Executive Summary: Key Legal and Evidentiary Issues

• Characterization of Doordash’s erroneous tax calculation on DashPass discounts as a potentially misleading representation under article 227.1 of the Loi sur la protection du consommateur (LPC).
• Evaluation of whether a good-faith tax error, with overcharged taxes remitted to governments, could still give rise to civil liability and corrective relief in a class action.
• Judicial assessment of the fairness and reasonableness of a settlement providing $1 order credits (up to a fixed fund) instead of direct cash refunds to class members.
• Scrutiny of the breadth of the release of “Released Claims” and “Released Persons” to ensure it remains limited to claims arising from the overcharging during the class period.
• Consideration of class members’ procedural rights, including the need for adequate French-language communication so francophone members could meaningfully opt out or object.
• Review of class counsel’s contingency-fee arrangement and the reasonableness of $107,000 in fees and disbursements, paid by Doordash on top of the credit fund, in light of access-to-justice goals.

Facts of the case

Thomas Vaillancourt, a resident of Quebec, subscribed to Doordash’s DashPass program, paying a monthly fee of $9.99. In exchange, DashPass members received reductions on delivery and service fees when they placed orders through the DoorDash Canada platform. During the relevant period, Vaillancourt observed that although the service fees on his orders were reduced as promised, sales taxes (TPS/TVQ) were nonetheless calculated on the full, undiscounted amount of the fees. In practical terms, the tax was applied as if no DashPass discount had been granted. This ran counter, in his view, to the indications of Revenu Québec regarding how sales tax should be computed when discounts are applied. For two example transactions, he determined that the miscalculation led to overcharges of $0.18 on one order and $0.30 on another. While modest in isolation, these amounts allegedly reflected a systematic practice affecting all DashPass subscribers in Quebec over several years, resulting in widespread overcollection of sales tax that should not have been charged.

The proposed class action and alleged legal violations

On 31 January 2023, Vaillancourt filed an application for authorization to bring a class action in the Quebec Superior Court. The proposed class comprised Quebec residents who, between 25 August 2019 and 8 May 2023, (1) held a DashPass subscription and (2) paid sales taxes on at least one order made via DoorDash Canada during that period. The end date of 8 May 2023 corresponded to the point at which Doordash had corrected its tax calculation process, explaining the restriction of the class period. In his pleadings, Vaillancourt alleged that Doordash’s billing method was misleading and contravened the Loi sur la protection du consommateur (LPC). In particular, the parties agreed that, for settlement purposes, the authorized class action would focus on the reproach under article 227.1 LPC, which prohibits any false or misleading representation regarding the existence, imputation, amount or rate of duties or taxes exigible under federal or provincial law. Vaillancourt also asserted that Doordash knew about the overcharging and nonetheless persisted in the practice, thereby deliberately misleading consumers. The relief sought included reimbursement of the overpaid tax for each class member and punitive damages of $5 per person.

Settlement-only authorization and Doordash’s position

Before the case proceeded to a contested authorization or trial on the merits, the parties entered into settlement discussions. On 6 June 2024, they concluded a settlement agreement. Doordash expressly denied all liability, disputed any obligation to compensate the class, and continued to contest the plaintiff’s right to have an action collective authorized. It maintained that any error in the tax calculation was committed in good faith and that the overcharged taxes had been remitted to federal and provincial tax authorities, not retained as profit. Nonetheless, Doordash agreed to resolve the matter in light of the foreseeable costs, delays and risks of a contested class proceeding. On 17 October 2024, the Superior Court authorized the class action for settlement purposes only, thereby avoiding a full contest on authorization. At the same time, it approved notices to class members describing the proposed settlement and informing them of a scheduled approval hearing on 15 January 2025, as well as the deadlines for opting out of the class action or filing objections to the settlement.

