Court File and Parties
COURT FILE NO.: Listed below DATE: 20230306 ONTARIO SUPERIOR COURT OF JUSTICE
Air Conditioning Systems Sheridan Chevrolet v. Valeo S.A., et al CV-14-506637-CP
Bearings Sheridan Chevrolet v. JTEKT Corporation et al CV-13-478644-CP
Door Latches and Closure Systems Sheridan Chevrolet v. Brose Schliebsysteme GmbH & Co. et al CV-20-651139-CP
Electric Powered Steering Assemblies Sheridan Chevrolet v. JTEKT Corporation et al CV-14-506652-CP
High Intensity Discharge Ballasts Sheridan Chevrolet v. Panasonic Corporation et al CV-14-506680-CP
Manual Steering Columns Sheridan Chevrolet v. Yamada Manufacturing Co, Ltd. et al CV-15-529853-CP
Automotive Wire Harness Systems Fady Samaha v. Furukawa Electric Co. Ltd. et al CV-12-446737-CP
- Automotive Parts Class Actions – Approvals of Mitsubishi Heavy, SKF, Brose, Yamada Settlements; Automotive Bearings, Electric Powered Steering Assemblies, High Intensity Discharge Ballasts, and Manual Steering Columns Distribution Protocol; Automaker Customer Information Production, Honoraria and Class Counsel Legal Fees
BEFORE: Justice Edward P. Belobaba
COUNSEL: Linda Visser and Jean-Marc Leclerc for the Plaintiffs Katherine Kay, Eliot Kolers and Danielle Royal for the Defendants, Aisin Seiki Co., Ltd., Aisin Holdings of America, Inc., Aisin World Corp. of America, Aisin Mfg. Illinois, LLC and Aisin Canada Inc., Ichikoh Industries, Ltd, Valeo S.A., Valeo Incorporated, Valeo Japan Co. Ltd., Valeo Climate Control Corp., Valeo Compressor North America, Inc., and Valeo Electrical System, Inc. Jeffrey B. Simpson for the Defendants, Mitsubishi Heavy Industries, Ltd. and Mitsubishi Heavy Industries Climate Control, Inc. Paul Martin and Laura F. Cooper for the Defendants, AB SKF, SKF USA Inc., SKF Canada Limited and SKF GmbH, Yamada North America, Inc., and Yamada Manufacturing Co., Ltd. Sandra Forbes, Chantelle Cseh and Maureen Littlejohn for the Defendants, Magna International Inc. and Magna Closures Inc. Emrys Davis and Jeffrey Leon for the Defendants Brose Schliebsysteme GmbH & Co. Kommanditgesellschaft and Brose North America
HEARD: February 13, 2023
Reasons for the Approvals
[1] I have been case-managing some 45 class actions alleging price-fixing in the global automotive parts industry. The actions 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. Some of the cases have settled.
[2] This is a motion to approve settlement agreements entered into with Mitsubishi Heavy, SKF, Brose and Yamada. The settlement agreements generally mirror those that have been previously approved.
[3] The plaintiffs also seek approval of:
a. the proposed protocol for distributing funds paid in the Automotive Bearings, Electric Powered Steering (EPS) Assemblies, High Intensity Discharge (HID) Ballasts and Manual Steering Columns actions;
b. orders authorizing the use of previously produced Customer Information in the administration of the proposed distribution protocol;
c. honoraria payments to the representative plaintiffs in the Automotive Bearings, EPS Assemblies, HID Ballasts, and Manual Steering Columns actions;
d. an order authorizing the wire harness residual funds to be used to offset the cost of administering the Second Omnibus Distribution Protocol;
e. an order approving the payment of class counsel’s legal fees;
f. the retainer agreement entered into with the representative plaintiffs in the Door Latches and Closure Systems action;
g. Class counsel’s fees and disbursements with respect to settlements entered into with the Mitsubishi Heavy, SKF, Brose, and Yamada defendants; and
h. outstanding disbursements in the EPS Assemblies action, to be paid from prior settlements.
[4] No class members filed objections to any of the above and none attended the approval hearing that proceeded via Zoom video on February 13, 2023. For the reasons that follow, the plaintiffs’ requests for court approval are granted in their entirety.
