Court File and Parties
COURT FILE NO.: 1899/15CP DATE: 20220107 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, Sarah Bowden, Jean-Marc Metrailler - Counsel, for the Plaintiff Sandra Forbes and Maura O’Sullivan - Counsel, for the Kamaya Defendants Kevin Wright and Todd Shikaze – Counsel, for the Susumu Defendants Sinziana Hennig – Counsel, for the KOA Defendants
HEARD: November 25, 2021
Endorsement
Endorsement
1Class counsel seek approval of class counsel fees of $192,500 plus HST which represents 25 percent of the settlement amount paid by the Kamaya defendants ($770,000). They also seek approval of disbursements incurred in the Ontario action of $19,466.69 plus applicable taxes of $2,324.85. They ask that these amounts be paid from the settlement funds held in trust.
2The Kamaya settlement is the second partial settlement in this action. A settlement with the Panasonic defendants was approved in March 2021. Class counsel sought and were approved to be paid 25percent of the Panasonic settlement. That resulted in a payment of $587,500 plus HST for fees, and disbursements of $132,607 plus applicable taxes.
3The disbursements sought on this motion relate principally to the cost of notice to the class ($16,294) of the settlement and approval hearing, and court filing fees ($1,454). The disbursements incurred are appropriate and necessary. I approve the disbursements of $19,466.69 and applicable tax of $2,324.85 to be paid from the settlement funds from the Kamaya settlement.
Analysis
4The retainer agreement with Mr. Allott allows for a class counsel fee of 30 percent of any amounts recovered. Counsel seeks 25 percent. Counsel’s request is consistent with the fee request approved from the Panasonic settlement.
5Class counsel submitted an affidavit sworn by an associate lawyer in support of this motion. The affidavit indicates, inter alia, that:
The aggregate value of time docketed as at October 31, 2021 by the firms who are acting in this action and the parallel class proceedings in Quebec and British Columbia is $1,279,338.
After deduction of the fees paid from the Panasonic settlement, the aggregate value of time is $691,838.50.
The hourly rates charged by counsel during the life of this litigation have increased dramatically. For example, Ms. Visser’s hourly rate spans $475 to $825. Mr. Mogerman and Mr. Jones show hourly rates of $525-900 and $500-875, respectively.
The hourly rates of associates and law clerks show similar but less dramatic increases. Nevertheless, the law clerk at CFM is billed at $250/hour. Ms. King, a third-year associate at Siskind, is billed at $325.
6Mr. Foreman submitted that the hourly rates applied are consistent with that charged by defence counsel in class proceedings. There is no evidence of same. Even if there were, the fact that counsel at a Bay Street firm can and does charge his or her clients $825/hour does not mean that counsel with different law office economics in London should be billing at the same rate. I regularly have counsel before me from across Ontario who are every bit as capable as counsel in this action but whose hourly rates are much more reasonable.
7The hourly rates used by counsel are excessive, grossly so. The excessive hourly rates distort the value of docketed time. It may be argued that the hourly rates are meaningless because the retainer agreement calls for payment of a percentage of monies recovered. I disagree. It is helpful to the court to see a fair statement of the time expended and the value of that time to measure the extent to which there is any premium paid to counsel for the risks they have taken.
8I am well aware of the risks class counsel take when they act in class proceedings. I am also aware of the economics of prosecuting these actions against well-heeled defendants who can afford to play the long game without mercy. I have taken into account the benefits to class counsel and the class of ensuring counsel have the economic resources to continue the fight. Incentivizing counsel is an important objective of class counsel fees, but it is not the sole objective. Meaningful and timely advancement of the litigation is also important.
Disposition
9I fix the amount payable for counsel fees from the Kamaya settlement at $100,000 plus HST. This award may be revisited in future after the contested certification is heard or a further settlement is reached. I decline to approve a 25 percent payment at this time for the following reasons:
counsel have very recently received a significant payment on account of legal fees;
counsel’s disbursements will have been substantially paid;
the time value of docketed time is distorted such that the true value of the docketed time is difficult to assess;
the litigation remains in its procedural infancy after six years. Meaningful advancement is needed; and
there is an opportunity to revisit the fees approved later when progress is shown.
10For the reasons given, I approve payment from monies held in trust for the Kamaya settlement of the following:
a. class counsel fees of $100,000 plus HST;
b. disbursements of $19,466.69 and applicable tax of $2,324.85.
The amount approved for class counsel fees is without prejudice to the right of counsel to seek an additional amount upon a further settlement and/or the contested certification motion is completed.
Justice R. Raikes
Date: January 7, 2021