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Subway may take a $ 210 million lawsuit against CBC for defamation

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Maria Gill
Maria Gill
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(Photo: Canadian Press)

Ontario’s highest court on Tuesday ruled a defamation lawsuit by the world’s largest fast-food restaurant chain against the Canadian Public Broadcasting Corporation over reporting chicken sandwiches.

By overturning Subway’s $ 210 million lawsuit dismissal without a merits hearing, the Ontario Court of Appeals ruled that the unproven claim is far from frivolous and merits careful consideration.

“Allowing this measure to proceed toward an affirmative decision gives appropriate weight to the public interest on the harm caused by the defamatory statements and the public interest on protecting the type of expression used by the CTC. Is being delivered,” the Court of Appeal noted.

On its “Marketplace” TV show in 2017, CBC claimed that about half of Subway’s chicken DNA is actually chicken, and the other half from soybeans. The report was based on tests conducted at Trent University.

A Subway expert in DNA methods and food testing replied that the tests were seriously flawed and their results were inaccurate. He said Subway tests detected no more than one percent of soybeans.

Subway has sued CBC and “Marketplace” host Charlsie Agro and others who worked on the show. The restaurant chain also sued Trent for defamation and negligence, alleging that the test was carried out due to negligence.

The company argued that the content of the show was wrong, unfairly damaged its reputation, damaged sales, and caused huge financial losses.

Gag order?

CBC argued in the Supreme Court that the defamation lawsuit violates the gag ordinance act, which prohibits legal action when the purpose is to end a discussion about matters of public interest. In November 2019, Judge Edward Morgan sided with the broadcaster.

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Mr. Morgan also ordered Subway to pay legal fees of $ 500,000 and $ 178,000 in costs and fees.

On appeal, Subway argued that Judge Morgan had made several errors. Among them, the company argued that the judge erred in concluding that CBC had a legitimate defense and that the public interest in protecting freedom of expression outweighed the harm it caused.

The appeals court agreed with Subway, and criticized Judge Morgan, among others, for concluding that CBC had done enough checks before it went live.

The Court of Appeal ruled that “there was no urgent need to publish the information.” “If a reasonable examination had been conducted before his release, the information would have been verified,” he added.

The appeals court also found Judge Morgan erred in ruling that the public interest outweighs the potential harm to Subway’s reputation and financial interests.

The appeals court ruled that “the substance of the lawsuit is CBC’s ability to rely on the defense of responsible communications.”

“Continuing to act should not prevent others from speaking out, but it should deter others from making observations without taking reasonable steps first to ensure that those observations are correct.”

Subway’s attorneys did not immediately respond to a request for comment, but CBC spokesperson Chuck Thompson said he was disappointed with the decision.

“(We) support our journalism and are now looking at the next steps,” said Thompson.

The Court of Appeals, in a parallel ruling, rejected Judge Morgan’s ruling that Subway’s negligence lawsuit against Trent University could continue. The appeals court set aside the $ 220,000 Subway owed and ordered the company to pay the academic $ 45,000 to cover the costs of the appeal.

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