SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MARCY DAVID, BRENDA BROOKS, and ANDREW BALODIS, Plaintiffs
– and –
LOBLAW COMPANIES LIMITED, GEORGE WESTON LIMITED, WESTON FOODS (CANADA) INC., WESTON BAKERIES LIMITED, CANADA BREAD COMPANY, LIMITED, GRUPO BIMBO, S.A.B. DE C.V., MAPLE LEAF FOODS INC., EMPIRE COMPANY LIMITED, SOBEYS INC., METRO INC., WAL-MART CANADA CORP., WAL-MART STORES, INC. and GIANT TIGER STORES LIMITED, Defendants
BEFORE: Justice E.M. Morgan
COUNSEL: Jay Strosberg, Reidar Mogerman, K.C., and Kyle Taylor , for the Plaintiffs
Linda Plumpton and Colette Koopman , for the Defendants, Loblaw Companies Limited George Weston limited. Weston Foods (Canada) Inc., and Weston Bakeries Limited
Cathy Beagan Flood and Nicole Henderson , for the Defendant, Canada Bread Company Limited
Eliot Kolers , for the Defendant, Sobeys Inc.
Andrew McCoomb and Ted Brook , for the Defendant, Metro Inc.
Chantelle Cseh , for the Defendant, Giant Tiger Stores Limited
Sandra Forbes and Kristine Spence, for the Defendant, Walmart Canada Corp.
HEARD: May 5, 2025
AMENDED SETTLEMENT AND FEE APPROVAL
1The Plaintiffs bring this motion for settlement approval, class counsel fee approval, and related relief under the Class Proceedings Act, 1992 (“CPA”), as in force prior to the October 1, 2020 amendments.
I. The proposed settlement
2## The proposed settlement
The proposed settlement is contained in the Settlement Agreement signed January 31, 2025. It provides the basis for settling the action as against Loblaw Companies Limited, George Weston Limited, Weston Foods (Canada) Inc., and Weston Bakeries Limited (collectively “Loblaw”). The Settlement Agreement envisions the action proceeding as against the rest of the Defendants (collectively, the “Non-Settling Defendants” or “NSDs”).
3The price fixing conspiracy with which this case is concerned was described in detail in my reasons for decision in the certification motion: David v. Loblaw , 2021 ONSC 7331 at paras. 10-14 . I will not repeat that description, except to observe that it dealt with packaged bread – a staple of Canadian food products – and impacted on virtually every household in Canada.
4The settlement amount of $500,000,000 is composed of an all-inclusive settlement payment of $404,000,000 plus $96,000,000 in a card program previously paid by Loblaw to potential class members. The Settlement Agreement provides the $500 million will be allocated 78% ($390 million CAD) to the Ontario action and 22% ($110 million) to the parallel Quebec action. This division is based on Canadian census data from 2001 to 2021.
5The proposed settlement entails a final resolution of all claims asserted or which could have been asserted against Loblaw by the Plaintiffs. This settlement and resolution of claims against Loblaw is to be on a national basis. The stated purpose of the settlement is not only to provide compensation for the class members, but to avoid further expense and the burdens brought on by protracted litigation.
6The Quebec action has proceeded in parallel with the within action, and was authorized as a class action in April 2020: Govan c. Loblaw Companies Limited , 2019 QCCS 5469 . The settlement approval hearing for the Quebec action is scheduled to take place in the Quebec Superior Court on June 16, 2025. Quebec class counsel will also separately be seeking approval of their fees in the Quebec proceeding. The Quebec approval requests are not part of the motions before me.
7The Distribution Protocol that forms part of the Settlement Agreement is designed to equitably distribute the settlement funds to class members. It takes account of the Loblaw card program discussed by me in a set of reasons arising out of a previous motion, and which was always envisioned as being a part of any potential settlement: David v. Loblaw , 2018 ONSC 198 , at paras. 22 , 25. It will be administered by Verita Global, a firm that is well experienced with class action settlement administration and is, by all accounts, equipped to handle a large-scale settlement administration such as this one.
