Court File and Parties
COURT FILE NO.: CV-17-00572508 -00CP DATE: 2020/04/17 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
SHIRLEY HOULE and ROLAND HOULE Plaintiffs
- and - ST. JUDE MEDICAL, INC. and ST. JUDE MEDICAL CANADA, INC. Defendants
Counsel: John-Otto K. Phillips and Paul Miller, for the Plaintiffs
Proceeding under the Class Proceedings Act, 1992
HEARD: In writing
PERELL, J.
REASONS FOR DECISION
[1] This is a motion for directions in a settled class action. The motion is unopposed.
[2] Section 12 of the Class Proceedings Act, 1992, S.O. 1992, c. 6 provides this Court with the discretion to make any order it considers appropriate respecting the conduct of a class proceeding and to impose such terms on the parties as it considers appropriate. Section 12 empowers the court to give directions to a claims administrator carrying out its duties under a settlement agreement. Article 10.1 of the Settlement Agreement in the immediate case, permits the Claims Administrator or the parties to seek directions from the case management judge.
[3] The action concerns lithium batteries in implantable cardioverter defibrillators (“ICDs”) and cardiac resynchronization therapy devices (“CRT-Ds”) manufactured by St. Jude Medical Inc. and distributed in Canada by St. Jude Medical Canada, Inc. The batteries allegedly could potentially form lithium clusters, causing the battery to short and rapidly deplete.
[4] In August 1, 2019, I among, other things, approved a $5.0 million Settlement Agreement and the appointment of Epiq Class Action Services as the Claims Administrator.
[5] Under the Settlement Agreement, the Claim Deadline was January 10, 2020. By the deadline, the Claims Administrator received 2,079 claims.
[6] Many of the claims were deficient. The main reasons for deficiencies in the claims were: (a) no benefit was selected or it was unclear which benefits claimants were claiming; (b) the claimant failed to provide supporting documentation that was necessary to process claims, particularly for Explant Patient claims; and (c) the claim forms were incomplete, often involving a simple failure to sign page 8 of the claim form.
[7] The Claims Administrator worked to resolve the deficiencies. This is a slow and laborious process.
[8] As of March 10, 2020, 253 claims remained deficient. 169 of these deficient claims are for Patient Class Members and 84 are for Derivative Class Members. The Claims Administrator is continuing to work with Class Members to cure any correctable deficiencies before assessing these claims.
[9] The Claims Administrator has identified two provisions of the Settlement Agreement, Articles 4.2(6) and 4.3(5) that are ambiguous.
[10] It is unclear to the Claims Administrator how Article 4.3(5) operates. This article provides that the Claims Administrator is to provide Class Members with 30 days to correct deficient claims, but it may be read as either providing a minimum period of 30 days or an upper limit of 30 days; i.e., it may be read to require deficiencies to be remedied within 30 days. Article 4.3 (5) states:
The Claims Administrator shall determine, in its sole discretion, whether a claim form has been properly completed and whether a claim has been validly asserted by a Class Member. The decision of the Claims Administrator as to whether a claim has been validly asserted shall be final and not subject to review. The Claims Administrator shall notify each Class Member who delivers an incomplete claim form of the nature of the deficiencies and provide the claimant Class Member 30 days to submit a complete claim form before deciding if their claim is invalid. Each claimant Class Member whose claim is deemed invalid shall be notified of that fact in writing by the Claims Administrator.
[11] Class Counsel and the Claims Administrator interpret Article 4.3(5) to set the minimum period of time to be given to Class Members to correct deficiencies, but the Claims Administrator has discretion to extend this period and give the claimant more time to remedy his or her claim and enjoy the benefits of the settlement.
[12] I agree with that interpretation of the Settlement Agreement. It is the correct one.
[13] It is also unclear to the Claims Administrator whether under Article 4.2 (6), it is obliged to make a final assessment of all claims by 60 days after the Claims Deadline, which, practically speaking, is not feasible nor would it be fair to the Claimants, who should have more time to remedy any deficiencies in their claim. Article 4.2(6) states:
The Claims Administrator and the Referee shall report to the Court, Class Counsel and to Defendants’ counsel on the total number of claims received and the decisions made by them in respect of any claim no later than 60 days after the Claims Deadline. The Claims Administrator and Referee shall update their reports to the court, Class Counsel and to Defendants’ counsel when all of the Eligible Claimants have been paid. The Claims Administrator will deliver a final report upon the distribution of any cy-pres payment after the six-month stale date has passed for all payments made to Eligible Claimants.
[14] Class Counsel and the Claims Administrator interpret Article 4.2(6) as requiring the Claims Administrator to provide a status report of the claims it has received and assessed 60 days after the Claims Deadline, but as not requiring the Claims Administrator to have completed a conclusive assessment of all claims by that date.
[15] I agree with this interpretation. It is the correct one.
[16] Accordingly, I approve the Order set out in Schedule A to these Reasons for Decision.
[17] In the circumstances of the Covid-19 emergency, these Reasons for Decision are deemed to be an Order of the court that is operative and enforceable without any need for a signed or entered, formal, typed order.
[18] Class Counsel may and should submit formal orders for signing and entry once the court re-opens; however, these Reasons for Decision are an effective and binding Order from the time of release.
Perell, J.
Released: April 17, 2020
SCHEDULE “A”
Court File No.: CV-17-512508-00CP ONTARIO SUPERIOR COURT OF JUSTICE
THE HONOURABLE JUSTICE PAUL M. PERELL
_______DAY, THE ______ DAY OF APRIL, 2020
B E T W E E N
SHIRLEY HOULE and ROLAND HOULE Plaintiffs
- and –
ST. JUDE MEDICAL INC. and ST. JUDE MEDICAL CANADA, INC. Defendants
Proceeding under the Class Proceedings Act, 1992
ORDER
THIS MOTION, made by the Plaintiffs, for an order providing directions from this court as to the implementation of the Settlement Agreement by the Claims Administrator was read this day at Osgoode Hall Courthouse, 130 Queen Street West, Toronto, Ontario.
ON READING the affidavit of Margaret L. Waddell, filed, and on reading the submissions of Class Counsel,
AND ON BEING ADVISED that the Defendants do not oppose this motion;
THIS COURT DIRECTS that the report to be provided to the Court, Class Counsel and Defendants counsel under Article 4.2(6) of the Settlement Agreement does not require the Claims Administrator or the Referee to have made their final decisions with respect to the claims received by no later than 60 days after the claims deadline, but rather this report is to provide a status update to the parties and the Court, with the final report to be delivered at the end of the administration process.
THIS COURT DIRECTS that the Claims Administrator has the discretion to grant reasonable extensions of time beyond 30 days for Class Members who have filed claims within the Claim Period to obtain such necessary further information as required by the Claims Administrator to cure deficiencies with their claims before the Claims Administrator determines the validity or invalidity of the claim.
THIS COURT ORDERS that there will be no costs of this motion.
COURT FILE NO.: CV-17-00572508 -00CP DATE: 2020/04/17 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: SHIRLEY HOULE and ROLAND HOULE Plaintiffs
- and - ST. JUDE MEDICAL, INC. and ST. JUDE MEDICAL CANADA, INC. Defendants
REASONS FOR DECISION