Court File and Parties
COURT FILE NO.: CV-16-553833-00CP DATE: 20200619 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Matthew Kirsh and Gayle Kirsh, Plaintiffs – AND – Bristol-Myers Squibb, Bristol-Myers Squibb Canada Co./La Société Bristol-Myers Squibb, Otsuka Pharmaceutical Co, Ltd., Otsuka Canada Pharmaceutical Inc., Otsuka America Pharmaceutical, Inc., Otsuka America, Inc., Otsuka Maryland Medicinal Laboratories, Inc., and Otsuka Pharmaceutical Development & Commercialization, Inc., H. Lundbeck A/S, and Lundbeck Canada Inc., Defendants
BEFORE: Justice E.M. Morgan
COUNSEL: Joel Rochon and Golnaz Nayerahmadi, for the Plaintiffs Gordon McKee, Robin Linley, Justin Manoryk, and Natasha Lombardi, for the Defendant, Bristol-Myers Squibb Canada Co./La Société Bristol-Myers Squibb Randy Sutton and Erika Anschuetz, for the Defendant, Otsuka Canada Pharmaceutical Frank McLaughlin, Dorothy Charach, and Brandon Kain, for the Defendants, H. Lundbeck A/S and Lundbeck Canada Inc.
HEARD: Costs submissions in writing
COSTS ENDORSEMENT
Introduction
1On March 13, 2020, I released my judgment certifying this action under the Class Proceedings Act, 1992, and dismissing a motion by two of the Defendants, Bristol-Myers Squibb Canada Co./La Société Bristol-Myers Squibb (“Bristol-Myers”) and Otsuka Canada Pharmaceutical (“Otsuka”), for a stay of proceedings. All counsel have now provided me with submissions on costs.
2Counsel for the Plaintiffs seek $338,921.47 in fees on a partial indemnity basis. Along with that they seek $366,149.88 in disbursements (amended after discovering a calculation error from their initial request of $470,369.29), for an all-inclusive total of $705,071.35. They submit that that the Plaintiffs were successful in both motions and as a matter of course deserve their partial indemnity costs and reimbursement of out-of-pocket disbursements. Plaintiffs’ counsel have supported their request with a Bill of Costs setting out the time spent and hourly rates of their team.
Governing Principles
3Costs are always discretionary under section 131 of the Courts of Justice Act. That does not change for class actions. The Court of Appeal in Pearson v. Inco Ltd., [2006] OJ No 991 set out a number of factors to be brought to bear in exercising that discretion.
4The following represents those principles articulated in Pearson, at para 13, that are particularly helpful in analyzing the claim for costs here [citations omitted]:
(3) The costs should, if possible, reflect costs awards made in closely comparable cases, recognizing that comparisons will rarely provide firm guidance.
(4) A motion for certification is a vital step in the proceeding and the parties expect to devote substantial resources to prosecuting and defending the motion.
(5) The costs expectations of the parties can be determined by the amount of costs that an unsuccessful party could reasonably expect to pay.
Analysis
5Counsel for the various Defendants and counsel for the Plaintiffs each have a list of their favourite cases where cost awards were either lower or higher than the Plaintiffs’ request. As the Court of Appeal said, comparisons with other cases are inherently difficult and will not typically provide firm guidance.
6That said, previous cases make it clear that the Plaintiffs’ request is not unprecedented or extraordinary. In Vester v. Boston Scientific Ltd., 2017 ONSC 2498, the plaintiffs were awarded a total of $850,000, including disbursements totalling $433,020. In Martin v. AstraZeneca Pharmaceuticals PLC, 2012 ONSC 4666, aff’d 2013 ONSC 1169 (Div Ct), the successful plaintiffs were awarded a total of $655,407 in costs. In Lambert v. Guidant Corp., [2009] OJ No 5264 (Div Ct), the Plaintiffs were awarded a total of $650,000 in costs. The Divisional Court in Lambert commented, at para 11, that the defendants there, like those here, fought certification “every inch of the way”, and while they were entitled to do so, “[s]uch an approach…inevitably escalates costs significantly.”
7Counsel for the Plaintiffs concede that they produced a rather robust evidentiary record for the certification motion, but explain that this was necessary given the challenges to certification thrown up by the Defendants. The record addressed all of the contentious issues in the motion, in particular causation and commonality. Putting together an evidentiary record that establishes these features can be a complicated matter in a pharmaceutical products liability case. The evidence of Plaintiffs’ experts Dr. Gardner (pharmaco-epidemiologist), Dr. Hollander (psychiatrist), and Dr. Napier (neuropharmacologist), were all referenced by me in my judgment and were an important part of the case for the Plaintiffs.
8Certification is obviously a crucial stage in a proposed action. The claim itself is an important one, both for the class and the public at large. It relates the harmful side effects of a drug used to treat psychiatric disorders. The certification of the action impacts on the legal rights of many thousands of potential class members, given the number of prescriptions known to have been written for the medication. Moreover, the action raises the publicly important issue of drug safety and warnings by manufacturers to the consuming public.
9Further, in addition to the certification issues, the Plaintiff was forced to deal with a motion brought by two of the three Defendants alleging that the claim was identical to one already certified in Quebec. I went through that procedural history and will not repeat it here, but the evidence points to the Quebec plaintiff changing its pleading at the last moment and copying the present Plaintiffs’ pleading and framing the issues the same way as the present Plaintiffs, and not the other way around. For the sake of the class, it was important for Plaintiffs’ counsel to invest significant effort into ensuring that the Quebec claim, where significantly less work has been done than in the present case, was not the only national class action addressing the potentially harmful medication produced and marketed by the Defendants.
