Court Files

Air Conditioning Systems Sheridan Chevrolet et al v Valeo S.A. et al CV-14-506637-00CP

Anti-Vibration Rubber Parts Fady Samaha v Yamashita Rubber Co., Ltd. et al CV-13-472262-00CP

Autolights Sheridan Chevrolet et al v Koito Manufacturing Co., Ltd. et al CV-13-478642-00CP

Automotive Exhaust Systems Sheridan Chevrolet et al v Bosal International NV et al CV-17-582446-00CP

Automotive Steel Tubes Sheridan Chevrolet et al v Maruyasu Industries Co., Ltd. et al CV-17-582447-00CP

Braking Systems Kate O’Leary Swinkels v ZF Friedrichshafen AG et al CV-18-604648-00CP

Electronic Throttle Bodies Sheridan Chevrolet et al v Denso Corporation et al CV-14-506649-00CP

Fuel Injection Systems Sheridan Chevrolet et al v Hitachi, Ltd. et al CV-14-506683-00CP

High Intensity Discharge Ballasts Sheridan Chevrolet et al v Panasonic Corporation et al CV-14-506680-00CP

Ignition Coils Sheridan Chevrolet et al v Delphi Technologies PLC et al CV-21-664894-00CP

Instrument Panel Clusters Sheridan Chevrolet et al v Nippon Seiki Co., Ltd. et al CV-12-449238-00CP

Occupant Safety Systems Sheridan Chevrolet et al v Takata Corporation et al CV-13-472259-00CP

Valve Timing Control Devices Sheridan Chevrolet et al v Denso Corporation et al CV-14-506670-00CP

DATE: 2021-11-10

ONTARIO

SUPERIOR COURT OF JUSTICE

Proceedings under the Class Proceedings Act

BEFORE: Justice Edward Belobaba

COUNSEL: Linda Visser and Jean-Marc Leclerc for the Plaintiffs

Emrys Davis for the Defendants Bridgestone Corporation, Bridgestone Elastech Co. Ltd., Bridgestone APM Company, Delphi Technologies PLC, Delphi Powertrain Systems, LLC, Delphi Automotive LLP, Delphi Automotive Systems, LLC, Korea Delphi Automotive Systems Corp., Delphi Powertrain Systems Korea Ltd., Nippon Seiki Co., Ltd., N.S. International, Ltd., New Sabina Industries, Inc., ZF Friedrichshafen AG, TRW Automotive GmbH (now known as ZF Automotive Germany GmbH), TRW Vehicle Safety Systems Inc. (now known as ZF Passive Safety Systems US Inc.), Kelsey-Hayes Company (now known as ZF Active Safety US Inc.), TRW Canada Limited (now known as ZF Automotive Canada Limited), and Kelsey-Hayes Canada Limited (now known as Roadster Holdings (Canada) ULC)

Casey Halladay for the Defendants Stanley Electric Co., Ltd., Stanley Electric U.S. Co., Ltd. and II Stanley Co., Inc.

Katherine Kay and Danielle Royal for the Defendants Friedrich Boysen GmbH & Co. KG, Boysen USA, LLC, Keihin Corporation (now known as Hitachi Astemo, Ltd.), Keihin North America, Inc. (now known as Hitachi Astemo Indiana, Inc.), Takata Corporation, Valeo S.A., Valeo Incorporated, Valeo Japan Co. Ltd., Valeo Compressor North America, Inc., Valeo Electrical System, Inc., Ichikoh Industries, Ltd., Toyo Denso Co., Ltd., Aisin Seiki Co., Ltd., Aisin Holdings of America, Inc., Aisin World Corp. of America, Aisin Automotive Casting Tennessee, Inc., Aisin Automotive Casting, LLC and Aisin Canada Inc.

Paul Martin for the Defendants MAHLE Behr GmbH & Co. KG and MAHLE Behr USA Inc.

