Shoppers Drug Mart named in $1B class action

Shoppers Drug Mart Corp. is facing a proposed $1-billion class action lawsuit that alleges the company breached contracts with store owners. Shoppers said it received a “Notice of Action” on Monday from two “licensed associate-owners” who are seeking damages on behalf of a proposed class that would include proprietors of the chain’s 1,181 stores.

The Financial Post
November 21, 2010

Shoppers Drug Mart named in $1B class action
Drew Hasselback

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Shoppers Drug Mart Corp. says it has been named in a $1-billion proposed class action lawsuit that alleges the company breached contracts with licensed associate owners.

Shoppers Drug Mart Corp. is facing a proposed $1-billion class action lawsuit that alleges the company breached contracts with store owners.

Shoppers said it received a “Notice of Action” on Monday from two “licensed associate-owners” who are seeking damages on behalf of a proposed class that would include proprietors of the chain’s 1,181 stores.

Shoppers said: “The claim alleges, among other things, that Shoppers Drug Mart and two of its affiliates breached contractual and other duties to its associate-owners by collecting, receiving and/or retaining funds and/or benefits that are in excess of those permitted by the applicable agreements.”

The allegations mentioned in the notice have yet to be proven in court. Shoppers said that it believes the case is without merit, adding that it will vigorously defend the claim.

The plaintiffs are represented by Kenneth Rosenberg, a founding partner of the Toronto-based firm Paliare Roland Rosenberg Rothstein LLP.

Contacted on Monday, he said it’s too early for him to speak about the case. “It’s premature and I have no comment at this time.”

The proceedings were launched in the Ontario Superior Court of Justice on Friday with the filing of the notice of action. The notice came to the attention of Shoppers Drug Mart on Monday. If the plaintiffs wish to proceed, they still need to file a “statement of claim” that spells out their allegations. Ontario’s rules of civil procedure call for the statement of claim to be filed within 30 days of a notice of action, though this period can be extended in certain circumstances.

If the statement of claim is issued, the case would still need to be certified by a judge before it can proceed as a class action.

Founded in 1962, Shoppers licenses its brand to pharmacists or “associates” who own and operate their stores and share in the company’s profits. The company had sales of about $10-billion in fiscal 2009.

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http://www.financialpost.com/news/Shoppers+Drug+Mart+named+class+action/3867149/story.html


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