Subway's $210 Million Chicken Content Defamation Claim Against The CBC Restored By Court Of Appeal

• Published date: 26 January 2021
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation, Libel & Defamation
• Law Firm: Gardiner Roberts LLP
• Author: Mr James Cook

The Ontario Court of Appeal has restored Subway's defamation action against the CBC which was dismissed in 2019 pursuant to Ontario's anti-SLAPP legislation, while summarily dismissing a negligence claim against the University which conducted the tests used by CBC in its investigation: Subway Franchise Systems of Canada, Inc. v. Canadian Broadcasting Corporation, 2021 ONCA 26 (CanLII); 2021 ONCA 25 (CanLII).

In 2017, CBC's Marketplace television show reported that Subway's chicken sandwiches compared poorly with four other restaurants under investigation. Unlike its competitors, whose sandwich meats were made nearly entirely of chicken, Subway's chicken sandwiches were reported to be made of "only slightly more than 50% chicken." The products were tested for the CBC by a DNA test laboratory at Trent University ("Trent").

Subway then commenced a defamation action against CBC and Trent, claiming that their investigation was faulty, that the Marketplace episode was defamatory, and that Subway had suffered business losses and serious reputation damage as a result. Subway sought damages of $210 million.

In 2019, Justice E.M. Morgan heard motions brought by the CBC and Trent to dismiss Subway's action pursuant to s. 137.1 of the Courts of Justice Act ("CJA"), Ontario's anti-SLAPP legislation. Essentially, CBC and Trent argued that the purpose of Subway's action was not to vindicate its reputation or recover any real damages, but to chill public discussion of an important consumer protection issue.

CBC's motion was successful and Trent's was not. Justice Morgan found that the court could not reasonably conclude that CBC's defence of "responsible communication" would not succeed, and further that the "public interest" aspect of CBC's program outweighed the potential impact of harm on the private business interests of Subway.

Conversely, Trent could not rely on the same protection since its anti-SLAPP motion was aimed to dismiss a negligence claim (based on how the tests were conducted) rather than defamation. Justice Morgan was not satisfied that Subway's negligence claim arose from an "expression" relating to a matter of public interest" as required by the statute.

The Court of Appeal reversed both decisions.

CBC's Defamation Claim Restored

Between the time of Justice Morgan's motion decision and the appeal, the Supreme Court of Canada released two decisions on the interpretation of s. 137.1 of the CJA which framed the Court of Appeal's analysis: 1704604...