Court File and Parties
COURT FILE NO.: CV-13-483540
DATE: 2019/11/28
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
Counsel:
Jean-Marc Leclerc for the Plaintiffs
Maureen Littlejohn for the Defendant LG Chem, Ltd., LG Chem America Inc
Proceedings under the Class Proceedings Act, 1992
HEARD: November 28, 2019
REASONS FOR DECISION
PERELL, J.
[1] In this action, which is proceeding under the Class Proceedings Act,[^1] the Plaintiffs seek a confidentiality order.
[2] In June 2013, pursuant to the Class Proceedings Act,[^2] 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”).
[3] 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.
[4] 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.
[5] Parallel class proceedings were commenced in the United States relating to allegations of anticompetitive conduct in the sale of LIBs.
[6] In the Canadian proceedings, 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.[^3] 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.
[7] Related class proceedings with a consortium of Class Counsel are proceeding in British Columbia and Quebec.
[8] 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).
[9] Two Japanese corporations, NEC Corporation and NEC Tokin Corporation were successful in having the action dismissed on jurisdictional grounds.[^4]
[10] In 2015, I certified the action as a class action under the Class Proceedings Act, 1992.[^5] 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.
[11] In the class definition, I removed what the parties called the “Unconnected Purchasers” or “Umbrella Purchasers” from class membership. I did not certify the Plaintiffs’ causes of action for: unlawful means conspiracy and unjust enrichment based on a contravention of the Competition Act. I concluded 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.
[12] 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.[^6] The Plaintiffs were granted leave to appeal to the Ontario Court of Appeal on the umbrella purchaser issue.
[13] 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.[^7] Leave to appeal to the Supreme Court of Canada was sought in December 2018. Leave to appeal was denied. The result of the appeals is that umbrella purchaser claims and claims for unlawful means conspiracy are certified.[^8]
[14] Both the Ontario and Quebec proceedings are now in the discovery stage. The parties have exchanged voluminous documentary discovery.
[15] While the 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.[^9] Subsequently, settlements were reached with LG Chem and Toshiba and the settlements were approved.[^10] The Plaintiffs next negotiated a settlement with Maxell and that settlement has also been approved.[^11]
[16] The Panasonic/Sanyo Defendants are now the only remaining Defendants in the litigation.
[17] In the course of the litigation to date, the Plaintiffs have received more than 2.5 million documents from the Defendants. These documents were produced by the Defendants as part of the discovery process or as a result of settlement or discontinuance cooperation agreements.
[18] Pursuant to the Discovery Plan, each non-settled Defendant produced: (a) narrative description of the scope of its U.S. productions; (b) the pre-existing documents it produced in the U.S. Litigation; (c) transaction data for its purchases and/or sales of LIBs and/or LIB Products in Canada; and (d) transcripts, video and sound recordings of depositions or sworn testimony of its current and former employees, directors and officers taken in the U.S. Litigation.
[19] The Discovery Plan requires the parties to treat the Defendants' documents in accordance with the U.S. Protective Order until a comparable order is issued by the Ontario court. The Discovery Plan also provides that the parties will take all reasonable available steps to obtain such an order from the Ontario court. The Plaintiffs agreed to initially abide by the terms of the U.S. Protective Order in order to facilitate a more timely production of documents.
[20] A Protective Order was granted in the U.S. Litigation to protect confidential documents and information produced by the Defendants ("U.S. Protective Order"). Among other things, the U.S. Protective Order: (a) permits the parties to designate certain documents as Confidential or Highly Confidential to protect them from disclosure; (b) limits access to each category of Confidential or Highly Confidential documents to certain groups; and (c) prohibits disclosure of documents designated as Confidential or Highly Confidential beyond the identified groups.
[21] Pursuant to the settlements achieved in the Canadian Proceedings, Defendants were required to provide some or all of the following documents: (a) detailed transactional sales data; (b) documents produced in the U.S. Litigation; (c) documents produced to the U.S. Department of Justice; (d) any responses to written interrogatories provided in the U.S. Litigation; and (e) transcripts of depositions or other live testimony of current or former employees, officers or directors of the Defendant, taken in the U.S. Litigation.
[22] LG Chem, Toshiba and Maxell settled after they produced documents pursuant to the Discovery Plan. Accordingly, they were only required to provide certain categories of cooperation if they had not been previously produced in the contested litigation. Samsung SDI's settlement provides for documentary cooperation. However, Samsung SDI produced documents pursuant to the Discovery Plan before the settlement was executed.
[23] The settlement agreements require the Plaintiffs to maintain the confidentiality of the cooperation documents and information in various ways. For example, several of the settlements require the Plaintiffs to: (a) notify the relevant Defendant of any intention to produce or file cooperation information or documents in the litigation, in order that they can intervene to obtain a confidentiality order; and (b) treat information and documents provided as cooperation in accordance with the terms of the U.S. Protective Order, until such time as a confidentiality order is issued in the Canadian Proceedings.
[24] The Defendants maintain that many of the documents that have been disclosed are commercially sensitive. As noted above, the Discovery Plan and Settlements Agreements include various requirements to maintain the confidentiality of the Defendants' documents. On this motion, the Plaintiffs seek an order to protect certain confidential documents.
