Skands v Allergan Inc, 2021 ABQB 870

Court of Queen’s Bench of Alberta Citation: Skands v Allergan Inc, 2021 ABQB 870 Date: 20211102 Docket: 1901 08347 Registry: Calgary Between: Jennifer Skands Plaintiff - and - Allergan Inc., Allergan Usa Inc. Defendants _______________________________________________________ Memorandum of Decision of the Associate Chief Justice J.D. Rooke _______________________________________________________ Introduction [ 1 ] This Memorandum of Decision (Decision) is about the costs that follow from a negotiated certification of a class action [1] where the Representative Plaintiff (RP), Jennifer Skands (Ms.

Skands) [2] , agreed, during the then opposed certification hearing, to certification on fewer claims, causes of action and common issues than originally claimed by the RP, on the basis of arguments against

certification by Allergan Inc. (Allergan), in its briefs of law, relating to 5 brands of alleged faulty “Textured Breast Implants”, each bearing the trademark prefix “Natrelle” in their individual product names. [ 2 ] More specifically, Allergan asserts, and I so find, that the RP originally sought certification – claims of “injuries ... not limited to the development of cancers ... chronic fatigue, fever, loss of appetite, weight loss, cognizant dysfunction, infertility, autoimmune disorder, Sjogren’s syndrome, systemic sclerosis, sarcoidosis, lowered libido, brain fog, hair loss and persistent stress and anxiety of cancer spreading in the body ...” and “other pain, shock, suffering, or loss”, but, in para 80 of the SASC, replaced all of that simply with “the development of BIA-ALCL”.

Moreover there were causes of action that were terminated and common issues reduced, as I will discuss below.

In the result, the certification order was limited to those implanted with “a Textured Breast Implant”, which included 5 varieties of breast implants with the registered trade name “NATRELLE”, from which “personal injury or death caused by ALCL” arose. [ 3 ] Specifically, this is what Counsel for the RP admits at paras. 29 - 30 of the RP’s Initial Brief, although the argument, falsely or misleadingly, asserts that it is certification of “the majority of the claims” – it is neither that, nor the majority of the causes of action asserted (with no foul in discontinuing the now SCC refuted cause of action for “waiver of tort”).

Nor is any foul claimed for changes of form only, not substance, in the class definition (para. 31 and Appendix A of the Initial Brief). There are, however, significant changes (not merely “reframed and merged for clarity”) from the proposed common issues (para. 32 of the Initial Brief, in relation to items 3 – 8 of Appendix

B) in comparison to the new common issues. [ 4 ] Moreover, at para 34, Counsel for the RP asserts, but in an understated way, merely that “the final certification order is modestly narrower than the certification which was sought in the first instance” (emphasis added) – which misses the two relevant points: the RP will not be penalized for the resulting, what I find to be quite a bit narrower, certification order – she will receive costs in this Decision, the basic costs for certification; but neither party will get costs for the unnecessary material filed and hearing time prior to settlement, that could have been avoided. [ 5 ] Stated in another way, the RP, undoubtedly based on the advice of her Counsel, sought certification on a number of alleged injuries, causes of action and common issues in this class proceeding.

To use a metaphor, Counsel on her behalf, shot for the stars. However, in face of Allergan’s Response Brief on the substance of certification, Counsel for both parties negotiated the Certification Order, on fewer claims of injuries, fewer (and somewhat different) causes of action, and fewer common issues, but a certification nevertheless [3] , notwithstanding that is was not as grand a certification as Counsel for the RP initially sought.

To continue the metaphor, in the result, Counsel shot for the stars, but only captured the moon. [ 6 ] Specifically, Counsel for the RP, in her application for costs (undated and whether filed, or not, and if so, on what date, uncertain) sought: costs for certification under Rule 10.29; pursuant to Rule 10.31(a), as contained in a Bill of Costs (based on the May 2020 amended

Schedule “C”, as accepted by Allergan at para. 8 of its Response Brief), attached to the Affidavit of Lenitta Covill, sworn January 29, 2021, filed February 3, 2021; and, pursuant to Rule 10.31(3), a 3.0 multiplier of

Schedule “C”.