Settlement Approvals
[5] The applicable law on settlement approval is well established. The court must be satisfied that the proposed settlement is fair, reasonable and in the best interests of the class. [1]
[6] Except for SKF, the settling defendants either did not have any direct Canadian sales or did not have any potentially-affected direct Canadian sales. SKF had limited direct Canadian sales.
[7] The table below provides an overview of the proposed settlements:
| Defendant | Part(s) | Date of Settlement | Settlement Amount | Percentage of U.S. Indirect Settlements |
|---|---|---|---|---|
| Mitsubishi Heavy | Air Conditioning Systems | Dec 13, 2022 | USD$855,000 | 9.5% |
| SKF | Automotive Bearings | Dec 9, 2022 | CDN$2,100,000 | Approx. 9.5% of US direct and indirect settlements |
| Brose | Door Latches and Closure Systems | Dec 20, 2022 | USD$375,000 | 10% [2] |
| Yamada | Manual Steering Columns and EPS Assemblies | Dec 23, 2022 | USD$294,500 | 9.48% |
[8] The proposed settlements fall within the range of 8 to 10 per cent of the relevant U.S. indirect settlements that have been routinely approved to date based on comparative population and they are likewise approved herein.
Distribution Approval
[9] The test to be applied in approving a distribution protocol is the same test used when deciding whether to approve a settlement. A proposed distribution of settlement funds will be appropriate if, in all circumstances, the plan of distribution is fair, reasonable, and in the best interests of the class. [3]
[10] I am satisfied on the affidavit evidence provided that the proposal to add Automotive Bearings, EPS Assemblies, HID Ballasts, and Manual Steering Columns to the Second Omnibus Distribution Protocol is fair, reasonable and in the best interests of the class. It is designed to compensate settlement class members in a manner that best reflects the impact of the alleged conspiracy and can be implemented in an economically feasible manner. The new cases to be added were fully resolved for approximately $21.7 million.
[11] The affected vehicles and time periods were determined in the same manner as the previous distributions (by reference to the scope of the guilty plea information and information obtained in the prosecution of the litigation).
[12] The affected vehicles overlap with those disclosed in the Second Omnibus Distribution Protocol. As such, the administration will run in conjunction with the Second Omnibus administration. 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 Automotive Bearings, EPS Assemblies, HID Ballasts, and Manual Steering Columns Distribution Protocol.
[13] Consistent with the Second Omnibus Distribution one per cent of the settlement funds (plus interest, less class counsel fees and disbursements, and estimated administration costs)). The chart below reflects the proposed allocation if the Canadian automakers were to apply for these funds:
| Relevant Part / Class Action | Canadian Automaker | Allocation |
|---|---|---|
| Automotive Bearings | Honda Canada Inc. | $120,000 |
| HID Ballasts | Toyota Motor Manufacturing Canada | $15,000 |
Automaker Production Orders
[14] Various Canadian automakers were previously ordered to provide customer information for the purposes of facilitating notice and administration in relation to previously approved distribution protocols.
[15] Class Counsel seeks orders permitting the customer information previously provided by Honda, Nissan, Subaru, and Toyota in conjunction with earlier auto parts settlements to be used for the purposes of facilitating notice and administration in relation to the new parts in the proposed distribution. These requests are reasonable and easily granted.
Honoraria
[16] In the Automotive Bearings, EPS Assemblies, HID Ballasts, and Manual Steering Columns actions, class counsel seek modest honoraria for the representative plaintiffs in recognition of the time and effort they have expended in advancing class members’ claims. Class Counsel is requesting honorariums in the amount of $200 each for Gazarek Realty Holdings Ltd. (formerly, Sheridan Chevrolet Cadillac Ltd.), 5045320 Ontario Ltd. (formerly, The Pickering Auto Mall Ltd.), and Fady Samaha, and $2,500 for Jordan Ramsay, a representative plaintiff in the EPS Assemblies action.
[17] 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. [4]
[18] Here, however, the requested $200 amounts are extremely modest and have been routinely approved in the other auto parts settlements. The requested $2500, also a relatively modest amount, is justified on the evidence before the court. The requested amounts are approved.
Residual Wire Harness Funds
[19] There are $9,520.25 in residual funds following the implementation of the wire harness distribution protocol. These are funds that were payable to Nissan for collecting customer information but Nissan has advised that it does not want the payment.
