This class action lawsuit alleges that the Canadian franchisor of the Quiznos chain and others have illegally conspired to enhance and fix the prices of supplies purchased by Quiznos franchisees for their businesses. The statement of claim alleges a system of kickbacks that included Quiznos Canada Restaurant Corporation and its designated exclusive supplier, GFS Canada Inc.

The action is based on law that includes the Competition Act, a federal statute that prohibits price maintenance and conspiracies to maintain prices. Under this law, it is illegal to force or coerce a distributor (for example) to fix or enhance the prices at which it sells goods or to set a minimum resale price.

This action alleges that the defendants violated the Competition Act essentially by inflating prices on supplies and raw materials purchased by the franchisees for their businesses.  According to the allegations, Quiznos received a portion of the enhanced price which the distrubutor sold to the franchisees. The plaintiffs complain that the prices for these suppliers were above what is commercially reasonable-and therefore in further violation of laws that protect franchisees.

The plaintiffs seek a money award that represents the harm that the class members suffered and an award of punitive damages designed to punish the defendants.

In March 2008, a motion judge declined to certify the proceeding as a class action. He held that there were certain issues which were not common to the entire class, specifically the amount of damages suffered by each franchisee as a result of the alleged price-fixing scheme.  However, this decision was appealed to the Divisional Court which in April 2009 overturned the motion judge and held that the class action should be certified.  This decision was unanimously upheld on further appeal by the Ontario Court of Appeal. Leave to appeal to the Supreme Court of Canada was dismissed.

The case is proceeding towards trial on all issues on behalf of the class.

Notice to class

• Notice to class (Nov 23, 2009)

Pleadings

• Amended-amended-amended statement of claim (Nov 6, 2009)
• Statement of defence (Quiznos) (Dec 7, 2009)
• Statement of defence (Gordon Food Services) (Dec 7, 2009)
• Reply to the statement of defence of Quiznos (Dec 21, 2009)
• Reply to the statement of defence of GFS (Dec 21, 2009)

Court Decisions and Orders

• Reasons of Ontario Court of Appeal upholding the certification decision of the Divisional Court
• Order of Justice Perell granting certification (Nov 23, 2009)
• Reasons of Ontario Court of Appeal for upholding the decision of Justice Goudge (Sep 16, 2009)
• Reasons of Justice Perell dismissing motion for stay of execution of costs while under appeal (Jul 21, 2009)
• Reasons of Justice Goudge dismissing Quiznos’ motion for leave to extend time to appeal the dismissal of Quiznos’ motion to stay action (Jun 26, 2009)
• Order of the Divisional Court (Apr 27, 2009)
• Reasons of the Divisional Court setting aside the order denying certification (Apr 27, 2009)
• Reasons of Justice Perell denying certification and dismissing Quiznos’ motion to stay action (Mar 4, 2008)
• Reasons of Justice Hoy for denying GFS’ motion to strike and adjourning Quiznos’ motion for a stay (Mar 28, 2007)

More Information

• Class Action Update (November 19, 2010)
• Class Action Update (May 20, 2010)
• Class Action FAQ
• Denver Subs Web Page

• January 3, 2012: On December 19 and 20, 2011, all parties engaged in voluntary judicial mediation in Toronto to explore the possibility of settlement. Class counsel, the class representatives and a representative for current Quiznos franchisees met with GFS and Quiznos representatives and attempted to broker a deal that would suit all parties. Ultimately, a settlement agreement could not be reached. The case is currently proceeding toward trial.
• October 19, 2011: A mediation of this lawsuit will take place on December 19 and 20, 2011.  Mediation is a voluntary process aimed at facilitating a settlement of a lawsuit.  The mediation will be conducted by a judge of the Superior Court of Justice. We will inform all class members of the outcome of the mediation after it is concluded.
• April 27, 2009: On appeal, the Ontario Divisional Court overturned the motion judge and held that the class action should be certified.  This decision was unanimously upheld on further appeal by the Ontario Court of Appeal. Leave to appeal to the Supreme Court of Canada was dismissed.
• March 4, 2008: A motions judge of the Ontario Superior Court of Justice declined to certify the proceeding as a class action. He held that there were certain issues which were not common to the entire class, specifically the amount of damages suffered by each franchisee as a result of the alleged price-fixing scheme.

Allan Dick
t: 416.977.5333 x 309
f: 416.977.0717
e: adjdick@sotosllp.com

David Sterns
t: 416.977.5333 x 313
f: 416.977.0717
e: dsterns@sotosllp.com

Sam Hall
t: 416.977.5333 x 305
f: 416.977.0717
e: shall@sotosllp.com

Shane Murphy
t: 416.977.5333 x 311
f: 416.977.0717
e: smurphy@sotosllp.com