Counsel for Allergan sought that a lesser award be granted to the RP, but offset by costs to Allergan, for its Response Brief in opposition to the claim, that resulted in certification on one cause of action, by way of a negotiated settlement, mid way through the certification hearing. [ 7 ] At the Court’s request, but not exactly in conformance therewith, the Covill affidavit provided 2 alternative claims for costs, one for the actual time at hearings and one for the equivalent of 1 day of hearings (on the theory that if certification had been consented to earlier, this would have resulted – see para. 7 of the RP’s Supplemental Brief), plus in each case a brief for the costs issue herein.

Disclaimer [ 8 ] At the forefront of my analysis, there needs to be a disclaimer. Notwithstanding a number of statements by Counsel, I, as the certification Justice, never decided any issue leading up to the settlement on certification, nor suggested any. While I might well have grilled Counsel on the potential weaknesses of their arguments, and while oral argument may “illuminate unexplored alleyways” (para 57 of RP’s Initial Brief), I believe the transcript will reflect that I never went beyond that. [ 9 ] Reference can be made to a number of assertions by Counsel in this regard: a.

For the RP: - Application, paras. 8.1 and 8.2 - RP Initial Brief, paras. 2, 4, 18 b.

For Allergan: - Bench Brief, para. 6, and 24.b - Bench and Response Briefs, including arguments that the RP’s claim was “doomed to fail”, “would have certainly failed” or was “defective”, or would “likely have been dismissed: or that the RP “was going to lose”, intimating that the court so found (which the Court specifically did not do), or the PR “abandoned a material portion of its claim” (which appears to be the case). and that Allergan “would have been solely and wholly successful ... but for the plaintiff’s last minute material change” – see para. 23 and 30 of the Bench Brief and paras. 3, 9(

a) and (b), 10, and 12 - 14 of the Response Brief [ 10 ] Thus, in the result the settlement between Counsel was that to which they agreed, not what the Court decided or intimated. Methodology and

Summary of the Results of the Court’s

Decision [ 11 ] By way of methodology, I have reviewed each of the briefs of the parties, which I have somewhat set-out below, and made decisions on individual issues as I went. Now, having done that, I come back to near the beginning of this Decision to provide a

summary of the results. [ 12 ] For the reasons that follow, and subject to any issue in assessment of any amount by the Assessment Officer, I hereby approve, in general, the RP’s 2 nd alternative cost

schedule above, plus costs for the RP’s Initial Brief, but absent any multiplier. That can be more precisely stated as follows: a. The RP will have costs for the certification in Column 5 of

Schedule “C”, as contained in the 2 nd Alternative Cost

Schedule prepared on behalf of the RP, including her Initial Certification Brief (but not her Reply Brief), as well as item 5(2) from the 1 st Alternative Cost

Schedule for attendance at cross-examination on affidavit, but not on an enhanced basis at least at this time – see below). These costs are, payable forthwith, in any event of the cause, plus disbursements as claimed, except for the third report of Dr. Etminan (for the reasons set out below) [4] , as agreed to by Counsel, or, failing agreement, as assessed by the Assessment Officer. That fact that the RP’s Counsel shot for the stars, but only captured the moon, is nevertheless a certification.

However, the extra hearing time (beyond 1 day) that it took to get to what was actually achieved, for the reasons expressed more fully below, is at the expense of the RP, and receives no costs; b.

Allergan will have costs for 1 brief only (it filed a Bench Brief and a Response Brief), the latter of which focused primarily on what turned out to be a defence to the RP’s certification application arguing that Counsel for the RP was overreaching in her claim for certification), but no amount for any hearing time, under the same Column, without enhancement (at least at this time), as in a. above, off setting a., also payable forthwith, in any event of the cause, on the same terms; and c. In light of some mixed success, but greater success for the RP, she will have ½ of item 8(1)(

a) for submissions on costs. Positions of the Parties and Analysis [ 13 ] In this section, I will address some of the positions taken by the parties, analyze same and make some findings that have resulted in the decision to which I have come. Representative Plaintiff [ 14 ] The RP’s application seeks costs because, as she submits therein, she was “wholly successful in achieving certification”.