8Class counsel submit, and I agree, that the Distribution Protocol is structured to accomplish the task of distributing the funds to class members in as user-friendly a way as possible. The mechanics of the distribution are summarized by class counsel as follows:
(a) A pro rata share of the monies allocated to the Consumer Fund in an amount up to $25 will be calculated as compensation for those Consumer Purchasers who did not participate in the Loblaw Card Program and whose claims are approved by the Settlement Administrator;
(b) If there are monies remaining in the Consumer Fund after the initial calculation of $25 of compensation for Consumer Purchasers who did not participate in the Loblaw Card Program, a pro rata share of the remaining funds will be calculated for all Consumer Purchasers whose claims are approved by the Settlement Administrator including those who participated in the Loblaw Card Program;
(c) Consumer Purchasers who participated in the Loblaw Card Program whose claims are approved by the Settlement Administrators will be paid this incremental compensation provided their incremental pro rata share as calculated exceeds the $5 minimum payment threshold. For those Consumer Purchasers who did not participate in the Loblaw Card Program, their initial $25 pro rata share and their supplemental pro rata share as calculated in accordance with the provisions of the Distribution Protocol will be combined and paid as a single payment;
(d) If any monies allocated to the Consumer Fund in either Action remain after distribution has been made in accordance with the provisions of the Distribution Protocol (and any entitlement of the Fonds d’aide aux actions collectives in the Quebec action), the balance remaining shall be paid by the Settlement Administrator in that Action cy-près to a registered charity or not-for-profit organization connected to addressing food security in Canada (including, but not limited to, food banks and/or school food programs), selected by Class Counsel in the Action and approved by the Court for that Action. Under no circumstances will monies revert to Loblaw/Weston.
9Importantly for the class, the S ettlement Agreement also provides for future cooperation by Loblaw to assist class counsel in prosecuting the ongoing action against the Non-Settling Defendants. This assistance includes fulsome documentary production, sales and data production, assistance with future discovery of and by the NSDs, future assistance from Loblaw’s counsel, and the provision of witnesses in discovery and trial. This portion of the Settlement Agreement, which is contained in Schedule “D” to that agreement, is material to the compromise reflected in the overall agreement.
10The long duration of the price fixing conspiracy alleged in the pleadings, the secrecy which surrounded the conspiracy, and the vigorous defences put up by the Non-Settling Defendants, make Loblaw’s cooperation a key factor in assuring that the Plaintiffs can continue to litigate against the NSDs.
11Finally, the Settlement Agreement calls for what have become standard bar orders. These orders prohibit the class from seeking to recover the proportion of any liability that could be found against Loblaw from the Non-Settling Defendants and/or named or unnamed co-conspirators or any other party that was not a party being released under the Settlement Agreement. The bar orders also prohibit claims for contribution, indemnity or other claims over relating to the claims that were made, or which could reasonably have been made, as against Loblaw by the Non-Settling Defendants or any named or unnamed co-conspirator.
12The proposed bar orders also contain provisions specifically designed to address the crossclaims asserted by Metro Inc. and Sobeys Inc. Those orders will prevent the settlement from affecting the independent claims for relief under those crossclaims, unrelated to the damages claimed by the Plaintiffs.
II. The difficult litigation and settlement process
13## The difficult litigation and settlement process
The parties do not have to do much to convince me that the litigation has been hard fought on all sides. I have case managed this action from the outset and am intimately familiar with the series of motions that the action has spawned. I understand from counsel that the parallel action in the Quebec courts has been prosecuted and defended with equal vigour by the parties.
14The long and complex history of these proceedings can be gleaned by listing the motions, appeals, and other proceedings that have been brought.
Notice of Action (November 7, 2017) and Statement of Claim (December 7, 2017)
Motion re propriety of Loblaw card program - David v. Loblaw , 2018 ONSC 198
Ontario contested carriage motion - David v. Loblaw, 2018 ONSC 1298 .
British Columbia contested carriage motion and appeal - Asquith v. George Weston Limited , 2018 BCSC 1557 , aff’d 2019 BCCA 447
Third party funding approval motion - David v. Loblaw , 2018 ONSC 6469
Litigation pause motion pending Supreme Court ruling on rights of “umbrella purchasers” - David v. Loblaw , 2018 ONSC 7519
Quebec contested authorization motion - Govan c. Loblaw Companies Limited , 2019 QCCS 5469 ; Govan c. Loblaw Companies Limited , 2020 QCCS 968
Draft Mareva motion and resolution of contested sale of Weston Foods (Canada) Inc.