[25] The primary purpose of the proposed confidentiality order is to prescribe how the parties may use, store, and share confidential documents. The order sets out the persons that are permitted to view the documents and requires certain of those persons to sign an undertaking stating that they agree to be bound by the terms of the order.
[26] The proposed confidentiality order provides various restrictions on the parties' use of Confidential Information. For example, the order includes, among other things: (a) a process for designating documents as Confidential Information; (b) a description of persons who are authorized to view Confidential Information ("Authorized Recipients"); (c) an undertaking that must be signed by certain Authorized Recipients; (d) parameters surrounding the storage and copying of Confidential Information; (e) a process for resolving disputes about whether Confidential Information is properly designated; and (f) a requirement that the parties destroy the Confidential Information after the completion of the litigation.
[27] The proposed confidentiality proposes a process to follow if any of the parties intend to rely on Confidential Information on a motion or other court hearing. Pursuant to this process: (a) the Party seeking to file Confidential Information with the court must provide affected parties with notice; (b) Confidential Information may be filed with the Court with the consent of the affected parties. Alternatively, Confidential Information may be filed under interim seal; and (c) if Confidential Information is filed under interim seal, the affected parties have 60 days to bring a motion for a permanent sealing order. If the affected parties do not so move, the relevant Confidential Information will be de-designated and may be filed with the Court in the ordinary course.
[28] The proposed confidentiality order does not provide for the permanent sealing of any Confidential Information. Rather, it proposes the above process whereby Confidential Information may be filed under interim seal pending a further sealing motion. This process is intended to reduce delay in the proceeding. This process is also intended to provide a mechanism by which the parties can protect their confidential documents pending a motion for a permanent sealing order. Finally, this process is designed to allow the court to consider the permanent sealing of specific documents with the benefit of a full record. This process is consistent with that contained in the U.S. Protective Order.
[29] Section 137(2) of the Courts of Justice Act[^12] gives the court jurisdiction to seal a document filed in civil litigation. In Sierra Club of Canada v. Canada (Minister of Finance),[^13] which concerned a request for a sealing order in proceedings before the Federal Court, the Supreme Court of Canada formulated a test for when a sealing order should be granted.[^14]
[30] Justice Iacobucci stated that a sealing order should only be granted when: (1) the order is necessary in order to prevent a serious risk to an important interest, including a commercial interest, in the context of litigation because reasonably alternative measures will not prevent the risk; and (2) the salutary effects of the confidentiality order, including the effects on the right of civil litigants to a fair trial, outweigh its deleterious effects, including the effects on the right to free expression, which includes the public interest in open and accessible court proceedings.
[31] Justice Iacobucci added that when an important commercial interest was the justification for a sealing order, then under the first branch of the test (necessity), there were three elements: (1) the risk must be real and substantial and be well grounded in the evidence; (2) the interest cannot merely be specific to the party requesting the order and must be one which can be expressed in terms of a public interest in confidentiality; the open court rule only yields where the public interest in confidentiality outweighs the public interest in openness; and (3) courts must be alive to the fundamental importance of the open court rule. He added that the court must not only consider whether reasonable alternatives to a confidentiality order are available, but also restrict the order as much as is reasonably possible while preserving the commercial interest in question.[^15]
[32] Applying the Sierra test to the circumstances of the immediate case, I am satisfied that the requested confidentiality order should be granted. The proposed confidentiality order is restricted as much as possible. The deleterious effect of the proposed confidentiality order is minimal, especially when balanced against the salutary effects of the proposed order. The proposed order promotes the search for the truth and the Plaintiffs' and class members' right to a fair trial.
[33] Order accordingly.
Perell, J.
Released: November 28, 2019.
COURT FILE NO.: CV-13-483540
DATE: 2019/11/28
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: November 28, 2019
[^1]: S.O. 1992, c.6. [^2]: 1992, S.O. 1992, c. 6. [^3]: R.S.C. 1985, c. C-34. [^4]: See Shah v. LG Chem, Ltd., 2015 ONSC 2628. [^5]: Shah v. LG Chem, Ltd., 2015 ONSC 6148, leave to appeal granted 2016 ONSC 4670 (Div. Ct.), var’d 2017 ONSC 2586 (Div. Ct.). [^6]: Shah v. LG Chem, Ltd., 2017 ONSC 2586 (Div. Ct.). [^7]: Shah v. LG Chem, Ltd. 2018 ONCA 819. [^8]: The umbrella purchaser issue was argued before the Supreme Court of Canada in Godfrey v Sony Corporation in December 2018. In September 2019, the Supreme Court held that umbrella purchasers in that case had a cause of action under s. 36 of the Competition Act. See Godfrey v Sony Corporation * [^9]: Shah v. LG Chem, Ltd., 2018 ONSC 6106. [^10]: Shah v. LG Chem, Ltd., 2019 ONSC 554 and Shah v. LG Chem, Ltd., 2019 ONSC 3453. [^11]: Shah v. LG Chem, Ltd., 2019 ONSC *. [^12]: R.S.O. 1990, c. 43. [^13]: 2002 SCC 41, [2002] 2 S.C.R. 522 (S.C.C.). [^14]: 2002 SCC 41, [2002] 2 S.C.R. 522 at paras. 53-57 (S.C.C.). [^15]: 2002 SCC 41, [2002] 2 S.C.R. 522 at paras. 53-57 (S.C.C.).