Indeed, she did achieve certification, but not for as wide as originally claimed. [ 15 ] The RP’s application also asserts that “the costs and disbursements claimed are reasonable in light of the complexity and significance of ... certification to the overall litigation”.

However, I do not find that the certification was unusually complex, and certification is always significant to (indeed, essential to) the overall class action litigation. [ 16 ] The RP asserts, at para. 8.2 of her application: “The Plaintiffs had never intended and had been sufficiently clear in the [written] ... and ... oral submissions that there was no suggestion of a claim beyond those for BIA-ALCL/cancer...”.

I do not find Counsel for the RP’s submissions to be that “clear”. [ 17 ] In the RP’s Brief, dated January 29, 2021, and filed February 1, 2021 (RP Initial Brief), a number of submissions are made, some of which to which I will respond. a. In para. 2, Counsel for the RP says that as an exception to the firm’s usual practice, it “seeks costs in this instance because there ought to have been an early consent certification with facts that so obviously support certification”. Clearly, Allergan did not believe that, and, and with the metaphor of an opinion being in the “eyes of the beholder”, the parties differed.

Moreover, the Court has never made, and does not now make, such a finding. b. At para. 4, the RP asserted that Allergan was “intent on responding to a wildly more complex case than that which was actually proposed”. Again, the different views of the parties are in “the eyes of the beholder”, and the Court made no such findings. c. In para. 5, the RP claims that the claim’s “focus was on BIA-ALCL” and that “was or ought to have been abundantly clear to the Defendants”, who, allegedly, responded to a broader claim.

Para. 7 addressing the evidence being “focussed primarily on the risk of BIA-ALCL” (emphasis added) and para. 8 referencing the certification brief, are intended to re-enforce the argument in para. 5. However, the same resulting principles as in the last two points follow – it is not so clear. d. In para 9, the RP states that, on seeing the certification brief of Allergan, she responded in para. 22 of her substantive Reply Brief, as follows: Allergan “point[s] to ‘25+ adverse health effects’ allegedly [claimed] ....

But, the Plaintiff’s pleadings, litigation theory and expert evidence are narrowly focused on BIA-ALCL...”. This is an indication to me from the RP that, if the parties were of opposite points of view (for which I use these words to be neutral), the RP had now made her position clearer. The impact of that is, the RP infers, that Counsel for Allergan should have “seen the light” and offered certification.

Alternatively, I observe that Counsel for the RP could have as easily contacted Allergan’s Counsel to discuss the alleged misunderstandings and negotiate the settlement of the issue of certification ultimately reached, without filing a Reply Brief and continuing with the hearings.

While, the Court was not privy to the communications (or lack thereof) between Counsel (see para. 9 of RP’s Supplemental Brief regarding a “reasonable guess” (not evidence) of what Counsel “would have done”), there is no record of either of these alternatives occurring, such that the Reply Brief and the 2 part days of oral arguments, appear to be – indeed, I find to be - unnecessary.

e. In the Initial Brief, the RP blames Allergan for: para. 10 - “proceeding to a full certification hearing”; para. 36 - “not making aproposal for certification prior to the hearing...”; and para. 44 for not heeding “the signals” (emphasis added) in RP’s material (in otherwords not “reading the mind” of RP’s Counsel, or, at least not “reading between the lines”). However, I conclude, absent evidence on thepoint, that the blame could equally be put on the RP and Allergan – neither Counsel “picked up the phone”. Thus, the principles of S.J.v.

Parkland School Division No. 70, 2020 ABQB 35 , 2020 ABQB, at para. 35, apply to both Counsel. To the same extent, inpara. 11, Counsel for the RP claims that it was only after bringing forward the SASC that Counsel for Allergan, finally saw the light.Who should take cost responsibility for these items, which resulted in a waste of Counsel and Court time and resources? In my view, bothparties should bear this loss due to the battle of clarity or lack of clarity over their positions, with neither party getting costs for same –i.e. each bears its own costs of these items.