Language fairness, additional notices and objections

When the Court heard the settlement approval application on 15 January 2025, the Fonds d’aide aux actions collectives (FAAC) intervened and raised a procedural fairness concern. Specifically, the FAAC argued that francophone members of the class had not been provided with an oral reading of a French version of the settlement, which limited their ability to clearly understand its contents, exercise their right to opt out, or submit informed objections. In response to this concern, the Court suspended its deliberations and, on 11 February 2025, approved additional notices granting class members a fresh 30-day period to exclude themselves from the class action or object to the settlement. The Court reserved 30 April 2025 as the date to hear any objections. Ultimately, no class member filed an objection. Eleven class members elected to opt out. While the absence of objections was not treated as a decisive factor by itself, it formed part of the overall context the Court considered in assessing the fairness and reasonableness of the settlement.

Terms of the settlement and distribution mechanism

The settlement agreement structured the compensation to class members as non-cash credits administered by Doordash rather than direct monetary payments. Based on its records, Doordash identified approximately 323,422 members of the class. For these persons, it agreed to provide a $1.00 credit applied automatically to each qualifying order placed on the DoorDash Canada platform through the email-linked account that had been subject to the original overcharging. Orders containing alcohol were excluded from this credit. These credits were to be drawn from a fixed credit pool of $357,000; in practical terms, this allowed for up to 357,000 orders to receive a $1.00 reduction. The amount available to each individual class member was not capped per se; a given member could receive multiple $1.00 credits as long as they placed eligible orders while credits remained. The availability of credits would appear in the “Promo Codes” section of active accounts, and Doordash undertook to administer this system at its own cost. For class members whose accounts had been deactivated, the settlement permitted them to request reactivation until 31 December 2024 to benefit from the credits. Doordash also assumed responsibility for issuing the settlement notices to the class and for producing a final report on the administration of the credit fund within 60 days after its full depletion.

Released claims and scope of the discharge

In exchange for these benefits, class members (except those who opted out) agreed to release Doordash and various related entities from a defined scope of claims. The agreement defined “Released Claims” broadly as all claims, demands, rights, liabilities and causes of action of any nature whatsoever—known or unknown, matured or unmatured, whether based in delict, contract or any other legal right under federal or provincial law—that the plaintiff or any class member has or may have against the “Released Persons,” arising out of or in any way related to the claims asserted in the litigation. To remove doubt, the definition specified that this included all claims in respect of any charges paid by class members to the defendants during the class period. “Released Persons” included Doordash Technologies Canada Inc. and its past and present partners, affiliates, predecessors, successors, assigns, parent companies, subsidiaries, insurers, officers, directors and employees. The Court emphasized that while the language was broad, it remained tied to the dispute over overcharged fees and taxes in the defined period, and did not extend to entirely unrelated future claims.

Judicial framework for approval of class settlements

The Court reiterated that under article 590 of the Code de procédure civile, a settlement in a class action must be approved by the Court and will then bind all non-excluded members with the authority of res judicata. This consequence triggers a protective role for the judge, who must ensure that the agreement is just, fair and in the best interests of the class. Drawing heavily on Quebec Court of Appeal precedents such as Option consommateurs c. Banque Amex du Canada and A.B. c. Clercs de Saint-Viateur du Canada, the judge organized the analysis around standard criteria: the probabilities of success of the action; the nature and extent of the evidence; the settlement’s modalities; the recommendation and experience of counsel; the anticipated costs and duration of continued litigation; any neutral third-party view; the number and nature of objections; and the good faith of the parties and absence of collusion. Because both sides jointly supported the settlement, and settlement negotiations and client communications are usually subject to privilege, the Court noted that it had to compensate for limited disclosure by exercising heightened vigilance and insisting on full, frank information at the approval stage.

Evaluation of litigation risk, quantum and settlement value

Regarding the prospects of success, Doordash’s counsel argued that the company’s mistake in calculating tax was a good-faith error and that all overcollected taxes were paid over to governmental tax authorities, so that Doordash itself had not been unjustly enriched. From this perspective, they maintained that liability was far from assured and that the action would be vigorously contested. Plaintiff’s counsel acknowledged these litigation risks both at authorization and on the merits, noting the complexity of the fiscal issues and the uncertain likelihood of securing punitive damages of $5 per person. The parties had previously estimated the total value of the claim at approximately $1.25 million. When the settlement’s value was considered as a whole—combining the $357,000 credit fund available to class members with $107,000 in class counsel fees and disbursements—the Court accepted plaintiff counsel’s submission that the settlement represented about 37% of the overall claimed value. Given the low individual stakes, the costs and delay of continued litigation, and the prospect that no recovery or a smaller net recovery might be obtained after a full trial, the Court concluded that this percentage represented a reasonable compromise.