10In addition to all of that, the Court of Appeal has specified that the costs sought by a successful party must be within the reasonable expectation of the opposing side. As set out above, the Court indicated in that this is measured by “the amount of costs that an unsuccessful party could reasonably expect to pay.” Unfortunately, that amount is unclear from the Defendants’ cost submissions. That is, they each give a lower amount as a global figure, but those figures appear to be arbitrarily arrived at.
11The Defendants have provided me with no Bills of Costs or Costs Outline of their own, and have not mentioned in their written submissions what their own fees came to. They do indicate that their own disbursements for expert fees came to $214,671.64, which is less than the $366,149.88 that the Plaintiffs spent on experts. That one piece of information, however, does not tell me enough.
12The Defendants were represented by three large law firms, each with substantial legal teams. The Plaintiffs were represented by a well-regarded, but not particularly large firm, and had one senior and one junior lawyer on the case. Plaintiffs had the burden in a certification motion of demonstrating the strength of their case and so retained the experts they thought they needed for the evidentiary record and to assist their relatively small legal team in coming to grips with the scientific evidence.
13The Defendants had the reactive role in the motion, and retained the experts they thought they needed to respond to the Plaintiffs and to assist their larger legal team. I would surmise, although I cannot know for sure since I do not have a Bill of Costs or Costs Outline from any of Defendants’ counsel, that what the Plaintiffs spent in expert fees was more than compensated for on the Defendants’ side by legal fees that are a good deal higher than the $338,921.47 claimed by the Plaintiffs.
14In Ristorto v. State Farm Mutual Automobile Insurance Co. (2003), 64 OR (3d) 135, Winkler J. (as he then was) indicated that where the unsuccessful party does not provide a Bill of Costs or Cost Outline, the court is effectively deprived of the best comparator for evaluating their submission that the successful party spent too much on the file. Justice Winkler specifically observed that it provides “useful context for the process if the court had before it the bills of all counsel when allegations of excess and ‘unwarranted over-lawyering’ are made”: Ibid., at para 10. Where no Bill of Costs or Costs Outline is submitted by counsel who are then critical of successful counsel’s investment of time in the matter, the criticism is not particularly cogent. In fact, this kind of critique has been characterized as “no more than an attack in the air”: Ganie v. Ganie, 2016 ONSC 1831, at para 33, citing Ristorto, at para 10.
15Given the complexity of the case, the self-evidently large quantity of work put into it not only by Plaintiffs’ counsel but by Defendants’ counsel, the voluminous record with multiple expert witness reports on both sides, and the size of the class and amount at stake in the case, it stands to reason that the request by Plaintiffs’ counsel must have been within the reasonable expectations of the Defendants. As already indicated, it is not out of line with costs awarded in other certification motions raising important and complex issues.
16This was a hard-fought motion on all sides. I am confident that Defendants’ counsel were expecting to be awarded a substantial amount in costs if successful; indeed, just one of the Defendants’ firms, let alone all three, might have sought costs equal to or greater than what Plaintiffs’ counsel are requesting. They certainly ought to have expected the Plaintiffs to likewise be awarded a substantial amount in costs if successful.
17The Bill of Costs establishes that Plaintiffs’ counsel invested considerable time into investigating, preparing, and presenting the case and responding to the many challenges posed by the three sets of Defendants. That investment paid dividends in the result of the motions. I see no reason to second-guess the amount of time that counsel put into a matter that resulted in success in both the certification motion and in the stay motion.
Allocation of Costs
18Counsel for the Defendants, H. Lundbeck A/S and Lundbeck Canada Inc. (“Lundbeck”), point out, correctly, that their clients did not bring the stay motion as the Quebec claim had already been discontinued as against them. Accordingly, the costs of the stay motion are to be borne by Bristol-Myers and Otsuka without participation by Lundbeck.
19It is difficult to discern from Plaintiffs’ counsel’s Bill of Costs precisely how much is attributable to the stay motion as opposed to the certification motion. Counsel for Lundbeck submit that the Bill of Costs contains one specific amount - $17,019.50 for preparing the Responding materials for the stay motion – and that the rest must be deduced from the Bill, as follows:
Approximately one quarter of the hearing was devoted to the Stay Motion. The total for all the work contained in section G of the Plaintiffs’ Bill of Costs is $54,000 (rounded). A reasonable estimate is that approximately one quarter, or $13,500 was devoted to the Stay Motion. This produces a combined total of $30,519.50 of costs of the Plaintiffs referable only to the Stay Motion ($17,019.50 + $13,500).
20I am willing to accept this logic. Using round figures, I will attribute $30,000 to the costs of responding to the stay motion. That amount is included in the overall award to the Plaintiffs, but is to be borne equally by Bristol-Myers and Otsuka, without participation of Lundbeck.
Disposition
21The Defendants are to pay the Plaintiffs $366,149.88 in disbursements (inclusive of HST where applicable), plus $333,850.12 in fees (inclusive of HST), for an all-inclusive payment of $700,000. Of this amount, $670,000 is payable jointly and severally among all three sets of Defendants, and $30,000 is payable jointly and severally between Bristol-Myers and Ostuka.
Date: June 19, 2020 Morgan J.