[20] Class counsel seek an order authorizing these funds to be applied against the cost of administering the Second Omnibus Distribution Protocol. This request is granted. I am advised that there is some overlap in affected class members as between the wire harness action and the actions included in the Second Omnibus Distribution Protocol.
Fee Approval
[21] Class counsel are pursuing the Auto Parts Cases on a coordinated basis in Ontario and BC and are seeking a fee award in the Ontario actions. BC class counsel will be paid out of the fees awarded to Ontario class counsel.
[22] The retainer agreements, approved in principle in previous settlements provide for a contingency fee of 25%. The representative plaintiffs support Ontario class counsel’s fee request. No class members have objected.
[23] The following chart summarizes the fee request, time incurred, and outstanding disbursements:
| Part | Requested Fees | Time Incurred | Outstanding Disbursements | Approving Courts |
|---|---|---|---|---|
| Air Conditioning Systems | USD$213,750 | $240,555.17 | $5,899.89 | ON |
| Bearings | $487,200 | $305,839.25 | $9,645.11 | ON, QC |
| Door Latches | USD$93,750 | $7,354.00 | $2,231.05 | ON |
| Manual Steering Columns | $88,140.37 | $21,712.50 | $1,767.40 | ON |
| EPS Assemblies | n/a [5] | $104,391.97 | $39,545.05 | ON |
| Total | USD$307,500 CAD$575,340.37 | $679,852.89 | $59,088.50 |
[24] Class counsel also asks for judicial approval of the outstanding general disbursements. Class counsel would like to allocate general disbursements amongst the two largest settlements on a pro rata basis. The proposed allocation is as follows:
| Settling Defendant | Allocation |
|---|---|
| SKF | $6,518.90 |
| MHI | $2,654.12 |
| Total | $9,173.02 |
[25] In the EPS Assemblies action, there are outstanding disbursements in the amount of $39,545.05. These disbursements relate primarily to document storage costs — specifically, they relate to the cost of loading and testing documents provided by JTEKT pursuant to its cooperation obligations. The previous settlement approval orders state that the settlement funds can be used to pay for disbursements incurred for the benefit of the settlement class.
[26] As discussed in Cannon v. Funds for Canada Foundation, 2013 ONSC 7686, [6] and as further refined in Brown v. Canada (Attorney General), 2018 ONSC 3429, [7] the contingency fee amount is presumptively valid and reasonable on the facts herein. Class counsel’s fee and related requests as just discussed are all approved as presented.
Disposition
[27] The plaintiffs’ motion is approved in its entirety, namely:
a. the Mitsubishi Heavy, SKF, Brose, and Yamada settlement agreements;
b. the Automotive Bearings, EPS Assemblies, HID Ballasts, and Manual Steering Columns Distribution Protocol;
c. the orders authorizing the use of previously produced customer information in the administration of the proposed distribution protocol;
d. the honorarium payments to the representative plaintiffs in the Automotive Bearings, EPS Assemblies, HID Ballasts, and Manual Steering Columns action;
e. the order authorizing the wire harness residual funds to be used to offset the cost of administering the Second Omnibus Distribution Protocol;
f. the retainer agreements entered into with the representative plaintiffs in the Door Latches and Closure Systems action; and
g. Ontario and BC class counsel’s legal fees in the aggregate amount of CA$575,340.37 and US$307,500 (to be converted to Canadian dollars upon payment) plus disbursements of $59,088.50, plus applicable taxes.
[28] Orders to go as per the Umbrella Order signed on February 13, 2023.
Signed: Justice Edward Belobaba Date: March 6, 2023
Footnotes:
[1] Urlin Rent a Car v. Furukawa Electric, 2016 ONSC 7965, at para. 5; Sheridan Chevrolet v. Furakawa Electric et al., 2016 ONSC 729.
[2] The Brose settlement is 10% of the U.S. indirect Door Latches settlement (US$300,000), plus US$75,000 for Closure Systems.
[3] Class Proceedings Act, 1992, S.O. 1992, c. 6.
[4] Aps v. Flight Centre Travel Group, 2020 ONSC 6779, at para. 43; Casseres v. Takeda Pharmaceutical Company, 2021 ONSC 2846, at para. 10.
[5] Class Counsel are not seeking fees in respect of the EPS Assemblies action because nominal settlement funds ($1,000) were allotted to the case.