Ontario contested certification motion - David v. Loblaw , 2021 ONSC 7331
Appearance re contested terms of certification Order - David v. Loblaw , 2022 ONSC 3486 .
Motions for leave to appeal the certification Order - David v. Sobeys Inc ., 2023 ONSC 1585 (Div. Ct.); David v. Sobeys Inc ., 2023 ONSC 1799 (Div. Ct.).
Contested appeal of certification ruling - David v. Loblaw , 2024 ONSC 1157 (Div. Ct.)
Leave to appeal Divisional Court ruling on certification denied - COA-24-OM-0093
Quebec contested motions over production and discovery issues - Govan c. Loblaw , 2021 QCCS 63 , appeal allowed in part 2021 QCCA 1914 ; Loblaw c. Govan , 2022 QCCA 1155 , motion for a stay rejected, 2022 QCCA 1603 , leave to appeal to SCC ref’d 2023) an arrangement or agreement with the other defendants contrary to section 45 of the Competition Act and (ii) that such an unlawful agreement caused price increases and damages beyond the two price increases for which Canada Bread has pled guilty. They argued this would need to be done for every alleged price increase across different markets and for the entirety of the class period.
The Loblaw and Weston Defendants also pointed to additional uncertainty about whether the plaintiffs would be able to establish violations of both the old (pre-2010) version of the Competition Act and the current version. Under the old version, the plaintiffs would have to establish that the price-fixing arrangement “unduly” prevented or lessened competition.
The defendants also took credible positions about uncertainty as to whether the plaintiffs would be able to establish liability for the conspiracy at the retailer level. They also pointed to the requirement that co-conspirators must be “competitors” of each other in order to attract liability under the current version of section 45 of the Competition Act . They argued this complicates the plaintiffs’ ability to prove a price-fixing conspiracy at both the manufacturer and retailer levels of the distribution chain. Therefore, and based on the positions taken at the mediation, it is apparent that the settlement agreement and distribution protocol will deliver significant compensation to the class now, and avoid years of continuing litigation against the Loblaw and Weston Defendants.
III. Cooperation and confidentiality in the Settlement Agreement
18## Cooperation and confidentiality in the Settlement Agreement
The Plaintiffs have been assured in the Settlement Agreement that they will have Loblaw’s cooperation going forward in the action against the Non-Settling Defendants. The Ontario and Quebec Plaintiffs and their respective counsel all consider this cooperation regime to be material to the settlement and incredibly valuable in the ongoing litigation.
19Indeed, the agreement of Loblaw to cooperate with the Plaintiffs in providing them with evidence of a conspiracy for which Loblaw itself says it was in the centre does not only form part of the compromise making up the present settlement; it may well facilitate an earlier potential resolution of the continued litigation against the NSDs. This cooperation includes full documentary disclosure by Loblaw to the Plaintiffs as well as the prospect of Loblaw assisting the Plaintiffs by providing supporting evidence at trial. It is noteworthy that this cooperation agreement is seen by Plaintiffs’ affiant and member of Plaintiffs’ counsel team, David Wingfield, as imposing obligations on Loblaw that “exceed what would be obtainable through the discovery process had Loblaw/Weston stayed in the Action.”
20With the centrality of the ongoing cooperation between Loblaw and the Plaintiffs in mind, the Defendants raise two concerns. The first is with respect to paragraph 21 of Schedule D to the Settlement Agreement, entitled Terms of Cooperation, which provides, in part:
(21)… Plaintiffs and Class Counsel agree they will not disclose the Documents and information provided by the Settling Defendants except in accordance with the terms of the Confidentiality Agreement entered into between the Parties for the purposes of mediation.
21Counsel for Metro Inc. points out that the Non-Settling Defendants do not have copies of the Confidentiality Agreement referenced in paragraph 21. Accordingly, they are unsure as to what might be held back from them pursuant to the agreement contained in this paragraph. Metro’s counsel submits that a clause should be added to any settlement approval order making it clear that the Plaintiffs are obliged to fulfill all of the disclosure and production requirements under the Rules of Civil Procedure, regardless of what the Settlement Agreement between the Plaintiffs and Loblaw says.
