Gasoline Price-Fixing Cartel: Class Action

Langlois Kronström Desjardins has succeeded in dismissing a motion for permission to institute a class action against its client Canadian Tire Corporation Limited (“Canadian Tire”) which was alleged to be a member of a cartel that fixed the price of gasoline in the cities of Victoriaville, Sherbrooke, Magog and Thetford Mines. Quebec Superior Court Justice Dominique Bélanger did however allow the class action to proceed against several other of the named defendants. Essentially it was alleged that all of the defendants colluded to raise the price of gasoline simultaneously in the four municipalities concerned.

The class-action initiative was prompted by the exposure of a price-fixing cartel by the Competition Bureau in the summer of 2002, which led to various criminal charges.

In its analysis of the criteria applicable in determining whether the class action should proceed, the Court divided the defendants into three groups: those who had pleaded guilty to the criminal charges; those who, according to the documents filed in court, had evidently taken part in the collusion, and those who had merely been targeted by a search warrant. Canadian Tire was part of this third group of defendants.

The Court upheld Langlois Kronström Desjardins’ contention that there was no legal nexus between the plaintiffs and its client, as the latter did not directly operate the service stations doing business under the Canadian Tire banner, and the companies operating them did not appear to be subsidiaries of or otherwise related to Canadian Tire. The Court also agreed that the documents did not indicate that Canadian Tire or any of its employees had participated in the cartel.

Canadian Tire was represented by Michel Jolin, Serge Amar and Marie-Geneviève Masson.