Lawyers go loco for cocoa

$50 million class action lawsuit launched

Tuesday, April 7th, 2009

They may seem sweet, but chocolate companies have left a bitter taste in the mouths of many consumers.

A class action lawsuit has been proposed against four major Canadian chocolate companies: Nestlé, Hershey’s, Cadbury and Mars.

The Toronto law firm Juroviesky and Ricci LLP allege the major manufacturers have gone against the Competition Act by conspiring to lessen competition and fix the price of their product for Canadian consumers.

On behalf of all Canadians who have consumed products of the listed companies between February 2004 and February 2008, the law firm has asked for $50 million in general damages.

Henry Juroviesky, managing partner at the law firm, said the governments in several countries including Germany, the United States and Canada have been investigating chocolate companies.

“Based upon the factual record that has been developed to date ... we feel that there is a strong case for a civil suit under the competition act,” he said.

Terry Smith, an employee at Mac’s Convenience Store at 277 Dundas St., agreed with the allegations that chocolate companies have raised their prices.

“The chocolate bars were $1.09 and now it’s $1.19,” he said.

If they win the lawsuit, Juroviesky said his firm plans to work with the judge to find a way to distribute the winnings among consumers. But he noted it would be a challenge, since such a large population is represented in this class action lawsuit.

“We would have to come up with a unique way to distribute the settlement proceeds,” he said. “It’s not as simple as cutting people a cheque.”

In particular, the firm suggested the use of coupons, so people who consume a large amount of chocolate are reimbursed for the unfair price jacks.

In addition to the aim of the lawsuit, the lawyers are also trying to make an example of the chocolate bar companies.

“All class actions are really meant to make a statement,” Juroviesky explained.

He said this trend of conspiracy among merchants is common in many industries, but many don’t get caught.

“The point of the class action is not necessarily to get a particular person a big win, but to change the behaviour of the defendants,” Juroviesky said.

Ultimately, the goal of the law firm was clear: “We want to stop them from the naughty behaviour.”

But the consensus of chocolate lovers on campus seemed to be the lawsuit was faulty.

Kate Kennedy, a journalism student, criticized the expectations of the lawsuit.

“If $50 million is what they’re shooting for, it’s not that much money for companies to dish out and it’s not much money for Canadians to get in return.”

Gemma Firman, second-year social science student, doubted the lawsuit would be successful.

Matt Walker, fourth-year media, information and technoculture student, agreed: “I feel like their time could be put towards something better.”

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