TORONTO – Canadian consumers obtained an important victory in Loblaw's admitted price fixing conspiracy today. In a proceeding brought by Strosberg Sasso Sutts LLP, The Honourable Justice Morgan of the Ontario Superior Court of Justice today ruled that Loblaw will not be able to deduct the $25 value it has placed on the gift card it is providing consumers unless it demonstrates that it is fair to consumers as part of an overall resolution of their price-fixing claims. In his ruling, Justice Morgan wrote, "When taking up the card offer, the consumer is advised that the card may ultimately replace $25 in settlement value, but that is not for certain. On the other hand, Loblaw has advised of its intention to offset the card against any eventual award or settlement, but that is equally not for certain. Both Loblaw (like the other defendants) and the consumer/class members will have the opportunity of presenting any eventual settlement for approval by the court at the time, and that will be based on the fairness, reasonableness and adequacy of the settlement overall…it does not bar substantive review of any class action settlement at the end of the review process."
On December 19, 2017 Loblaw announced that it was offering consumers a $25 card to restore consumer confidence in the company after admitting anti-competitive conduct. However, Loblaw was unclear about the cards' redemption terms. Once Loblaw's website to enable consumers to register for the card became operational on January 8, 2017, it became clear that Loblaw required consumers to agree that any future amounts awarded in any civil settlement would be discounted by $25 if the consumer accepted the card. In all class actions, the court must approve a settlement, and the court held that whether any credit must be given by consumers for the card Loblaw issues them be reserved until the class actions against Loblaw are settled.
Strosberg Sasso Sutts' motion stemmed from Loblaw's refusal to disclose the value of what the consumers' loss was over the 14 years that it admitted to its participation in an industry-wide price-fixing conspiracy for bread. Loblaw sought to offset its civil liability in the class actions in the amount that equals the value of the cards that it issues.
David R. Wingfield, Partner at Strosberg Sasso Sutts LLP and expert in competition law argued before the Court that Loblaw should not be allowed to offset its liability now because the company has not made a meaningful disclosure about what the conspiracy to fix the price of bread has cost Canadian consumers over 14 years. Without such disclosure, Canadian consumers cannot make an informed decision about whether to accept the coupon because Loblaw refuses to disclose the extent to which consumers were harmed.
"We are very pleased that the Court agreed with our argument, "said Mr. Wingfield. "If Loblaw wishes to offer a goodwill gesture and give consumers a coupon to be used in their stores, it is within their right to do so," said Wingfield. "However, the moment they ask to limit their liability based on the card without court supervision, there is a problem. This judgment confirms that the court's supervisory role can't be removed by Loblaw's unilateral action."
Loblaw and its parent company George Weston Ltd. disclosed the conspiracy to the Competition Bureau of Canada in exchange for immunity from criminal prosecution. However, the companies are still liable in civil actions. Strosberg Sasso Sutts filed a Class Action on November 8, 2017, over a month before Loblaw admitted its participation in the scandal.
Jay Strosberg, Co-Managing Partner, Strosberg Sasso Sutts LLP said, "The judge's ruling was morally and ethically appropriate. Loblaw will likely incur a heavy cost as a result of this theft; but the company should be subject to the same process as the consumers who were victimized. The Court rightfully sided with millions of Canadian consumers."
ABOUT STROSBERG SASSO SUTTS LLP
Strosberg Sasso Sutts LLP has offices in Windsor and Toronto and is one of the leading class action law firms in Canada. Strosberg Sasso Sutts LLP has recovered more than $1 billion for its clients. Its lawyers have been involved in some of Canada's most important class actions in Canada including the Walkerton class action, the Ticketmaster Class Action, Money Mart class action and the Hepatitis-C class action against the Federal and Provincial governments.
Source: Strosberg Sasso Sutts LLP
