A Loblaws store is seen Monday, March 9, 2015 in Montreal. THE CANADIAN PRESS/Ryan RemiorzRyan Remiorz/The Canadian Press
Loblaw Cos. Ltd. has acted fairly in its attempt to make amends with consumers for the grocer's part in fixing bread prices by offering free $25 gift cards, a court has ruled.
Justice Edward Morgan of Ontario Superior Court rejected the allegation that Loblaw, the country's largest grocer, was being unfair or misleading in telling consumers that in exchange for getting the gift card they would get $25 less of any future class-action settlement or award.
A Windsor, Ont., resident has asked the court for the green light to launch a class-action lawsuit on behalf of Loblaw customers over the retailer's part in what it has called an industry-wide bread price-fixing scheme, including its parent George Weston Ltd., which makes packaged breads such as Wonder and Country Harvest.
"Loblaw has a right to engage in a marketing campaign, and it equally has a right to reach out to consumers to settle part of its exposure in class-action litigation," Judge Morgan said in his ruling.
"As long as they have not misled anyone – and the explicit language of the application form and accompanying release is appropriate and serves to counter any misinformation that the consumer may have gleaned from press coverage of the card program – both of those aims are acceptable and can be combined into one package."
Still, Judge Morgan said if and when an ultimate settlement of a class action is reached, the court will be able to review the settlement's fairness. Already seven such class-action bids against Loblaw, Weston and other grocers, retailers and a bread maker have cropped up across the country, a lawyer for Loblaw said this week.
"At that stage, it may become relevant to consider whether it is appropriate that part of any settlement payment by Loblaw be composed of a $25 card that can only be used at a Loblaw store," Judge Morgan said.
Lawyers at Strosberg Sasso Sutts LLP, which represents the complainant who is seeking to launch one of the class-action lawsuits, had argued the gift-card program represents "a misleading and deceitful public-relations manoeuvre designed to profit Loblaws." They had argued that Loblaw should not be permitted to tell consumers they would have to forfeit $25 of any legal settlement if they register to get the gift card.
Judge Morgan said it was too early to decide whether such a set-off would be appropriate down the road.
"When taking up the card offer, the consumer is advised that the card may ultimately replace $25 worth of settlement value, but that is not for certain," the judge said. "On the other hand, Loblaw has advised of its intention to offset the cost of the card against any eventual award or settlement, but that is equally not for certain."
He said both Loblaw and the complainant will have the opportunity to present any eventual settlement for approval by the court. It will need to be based on the fairness, reasonableness and adequacy of the settlement, he said.
Loblaw spokesman Kevin Groh said in an e-mail the ruling "puts to rest the nonsensical claim by class-action lawyers that our $25 Loblaw card is misleading and confusing. Simply, we are trying to put money in our customers' hands quickly, without making them wait years and pay class-action lawyers' commissions. The money is our customers' to keep, period, whether the class-action lawsuits are successful or not."