On March 6, 2017, Roy O’Connor LLP issued a proposed class action lawsuit on behalf of a proposed representative plaintiff (Erin Christiansen) against medical marijuana producer Mettrum Ltd.
The lawsuit alleges that Mettrum Ltd used unauthorized pest control products in the production of some of its medical marijuana products between September 2014 and November 2016.
A proposed settlement has been reached in this action. The proposed settlement is, as set out below, subject to the approval of the Ontario Superior Court of Justice.
The settlement is subject to the approval of the Court. In particular, the Court will decide whether the settlement is fair, reasonable, and in the best interests of Class Members. The Ontario Superior Court of Justice will hold a hearing to decide whether to approve the settlement on December 16, 2020 at 10:00 am ET. Due to current Covid-19 precautions and restrictions, the hearing will proceed by video conference.
Class Members will be affected by the settlement. Under Ontario law, if you are a person falling within the Class definition, you will automatically be included in the Class unless you choose to be excluded from this proceeding (as described in section 6 below). This includes Class Members who reside anywhere in Canada, not just in Ontario. The proposed class definition consists of anyone who purchased the Recalled Products, including dried marijuana and cannabis oil, between September 2014 and November 2016.
Class Members should receive a written notice informing them of the proposed settlement by email or regular mail. A copy of the court-approved Notice of the Proposed Settlement can found in the Documents section of this site.
Mettrum and the proposed Representative Plaintiff have agreed to settle the class action for a total all-inclusive payment of $6.95 million. The settlement was reached following extensive negotiations between the parties. Please click here to view or download a copy of the proposed Settlement Agreement.
Mettrum does not admit any liability, wrongdoing or fault in this matter, and none of the allegations against Mettrum have been proven. The agreement to settle this matter does not imply any such liability, wrongdoing or fault on the part of Mettrum, and Mettrum expressly denies all such liability, wrongdoing and fault.
If the settlement is approved by the Court, the $6.95 million will cover all compensation to the Class Members for all damages arising from their purchase of the recalled marijuana medical marijuana from Mettrum and use of such products, legal fees and related disbursements (including taxes), the costs of administration and distribution of money to Class Members, and a 10% statutory levy (as discussed further below). In exchange for its $6.95 million payment, Mettrum will receive a full release of all claims and potential claims that Class Members may have against Mettrum for any sort of alleged or perceived damages.
If this settlement is approved, Class Members will not have to make an application to receive compensation. Compensation payments will be calculated based on a review of Mettrum’s records. If the settlement is approved, Class Members will receive a letter or letters explaining the calculation of their entitlement to compensation for each stage and a corresponding cheque.
The compensation paid to Class Members will be paid from the amount of money remaining after deducting the Court-approved legal fees and disbursements (including taxes) as well as the costs of administering and distributing the money to Class Members, from the $6.95 million. The money to be distributed to the Class Members will reimburse them for some or all of the purchase price paid for any Recalled Products they ordered. The distribution aims to return:
(a) 100% of the purchase price for any Recalled Products that tested positive for trace amounts of myclobutanil (Waves 2 and 3); and
(b) 20% (or possibly more – as discussed further below) of the purchase price for Recalled Products where the plants were exposed to pyrethrins but there were no detectable levels of pyrethrins in the products (Wave 1) and where some of the plants may have been exposed myclobutanil (Wave 4).
The details are set out in the Settlement Agreement and reference to the precise details of the distribution can be found in that Agreement. In general terms, and if approved by the Court, the settlement will be paid out in two stages. The first stage payments will be based (as set out above) on 100% of the purchase price paid by each Class Member for the Recalled Products involved in Waves 2 and 3, and 20% of the purchase price by each Class Member for Waves 1 and 4. If and to the extent that funds remain after the first stage after one year (e.g. if certain cheques from the first stage are not cashed by some Class Members), the remaining funds will be used to increase the payments for Waves 1 and 4 or, in other words, the remaining funds will be used to top-up the 20% payments for the purchase price paid for those products. The following calculations will be reduced by any refunds already provided by Mettrum.
Given administration expenses, if any payment to a Settlement Class Member totals less than $25.00, that payment will not be made to the Settlement Class Member and will instead remain in Trust with the Settlement Administrator. Any funds remaining after stages one and two above will be paid to a charity (namely: Centre for Addiction and Mental Health Foundation).
The Representative Plaintiff and Class Counsel recommend the settlement in light of a number of factors, including:
a. the focus of this class action was to obtain some refund for medical marijuana that was recalled by Mettrum;
b. this settlement will in fact refund a significant percentage of the purchase price of the Recalled Products in the near future without requiring Class Members to take any additional steps or incur any additional expenses;
c. the settlement amount and distribution take into account various facts, including:
i) no pesticides were detected in the Wave 1 Recalled Products;
ii) for Waves 2 through 4, Health Canada subsequently advised or clarified that the level of cyanide from the burning of the trace amounts of myclobutanil found in the samples was 500 times below the acceptable level established by the U.S. National Institute for Occupational Safety and Health;
d. there are significant risks to Class Members in continuing to litigate this action and, even if the action were ultimately certified and successful on the merits, the amount recovered for the Class Members may have very well been less than the amounts generated through this settlement;
e. putting cash compensation into the hands of Class Member today outweighs the risks of further years of delays, risks and unknown results, and a potential unfavourable finding, if the case had otherwise proceeded to a contested certification motion and, if such motion was successful, a contested trial and likely appeals.
