COURT FILE NO.: CV-13-483540-00CP

DATE: 2020/11/19

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

Emrys Davis for 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

Proceedings under the Class Proceedings Act, 1992

HEARD: November 19, 2020

PERELL, J.

REASONS FOR DECISION

1. Introduction

[1] In this already-certified competition law class action, settlements or discontinuances have been reached and approved against six 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”) (5) Toshiba Corporation, Toshiba America Electronic Components, Inc. and Toshiba of Canada Limited (collectively “Toshiba”) and (6) Maxell Holdings, Ltd. (formerly Hitachi Maxell Ltd.) and Maxell Corporation of America (collectively “Maxell”). The settlements to date total $13.0 million.

[2] The Plaintiffs, Khurram Shah and Alpina Holdings Inc., have now reached a settlement with Panasonic Corporation, Panasonic Corporation of North America, Panasonic Canada Inc., and Sanyo Electric Co., Ltd. (collectively “Panasonic”), and the Plaintiffs 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 hearing. With the Panasonic settlement, the settlements would total $21 million.

2. Background to the Class Action

[3] 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”).

[4] 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.

[5] 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.

[6] 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]

[7] 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 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 existed, 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]

[14] The Plaintiffs were granted leave to appeal to the Ontario Court of Appeal on the umbrella purchaser issue. 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 and was denied.[^7]

[15] While the certification contest was raging, Class Counsel reached settlements with NEC, Samsung, and Sony. The action was re-certified for settlement purposes, and the settlements were approved.[^8] Subsequently, settlements were reached with LG Chem, Toshiba, and Maxell, and the settlements were approved.[^9]

[16] In the context of the NEC, Samsung and Sony settlements, the notice of settlement approval as well as the related court orders specified that there would be only one opportunity to opt-out of the action. No opt-out requests were received.

[17] The Plaintiffs have now reached a settlement with Panasonic.

[18] In May 2020, as part of a motion to amend the claim and the certification order in the contested Ontario action, the Ontario class definition was amended to exclude Quebec residents. The Ontario class was amended to:

Non-Umbrella Purchasers:

All persons in Canada, except for Quebec, who, between January 1, 2000 and December 31, 2011 (the "Class Period"), purchased a Lithium Battery* manufactured by the Defendants and/or any of the following products containing a Lithium Battery manufactured by the Defendants: (1) notebook computers**; (2) cell phones, including smartphones***; (3) tablet computers; (4) e-book readers; (5) MP3 players; (6) personal digital assistants; (7) handheld GPS; (8) handheld video players; and/or (9) lithium ion battery packs (collectively "LIB Products"). Excluded from the class are the Defendants and the Defendants' present and former parents, predecessors, subsidiaries and affiliates.

Umbrella Purchasers:

All persons in Canada, except for Quebec, who, between January 1, 2000 and December 31, 2011 (the "Class Period"), purchased a Lithium Battery* not manufactured by the Defendants and/or any of the following products containing a Lithium Battery not manufactured by the Defendants: (1) notebook computers**; (2) cell phones, including smartphones***; (3) tablet computers; (4) e-book readers; (5) MP3 players; (6) personal digital assistants; (7) handheld GPS; (8) handheld video players; and/or (9) lithium ion battery packs (collectively "LIB Products"). Excluded from the class are the Defendants and the Defendants' present and former parents, predecessors, subsidiaries and affiliates.

*a Lithium Battery is a cylindrical, pouch or prismatic rechargeable battery cell which uses lithium-ion technology.

**for greater certainty, a notebook computer includes a laptop computer

***excluding cell phones acquired as part of a cellular phone service contract

[19] The notice of certification was to be mailed following the final resolution of all appeal proceedings arising from the May 2020 endorsement to any person who has inquired with Class Counsel about the Canadian Proceedings or to anyone who had registered to receive updates from Class Counsel. However, the notice of certification was not mailed, as Class Counsel were on the cusp of reaching an agreement with Panasonic once the appeal period had passed.

[20] Accordingly, in an effort to streamline the notice process, Class Counsel now intend to send only one notice to advise class members of the order in the contested certification and of the Panasonic Settlement Agreement. The long-form Notice of Hearing incorporates the pertinent details from the notice of certification and the Plan of Dissemination encompasses the Class Members that would have received a notice of certification.