22Plaintiffs’ counsel object to this addition to the Order. They submit that it is, if anything, premature since it raises a discovery issue and discovery of the NSDs has not yet begun. They also say that it is somewhat offensive, in that it suggests that the Plaintiffs must be prospectively prevented from breaching their obligations under the Rules. Plaintiffs’ counsel analogizes this to a requirement that the Plaintiffs not break the law when there is no evidence or suggestion that they have done so.
23I agree with Plaintiffs’ counsel; there is no reason to add a provision to the proposed Order addressing a hypothetical future failure of the Plaintiffs to live up to their discovery obligations. Discovery issues are to be addressed in the usual way, if and when they arise during the discovery stage of the action.
24More than that, a clarification such as that requested by the Defendants is entirely unnecessary. An agreement between two parties – i.e. the Plaintiffs and Loblaw – does not curtail the procedural rights of third parties – i.e. the Non-Settling Defendants. And that fact does not change just because this Court might approve the Settlement Agreement between the Plaintiffs and Loblaw.
25Plaintiffs’ counsel has confirmed that they do not view the Terms of Cooperation in Schedule D of the Settlement Agreement as impacting the rights of the Defendants under the Rules. They state that while they may contest the need to produce any given document down road on the grounds of privilege, relevance, etc., they will not argue that a document sought by the Defendants that the Plaintiffs obtained from Loblaw, and that is otherwise the Defendants’ right to obtain, cannot be produced due to the Terms of Cooperation in their settlement with Loblaw.
26The second contentious point is raised by counsel for Canada Bread Company Limited (“Canada Bread”). She expresses a concern with respect to paragraphs 6 and 12 of the Terms of Cooperation. Those paragraphs provide, in part:
(6) All Documents provided by the Settling Defendants pursuant to this Schedule, or that would have been provided pursuant to this Schedule if they had not previously been provided to the Plaintiffs…may be relied on by the Plaintiffs and tendered at trial…as if they were produced during documentary discovery…
(12) Class Counsel may: (i) use information obtained from the oral evidentiary proffers in the prosecution of any or all of the Actions…
27Again, the fear that is expressed here is that, since the NSDs will not know what the Plaintiffs and Loblaw considers confidential, and since I am being asked to put the Court’s seal of approval on the settlement, a future trial judge in this action might rule that these paragraphs make anything deemed confidential by the Plaintiffs and Loblaw inadmissible at trial. Counsel for Canada Bread is concerned to reserve the issue of admissibility to the trial judge.
28I agree with Canada Bread’s counsel that admissibility of any piece of evidence at trial is ultimately for the trial judge to determine. I do not agree, however, that the ability of the trial judge to make all evidentiary decisions for the trial is impacted in any way by paragraph 17 of the Terms of Cooperation. I also do not think that any trial judge will see her or his range of options with respect to admissibility impaired by paragraphs 6, 12, or any other paragraphs of the Settlement Agreement.
29Again, a trial judge will doubtless understand that the Settlement Agreement between the Plaintiffs and Loblaw binds them alone in this respect; it would be a very unusual trial judge who considered themself to be bound by that agreement as well. There is no reason to ward off a hypothetical future misunderstanding by the judge who eventually presides at a trial of this action.
30The suggestion put forward by Canada Bread’s counsel is a product of extra careful lawyering, which is ordinarily a good thing to encourage. But Canada Bread’s concern here demonstrates that sometimes there can be too much of a ‘good thing’.
IV. Best interests of the class
31## Best interests of the class
To approve the settlement, I must find that, in all circumstances, the settlement is fair, reasonable, and in the best interests of the class as a whole: Mancinelli v. Royal Bank of Canada , 2017 ONSC 2324 , at para. 36 . As the analytic question is usually expressed, within a zone of reasonableness; does the settlement allow for a range of acceptable outcomes depending on the subject matter of the litigation and the nature of the damages sought?: Sheridan Chevrolet v. Valeo S.A. , 2021 ONSC 3555 at para. 4 ; McKillop and Bechard v. HMQ , 2014 ONSC 1282 , at para. 23 .
