Lexpert Magazine

32 LEXPERT MAGAZINE | MARCH 2016 COFFIN V. ATLANTIC POWER CORP. DECISION DATE: JULY 24, 2015 Justice Edward Belobaba of the Ontario Su- perior Court of Justice released Reasons for Decision on July 24, 2015, in Coffin v. Atlan- tic Power Corp., 2015 ONSC 3686. e Court denied leave to proceed with claims under Part XXIII.1 of the Securities Act and denied class certification of statutory and related common law claims under the Class Proceedings Act. e plaintiffs' action focussed on Atlan- tic Power's announcement on February 28, 2013, that it was reducing its annualized dividend from $1.15 per share to $0.40 per share. Atlantic Power is a publicly-traded power generation company that owns and operates power projects in Canada and the United States. Atlantic Power is a dividend- paying company and the main determinant of its dividend level is the cash flow from its power projects. e plaintiffs alleged, among other things, that beginning on No- vember 5, 2012, Atlantic Power and its for- mer CEO and its CFO misrepresented At- lantic Power's ability to maintain the $1.15 dividend level. e plaintiffs – both shareholders of At- lantic Power – sought to certify a class con- sisting of persons who purchased or other- wise acquired shares or debentures on either the New York Stock Exchange or the Toron- to Stock Exchange during the period from November 5, 2012 through February 28, 2013, and held some or all of those securities at the close of trading on February 28, 2013. e plaintiffs filed expert evidence in con- nection with their assertions. In response to the plaintiffs' evidence and allegations, Justice Belobaba noted that the defendants "made a conscientious decision to do battle from the outset." e defendants "not only filed competing expert reports but also a massive amount of non-public (indeed court-sealed) internal and corporate narra- tive evidence to fully rebut the plaintiffs' al- legations and show they have no reasonable possibility of succeeding at trial." He further noted Atlantic Power's evi- dence demonstrated that the company's disclosure properly stated that dividends were not guaranteed, that dividends were connected to and dependent upon Atlan- tic Power's cash flow (which investors and analysts followed and understood), that the company had disclosed risks to its cash flow, that the company had enough cash on hand to continue to pay the $1.15 dividend for a number of years without any further accre- tive acquisitions, and that dividend payments in general are not formulaic calculations but involve the exercise of business judgment. Justice Belobaba found that Atlantic Pow- er's disclosures contained no misrepresenta- tions and that the company had not failed to disclose any material change. Justice Belobaba also dismissed the plain- tiffs' motion for certification of the action as a class proceeding. He refused to certify the statutory claims in respect of which leave was denied and also refused to certify the plain- tiffs' claims of common law negligent mis- representation and negligence. With respect to the debenture-holder component of the claim, Justice Belobaba granted leave for class counsel to file a re- constituted action that would be limited to claims made by debenture-holders provided that the reconstituted action includes a prop- er representative plaintiff, a redefined class, revised common issues and a new litigation plan and provided that the defendants are reimbursed on a partial indemnity basis for their success on the motion. On December 2, 2015, with the consent of the parties, Justice Belobaba signed an Order providing for the dismissal of the ac- tion, the abandonment of any appeal and the waiver of any claims the defendants might have for costs. Benjamin Zarnett, David Conklin, Mi- chael Wilson and Charlie Pettypiece of Goodmans LLP represented the defen- dants, Atlantic Power Corporation, Barry Welch and Terrence Ronan. Kirk Baert, Jonathan Ptak and Garth My- ers of Koskie Minsky LLP, Patricia Speight and Jay Strosberg of Sutts Strosberg LLP, and Joseph Groia, Bonnie Roberts Jones and David Sischy of Groia & Company repre- sented the plaintiffs, Jacqueline Coffin and Scott Fife. TAKEDA CANADA INC. V. CANADA (MINISTER OF HEALTH) DECISION DATE: JUNE 15, 2015 In Takeda Canada Inc. v. Canada (Minister of Health), 2015 FC 751, the Federal Court dismissed an application brought by Takeda Canada Inc. and Takeda GMBH under the Patented Medicines (Notice of Compliance) Regulations (the Regulations) in relation to the drug TECTA® (pantoprazole magne- sium). Takeda was seeking to prohibit the Minister of Health from issuing market au- thorization to Mylan Pharmaceuticals ULC for its generic pantoprazole magnesium drug until the expiry of Canadian Patent No. 2,341,031 (the 031 Patent). Pantoprazole magnesium is used to treat ulcers and other gastro-esophageal conditions. is is the first patent decision relating to pantoprazole magnesium and is a rare in- stance of a Canadian court holding a patent invalid for inherent anticipation. is decision allowed Mylan to imme- diately receive market authorization and become the first generic company to sell its lower cost pantoprazole magnesium product in Canada. e principal claim in issue was directed to pantoprazole magnesium dihydrate, a sol- id form of the drug incorporating two mol- ecules of water for every molecule of panto- prazole magnesium in a crystalline structure. e Court held that Mylan's allegations that the relevant claim was not infringed and in- valid for anticipation were justified. With respect to anticipation, the Court held that a prior patent application inher- ently anticipated the claim at issue in the 031 Patent by disclosing a process that A LOOK AT COFFIN V. ATLANTIC POWER CORP., IN WHICH THE NEW LEAVE TEST FOR SECONDARY MARKET CLASS ACTIONS WAS CONSIDERED; TAKEDA CANADA INC. V. CANADA (MINISTER OF HEALTH), IN WHICH THE COURT HELD A PATENT INVALID FOR INHERENT ANTICIPATION; AND UNION GAS'S APPLICATION TO THE ONTARIO ENERGY BOARD ON ITS PROPOSAL FOR LNG SERVICE BIG SUITS

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