The Plaintiff’s written materials setting out the history of this lawsuit, a more detailed explanation of the features and benefits of the settlement and more detailed reasons why the Plaintiff and Class Counsel recommend the settlement will be posted to the Documents section of this site.
Class Members are entitled, but not obligated, to express their opinions about the settlement and whether it should be approved. Class Members that wish to make a submission to the Court supporting or objecting to the proposed settlement, must send a submission in writing (by mail or email) or by voicemail to Class Counsel, as set out below, and ensure they are received no later than Tuesday, December 1, 2020. Class Counsel will provide all submissions to the Court and the Defendant in advance of the hearing. The submissions should include:
a. the Class Member’s name, mailing address, telephone number and, if applicable, email address; and,
b. a brief statement of the reasons that the Class Members supports or opposes the proposed settlement terms; and,
c. whether they wish to view the settlement approval hearing by videoconference and whether they wish to make public oral submissions (by videoconference) to the Court regarding the proposed settlement. Class Members will be contacted by Class Counsel if they indicate that they want to view the hearing by video conference.
For those Class Members who indicate that they would like to make public oral submissions to the Court on the date of the hearing, reasonable steps will be taken in coordination with directions from the Court to accommodate such submissions. It may be that a representative selection or sample of such Class Members may be selected to make oral submissions at the hearing, particularly if the number of Class Members indicating a desire to speak is high.
Please note and remember that photographing, copying, recording, publishing, broadcasting or disseminating any court hearing, or any portion of it, including a hearing that is conducted by videoconference, is prohibited and is an offence under s. 136 of the Courts of Justice Act, R.S.O. 1990, c. C.43.
Class Members cannot yet exclude themselves (opt-out) of this proceeding but will be able to in the event the settlement is approved.
In the event this settlement is approved and certification is granted, Class Members not wishing to participate in the Class Action and the settlement, or who wish to bring their own lawsuit against Mettrum for any sort of alleged damages will be required to exclude themselves from this proceeding. A summary on the opt-out procedure will be posted to the Documents section of this site in the near future.
The Court will decide whether to approve or reject the settlement. It does not have the authority to unilaterally change the material terms of the settlement. If the Court does not approve the settlement, the lawsuit will continue. It may take several more years to complete the pre-trial procedures, common issues trial and possible appeals. The Class may not be successful in respect of certification, the determination of the common issues at trial and, even if successful, Class Members may not necessarily receive more compensation than under this proposed settlement. The damages sought as part of the common issues in this proceeding (which are/were the issues proposed by the plaintiff to be resolved at trial) relate to or focus on the amounts paid by the Class Members for the Recalled Products.
The law firms of Roy O’Connor LLP and Wagners LLP are proposed Class Counsel and represent members of this Class Action in Canada. Class Counsel’s contact information is set out below.
Class members will not have to personally pay Class Counsel for the work that they have done or for the disbursements that they have carried since this case began. The proposed Representative Plaintiff entered into a contingency fee agreement with Class Counsel at the outset of the case, providing that Class Counsel are to be paid only in the event of a successful settlement or trial judgment. As provided for in that contingency fee agreement, Class Counsel will be asking that the Court approve legal fees of 30% of the settlement funds, plus disbursements and applicable taxes. Approval of the Settlement Agreement and Distribution Protocol will not be contingent upon the court approval of legal fees. Any approved legal fees and disbursements will be paid out of the $6.95 million total funds paid by the Defendant.
The percentage fees set out in class action retainer agreements (including 30% fees) have generally been enforced by Ontario Courts for a settlement of this nature and size. The materials from the Plaintiff and Class Counsel that are expected to be posted to mettrumclassaction.ca by November 1, 2020 will also address the basis for requesting and potentially approving such fees. As noted above, please review that website for updates from time to time.
In this case, the Plaintiff has received financial support from the Class Proceedings Fund (the "Fund"), which is a body created by statute and designed to allow access to the courts through class actions in Ontario. The Fund has agreed to reimburse the Plaintiff for some disbursements incurred in pursuing this action. The Fund would also be responsible for costs that may be awarded against the Plaintiff in this case. In exchange, the Fund will be entitled to recover, from any court award or settlement in favour of the Class Members, the amount of its funded disbursements (except amounts already repaid to the Fund). The Fund is also entitled to 10% of any amounts that may be payable to Class Members.
The hearing will be held before a judge of the Ontario Superior Court of Justice on December 16, 2020 at 10:00 am EDT.
Due to current Covid-19 precautions and restrictions the hearing will proceed by video conference. Class Members should Class Counsel by December 1, 2020 if they intend to watch the hearing online.
For further information about the class proceeding lawsuit please contact Class Counsel at:
Roy O’Connor LLP
Attention: James Katsuras
Further updates about this action will be posted to website as the case develops.