32To make that determination of reasonableness, courts typically consider a number of the diverse factors first described by Winkler J. (as he then was) in Parsons v. Canadian Red Cross Society , [1999] O.J. No. 3572, at paras. 71 , 72 and 92 (SCJ):
(i) the likelihood of recovery or success,
(ii) the amount and nature of discovery evidence,
(iii) settlement terms and conditions,
(iv) the recommendation and experience of counsel involved,
(v) future expense and likely duration of litigation,
(vi) recommendation of neutral parties, if any,
(vii) the number and nature of objections,
(viii) presence of good faith and the absence of collusion,
(ix) degree and nature of communications by counsel and plaintiff with class members,
(x) the dynamics of, and positions taken during, the negotiations, and
(xi) the risks of not unconditionally approving the settlement.
33Applying each of these grounds to the Settlement Agreement in issue here, the conclusion comes out in favour of approving the proposed settlement. The likelihood of recovery or success was high but not guaranteed, and the future length and expense of continued litigation was very large. The mediation gave rise to a detailed and thorough exchange of information between the parties, allowing them to evaluate each other’s case in a meaningful and confidence-building way. The settlement terms and conditions are favorable to the class, with a very substantial damages payment along with an advantageous cooperation agreement in respect of the ongoing litigation against the Non-Settling Defendants.
34Most importantly, the parties bargained in good faith with the help of experienced counsel. The mediation was also conducted with a highly competent and experienced mediator, who has written a report outlining the mediation process and opining that it was a serious negotiation on both sides and that it ultimately produced a Settlement Agreement with terms that accommodate the needs of both sides.
35Previous cases have acknowledged that there can be a range of acceptable settlements, especially in complex litigation such as the case at bar. In assessing a settlement, a court is compelled to recognize “the uncertainties of law and fact in any particular case and the concomitant risks and costs necessarily inherent in taking any litigation to completion”: Ford v. F. Hoffman - La Roche Ltd ., 2005).
36Counsel advise that there have only been 475 valid opt-outs and 4 objections to the settlement. None of the objectors chose to speak at the hearing of the settlement motion, but a review of their written objections indicates that they have no principled grounds for objecting to the settlement other than that they would like more money. While I sympathize with that sentiment, I am not in a position to compel that the settlement fund be increased, nor am I inclined to reject the settlement based on a small handful of class members who would like more. In any case, 4 objections and 475 opt-outs are very small numbers in view of the estimated 20 million-plus class members.
37With all of that in mind, I conclude that the settlement being proposed here is an excellent and fair result for all concerned. It encompasses all of the traditional factors that favour approving a settlement. In particular, it is in the best interests of the class as a whole. In my view, it falls squarely within the zone of reasonableness.
V. Payout of third party funder
38## Payout of third party funder
On October 29, 2018, I approved the Litigation Funding Agreement (“LFA”) between the Plaintiffs and the third-party funder, which is now Omni Bridgeway: David v. Loblaw , 2018 ONSC 6469 . Under the LFA, the funder’s return is based on the amount of “Litigation Proceeds” paid directly or indirectly for the benefit of the (Ontario) class members.” This comes to a total of $390 million.
39With the court’s approval of the Settlement Agreement, the amount payable to Omni Bridgeway under the LFA in respect of this Action will be $26,734,619. The Settlement Agreement provides that these funds are not to be paid out to the funder until the Effective Date under the Settlement Agreement – i.e. the date the claim against Loblaw is dismissed and the Release takes effect. This arrangement is designed to protect the settlement fund from any mishap in respect of the funder’s payout.
VI. Fee approval
40## Fee approval
Sections 32 and 33 of the version of the CPA in force when this action was commenced require that counsel fees be “fair and reasonable” in order to be approved by the court: Lavier v. MyTravel Canada Holidays Inc ., 2013 ONCA 92 , at para. 27 . Optimally, the fees charged by class counsel should foster access to justice for the class, while providing the economic incentive necessary to encourage lawyers to take to take the risk of a class action and to use their best efforts to obtain a favourable recovery for the class.
41The Court of Appeal in Smith Estate v. National Money Mart (2011), 2011 ONCA 233 , 106 O.R. (3d) 37, at para. 80 . set out a list of factors to consider in making this assessment:
Factors relevant in assessing the reasonableness of the fees of class counsel include: (a) the factual and legal complexities of the matters dealt with; (b) the risk undertaken, including the risk that the matter might not be certified; (c) the degree of responsibility assumed by class counsel; (d) the monetary value of the matters in issue; (e) the importance of the matter to the class; (f) the degree of skill and competence demonstrated by class counsel; (g) the results achieved; (h) the ability of the class to pay; (i) the expectations of the class as to the amount of the fees; (j) the opportunity cost to class counsel in the expenditure of time in pursuit of the litigation and settlement.
