COURT FILE NO.: CV-19-00625030-00CP
DATE: 20210723
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
RINA DEL GIUDICE and DANIEL WOOD
Plaintiffs
- and -
PAIGE A. THOMPSON, CAPITAL ONE FINANCIAL CORPORATION, CAPITAL ONE BANK (CANADA BRANCH), CAPITAL ONE (SERVICES) CANADA INC., CAPITAL ONE, N.A., CAPITAL ONE BANK (USA), N.A., GITHUB, INC., AMAZON WEB SERVICES INC., AND AMAZON WEB SERVICES (CANADA) INC.
Defendants
John A. Campion, R. Douglas Elliott, Chris Macleod, Hugh Scher, Glyn Hotz and Darrel Hotz for the Plaintiffs
Sarah Armstrong, Alex Cameron, Vera Toppings and Pavel Sergeyev for the Defendants Capital One Financial Corporation, Capital One Bank (Canada Branch), Capital One (Services) Canada Inc., Capital One, N.A., Capital One Bank (USA), N.A.
Proceeding under the Class Proceedings Act, 1992
HEARD: In writing
PERELL, J.
REASONS FOR DECISION - COSTS
[1] This is a costs decision with respect to two motions. More precisely, it is a reconsideration of a $112,500 costs award that I made against the Plaintiffs Rina Del Giudice and Daniel Wood in favour of the Defendants Capital One Financial Corporation, Capital One Bank (Canada Branch), Capital One (Services) Canada Inc., Capital One, N.A., Capital One Bank (USA), N.A. (“Capital One”) on April 22, 2021.[^1]
[2] At a case management conference on May 13, 2021, I set aside that costs decision, pursuant to the following file direction, which stated:
This is a case conference. I recently released a costs decision in favour of Capital One with respect to several interlocutory motions. It now appears that I misapprehended that the parties had completed their costs submissions. The Plaintiffs are seeking leave to appeal my decision because they did not have the opportunity to respond. In these circumstances, I am setting aside my decision, which has not yet been entered, and I invite the parties to submit further submissions.
The parties have accepted this invitation, and I understand that the Plaintiffs will withdraw their motion for leave to appeal. The timetable for further submissions is as follows: (1) Plaintiffs’ submissions by June 15, 2021; (2) Capital One’s responding submissions by June 30, 2021; and (3) Plaintiffs’ reply submissions by July 15, 2021.
[3] My original costs decision was as follows:
This is a costs decision with respect to two motions.
In this proposed class action under the Class Proceedings Act, 1992,[^2] the Plaintiffs Rina Del Giudice and Daniel Wood allege that on March 22 or 23, 2019, the Defendant Paige Thompson, who was then a computer programmer at Amazon, hacked the data base of the Defendants Capital One Financial Corporation, Capital One Bank (Canada Branch), Capital One (Services) Canada Inc., Capital One, N.A., Capital One Bank (USA), N.A. (collectively “Capital One”).
The putative Class is seeking compensation of $0.25 trillion.
The Capital One Defendants claim costs for two motions; namely a refusals motion and motion for an interlocutory injunction; visualize:
a. In March 2021, the Plaintiffs brought a motion for an injunction seeking to enjoin a proposed communication from the Capital One Defendants to the Putative Class Members, who are or were their customers.
b. The Capital One Defendants resisted the motion, and they relied on a four-paragraph affidavit from Carolyn Flanagan, who is an associate lawyer at Fasken Martineau DuMoulin, LLP, the lawyers for Capital One.
c. Ms. Flannigan was cross-examined at length on March 10, 2021. The transcript is 153 pages of 388 questions and an insufferable number of vile exchanges between counsel. Ms. Flannigan answered 311 questions. She refused to answer 77 questions.
d. The Plaintiffs brought a refusals motion. The motion was dismissed in its entirety.[^3]
e. Subsequently, the Plaintiffs’ motion for an injunction was dismissed in its entirety.[^4]
Capital One requests costs of $135,000, all inclusive, on a substantial indemnity basis or in the alternative costs of $112,500, all inclusive, on a partial indemnity basis.
Notwithstanding that they lost both motions, unabashedly, the Plaintiffs submit that they should be awarded costs of $15,000 because they secured their objective of having the court review the notice that Capital One had intended to distribute to putative Class Members.
