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Canadian Courts Derail McDonald's Monopoly Settlement

The world's largest fast-food chain thought it closed the book on the embarrassing fiasco surrounding a series of promotional games in April 2003, when Judge Stephen Schiller of the Circuit Court of Cook County, Ill., approved a global settlement in Boland v. McDonald's. But someone forgot about Canada.

In a February 2005 decision the Ontario Court of Appeal allowed a parallel Canadian class action to proceed despite an American settlement that purported to bind Canadian class members. The ruling in Currie v. McDonald's Restaurants of Canada Limited and Simon Marketing Inc. came as a rude surprise to American companies that expect Canadian courts to rubber stamp U.S. class action settlements. The decision means U.S. companies seeking an end to litigation by settling in a U.S. court have no assurance they will not face further exposure in Canada.

Schiller ordered McDonald's to publish notice of the settlement in five publications in the United States, including USA Today. He also specifically provided for notice of the settlement to Canadian plaintiffs. He required McDonald's to place two ads in MacLean's, the leading English-language newsweekly in Canada, and in each of three prominent French-language newspapers in Quebec.

Sometime between May and September 2003, Greg Currie, a McDonald's patron in Canada, heard about Jacobson's claim that McDonald's was trying to avoid handing out high-value prizes in Canada. No such allegation had ever been made in Boland. Currie commenced a class action in the Ontario Superior Court of Justice against McDonald's in October 2003. The class action was based on Jacobson's allegations, as well as those in the Boland complaint. No member of Currie's class appeared or took part in any way in the American proceedings.

This didn't happen in Boland. Indeed, the evidence established that the notice as published in Canada reached only 29.9 percent of Canadians who frequent burger restaurants. The contents of the notice also were

suspect:"[The] wall to wall legalese [of the notice] conveys no more than a hint of its eye-glazing opaqueness," the court wrote.


Julius Melnitzer

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