January 26, 2016
We are pleased to report that the Ontario Court of Appeal has allowed the appeal we filed in respect of the decision of the CCAA Judge refusing to allow access to the Settlement Agreement entered into between US Steel, US Steel Canada and the federal government in 2011.
By way of background, US Steel in the United States purchased Stelco in 2007 and at the time gave the Canadian federal government undertakings (i.e., commitments) in order to obtain the federal government’s approval for the acquisition under the Investment Canada Act (“ICA”). Those undertaking included production commitments and pension contribution and employment promises. USS breached the Undertakings almost immediately after acquiring Stelco.
The federal government sued USS (the first time the federal government has done so under the ICA) and after a few years of litigation, USS, USSC and the federal government agreed to a settlement in 2011.
When US Steel Canada (as Stelco was renamed) filed for CCAA protection in September 2014 we as Representative Counsel to all non-USW employees and retirees and the USW requested production of the “Secret Settlement Agreement” from USS, USSC and the federal government, who refused to produce the Agreement and took the position that the Agreement was confidential under the provisions of the ICA.
We and the USW brought a motion before the CCAA Judge for an order requiring USS, USSC and the federal government to produce the Agreement. The CCAA Judge dismissed the motion on his interpretation of the provisions of the ICA which he held operated to keep the Agreement confidential. The CCAA Judge noted our additional argument that the Agreement should also be released to us under the law of “settlement privilege” but His Honour did not rule on that argument extensively since he found the Agreement was confidential under the ICA. We filed and obtained leave to appeal to the Ontario Court of Appeal.
The Ontario Court of Appeal allowed our appeal holding that the Settlement Agreement was not confidential under provisions of the ICA. The Court of Appeal directed that the Agreement be released to the CCAA Judge by the Monitor for the judge to review, and also ordered that the CCAA Judge determine whether to release the Agreement to us only under the law of settlement privilege. We are following up with USS, USSC and the federal government about next steps and will report further with new developments.