Some, or better, communication would have solved the problem and avoided the costsclaimed/denied. [18] The Court accepts the general tenor of Counsel for the RPs arguments on ordinary costs rules in paras. 19, 21, the firstsentence of para. 22, and 23 - 28 of RP’s Initial Brief, with a couple of comments or exceptions: a. The basic premise of costs to the plaintiff on a successful certification, relying on my decision in Bruno v. Samson Cree Nation,2020 ABQB 187 , 2020 ABQB, at para. 187, is accepted, even though there are some changes in the result from what was firstcontemplated.

Indeed, where possible the parties should try to work out only minor changes. However, fundamental misunderstandingsand unreasonable positions merit cost awards. Moreover, the situation at Bar is much different than that in Bruno. b. The reasoning in Granger v. Ontario, 2020 ONSC 4101, is not challenged in the context of the facts in that case, but it has fewlessons, beyond the basic principles, for the case at Bar.

The principle that costs for reasonable conduct for certification until settlement(a slight variation of para. 73 of Granger), is not disputed – indeed, it is accepted, in the last sub-para. hereof and elsewhere above. Thequestion at Bar is what was reasonable. Any “hybrid approach”, however, should not be taken as a “flip of the coin” compromise, butmust only taken on the application of appropriate principles to the existing facts.

In Alberta, the default, absent some principledexception, is costs, in any event of the cause, payable forthwith, and I find no principled reason to entertain an exception herein: Rule10.29(1). c. I find that the arguments advanced, based on Great Canadian Gaming Corporation v.

British Columbia Lottery Corporation,2018 BCSC 370, add nothing to the debate herein, beyond the argument in para. 19 of the Initial Brief, referencing Bruno. [19] Three days after her Initial Brief, on February 3, 2021, in response to a message from my office of January 31, 2021, forsubmissions on alternative cost proposals and amendments to

Schedule “C”, the RP filed “Supplemental Written Submissions on Costs”(RP Supplemental Brief). Enhanced Costs [20] The principle of enhanced costs in the right case is accepted (see AC and JF v. Alberta, 2020 ABCA 354, at para. 13), but itsapplication to this case is not clear enough to award same, at least at this time. Moreover, no objection is taken to the basic principles ofRule 10.33(1) when the Court exercises its discretion, but that is usually done in Alberta in the context of

Schedule “C”. However, Rules10.33(2)(a), (b), (

d) are also relevant in this case in the way in which Counsel conducted themselves. [21] As to enhanced costs, the RP’s application claimed (para. 9) that they were justified for a number of reasons: (

a) the“Defendants’ opposition to certification on the basis proposed had no discernible merit whatsoever”; (

b) the “certification is inherentlycomplex” – see also para 43 of the Initial Brief; (

c) certification was important to the RP and class (see also para. 42 of the Initial Brief),but “would not exist but for the willingness” of the RP and Counsel to advance the claim for certification; and (

d) the length of thescheduled and actual hearing time. I find, as to (

a) that the merits of Allergan’s position is reflected in the certification settlement. I donot agree with (c), because, while, certification is always important, in that without it the claim fails as a class proceeding, that, in itself,is not a reason for enhanced costs. With respect to (b), while I acknowledge that there is a lot of work to properly preparing certificationapplications, I do not find the certification herein more complex than many (perhaps most) other such cases; and (

d) the actual reasonablehearing time is covered by

Schedule “C”, in any event. [22] There are other considerations relating to the claim for enhanced costs. First,

Schedule “C” was upgraded to take into accountinflation effective May 1, 2020 (O.C. 078/2020), with “a relatively significant increase in the costs awarded for each item”, and the costsherein will reflect that tariff for the whole duration of the action, even though the action was initially commenced a year earlier – for thereason that the costs award should apply at the time awarded, not at the time incurred. Moreover, Column 5 now goes to claims valued to$2 million: see, by way of

summary, the publication on the subject of the Law Society of Alberta on August 25, 2020 (see also, to similareffect, para. 3 of the RP Supplemental Brief). I note that the SASC does not set any monetary amount for the claims advanced, nor werethere any submissions on the amount. While I might surmise that a successful final determination or settlement might well exceed $2million, I cannot base a finding on such speculation.