In unabashedly asking for costs, the Plaintiffs also take credit for being the catalyst for my obiter postface comments about best practices in matters of giving notice to putative Class Members.
Notwithstanding the courage of their convictions about claiming costs, I understand that the Plaintiffs are not proud of what occurred during Ms. Flannigan’s cross-examination.
In any event, there is no basis for the Plaintiffs to assert any sort of success on either motion. The Plaintiffs lost both motions. Capital One is entitled to its costs, which I award on a partial indemnity basis.
When the dust settles, all that occurred in the immediate case is that the Plaintiffs brought two motions that failed in a proposed class action where the Plaintiffs claim $0.25 trillion in compensation.
The Plaintiffs must pay the normal price of failure in high stakes litigation.
The Plaintiffs’ failure was of the abysmal sort. The Plaintiffs’ motions were ill-advised and meritless, and the Plaintiffs took unreasonable, overreaching, and legally unavailable positions.
That said, it is an adversarial process, and the litigation cost of an abysmal failure is to waste one’s own legal resources and to also to have to pay spoils to the winner.
The Plaintiffs did not treat their own motions as trivial matters, and they would have reasonably expected that Capital One would respond in kind. It should be no surprise that in these circumstances, the two motions would expose the Plaintiffs to a non-trivial award of costs.
The Plaintiffs did not dispute Capital One’s Bill of Costs. The Plaintiffs did not submit a Bill of Costs of their own, and it was bold of them to claim success and to claim costs.
Having reviewed the Defendants’ bill of costs, I award Capital One costs on a partial indemnity basis of $112,500, all inclusive, payable within sixty days.
[4] I have reconsidered:
a. Capital Ones’ Costs Submissions dated April 12, 2021; and
b. The Plaintiffs’ Costs Submissions dated April 12, 2021.
[5] I have now considered:
a. The Plaintiffs’ Costs Submissions dated June 15, 2021;
b. Capital One’s Costs Submissions dated June 30, 2021; and,
c. The Plaintiffs’ Reply Costs Submissions dated July 14, 2021.
[6] Having reconsidered and considered all the costs submissions, for the following reasons, I award Capital One costs on a partial indemnity basis of $112,500, all inclusive, payable within sixty days plus $12,500 for its costs submissions for a total award of $125,000, payable within sixty days.
[7] In their costs submissions of June 15, 2021, the Plaintiffs seek costs be fixed at $18,000 and payable in the cause, which is to say that although they lost the refusals motion and their interlocutory injunction motion, they would receive costs should they be successful on the merits of I presume the certification motion, failing which Capital One would receive its costs. Thus, the Plaintiffs have abandoned their request for costs of $15,000 payable to them forthwith.
[8] In the circumstances of this case, I would not exercise the court’s discretion in either fashion particularly because the Plaintiffs lost both the refusals motion and the injunction motion, both of which were unnecessary, wasteful motions that were deplorably prosecuted. Both motions never should have been brought. Both added nothing but bad practice.
[9] Capital One had a strong case for a punitive costs award in any event of the cause; however, I have decided that rather than a punitive award, I should treat its claim for costs having regard to the principle that one of the factors the court may consider in awarding costs under rule 57.01 is whether any step in the proceeding was improper, vexatious, unnecessary, or taken through negligence, mistake, or excessive caution. All of those factors were engaged with respect to the Plaintiffs’ refusal motion and its unnecessary motion to enjoin Capital One from giving notice to 51,000 putative Class Members of the data breach that occurred in 2019 and its costs submissions.
[10] Given that five senior lawyers seem to have been involved in preparing and submitting the Plaintiffs’ costs submission, the Plaintiffs’ submission that Capital One’s “claim for costs reflects an egregious display of over-lawyering” for “responding to two simple motions in the context of a class action of unprecedented importance”, is all of cynical, bombastic, ironic, and mistaken.
[11] The injunction motion was not simple. It was, however, unnecessary, overreaching, unproductive, rude, and unsuccessful. The motion necessitated Capital One defending itself not only on the merits but also from being demonized, and it necessitated Capital One’s lawyers to defend themselves from demonization and allegations of professional misconduct.
[12] Unfortunately, both Capital One and its lawyers have been called on again to defend themselves in order to respond to the Plaintiffs’ propagandistic counterfactual costs submissions.