Caitlin Sainsbury and Pierre Gemson for the Defendants Diamond Electric Mfg Co. Ltd., Diamond Electric Mfg Corporation, Aisan Industry Co. Ltd., Franklin Precision Industry, Inc., Aisan Corporation of America, Sanoh Industrial Co., Ltd., Sanoh America, Inc., and Sanoh Canada, Ltd.

Jeffrey Simpson for the Defendants Mitsubishi Heavy Industries, Ltd., Mitsubishi Heavy Industries Climate Control, Inc., Continental AG, Continental Automotive GmbH, Continental Automotive Systems, Inc. and Continental Tire Canada, Inc. (formerly known as Continental Automotive Canada, Inc.)

Kevin Wright for the Defendants Hitachi, Ltd., Hitachi Automotive Systems, Ltd. and Hitachi Automotive Systems America, Inc.

HEARD: October 28, 2021 by Zoom video

Automotive Parts Price-fixing Class Actions

Settlement approvals in Bridgestone, Delphi, Hitachi Astemo, MAHLE, Nippon, Stanley, and ZF / Fee approvals in Bridgestone, Delphi, Hitachi Astemo, MAHLE, Nippon, Stanley, ZF and TK Holdings / Distribution protocol approval in Electronic Throttle Bodies / and Discontinuances or Dismissals in Hitachi Astemo, Friedrich Boysen and Takata

[1] I have been case-managing some 45 class actions alleging price-fixing in the global automotive parts industry. The actions are at various stages of litigation and involve a variety of auto parts produced by a wide range of suppliers. The class actions materialized in the aftermath of high-profile criminal and regulatory investigations in the United States, Canada and Europe and are being prosecuted on a coordinated basis by class counsel in Ontario, British Columbia and Quebec.

[2] Many of the auto parts actions have settled — as a rule they settle first in the U.S., then here. The Canadian settlements to date total more than $100 million.

[3] In these motions, the plaintiffs seek judicial approval of:

(i) the settlement agreements entered into with Bridgestone, Delphi, Hitachi Astemo, MAHLE, Nippon, Stanley and ZF;

(ii) the proposed protocol for distributing settlement funds in the Electronic Throttle Bodies (“ETB”) action;

(iii) the discontinuance of two actions — the Automotive Exhaust Systems action as against Friedrich Boysen GmbH & Co. KG and Boysen USA, LLC (“Friedrich Boysen”) and the Occupant Safety Systems action as against Takata Corporation (“Takata”) both on a without costs basis;

(iv) the dismissal of the Fuel Injection Systems Action as against Hitachi Astemo, Ltd. (successor to Keihin Corporation) and Hitachi Astemo Indiana, Inc. (“Hitachi Astemo”) on a without costs basis;

(v) the payment of a $200 honorarium to each of the representative plaintiffs in the ETB action; and

(vi) judicial approval of class counsel’s legal fees.

[4] I will deal with each of these matters in turn.

Approval of the settlements

[5] The total settlement amount involving the seven defendant groups herein is $7.9 million. The settling defendants have also agreed to cooperate in any ongoing litigation. Both class counsel and the representative plaintiffs support the settlements. No class members have objected.

[6] I accept class counsel’s submission that the settlement discussions were complex and often protracted. In some cases, negotiations were conducted over a period of several months, and in other cases discussions took place over several years. In the Bridgestone matter, the parties participated in a mediation before a former Supreme Court of Canada judge, the Hon. Thomas Cromwell.

[7] I also accept the evidence that the settling defendants had limited or no potentially-affected direct Canadian sales and that any potentially-affected direct sales were not relevant for the purpose of settlement (i.e., as a result of resolution outside the class action). In the Nippon action, class counsel advised the relevant original equipment manufacturer (“OEM”) that unless the OEM indicated otherwise, the action would be settled on the assumption that the OEM would not be participating in any distribution of the settlement funds. The relevant OEMs advised that they had settled their claims privately.

