Court File and Parties
COURT FILE NO.: 1899/15CP DATE: 20210810 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Sean Allott, Plaintiff AND: Panasonic Corporation; Panasonic Corporation of North America; Panasonic Canada Inc.; KOA Corporation; KOA Speer Electronics, Inc.; ROHM Co. Ltd.; ROHM Semiconductor U.S.A., LLC.; Vishay Intertechnology, Inc.; Hokuriku Electric Industry Co.; HDK America Inc.; Kamaya Electric Co., Ltd.; Kamaya, Inc.; ALPS Electric (North America), Inc.; Midori Precisions Co., Ltd.; Midori America Corporation; Susumu Co., Ltd.; Susumu International (USA) Inc.; Tokyo Cosmos Electric Co.; and TOCOS America, Inc., Defendants
BEFORE: Justice R. Raikes
COUNSEL: Jonathan Foreman, Linda Visser, Jean-Marc Metrailler, and Sarah Bowden - Counsel for the Plaintiff Sandra Forbes and Maura O’Sullivan – Counsel for the Kamaya Defendants Katherine Kay and Sinziana Hennig – Counsel for the KOA Defendants Paul Martin – Counsel for the ROHM Defendants Donald Houston and Gillian Kerr – Counsel for Vishay Robert Tighe and Paul Wearing – Counsel for Hokuriku and HDK Kyle Taylor, James C. Orr, and Annie Tayyab – Counsel for the ALPS Defendants Kevin Wright, Todd Shikaze, and Wendy Sun – Counsel for the Susumu Defendants David Kent and Samantha Gordon – Counsel for the Tokyo and TOCOS Defendants
HEARD: July 6, 2021
ENDORSEMENT
[1] The KOA, ROHM, Hokuriku, and Susumu defendants move for directions pursuant to s. 12 of the Class Proceedings Act, 1992 to temporarily suspend the plaintiff’s certification motion and steps leading to it in this action pending determination of the certification motion in Cygnus Electronics Corporation and Sean Allott v. Panasonic Corporation et al, Court File No. 3795/14CP (hereafter “the Cygnus action”).
[2] This action and Cygnus action are proposed price fixing class proceedings. Both involve electronic components found in everyday electronic products like computers, laptops, etc.. This action deals with linear resistors. The Cygnus action deals with capacitors. Counsel for the plaintiffs is common to both actions. Only the ROHM defendants are also defendants in the Cygnus action.
[3] The claim periods in the two actions overlap but are not the same. In this action the claim period is from July 9, 2003 to September 11, 2015, and in the Cygnus action, the claim period is September 1, 1997 to December 31, 2014. There is no allegation that the two alleged conspiracies are related to one another. Each action involves a separate stand-alone conspiracy involving largely different defendants for different products.
[4] The two actions have tortured procedural histories that show little progress beyond partial settlements and/or discontinuances against some defendants. The moving defendants attribute that lack of progress, in part, to strategic decisions made by plaintiff’s counsel as to which action to advance and when. It appeared to defence counsel in this action that plaintiff’s counsel prioritized the Cygnus action and was allowing this action to follow in its wake.
[5] The certification motion in Cygnus is more advanced. The defendants have served and filed their responding materials including expert affidavits addressing whether the plaintiffs’ expert has provided a viable and workable methodology for calculating damages on an aggregate basis. Cross-examinations on the affidavits filed for the certification are substantially complete save for cross-examinations of the experts. The defendants contend that there are outstanding undertakings from the cross-examination of the plaintiffs. No dates have been set for argument of the certification motion in Cygnus.
[6] By contrast, the plaintiff served his certification materials in this action in June 2020. The defendants have not yet responded to that motion. Requests have been made by plaintiff’s counsel to set a schedule for the steps to the hearing of the certification motion that have yielded no results beyond this motion.
[7] The moving defendants submit that it would be more efficient to await the outcome of the certification motion in Cygnus because,
The allegations in the two actions are substantially similar.
The plaintiffs have served expert reports dealing with the methodology by which damages may be calculated on an aggregate basis. The same expert is used in both actions (Dr. Reutter).
The reports of Dr. Reutter are substantially similar. He outlines the same or very similar methodologies to calculate damages on an aggregate basis for primary and secondary purchasers.
Dr. Reutter uses some of the same sources for information relied upon for both reports.
The Supreme Court of Canada released its decision in Godfrey v. Sony et al, 2019 SCC 42. and my decision in Cygnus will likely be the first decision to apply the principles in Godfrey to assess the adequacy of the expert evidence and the methodology proposed by Dr. Reutter.
My decision and analysis in Cygnus will inform the approach taken by the defendants in this action. It is virtually certain that my decision in Cygnus will lead the defendants to amend, supplement or redo their evidence in this action.
