Molson Coors wins judgement dismissing a C$1.4B class action
April 17, 2019
1.40 Billion CAD
On March 15, 2018, the Ontario Superior Court of Justice released its judgment in the case of Hughes v. Liquor Control Board of Ontario, 2018 ONSC 1723. The Court dismissed a C$1.4 billion class action against Molson Coors Canada.
The class action was brought on behalf of Ontario beer purchasers and also named Labatt, Sleeman, The Beer Store and the LCBO as defendants. The action alleged that a “Framework Agreement” between the LCBO and The Beer Store, under which the parties confirmed various historical practices including that beer in package sizes larger than 6-packs would only be sold at The Beer Store, was an illegal conspiracy to allocate the Ontario beer retail market that resulted in increased beer prices. The action also claimed that the defendants had illegally charged higher beer prices for non-retail purchasers of beer, contrary to the requirements of the Liquor Control Act that the price of beer “shall be the same at all government stores”.
All parties brought summary judgment motions focused primarily on whether the defendants could rely on the “regulated conduct defence” to resist the claims for breach of the Competition Act. Justice Perell agreed that the regulated conduct defence was a full answer to the plaintiffs’ claims under the Competition Act (calling plaintiffs’ arguments that the LCBO was not authorized to enter into the agreement “strained”). He also accepted the defendants’ interpretation of Liquor Control Act that the so-called “uniform price rule” allowed for different prices for beer sold to retail and on-retail consumers. Justice Perell further found that, in any event, amendments to the Liquor Control Act in 2015 retroactively blessing the Framework Agreement and differential pricing were a further full answer to the plaintiffs’ claims.
On April 17, 2019, the Ontario Court of Appeal denied the plaintiffs’ appeal from the Superior Court's decision.
McCarthy Tétrault LLP advised Molson Coors Canada with a team led by R. Paul Steep that included Adam Ship, Katherine Booth and William Main.