[8] As shown in the chart below, the seven settlement amounts generally fall within 8 to 10 per cent of their American counter-parts, a judicially accepted comparative measure:

Defendant	Part(s)	Date of Settlement	Settlement Amount (CAD)	Percentage of U.S. Indirect Settlements
Bridgestone	Anti-Vibration Rubber Parts	June 10, 2021	$4,326,000	8.97%
Delphi	Ignition Coils Valve Timing Control Devices	July 2, 2021	$75,084	6%
Hitachi Astemo	Electronic Throttle Bodies	June 14, 2021	$62,630	4.5%[^1]
MAHLE	Air Conditioning Systems	April 6, 2021, amended July 21, 2021	$235,092	10%
Nippon	Instrument Panel Clusters	March 22, 2021, amended September 23, 2021	$689,752	9.08%
Stanley	Auto-lights HID Ballasts	March 31, 2021	$2,408,000	10%
ZF	Braking Systems	July 20, 2021	$113,445	9%

[9] Two of the settlements fall short of the 8 to 10 per cent comparative measure.

[10] Delphi. The Delphi settlement is at the six per cent level. However, I accept class counsel’s explanation that there were unique limitation issues and a considerable level of uncertainty arising out of Delphi’s bankruptcy proceedings. Also, one of the main reasons for settling with Delphi was to obtain cooperation against a much larger player.

[11] Hitachi Astemo adamantly denied participating in the conspiracy, raised compelling limitation arguments and threatened to claim costs for prevailing in the Quebec authorization motion in the Fuel Injection Systems action. Class counsel acknowledged that other defendants had provided confidential information disclosing potentially unlawful conduct on the part of Hitachi Astemo. However, class counsel also recognized the very real risk that the court would find that the conduct did not amount to a breach of federal competition law. I accept this analysis.

[12] In sum, I am satisfied on the material before me that each of the settlements herein fall within the required zone of reasonableness and are in the best interests of the class.

[13] The settlements are approved.

Approval of the ETB distribution protocol

[14] The test to be applied in approving a distribution protocol is the same test that is used when deciding whether to approve a settlement, namely that it is fair, reasonable, and in the best interests of the class.[^2]

[15] The ETB action was resolved for approximately $1.9 million.

[16] This court previously approved a distribution protocol in 16 actions (the “Second Omnibus Distribution Protocol”). The affected vehicles and time period in the ETB protocol that is before me were determined in the same manner as in the previous distributions. Settlement payments will be calculated in accordance with the Second Omnibus Distribution Protocol and settlement class members who file claims under the Second Omnibus Distribution will be automatically considered for compensation under the ETB distribution protocol.

[17] The ETB distribution protocol is fair and reasonable and is easily approved.

Discontinuances

[18] Friedrich Boysen. The plaintiffs seek to discontinue the Automotive Exhaust Systems action against Friedrich Boysen on a without costs basis. Friedrich Boysen was never the subject of prosecutions or fines in any jurisdiction and the information obtained from settled defendants as against Friedrich Boysen was limited and likely insufficient to establish liability. Based on the foregoing, class counsel believes that discontinuing the litigation against the Friedrich Boysen is appropriate.

[19] I accept this submission.

[20] Takata. The plaintiffs also seek to discontinue the Occupant Safety Systems action against Takata on a without costs basis. Takata entered into bankruptcy proceedings in Canada, the U.S. and Japan. The plaintiffs filed claims in the U.S. bankruptcy proceedings and negotiated a settlement with Takata’s U.S. entity, TK Holdings Inc. The TK Holdings settlement was approved and settlement funds in the amount of US $26.3 million have been recovered. Orders obtained in CCAA proceedings provided for a stay of the proceedings and a release and discharge of the plaintiff’s claims against Takata. Takata has sold its assets to another company. Based on the foregoing, class counsel believes that discontinuing the litigation against Takata is appropriate.

[21] I accept this submission as well.

Dismissal

[22] Hitachi Astemo was named in both the ETB and Fuel Injection Systems actions. These are related products. An “electronic throttle body” is a component of a Fuel Injection System. As part of Hitachi Astemo’s ETB settlement, the plaintiffs are required to seek a dismissal of the Fuel Injection Action against Hitachi Astemo.

