COURT FILE NO.: CV-13-483540

DATE: 20190910

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

Kevin Wright for the Defendants, Hitachi Maxell Ltd., Maxell Corporation of America

Meg Bennett, 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, Sony Corporation, Sony Energy Devices Corporation, Sony Electronics Inc., and Sony of Canada Ltd.

Proceedings under the Class Proceedings Act, 1992

HEARD: September 9, 2019

PERELL, J.

REASONS FOR DECISION

1. Introduction

[1] In this already certified competition law class action, settlements have been reached and approved against five groups of Defendants; namely: (1) NEC Corporation and NEC Tokin Corporation, (collectively “NEC”); (2) Samsung SDI Co., Ltd. and Samsung SDI America, Inc. (collectively, “Samsung”) (3) Sony Corporation, Sony Energy Devices Corporation, Sony Electronics, Inc., Sony of Canada Ltd. (collectively “Sony”); (4) LG Chem, Ltd. and LG Chem America, Inc. (collectively “LG Chem”) and (5) Toshiba Corporation, Toshiba America Electronic Components, Inc. and Toshiba of Canada Limited (collectively “Toshiba”).

[2] The Plaintiffs, Khurram Shah and Alpina Holdings Inc., have now reached a settlement with Maxell Holdings, Ltd. (formerly Hitachi Maxell Ltd.) and Maxell Corporation of America (collectively “Maxell”), and they 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.

[3] Including Maxell, the settlements to date total $13.0 million.

2. Background to the Class Action

[4] In June 2013, pursuant to the Class Proceedings Act,[^1] the Plaintiffs, Khurram Shah and Alpina Holdings Inc., brought a competition law class action. The action was brought on behalf of direct and indirect purchasers in two distribution channels in the marketplace for rechargeable Lithium Ion Battery Cells (“LIBs”).

[5] 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.

[6] The Plaintiffs alleged that the Defendants conspired to fix the price of LIBs manufactured and sold in Canada for the 11 years between January 1, 2000 and December 31, 2011.

[7] 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.[^2] 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.

[8] Related class proceedings with a consortium of Class Counsel are proceeding in British Columbia and Quebec.

[9] The action was discontinued or dismissed against five Defendants, Hitachi Ltd., Maxell Canada, NEC Canada, Inc., Toshiba of Canada Limited (all discontinuances), and GS Yuasa Corporation (dismissal).

[10] Two Japanese corporations, NEC Corporation and NEC Tokin Corporation were successful in having the action dismissed on jurisdictional grounds.[^3]

[11] 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.

[12] 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.

[13] 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.

[14] On October 12, 2018, the Ontario Court of Appeal reversed the decision of the Divisional Court and certified the action to include the claims of umbrella purchasers.[^6] Leave to appeal to the Supreme Court of Canada was sought in December 2018. The decision on leave remains outstanding.

[15] While certification contest has been raging, Class Counsel reached settlements with NEC, Samsung, and Sony. The action was re-certified for settlement purposes and the settlements were approved.[^7] Subsequently, settlements were reached with LG Chem and Toshiba and the settlements were approved.[^8]

[16] The Plaintiffs have now reached a settlement with Maxell.

3. Background to the Settlements

[17] On October 11, 2018, the plaintiffs entered into a settlement agreement with Maxell, which agreed to pay settlement proceeds of $300,000 USD.

[18] The Settlement Agreement provides the following, among other things:

a. The $300,000 USD will be held in an interest-bearing trust account for the benefit of Settlement Class Members;

b. The costs of disseminating the Notices of Hearing are to be paid by Class Counsel from the Settlement Amount;

c. Maxell agrees 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 Settlement Agreement is conditional upon approval of the Ontario court. The parallel Quebec class action was discontinued as against Maxell. The parallel British Columbia class action will be dismissed as against Maxell and other Releasees who are named as Defendants in the BC Proceeding, and the BC Plaintiff shall seek to register the Ontario order approving the Settlement Agreement with the British Columbia Supreme Court, pursuant to the Enforcement of Canadian Judgments and Decrees Act.[^9]

4. 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] The 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, including battery cells and battery cells that have been assembled into packs, but excluding lithium-ion rechargeable batteries designed for use in automobiles or other vehicles.

**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.

[23] Consistent with the Court of Appeal decision, the class includes umbrella purchasers.

[24] The Plaintiffs propose that this action be certified for settlement purposes only, on the basis of the following common issue, which is similar to a question certified in the contested certification motion:

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?

[25] 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.

[26] The Plaintiffs and Maxell 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

[27] 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.

[28] 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.[^10]

[29] 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.

[30] Accordingly, I grant the Plaintiffs’ motion.

Perell, J.

Released: September 10, 2019.

COURT FILE NO.: CV-13-483540

DATE: 20190910

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: September 10, 2019

[^1]: 1992, S.O. 1992, c. 6. [^2]: R.S.C. 1985, c. C-34. [^3]: See Shah v. LG Chem, Ltd., 2015 ONSC 2628. [^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]: Shah v. LG Chem, Ltd. 2018 ONCA 819. [^7]: Shah v. LG Chem, Ltd., 2018 ONSC 6106. [^8]: Shah v. LG Chem, Ltd., 2019 ONSC 554 and Shah v. LG Chem, Ltd., 2019 ONSC 3453. [^9]: S.B.C. 2003, c.29. [^10]: Osmun v. Cadbury Adams Canada Inc., [2009] O.J. No. 5566 at para. 21 (S.C.J.).