Last week in Pro-Sys Consultants Ltd. v. Infineon
Technologies AG (Pro-Sys), the British Columbia
Supreme Court approved final settlements and a distribution
protocol, as well as class counsel's fees, in a certified class
action relating to the manufacture of dynamic random access memory
(DRAM), a component in many household appliances such as
televisions, computers and electronic notebooks.
The decision is noteworthy not only for the quantum of class
counsel's fees, but also for the comprehensive and flexible
distribution plan approved in what is reported to be the
second-highest value recovery to date in a Canadian competition
The Canadian class action followed the United States Department
of Justice investigation into allegations of price fixing of DRAM
by its manufacturers and some computer manufactures. Ultimately,
five DRAM manufacturers pleaded guilty to their involvement in an
international price-fixing conspiracy and paid fines as high as
The action in Pro-Sys was filed in 2004 against
manufacturers of DRAM, against whom the plaintiff alleged a
large-scale price-fixing conspiracy for a period covering 1999 to
2002. Parallel proceedings were advanced in British Columbia,
Ontario and Quebec. The litigation was contentious, and the sister
action from Quebec went all the way to the Supreme Court of Canada
as part of the 2013 "Class Action Trilogy."
This decision approved settlements with the remaining
defendants, the other defendants having previously settled
piecemeal between 2012 and 2014. The settlements are national in
scope and were approved in each of British Columbia, Ontario and
Quebec. The parties invited the respective case management judges
to confer in assessing the proposed settlements.
The ultimate settlement value for all defendants –
inclusive of interest but before deductions for fees, disbursements
and administrative expenses – exceeds C$80-million. The court
observed that the settlements for the respective defendants were
"in reasonable harmony with the market share" of
The court accepted the distribution plan put forward by the
class. Prior to bringing the application for approval of the plan,
class counsel initiated a public consultation phase and an
adversarial process, whereby separate counsel were appointed for
subgroups within the class in order to advocate for different
levels of the distribution chain. Expert evidence was sought on the
makeup of the chain of distribution of DRAM, and a carefully
structured unit-value cost for each set of subgroup was designed.
While more common in U.S. class actions settlements, this type of
approach is still relatively new in Canada.
The distribution plan is notable for the substantial discretion
that it leaves with class counsel and the claims administrator in
order to create a flexible process for distribution, as settlement
takes place, without the need to return to court for judicial
oversight at every stage. The plan uses principles rather than
specific criteria to govern the submission of claims.
Recognizing that indirect consumer class actions (as distinct
from those alleging personal injury, for example) often suffer from
low take-up rates, the class put forward four professional
marketing plans (of C$1-million to C$4-million, respectively) in an
attempt to achieve the highest take-up rate possible. At the same
time, the class refrained from asking the court at the outset for
cy-près distribution, leaving the option for compensation to
be re-adjusted to avoid leftover funds.
Class counsel's 30-per-cent fee, totalling approximately
C$22.7-million across all settlements (and shared between four
established plaintiffs' firms) was also approved. This stands
as one of the largest fee awards in a Canadian class proceeding,
and is significant for having been made at the same level as the
maximum under the plaintiffs' contingency arrangements in
Ontario and Quebec, although it was less than the 33-1/3-per-cent
maximum permitted under the B.C. fee arrangement. In general, B.C.
courts have not awarded at the top end of fee limits without the
matter having first proceeded to a merits decision. It is equally
worth observing that this dramatic fee was approved without any
objection or comment from class members, the majority of whom stand
to recover about C$20 per claim (for ordinary retail
The outcome in Pro-Sys will stand as a benchmark for
future industry-wide competition cases, and may be used by both
plaintiffs and defendants as useful reference on outcomes.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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This paper discusses contract law issues including decisions of relevance to commercial lawyers and business leaders giving a snapshot of particular principles of interest that arose in case law over the past 12 months.
In the case Cantin c. Ameublements Tanguay inc., 2016 QCCS 4546 (the "Cantin Case"), the Superior Court of Quebec granted authorization of a proposed class action by consumers against various respondents...
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