Loblaw’s card offer isn’t misleading, judge rules

$25 gesture doesn’t mean consumers can’t get further damages in class-action suit

The terms of the $25 card being offered by Loblaw Cos. Ltd. as a way of making amends to customers for 14 years of fixing the price of bread are fair and not misleading, an Ontario Superior Court justice ruled Tuesday.

The disclosure contained in Loblaw’s actual application form and information package is “ample and fair,” Justice Edward Morgan wrote in a decision issued one day after a legal motion challenging the terms of the card was argued in court by lawyers attempting to bring a class-action lawsuit against Loblaw and other grocers.

The lawyers were seeking to strike down the restrictions Loblaw placed on the card, namely that consumers who sign up for one must agree to forgo the first $25 of any future settlement.

The motion was brought by partners at Strosberg Sasso Sutts LLP, who argued that because the $25 card is in fact a coupon to be used in Loblaw grocery stores, it would benefit Loblaw Cos. by bringing customers into its stores to buy products that are sold at a profit by Loblaw and that it would be improper to deduct it from any future settlement that might be awarded in the case.

“Today’s ruling puts to rest the nonsensical claim by class-action lawyers that our $25 Loblaw card is misleading and confusing,” a statement from Loblaw read on Tuesday .

“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.”

Loblaw has estimated that between three million and six million people will take up the card offer and said that the cost of the program, estimated at between $75 million to $150 million — depending on customer uptake — will be offset against any eventual damages or settlement reached in class action lawsuits.

Lawyers for Loblaw characterized the card as an expression of remorse and an effort to regain the confidence of customers after having done something the company regrets, Morgan wrote.

“The card program, however, is not akin to a Christmas turkey giveaway that the retailer decided to do in order to regain customer goodwill and nothing further. It is specifically related to the class-action liability that it foresees down the road,” he wrote.

Loblaw has admitted participating in fixing the price of bread and received immunity from prosecution after turning itself in to the Competition Bureau when the fraud was discovered.

The company has not divulged how much money it made during the 14 years it engaged in the price-fixing.

Morgan pointed out that several class-action lawsuits have been launched.

Lawyer Jay Strosberg, a partner at Strosberg Sasso Sutts, said the decision is in fact a victory because Morgan also ruled that it is too early to declare that the release Loblaw is asking people to sign in exchange for the $25 card is enforceable.

“That decision must be reserved,” Morgan wrote.

“That is tremendously important. He sent a huge signal to Loblaw that he has a problem with coupon settlement,” Strosberg said. “The judge didn’t find that we were being nonsensical.”