Counsel for the plaintiffs alleged that Maple Leaf was 'no corporate parent bystander' in the scheme
The Ontario Court of Appeal declined Wednesday to reclassify Maple Leaf Foods Inc. as a certified defendant in a bread price-fixing class action lawsuit that covers Canadian consumers outside of Quebec, rejecting a former Maple Leaf subsidiary’s argument that new evidence supports such a reclassification.
The plaintiffs filed their proposed class action in 2021, alleging that multiple companies – including Loblaw Companies Limited, George Weston Limited, Canada Bread Company, Maple Leaf Foods Inc., Sobeys Inc., Wal-Mart Canada Corp., and more – had engaged in a decades-long conspiracy to fix the price of packaged bread in Canada.
In December of that year, the Ontario Superior Court of Justice certified the plaintiffs’ claims with respect to nine of the defendants, including Canada Bread, which was a subsidiary of Maple Leaf until 2014. However, the court declined to certify claims against defendants that were parent corporations of other defendants, including Maple Leaf, reasoning that the lawsuit simply lumped them in with their subsidiaries that actually took the steps to participate in the price-fixing conspiracy.
The court added that the plaintiffs failed to make any specific allegations about the parent companies’ participation in the conspiracy.
The plaintiffs did not appeal the certification order’s refusal to certify the claims against Maple Leaf. In 2023, however, they filed an amended pleading that they believed included new evidence about Maple Leaf’s conduct in the conspiracy. The plaintiffs, along with Canada Bread, requested that the court amend the 2021 certification to reclassify Maple Leaf as a certified defendant in the case.
The Ontario Superior Court of Justice rejected the motion, stating that neither Ontario’s Rules of Civil Procedure nor the province’s Class Proceedings Act allowed the court to revisit the matter that had been decided and not successfully appealed.
The plaintiffs and Canada Bread appealed to the Ontario Court of Appeal, arguing that the portion of the certification order that declined to certify Maple Leaf was not “final.” The plaintiffs and Canada Bread argued that, in their view, the certification order left open the possibility of reclassifying Maple Leaf as a certified defendant if circumstances changed, such as the submission of an amended pleading.
But an OCA panel rejected this argument on Wednesday, agreeing with the lower court that the class certification order had already decided the matter. The panel also agreed with the lower court that neither the Rules of Civil Procedure nor the Class Proceedings Act permitted the plaintiffs and Canada Bread to amend the pleadings.
Regarding the Class Proceedings Act, the panel noted that the statute neither modifies nor creates “substantive rights.”
“Maple Leaf’s right to rely on the doctrine of res judicata” – which bars the relitigation of matters that have already been decided – “is a substantive right,” the panel said. “It cannot be modified, let alone taken away, by interpreting these sections of the CPA in a manner that would allow for the relitigation of matters that have been finally decided.
Put another way, interpreting ss. 8(3) and 12 of the CPA in a way that permits relitigation in the face of the doctrine of res judicata would create a new substantive right for class action plaintiffs, contrary to the context and purpose of the statute read as a whole,” the panel added.
In a statement to Law Times, Jay Strosberg, managing partner at Strosberg Wingfield Sasso LLP, who represents the plaintiffs, said he believes “regular Canadians will have a hard time accepting the outcome from the Court of Appeal.”
Noting that “the bread price-fixing scandal is one of the biggest wrongs ever perpetrated on the Canadian public at large,” he said there are now “real allegations that Maple Leaf Foods was no corporate parent bystander in this scheme but rather was a direct participant at the heart of it and that it aided and abetted other defendants who are already included in the class proceeding.
“These are allegations that we did not have – and we could not get – when the certification motion was heard, and the law gives us no way to get that information in this preliminary phase of the case,” Strosberg added. “Let me be clear: Maple Leaf Foods should be a defendant in this case. We are disappointed, and we are considering all future legal options.”
Christopher Naudie, a partner at Osler, Hoskin & Harcourt LLP who represented Maple Leaf, said the company was pleased with the OCA’s decision.
“In 2021, the Ontario Superior Court held that the class plaintiffs had failed to assert any viable cause of action against [Maple Leaf],” Naudie said. “After a number of years of attempts by the class plaintiffs and Canada Bread to revisit that ruling, the Court of Appeal dismissed their appeals and upheld the finality of judicial rulings.”
Counsel for Canada Bread did not respond to a request for comment.
The saga around the alleged conspiracy to fix bread prices began nearly a decade ago, when the Competition Bureau announced it was investigating claims of a possible conspiracy. In 2019, a Quebec court certified a class action filed against a group of companies allegedly involved in the price-fixing conspiracy. The Ontario class action targeted roughly the same group of companies.
Last year, Loblaw and George Weston agreed to pay a combined $500 million to settle both the Quebec and Ontario class-action lawsuits. The settlement agreement was approved by courts in Quebec and Ontario earlier this year.