[13] I agree with what Capital One submits in paragraphs 16 and 26 of its costs submissions:
The costs claimed by Capital One are reasonable and proportionate for a time sensitive, business-critical, serious and aggressively pursued injunction motion and a related refusals motion brought within the context of what the Plaintiffs repeatedly describe as a “[proposed] class action of unprecedented importance.” As set out at greater length in the Capital One Main Costs Submissions, the costs incurred by Capital One are directly related to the unreasonable and abusive litigation steps adopted by the Plaintiffs, which required Capital One to respond simultaneously on multiple fronts (requiring the involvement of multiple lawyers), defend its own conduct and reputation, and respond to the repeated changes to the positions taken by the Plaintiffs.
The Plaintiffs’ allegation that Capital One “over lawyered” this matter is without merit. As set out in the Capital One Main Costs Submissions, throughout their prosecution of the Motion to Enjoin and the Refusals Motion, the Plaintiffs and their counsel undertook numerous unreasonable, overreaching and abusive litigation steps, which required Capital One to respond simultaneously on multiple fronts and respond to the repeated changes to the positions taken by the Plaintiffs. Capital One was also required to respond to a litany of unfounded allegations from the Plaintiffs and their counsel impugning the character and reputation of both Capital One and its counsel.* As a result, Capital One was required to engage a legal team consisting of multiple lawyers with the necessary experience to adequately respond to the Plaintiffs’ unreasonable litigation strategy and unfounded allegations. It should not have come as a surprise to the Plaintiffs that Capital One would put its best foot forward in responding to their motions and that, if unsuccessful, their motions would expose the Plaintiffs to a significant costs award.
* As set out at paragraph 64 of the Capital One Main Costs Submission, the following were among allegations of improper conduct, dishonesty, conspiracy and deceit made against Capital One and its counsel during Ms. Flanagan’s cross-examination: (a) that counsel for Capital One had entered into a “secret agreement” with counsel for the other Corporate Defendants; (b) that counsel for Capital One, along with counsel for the other Corporate Defendants, attempted to intentionally mislead Plaintiffs’ counsel and this Court in connection with the Sealing Motion in an attempt to improperly adduce evidence at Phase I of the certification motion; (c) that the security systems in place at counsel for Capital One’s law firm were inadequate and that the Thompson Post might be improperly accessed and/or publicly disclosed by counsel, its staff or unauthorized third parties; (d) that counsel for Capital One waived privilege in its email to Plaintiffs’ counsel dated February 24, 2021.
[14] I also agree with Capital One’s submission that Plaintiffs’ Counsel engaged in reprehensible, scandalous and outrageous conduct by: (a) advancing numerous allegations of improper conduct, dishonesty, conspiracy and deceit against Capital One and its counsel, including through an improper cross-examination, (b) proceeding to bring a meritless refusals motion based on that cross-examination, and then (c) attempting to co-opt Capital One’s intended notice to the Additional Individuals in order to promote their proposed class action directly to putative class members through Capital One as their spokesperson.
[15] I confirm my initial determination of costs and add that Capital One should have its costs for the costs submissions. I fix those costs at $12,500. In the result, I award Capital One $125,000, all inclusive, payable within sixty days.
[16] Order accordingly.
Perell, J.
Released: July 23, 2021
COURT FILE NO.: CV-19-00625030-00CP
DATE: 20210723
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
RINA DEL GIUDICE and DANIEL WOOD
Plaintiffs
- and -
PAIGE A. THOMPSON, CAPITAL ONE FINANCIAL CORPORATION, CAPITAL ONE BANK (CANADA BRANCH), CAPITAL ONE (SERVICES) CANADA INC., CAPITAL ONE, N.A., CAPITAL ONE BANK (USA), N.A., GITHUB, INC., AMAZON WEB SERVICES INC., AND AMAZON WEB SERVICES (CANADA) INC.
Defendants
REASONS FOR DECISION
PERELL J.
Released: July 23, 2021
[^1]: Del Giudice v. Thompson, 2021 ONSC 3001 [^2]: S.O. 1992, c. 6. [^3]: Del Giudice v. Thompson, 2021 ONSC 2015. [^4]: Del Giudice v. Thompson, 2021 ONSC 2206.