ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
KHALID EIDOO and CYGNUS ELECTRONICS CORPORATION
Plaintiffs
– and –
INFINEON TECHNOLOGIES AG, INFINEON TECHNOLOGIES CORPORATION, INFINEON TECHNOLOGIES NORTH AMERICA CORPORATION, HYNIX SEMICONDUCTOR INC., HYNIX SEMICONDUCTOR AMERICA INC., HYNIX SEMICONDUCTOR MANUFACTURING AMERICA, INC., SAMSUNG ELECTRONICS CO., LTD., SAMSUNG SEMICONDUCTOR, INC., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG ELECTRONICS CANADA INC., MICRON TECHNOLOGY, INC. MICRON SEMICONDUCTOR PRODUCTS, INC. o/a CRUCIAL TECHNOLOGIES, MOSEL VITELIC CORP., MOSEL VITELIC INC. and ELPIDA MEMORY, INC.
Defendants
Jonathan Foreman for the Plaintiffs
Proceeding under the Class Proceedings Act, 1992
HEARD: November 20, 2020
PERELL, J.
REASONS FOR DECISION
[1]
Introduction
This is the closure motion in this national class action brought under the Class Proceedings Act, 1992.1
2Ontario Class Counsel seeks an order: (a) approving a cy-près distribution of surplus funds; (b) discharging the claims administrator, RicePoint Administration Inc. (“RicePoint”) after the distribution of the surplus funds; and, (c) confirming the payment of the final disbursements of Ontario Class Counsel, which were incurred in the course of completing the claims distribution process.
3Parallel orders were sought and have been granted by Justice Gagnon of the Cour Supérieure du Québec on September 4, 2020 and by Justice Masuhara of the Supreme Court of British Columbia on November 4, 2020,2 with whom it has been a privilege and pleasure to co-operatively case manage these parallel class actions.
[4]
Background
The background facts for this motion are as follows:
a. On February 3, 2005, this action was commenced in Ontario by Harrison Pensa LLP. Class Counsel subsequently transitioned to Foreman & Company and Strosberg Sasso Sutts LLP.
b. Parallel actions were brought in the Supreme Court of British Columbia, Pro-Sys Consultants Ltd. v. Infineon Technologies AG, and in the Cour Supérieure du Québec, Option Consommateurs c. Infineon Technologies AG. The three actions were prosecuted by a consortium of Class Counsel.
c. The National Class Actions focused on price-fixing of dynamic random-access memory (“DRAM”), an essential component in any computer.
d. The National Class Actions came to a successful resolution. The Representative Plaintiffs achieved settlements of approximately $80 million.
e. By Order dated October 20, 2014, I approved a distribution protocol, an administration protocol, and I appointed RicePoint as the claims administrator.
f. By Orders dated November 19, 2015 and June 10, 2016, I approved payments of all approved claims.
g. RicePoint distributed payments to a total of 915,409 claimants.
i. On December 11, 2015, 880,788 cheques for $20 each were mailed to claimants. Of those, 818,628 were cashed;
ii. On July 13, 2016, 34,621 cheques were mailed to the remaining claimants, of which 32,037 were cashed; and,
iii. On September 16, 2016, RicePoint issued 21,070 replacement cheques to claimants who did not cash their initial cheque. (RicePoint undertook the work necessary to update and verify replacement address information for all of those 21,070 claimants.)
h. In total, 95% of approved claimants cashed their respective cheques representing 98% of the settlement funds available for distribution to Class Members.
i. After taxes, disbursements and all other applicable expenses, the total net surplus funds available for distribution is $922,974.00.
j. Following the distribution of the settlement funds to Class Members, Class Counsel in Ontario and British Columbia prepared a plan to provide a portion of the residual funds to a series of organizations that specialize in refurbishing computer equipment for education needs for students, school boards, and First Nation communities.
k. Class Counsel in Québec proposed a slightly different process to allocate the Québec share of the surplus funds to a consumer protection project to be undertaken by Options Consommateurs, one of the plaintiffs in the Québec action.
l. Given the novelty of the Québec position, counsel for the National Class Actions agreed to pursue the Québec cy-près approval process first.
m. The Québec approval motion was heard on April 13, 2018. Mr. Justice Gagnon declined the approval of the Québec proposal.
n. Options Consommateurs sought an appeal to the Québec Court of Appeal. On December 10, 2019, Mr. Justice Gagnon’s order was upheld by the majority of the panel on the appeal, but with a dissenting judgment.
o. Options Consommateurs sought leave to appeal to the Supreme Court of Canada. Leave was denied on April 30, 2020.
p. With knowledge that the original Québec proposal would not be approved, the National Class Action counsel team convened and revised the national cy-près distribution plan that is now before the court.
[5]
Cy-près Distribution Plan
Under the revised plan that was approved by Justices Gagnon and Masuhara on November 4, 2020, the surplus funds are distributed to provincial and federal organizations that engage in work to promote increased accessibility to information technology to persons and organizations in need. In addition, under applicable Québec law, a levy is payable out of the Québec share of the Surplus Funds to the Fonds D’aide aux Actions Collectives. The allocation of the Surplus Funds is as follows:
Beneficiary
Surplus Funds to be Distributed
Renewed Computer Technology
$387,510.63
BC Technology For Learning Society
$193,755.32
Insertech
$193,755.32
Fonds D’aide aux Actions Collectives
$147,952.73
Total :
$922,974.00
6All reasonable efforts have been made to locate missing class members and to provide them with re-issued settlement cheques. Other than the Fonds D’aide aux Actions Collectives, which will receive a share of the surplus, all of the Proposed Recipients of the Surplus Funds perform work that has a rational connection to the subject matter of the DRAM price-fixing litigation. All of the recipients acquire technology products and specifically input components, including DRAM and other memory products, for the refurbishment of computer products. Those refurbished computer products are distributed to individuals and organizations in need across the country. The funds that the Proposed Recipients will receive cannot be feasibly distributed to the Class.