The submission by Counsel for the RP – challenged by Allergan, as will be seenbelow – was of an estimate of “40,000 people in the class” and a speculation that the “recovery could be more than $400 million”.However, it is also possible that the ultimate substantive claim could be wholly unsuccessful. [23] In the circumstances, I find that I cannot now grant a multiplier on this record.

However, so that the class might not beprejudiced in the end, I leave the ultimate question of the multiplier for certification to be open to settlement discussions, or anapplication to revisit the issue at the end of the case. [24] I had no issues with the disbursements that the RP claims on their face, as Allergan does, as noted below. I will rule on some,and the rest, can be negotiated, or taken to the Assessment Officer, at the risk of further costs. Allergan

[25] Allergan first filed a Bench Brief (Allergan’s Brief) on January 29, 2021, claiming, in para. 1, costs of the certificationhearing (articulated at close to $20,000 in para. 7 and Tab 1), which I note does not include any enhanced costs) on the following basis: [Allergan] should be awarded costs of the certification application because the plaintiff unnecessarily caused Allergan to have to incursubstantial legal fees responding to a legally defective application for certification, that did no meet the test for certification, until theplaintiff finally and fundamentally amended its application at the eleventh hour in the middle of the oral hearing of the certification(directly in response to Allergan’s responding submissions). [26] Allergan also (para. 27) referenced Justice Cullity’s decision in Markson v.

MBNA Canada Bank (ONSC), [2004] O.J. No 3226, para 44, as to the possibility (perhaps) of costs being contemplated when changes during the certificationapplication cause a “moving target”, and (para. 30) Justice Hoy’s decision in Peter v. Medtronic Inc. [2008] O.J. No. 1700, para. 8, forlast minute abandonment of claims after notice from the defendant.

While I respect the Justices involved, and the threat of Justice Cullityto deny costs in the claim before him and the actual acceptance of the principle by Justice Hoy in denying costs, that is not my judgmentin this case – rather, I have reduced the costs to which the RP might otherwise have been entitled. [27] Alternatively, Allergan sought the denial of costs sought by the RP. That too is rejected, but such RP costs have been reducedin this Decision from those claimed. [28] Subsequent paragraphs of the Allergan Brief repeated, or, in some cases, elaborated on these allegations.

These includedallegations that: a) “every step taken in the application was unnecessary and was carried out because of the [RP’s] failure to correct acareless or overly aggressive litigation strategy” (pars. 26);

b) that while Allergan identified all the legal defects in the RPs application,the RP waited until the middle of the hearing to acknowledge the defects, after Allergan’s Response Brief, necessitating the oral hearing(para. 24 c.) that “served no purpose”;

c) Allergan had to incur “substantial legal fees” to respond to the RP’s certification application,ultimately relinquishing 25+ allegations of harm (allegedly reduced to one) and 75% of the causes of action (from 11 in the originalStatement of Claim to three), and the proposed common issues from 15 to six” ;

d) after amendment by the RP that “fundamentallynarrowed and revised its claim, Allergan, “acting responsibly, consented to certification on that fundamentally different action”, which if(as Allergan claims) the RP had done this in the first place, certification would then have been by consent, sparing all the expense of“every step in this application [that] was unnecessary”, including the RP’s “oppressively lengthy briefs of law – a combined 158pages...”, including “an excessively long (133-page) rambling, written brief...” and 12 affidavits of adverse health effects “not related toALCL”, that caused Allergan costs to question on them, as well as a 651 page compendium.