There is a real prospect that whatever schedule is set in this matter will be disrupted if, as expected, new or amended evidence is filed. That may well scuttle any scheduled hearing date for certification in this action.
Such a disruption will lead to duplication of effort and needless expenditure of resources by the parties and court. The brief delay requested is “worth the wait” per Morgan J. in David v. Loblaw, 2018 ONSC 7519, at para. 24.
Efficiency and timeliness will be achieved by the requested temporary stay.
[8] The plaintiff opposes the requested temporary stay. He asserts that the defendants have already had a year to respond to his certification motion. The plaintiff’s expert is the same expert whose approach and methodology were accepted by the Supreme Court of Canada in Godfrey and by the Ontario Court of Appeal in Shah v. LG Chem, 2018 ONCA 819. There is no compelling reason to pause the certification motion in this action; in fact, there is good reason to push this matter forward. It has already taken far too long to get where it has. The plaintiff class will be prejudiced by further delay as it will make proving the case more difficult the older it is.
Analysis
[9] It is commonplace that actions involving substantially the same issues proceed apace on separate tracks. Each arrives at its destination – hearing or resolution – in its own time. Where the same parties are involved, the Rules provide a mechanism to permit two or more actions to be consolidated or tried together. That is done for reasons of efficiency and to avoid the risk of inconsistent findings.
[10] While the claims asserted in these two actions are similar, the parties are not, the product is different, the time period in question differs, and there is no factual overlap between them. The two conspiracies are not intertwined with one another. Joining the two actions through consolidation or trial together is not applicable.
[11] I have carefully reviewed the expert reports of Dr. Reutter filed in the two actions. I agree with counsel for the moving parties that there are substantial similarities in the approach taken and the methodologies advanced. That is hardly surprising given the nature of the two products at issue, their uses, markets, and the nature of the claims. They are not identical, however.
[12] In Aria Brands v. Air Canada, 2012 ONSC 4773, Leitch J. distinguished taking a pause to wait on a ruling by the Supreme Court of Canada on an issue central to the case versus a pause to resist setting a schedule leading up to the certification motion. In that case, the Supreme Court was scheduled to hear an appeal on key issues relevant to the action before her and that appeal was to happen within weeks of the already scheduled certification hearing date. She noted the circumstances were “very unique”.
[13] In my view, a decision to pause is not restricted to “rare” cases but neither is it to be granted as a matter of routine. The court must take a common-sense approach consistent with access to justice and judicial economy.
[14] The cases cited and relied upon by the defendants all involve stays granted pending an appellate decision on issues material to the claim before the court. That is not this case. Further, based on my experience and my review of class action cases, it is almost inevitable that whatever my decision in Cygnus, there will be an appeal or motion for leave to appeal. Were I to accede to the defendants’ request, this matter would likely be further delayed pending that appeal. The spectre of indefinite delay is very real.
[15] This action has limped along for far too long. Some of that delay rests firmly with plaintiff’s counsel. That does not mean that further delay is unexceptional or less concerning. The case does not improve with the passage of time and it is unfair and potentially prejudicial to the plaintiff class to delay certification – a procedural motion – indefinitely. See Osmun v. Cadbury Adams Canada Inc., (September 20, 2011 Scheduling Direction, Toronto Court File No. 08-CV-347263PD2). It is also unfair to the remaining defendants who continue to face litigation with no end in sight. I appreciate the defendants’ willingness to bear having the litigation take longer but the justification offered for doing so is not, in my view, sufficient to warrant a stay.
[16] Had the defendants marshalled and served their responding certification materials sooner, they might well have been able to catch up or even be first to a certification hearing. They have not done so.
[17] I do not agree that judicial economy will be served by temporarily staying the steps leading to certification pending my decision in Cygnus. The certification motion in Cygnus has not been set. The suggestion that material filed in this action for the certification motion will have to be revised or supplemented is speculative. So too is the prospect of having to adjourn the certification motion in this case.
[18] This motion comes before me under s. 12 of the CPA. I have a broad discretion to make orders respecting the conduct of the proceeding to ensure its fair and expeditious determination. In exercising my discretion, I find that this action must move forward to certification with reasonable dispatch and a stay should be declined. Indefinite delay of the certification motion will not achieve judicial economy, fairness, or access to justice.
[19] The defendants have had a year plus to serve and file their responding material for the certification motion. I direct the defendants to do so on or before October 29, 2021 at 4 p.m.. In the meantime, counsel will confer to see whether they can agree on a timetable for the remaining steps to certification. If they cannot agree by September 15, 2021, a case conference will be convened with me for that purpose to be held within the following two weeks.
[20] For the reasons above, the motion to temporarily stay the certification motion is dismissed. If the parties cannot agree on costs of this motion, they may make written submissions within 15 days hereof not exceeding 3 pages.
Justice R. Raikes
Date: August 10, 2021