7The work of the Proposed Recipients has a public benefit. Their work targets delivery of computer and related technology products and services to an overlooked and in-need demographic category of persons and organizations within Canada including schools, First Nations bands, refugees, and individuals and families living with limited income.
a. Renewed Computer Technology (“RTC”) is a not-for-profit organization that specializes in restoring and distributing computers and running programs that teach communities about information and communication technology. RTC has partner organizations across Canada and has proposed to split the Surplus Funds between themselves and their provincial partners. The Surplus funds will be used to support youth interns’ work experience, transportation and delivery costs to remote areas, and to purchase parts to restore computers and replenish equipment that is ready for donation.
b. BC Technology for Learning Society (“BCTLS”) is a not-for-profit organization that specializes in information technology, distribution of refurbished computers to low income schools and First Nations communities and provides opportunities for youth. BCTLS has proposed to use the Surplus Funds to create a marketing plan designed to solicit more tech donations for future distribution, to purchase IT supplies to complete repairs on donated computer equipment, and to create a contingency fund for future expenditures.
c. Insertech is a federal not-for-profit organization, based in Québec. Insertech specializes in the sale of refurbished computers, the repair of devices and the cultivation of educational opportunities for youth and new Canadians. Insertech has established multiple special projects that benefit: (a) children in elementary schools by providing coding instruction; (b) young adults who are interested in technology through the creation of technology-related internships; (c) small businesses through the provision of refurbished electronics at discounted rates, and (d) members of the general public through the provision of instruction sessions focusing on the repair of electronic equipment in order to increase the useful life of personal electronic devices. Insertech has proposed to use the Surplus Funds to improve and sustain existing special projects, including: (a) a project to provide free technology to qualifying small businesses; (b) a project to distribute computers to full-time residents of old age homes; (c) a project to further technology-related education programs for elementary school students; (d) the completion of a project to create an educational video for families and households regarding coding and computer repair/assembly; and (e) creating a series of computer repair training sessions known as “Réparathons” across the city of Montréal.
8Pursuant to Québec law, a certain percentage of cy-près amounts are required to be paid to Les Fonds D’aide aux Actions Collectives which is an organization that helps bring financial aid to people or companies who intend to start a class action and the dissemination of information about such actions to the public. As prescribed by Québec law, Les Fonds D’aide aux Actions Collectives will receive 70% of the Surplus Funds designated for the Québec organization; i.e., 70% of $211,361.05 for a total of $147,952.73. All Québec-specific distribution items have been approved by Justice Gagnon.
[9]
Discharge of Claims Administrator
RicePoint has assisted with this action since being appointed by the court as the claims administrator in 2014. They completed the review, adjudication, and ultimate payment of approved claims in the National Class Actions. After the distribution to cy-près beneficiaries, RicePoint will have fulfilled all services under its court-appointed role as claims administrator. It is appropriate to discharge RicePoint as claims administrator following the distribution.
[10]
Class Counsel Disbursements
On June 30, 2016, this Court approved a hold-back of $25,000 from the distribution of settlement funds to pay for future disbursements incurred by counsel in the National Class Actions. Ontario Class Counsel have incurred disbursements of $6,631.91 during their mandate to finalize the claims distribution process. Ontario Class Counsel disbursements are standard disbursements which include agency fees, photocopies, courier, travel costs, long distance charges, and Westlaw expenses. Ontario Class Counsel’s disbursements are properly paid from the holdback previously approved by this Court.
11The Québec and British Columbia Courts approved Class Counsel’s disbursements on April 13, 2018 in the amount of $949.89 and November 14, 2019 in the amount of $5,096.68, inclusive of taxes, respectively. The total of all Class Counsel disbursements does not exceed the amount of the pre-approved $25,000 holdback.
[12]
Conclusion
For the above reasons, this closure motion in this national class action should be granted.
PERELL, J.
Released: November 26, 2020
COURT FILE NO.: 05-CV-4340CP
COURT FILE NO.: 10-CV-15178CP
DATE: 2020/11/26
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
KHALID EIDOO and CYGNUS ELECTRONICS CORPORATION
Plaintiffs
– and –
INFINEON TECHNOLOGIES AG, INFINEON TECHNOLOGIES CORPORATION, INFINEON TECHNOLOGIES NORTH AMERICA CORPORATION, HYNIX SEMICONDUCTOR INC., HYNIX SEMICONDUCTOR AMERICA INC., HYNIX SEMICONDUCTOR MANUFACTURING AMERICA, INC., SAMSUNG ELECTRONICS CO., LTD., SAMSUNG SEMICONDUCTOR, INC., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG ELECTRONICS CANADA INC., MICRON TECHNOLOGY, INC. MICRON SEMICONDUCTOR PRODUCTS, INC. o/a CRUCIAL TECHNOLOGIES, MOSEL VITELIC CORP., MOSEL VITELIC INC. and ELPIDA MEMORY, INC.
Defendants
REASONS FOR DECISION
PERELL J.
Released: November 26, 2020
Footnotes
- S.O. 1992, c. 6.
- There is a typographical error in the British Columbia order with respect to the amounts to be paid to the Renewed Computer Technology provincial partners in Ontario and Manitoba. The BC Order is currently being revised to accord with the amounts approved in Québec and the amounts before this Court for approval.