January 6, 2015: The Settlement Agreement entered into between the parties was approved by the court. This action has now been concluded.The court Order approving the settlement can be reviewed here

Overview

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 distributor 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.

Updates

January 6, 2015: The Settlement Agreement entered into between the parties was approved by the court. This action has now been concluded.The court Order approving the settlement can be reviewed here
  • December 30, 2014: The parties have entered into a revised settlement agreement and will present the agreement to the Court of Appeal on January 6, 2015 at 10:00am, in Courtroom 5, at Osgoode Hall, 130 Queen St. W., Toronto, Ontario. You can review the agreement here. Quizno’s Canada Settlement Agreement
    A redline comparison showing revisions from the previous agreement can be found here. Quizno’s Settlement Agreement Comparison

    Justice Perell’s reasons addressing the previous settlement agreement can be found here.

    Class members may attend the approval hearing and speak to the court. Any comments in writing should be sent via email by January 5, 2015 to smurphy@sotosllp.com.

  • October 2, 2014: The  court declined to approve the proposed Settlement Agreement.
    You can review the court’s reasons here.

    Details of any future settlement proposal will be posted on this website. Please check back in the future for updates.

  • July 11, 2014: In March of this year, various entities that make up Quiznos filed for bankruptcy protection in the United States. Given Quiznos’ Canadian structure and the US bankruptcy, any judgment which might be obtained against Canadian Quiznos in this action was likely to be hollow. After careful consideration, the representative plaintiffs decided that the prospects of collection did not warrant the out-of-pocket expenses needed to see the case through to trial and we agreed with this assessment.A tentative settlement has been negotiated which would see Quiznos reimburse $275,000 for out-of-pocket expenditures which have been incurred on behalf of the class members to date.The tentative settlement agreement requires court approval.  The parties will appear in court on October 2, 2014, to ask the court to approve the settlement agreement.  If you are a class member, please review the Notice to Class Members, which summarizes the terms of the Settlement Agreement and the ways class members can provide comments or oppose the settlement:
  • October 22, 2013: Quiznos and GFS have brought summary judgment motions to have this action dismissed before trial. These motions will be heard over the course of a week starting on July 3, 2014. Class counsel will be opposing these motions. In response to Quiznos and GFS, the court will be provided with evidence from former Quiznos franchisees and various food industry experts. If the summary judgment motions are dismissed, the action will proceed to trial. 
  • 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.

Case Contacts

Allan Dick
t: 416.977.7180
f: 416.977.0717
e: adjdick@sotosllp.com

David Sterns
t: 416.977.5229
f: 416.977.0717
e: dsterns@sotosllp.com

Shane Murphy
t: 416.572.7311
f: 416.977.0717
e: smurphy@sotosllp.com