Allergan went on to articulate all theproblems that it claimed the original certification application contained, which I will not repeat herein. [29] Allergan’s arguments of law on costs add nothing new to the debate of the principles argued by the PR and which are wellknown to the court. [30] Later, on February 19, 2021, Allergan filed its Responding Bench Brief (Allergan’s Response Brief), responding to the RP’sBrief, largely repeating the positions taken in its initial Brief.

There are a couple of new or refined arguments that I will briefly address.First, Allergen attempts to refute (para 3) the RP’s assertions that Allergan should have understood, or (para. 11) should have known, orfailed to “heed the signals”, but rather that “Allergan had to respond”, and notes that, as a result, the settlement was achieved, but that theRP had to amend her claim by the SASC. Moreover, Allergan argued (para 3(

a) and para 19 of the Response Brief) against a multiple ofcosts, because the RP “grossly exaggerate[d] the potential quantum of this action”[5] and that any complexity was “of the plaintiff’s ownmaking”. [31] With respect to disbursements, Allergan makes three arguments (para 5). First (and again at para. 22.d of the Response Brief),that the fees of Dr. Etminan were “unreasonably high given the nature of the expert’s report”, being short in length. I reject this position,because there is no evidence to support the argument that the fee is “high”, never mind “unreasonably” so.

An expert’s report is notnecessarily valued on its length but rather on the background knowledge, expertise and, sometimes, research, and ultimately, opinion.The second argument is that Dr. Etminan’s third report did not relate to certification, but rather was in response to the application broughtagainst the RP by the “Ontario-BC plaintiffs consortium”. In response to this second argument, I find that the amount of such costs, notresponded to by the PR, are disallowed.

The third is that costs shouldn’t include case management conferences[6] and costs of draftingwritten cost submissions, which I find, respectively, are not costs in the cause, as alleged by Allergan at para. 22 b of its Response Brief,but relate directly to the certification application, and, as to briefs for costs submissions, I have limited those costs to the RP in thecircumstances identified in this case. [32] In addition to the above, my response to Allergan’s claim and arguments, and my reasons therefor, are substantially dealt withabove in reference the arguments of the RP.

Conclusion [33] For the reasons above, and subject to any issue in assessment of any amount by the Assessment Officer, I hereby approve, in general, the RP’s 2nd alternative cost

schedule above, plus costs for the RP’s Initial Brief, but absent any multiplier. More specifically,that includes the following: a. The RP will have costs for the certification in Column 5 of

Schedule “C”, as contained in the 2nd Alternative Cost Scheduleprepared on behalf of the RP, including her Initial Certification Brief (but not her substantive Reply Brief), as well as item 5(2) from the 1st Alternative Cost

Schedule for attendance at cross-examination on affidavit, but not on an enhanced basis at least at this time (asaddressed above). These costs are, payable forthwith, in any event of the cause, plus disbursements as claimed, except for the thirdreport of Dr. Etminan (for the reasons set out above), and additionally, as agreed to by Counsel or, failing agreement, as assessed by theAssessment Officer. However, the extra hearing time (beyond 1 day) that it took to get to the certification that was actually achieved, forthe reasons expressed more fully above, is at the expense of the RP, and the RP receives no costs; and

b. Allergan will have costs for 1 brief only (it filed both a Bench Brief and a Response Brief), the latter of which focused primarily on what turned out to be a defence to the RP’s certification application arguing that Counsel for the RP was overreaching in her claim for certification, but no amount for any hearing time, under the same Column, without enhancement (at least at this time), as in a. above, off setting a., also payable forthwith, in any event of the cause, on the same terms. c. In light of some mixed success, but greater success for the RP, she will have ½ of item 8(1)(

a) for submissions on costs. Heard on the 15 th day of October, 2020 and the 6 th day of January, 2021, with written submissions on costs on the 29 th of January, and the 1 st , 3 rd and 19 th day February, 2021. Dated at the City of Calgary, Alberta this 2 nd day of November, 2021. J.D. Rooke A.C.J.C.Q.B.A. Appearances: E.F. Anthony Merchant, Q.C., for the Plaintiff P.J. Pliszka, G. Punia and M. Stephanson, for the Defendants