42There is no statutory cap on fee agreements in Ontario class actions; typically, contingency fee percentages ranging from 15% to 33% enjoy presumptive validity. That said, the courts are not bound by the terms of contingency fee agreements, and they have the discretion to set a fee agreement aside where it would otherwise not be fair and reasonable for the class members: Westwood v. TD Asset Management Inc ., 2024 ONSC 6872 , at paras. 48-51 .
43As class counsel point out in their submissions, the proposed settlement of $500,000,000 is what Justice Belobaba in the “Sixties Scoop” case dubbed a “mega fund” settlement: Brown v. Canada (Attorney General) , 2018 ONSC 3429 , at para. 28 . There is no established definition for what constitutes a “mega fund” case. The courts have tended to make that evaluation on a case-by-case basis.
44Having said that, I have no hesitation in saying that the settlement amount called for here puts this case in the mega fund category. This settlement is beyond any of the mega fund thresholds noted in the case law, which are more typically in the $50 to $100 million range: see Cannon v. Funds for Canada Foundation , 2013 ONSC 7686 , at para. 3 ; Relvas v. Auxly Cannabis Group Inc ., 2023 ONSC 6394 , at para. 24 ; and Rosen v. BMO Nesbitt Burns Inc ., 2016 ONSC 4752 , at para. 23 ; Moushoom v. Canada (Attorney General) , 2023 FC 1739 , at para. 4 .
45The Court of Appeal has stated that in mega fund cases, class counsel fees should not necessarily be awarded on the basis of contingency percentage if the fee would be disproportionate to the risks incurred and would resemble a lottery win: Fresco v. Canadian Imperial Bank of Commerce , 2024 ONCA 628 , at para. 23 . As the Federal Court has put it: “This Court must avoid approving counsel fees that result in windfalls, as class action litigation is not a lottery and the purpose of this Court’s class action regime is not to make lawyers wealthy”: Moushoom , supra , at para. 87 .
46Courts have therefore resorted to using fee multipliers as a cross-check on mega fees. In doing so, they have sought to ensure that the premium over the time incurred cannot be so large as to be unseemly so as to impact the integrity of the profession: Fresco , supra , at para. 23 . The fee must be at a level that is non-champertous; but it must also allow class counsel an incentive to obtain a multiple of their base fee: Parsons , supra , at para. 11.
47Accordingly, “[i]f the proposed fees are to be reduced on the ground that they impair the integrity of the profession, some principled basis must be suggested for doing so”: Endean v. Canadian Red Cross Society , 2000 BCSC 971 , at para. 85 . Class counsel point out in their factum that fees such as those sought here – in the $75 million range – have been approved elsewhere in mega fund cases. In Pro-Sys Consultants Ltd. v Microsoft Corporation , 2018 BCSC 2091 , at para. 68 , which was, prior to the present case, the largest price-fixing settlement in Canadian history, the Court awarded fees of $100.1 million. That case had extensive, contested pre-settlement litigation similar to the case at bar.
48The requested fees here equate to a multiplier of approximately 3.49, based on a lodestar of $20,741,395 as at April 15, 2025 and the time docketed thereafter, estimated at $500,000. That is well within the 2x to 4x range of multipliers the courts have endorsed in mega fund cases. Moreover, on a percentage basis the requested fee equates to 19% of the recovery sought to be approved on this motion. That rate is, obviously, lower than the 25% provided by the applicable contingency agreement between class counsel and the representative Plaintiffs.
49It is also worth noting that there have been no objections by class members to the proposed fee. That indicates that, although the fee is a large number, the class, and the public at large, understands that it is in proportion to the risks assumed and the amount of work done, and is not so large as to shock the conscience.
VII. Disposition
50## Disposition
The Settlement Agreement signed January 31, 2025 is hereby approved.
51The counsel fee sought by class counsel in this Action is hereby approved, as is the ancillary relief required to administer the settlement.
52There will be Orders to go in respect of the above rulings in the forms submitted by class counsel.
Date: May 7, 2025 Morgan J.