[23] The requested dismissal is approved.

Honoraria

[24] Class counsel ask that the representative plaintiffs in the ETB action each receive a $200 honorarium for the time and effort expended in advancing the class members’ claims.

[25] As a general rule, representative plaintiffs do not receive additional compensation for simply doing their job as class representatives. It is only where they can demonstrate a level of involvement and effort that goes beyond what is normally expected and is truly extraordinary, or where there is evidence that they were financially harmed because of their role as class representative that a significant honorarium will be justified.[^3]

[26] Here, however, the requested $200 amounts are extremely modest and have been routinely approved in the other auto parts settlements. The requested amounts are approved here as well.

Approval of legal fees

[27] The retainer agreements (all of which have been previously approved) provide for a contingency fee of 25 per cent. The following chart summarizes the fee requests, time incurred, and outstanding disbursements:

Part	Requested Fees	Time Incurred	Outstanding Disbursements	Approving Courts
Air Conditioning Systems	$58,773	$190,879.95	$2,402.14	Ontario
Anti-Vibration Rubber Parts	$1,003,632	$919,776.20	$37,245.53	Ontario and Quebec
Auto-lights	$458,097.92	$92,364.00	$5,052.74	Ontario, BC, and Quebec
Braking Systems	$28,361.25	$173,757.00	$61,346.60	Ontario
Electronic Throttle Bodies	$15,657.50	$138,788.60	$3,014.05	Ontario
HID Ballasts	$108,360	$75,180.50	$1,241.07	Ontario
Ignition Coils	$17,832.45	$208,660.00	$4,809.01	Ontario
Instrument Panel Clusters	$159,550.46	$307,335.15	$2,125.84	Ontario and Quebec
Occupant Safety Systems	$7,691.93	$859,688.75	$2,401.90	Ontario
Valve Timing Control Devices	$938.55	$74,575.00	CA$894.65 plus US$46,992.50 (to be converted to CDN upon payment)	Ontario
Total	$1,858,895.06	$3,041,005.15	CA$120,533.53 plus US$46,992.50

[28] Class counsel is also seeking approval to allocate the outstanding $6,988,277.51 in general disbursements amongst the three largest settlements on a pro rata basis. The proposed allocation is as follows:

• $4,326,000 to be allocated to Bridgestone;

• $1,974,560 to be allocated to Stanley (Auto-lights); and

• $687,717.51 to be allocated to Nippon.

[29] As discussed in Cannon,[^4] and as further refined in Brown,[^5] the contingency fee amount is presumptively valid and reasonable on the facts herein and is approved.

[30] The requested allocations of the general disbursement amounts, as set out above, are also reasonable and approved.

Disposition

[31] The proposed settlement agreements, the ETB distribution protocol, the discontinuances, the dismissal, the requested honoraria and class counsel’s legal fees are all approved.

[32] Orders to go as per the draft Orders signed at the conclusion of the hearing on October 28, 2021.

[33] My thanks to all counsel for their assistance.

Signed: Justice Edward Belobaba

Notwithstanding Rule 59.05, this Judgment [Order] is effective and binding from the date it is made and is enforceable without any need for entry and filing. Any party to this Judgment [Order] may submit a formal Judgment [Order] for original signing, entry and filing when the Court returns to regular operations.

Date: November 10, 2021

[^1]: This is a percentage of Hitachi Astemo’s US Fuel Injections Systems indirect settlements. In the United States, Hitachi Astemo was named in the Fuel Injection Systems action but not the Electronic Throttle Bodies action. [^2]: Class Proceedings Act, 1992, S.O. 1992, c. 6. [^3]: Aps v. Flight Centre Travel Group, 2020 ONSC 6779, at para. 43; Casseres v. Takeda Pharmaceutical Company, 2021 ONSC 2846, at para. 10. [^4]: Cannon v. Funds for Canada Foundation, 2013 ONSC 7686. [^5]: Brown v. Canada (Attorney General), 2018 ONSC 3429.