letter, “This is when our discussion went off the rails. She now claims that she always intended to pursue an income claim.”

[16] With all due respect, I do not see the relevance of this concern about Ms. Chute’s previous intentions with respect to the prospect of an income loss claim. Whether or not she wanted to make such a claim previously, she apparently does now and is not out of time. Individual claims have not yet been formally submitted by class members. Portraying this as an apparent contradiction or sign of a supposed “flare for exaggeration” suggests a certain lack of perspective on the claims administrator’s part.

[17] It is perfectly understandable that Ms. Chute may have changed her mind or have had further thoughts on her claim. Certainly, one could question whether it was worth it to pursue an income loss claim under the originally proposed $5,000 ceiling, but decide that it is worth pursuing it now that the maximum has been raised to $20,000. I expressed a somewhat similar reaction myself at para 26 of my settlement approval judgment. This is not a reason to doubt Ms. Chute’s credibility and should not influence an assessment of whatever claim she ultimately submits.

[18] If there are contradictions in this story, they appear to be more prominent in the administrator’s response than in Ms. Chute’s correspondence. The administrator insists that Ms. Chute never indicated wanting to make an income loss claim; at the same time, the administrator is careful to explain that he went over with her how to go about making such a claim, and that he “recall[s] speaking to her a month or so before the hearing and the income claim award of $5,000 came up.” It seems odd that a claim in which Ms. Chute supposedly had no interest spontaneously “came up” in conversation with the administrator, prompting him to explain the claim process to her.

[19] In any case, the claims administrator says that he has now explained to Ms. Chute what will be required for an income loss claim. His letter indicates that he advised her that she will need to provide a doctor’s note and “tax returns for the 2 years leading up to the injection and 2 years following”.

[20] I have had an opportunity to go back and review the version of the Distribution Protocol that was distributed to class members prior to the settlement approval hearing. Under the headings “Income Loss Claim” and “Compensation”, the Distribution Protocol states:

Calculated based on the difference between the Settlement Class Member’s average net income for the two years prior to the alleged Compensable injury and the Settlement Class Member’s net income following the alleged Compensable Injury and shall be restricted to a maximum claim period of two years.

[21] The phrasing is clear that some evidence of income must be provided for two years prior to the Evolence injection, but it is silent as to the length of time for which proof of income must be provided following the Evolence injection. I would say, however, that evidence of two years following the injection makes sense if that is the number of years of loss that the class member is claiming. Two years of income loss is the maximum allowed in this provision.

[22] I note that the language quoted above does not specify that a claimant must produce tax returns. The action was commenced in British Columbia in 2008 and in Ontario in 2009, and the injuries were suffered by class members in the years prior to that. I do not know whether everyone keeps old tax returns for more than a decade. The claims administrator will have to be flexible and open to other evidence provided by the claimants.

[23] I am concerned that Ms. Chute’s claim be handled fairly and objectively. Needless to say, all class members’ claims must be handled in that way, but the claims administrator’s correspondence in response to Ms. Chute in particular gives me pause. As case management and settlement approval judge, I remain seized of any issues that may arise with respect to the administration and distribution of the settlement funds. I would expect that any class member who takes issue with the administration of the settlement in a way that cannot otherwise be resolved will raise it with class counsel, who will in turn raise it with me.

IV. Disposition

[24] Counsel may deliver to me clean copies of the Order approving the Settlement and the Order approving the Distribution Protocol, modified as indicated above. I will then advise them when it is signed and ready to be retrieved and entered.

Morgan J.

Date: March 6, 2019