Law Times

Page 10 April 7, 2014 • lAw Times www.lawtimesnews.com Unique process seeks class members' engagement FOCUS awyers on both sides in the DRAM class ac- tion litigation have hired former Supreme Court justice Ian Binnie to make recom- mendations to the three supervis- ing courts in British Columbia, Ontario, and Quebec with respect to the distribution of some $61.5 million in settlement funds. Binnie began by retaining an independent expert on the eco- nomic effects of price-fixing. He has also reached out to class mem- bers by inviting them to air their comments and opinions before reporting to the court. "We've had a ton of engage- ment with class members," says Jonathan Foreman of Harrison Pensa LLP in London, Ont. "It's been a very meaningful process." At the same time, various class counsel made representations to Binnie on behalf of three differ- ent categories of class members. e goal is to have a settlement proposal in which class members have participated to the greatest extent possible. "What's unique about the ap- proach in these cases is that the views of class members are being sought in a very public way," says Norm Emblem of Dentons Can- ada LLP's Toronto office. "e process is designed to en- sure as high a take-up rate as possi- ble because experience has shown that simply using mass mailings and the like doesn't work." Some nine years ago, plain- tiffs' lawyers in British Colum- bia, Ontario, and Quebec com- menced class actions alleging the manufacturers of DRAM fixed the price of their products during a three-year period from 1999 to 2002. DRAM is a ubiq- uitous semiconductor memory product found in computers, servers, telecommunications de- vices, and many other consumer electronic products. All defendants except for In- fineon Technologies AG, a ma- jor DRAM manufacturer, have agreed to settle the litigation. e Infineon case will go to trial in September 2014. Meanwhile, an equitable distribution of the settle- ment was, as with many class ac- tions, problematic. In this case, buyers at different levels of the distribution chain incurred the damages. ey in- cluded direct purchasers ranging from computer manufacturers like Dell Inc. to individuals who bought DRAM directly from the manufacturers; resellers of prod- ucts incorporating DRAM, such as Future Shop; and end users of products containing DRAM, ranging from institutions as large as governments and banks to in- dividual consumers. "Justice Binnie created silos of class members for allocation purposes," says J.J. Camp of Camp Fiorante Matthews Mogerman in Vancouver, who's providing inde- pendent legal advice to Binnie. In most cases, the lawyers, sometimes aided by experts, work out what seems fair and reasonable. It's only when the settlement proposal is complete that class members can weigh in to object. ose who do but who remain unhappy may make sub- missions to the judge who must approve the settlement. "e approach taken in the DRAM cases is a great way to avoid the ankle-biting that occurs when the settlement is created by the law firm and perhaps a class action administration firm and only then are class members in- vited to object," says Emblem. Emblem also believes a pro- cedure that involves class mem- bers in the formulation of the settlement proposal will address concerns regarding low take-up rates and attendant criticisms re- garding the cy-près distribution of settlement monies. Under the cy-près doctrine, courts may award sums to related causes, such as charities or consumer groups, when it's too difficult or expensive to make a sensible dis- tribution to class members. "e procedure in the DRAM cases could become the new model for the distribution of class action settlements," says Emblem. "In many cases, it's preferable to a solution that comes from clever lawyers whose ideas have never been road-tested before they are presented to the clients and the court." e process isn't over yet. ere are also complications due to the outstanding claims against Infineon. But it has been very satisfying for counsel so far. "Finding a great way to dis- tribute the settlement proceeds is one of the best parts of the job of plaintiff 's counsel," says Fore- man. "It's the reason we do what we do." LT Cited with approval by the Supreme Court of Canada and other courts in Canada Find everything you need to successfully initiate, defend or manage a class action lawsuit with Class Actions in Canada. 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