3. Background to the Settlements

[21] On October 1, 2020, the Plaintiffs entered into a settlement agreement with Panasonic whereby Panasonic agrees to pay USD $6,295,000, which converts to approximately CAD $8.2 million. The settlement also releases claims against Sanyo Energy (U.S.A.) Corporation and Sanyo North America Corporation.

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

a. the Settlement Amount 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; and,

c. the parties will consent to certification, solely for settlement purposes.

[23] For the purposes of the Settlement Agreement, the proposed Ontario Settlement 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 and *****Persons who are included in the *****Quebec Settlement Class.

*Lithium Batteries means cylindrical, prismatic or polymer batteries that are rechargeable and use lithium ion technology, excluding lithium-ion rechargeable batteries designed for use in automobiles or other vehicles.

**Lithium Battery Products means the following products that contain Lithium Batteries notebook or laptop computers, cellular phones including smartphones (excluding cellular phone acquired as part of a cellular phone service contract), tablet computers, e-book readers, MP3 players, personal digital assistants, handheld GPS, handheld video players and/or lithium ion battery packs.

***Class Period means January 1, 2000 to January 1, 2012.

**** 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.

*****Person means an individual, corporation, partnership, limited partnership, limited liability company, association, joint stock company, estate, legal representative, trust, trustee, executor, beneficiary, unincorporated association, government or any political subdivision or agency thereof, and any other business or legal entity and their heirs, predecessors, successors, representatives, or assignees.

****** Quebec Settlement Class means all Persons in Quebec who purchased Lithium Batteries and/or Lithium Battery Products in Canada during the Class Period, except the Excluded Persons.

[24] For the purposes of the Settlement Agreement, the Plaintiffs propose that this action be certified for settlement purposes only, on the basis of the following common issue:

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] The proposed common issue is very similar to the common issues already certified by this Court, which ask: “[…] did the defendants and/or any unnamed co-conspirators conspire, agree or arrange with each other to fix, maintain, increase or control the price of Lithium Batteries? Did Class Members suffer loss or damage as a result?

[26] The Settlement Agreement is conditional upon approval of the Ontario Court and Quebec Court. The parallel British Columbia class action will be dismissed as against the Settling Defendants and other Releasees who are named as Defendants in the BC Proceeding.

4. The notice plan

[27] The Plaintiffs and Panasonic have agreed on the form and content of the Notices of Hearing and a plan for disseminating the Notices of Hearing. The Plaintiffs seek approval of several notices; namely:

a. Publication Notice of Hearing – This notice is designed with simple graphics and minimal text. Its purpose is to draw the attention of Class members and direct them to the settlement website for more information. The publication notice will be published in a national newspaper, and two French newspapers and will be sent to industry associations (serving retailers and information technology professionals) for voluntary distribution to their memberships. As the right to opt-out has already been provided, the Plan of Dissemination includes a smaller list of newspapers than the Plan of Dissemination approved in respect of the first round of settlements.

b. Short-form Notice of Hearing – This notice advises Class Members of the basic terms of the Settlement Agreement and the distribution protocol and their rights to participate in the settlement approval and distribution protocol approval hearings. The short-form Notice of Hearing will be sent by direct mail or email to the direct purchaser customers of the Settling Defendants, and persons who have registered with class counsel to receive updates about the action.

c. Long-form Notice of Hearing – This notice provides the same categories of information as the short-form notice, but in greater detail.[^10] It also advises Class Members about the status of the contested litigation and distribution protocol. This notice will be posted on class counsel’s websites and sent to any person who requests it.

5. Certification for Settlement Purposes

[28] Although this action has already been certified after a contested certification motion, the Plaintiffs now seek certification for settlement purposes.

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

[30] 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.

[31] 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.

[32] 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.[^11]

[33] 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.

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

Perell, J.

Released: November 19, 2020.

COURT FILE NO.: CV-13-483540-00CP

DATE: 2020/11/19

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 19, 2020

[^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]: Panasonic Corp. v. Shah, [2018] S.C.C.A. No. 520

[^8]: Shah v. LG Chem, Ltd., 2018 ONSC 6106.

[^9]: Shah v. LG Chem, Ltd., 2019 ONSC 554; Shah v. LG Chem, Ltd., 2019 ONSC 3453; and Maxell Holdings, Ltd. (formerly Hitachi Maxell Ltd.) and Maxell Corporation of America (collectively “Maxell”).

[^10]: Ibid., para. 19(c).

[^11]: Osmun v. Cadbury Adams Canada Inc., [2009] O.J. No. 5566 at para. 21 (S.C.J.).