January 28, 2013
In a decision in December, issued today (see: Green v. Tecumseh Products of Canada Limited, 2012 BCSC 2026), the BC Supreme Court approved a settlement with two defendants in a competition class action involving alleged price-fixing of cooling compressors.
The class proceedings in this case began in October, 2010 on behalf of BC residents that purchased cooling compressors and other products manufactured by the settling defendants and other defendants. According to the plaintiff, the defendants allegedly fixed cooling compressor prices or allocated markets and customers in Canada.
In October, 2010, the Bureau announced that Embraco North America Inc. plead guilty and was fined $1.5 for participating in fixing the price of cooling compressors (see: Embraco North America Inc. Pleads Guilty to Price-Fixing Conspiracy). In November, 2010, the Bureau made a similar announcement in relation to Panasonic Corporation (see: Panasonic Corporation Pleads Guilty to Price-Fixing Conspiracy).
As part of the settlement in the decision issued earlier today, the two settling defendants ACC USA LLC and ACC Sp.A, with a relatively small combined volume of commerce in Canada, entered into a settlement agreement with the plaintiff, agreed to pay $50,000 (and costs up to a further $50,000) and to cooperate with the plaintiff.
In coming to her decision, Madam Justice Gropper reviewed the authorities in BC for approving settlements in class actions. Somewhat quaintly, Justice Gropper also referred to the plaintiff as saying that “it is the tradition to favour the first settling defendant”. Seeking to settle with and gain the cooperation of smaller defendants is a common strategy of plaintiffs’ counsel to strengthen a case and gain a source of information and evidence against larger (and more profitable) quarry.
Interestingly, one of the other defendant’s counsel raised the fact that indirect purchaser cases were due to be decided by the Supreme Court of Canada (that were heard last fall), which may have a bearing on this case (i.e., if there is no evidence of a direct purchaser in BC, the proceeding may ultimately be a nullity). The Court held, however, that even though the ultimate decision by the Supreme Court may have implications for this case, there was no reason to delay the approval of this settlement or any basis to require the parties to appear again.
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