Evidence, expert complexity and cost-benefit considerations

On the evidentiary side, the Court noted that proving systemic overcharging would require complex, technical fiscal evidence. Plaintiff’s counsel indicated that they would need to retain an expert to analyze Doordash’s historical tax calculation practices across the class period, involving significant cost and time. Those expenses would be substantial relative to the relatively small per-consumer amounts at issue, and success remained uncertain in light of Doordash’s defence that the overcollected sums had gone to government authorities rather than being pocketed. The judge weighed these elements in favour of settlement, highlighting that proceeding to a fully contested trial could entail years of litigation and substantial expert and legal costs, potentially leading to a smaller effective benefit for class members than the straightforward, automated credit scheme now offered.

Favourable features of the distribution scheme

The Court attached particular importance to the settlement’s practical design. Rather than requiring claims forms or proactive participation by class members, the $1 credits were applied automatically to the accounts identified as belonging to the class, thereby ensuring a broad and efficient distribution. This structure responded to a recurring challenge in consumer class actions: low take-up rates when consumers must file individual claims for small sums. With Doordash both administering the credits and paying for the costs of administration and notice, and with an obligation to report back to the Court and the Fonds d’aide aux actions collectives, the judge was satisfied that the mechanism maximized the likelihood that the credit fund would be depleted in favour of class members within a reasonable time. In light of all these elements, the Court found that the terms and conditions of the settlement were favourable and in the class’s best interests.

Class counsel fees, contingency agreement and access to justice

The Court then examined the requested approval of class counsel’s fees under the applicable jurisprudential framework. The contingency fee agreement between Vaillancourt and his lawyers set a 30% percentage fee on any sums or value obtained. Under the settlement, however, the parties agreed that the plaintiff’s counsel would receive $107,000 in total, consisting of $91,310.57 in extrajudicial fees, $2,015.67 in disbursements, and $13,673.76 in taxes. The strictly fee component equated to about 25.58% of the value directed to class members under the credit fund, and Doordash undertook to pay this amount separately, in addition to the $357,000 in credits. Considering the entire settlement value at $464,000 ($357,000 in credits plus $107,000 in fees and disbursements), plaintiff’s counsel argued—and the Court agreed—that the structure was more advantageous to the class than a straightforward application of the 30% contingency on the total, which would have resulted in a higher counsel share of the global value. The Court reiterated that contingency fees are intended to reflect the real risk assumed by lawyers who invest considerable time and resources in complex, often lengthy class actions with uncertain prospects of success and with no guarantee of payment. They serve as a key driver of access to justice for consumers whose small individual claims would never be pursued individually. In this case, plaintiff’s counsel had navigated non-trivial consumer protection and fiscal issues, developed a distribution formula that provided simple, automatic relief for over 300,000 consumers, and shouldered the risk that the claim could falter at authorization or on the merits. In view of these factors, the Court concluded that the $107,000 fee and expense package was reasonable, below the contractual maximum, and did not give the class action practice an appearance of excessive commerciality.

Final orders, successful party and total monetary amount

In its operative portion, the Superior Court allowed the application for approval of the settlement, declared the agreement fair, reasonable and in the best interests of the class, and held that it bound all class members who had not opted out by 31 December 2024. The settlement was characterized as a transaction under article 2631 of the Code civil du Québec, engaging the parties and class members and constituting their exclusive recourse for the claims covered. The Court ordered collective recovery with individual liquidation of claims via the $1 credits, required Doordash to provide the agreed administration report to the Court, class counsel and the Fonds d’aide aux actions collectives, and retained jurisdiction over implementation issues until a closing judgment is rendered. It approved the contingency-fee convention and authorized class counsel to receive $104,999.66 in extrajudicial fees and $2,000.34 in reimbursed disbursements from Doordash, all paid by the defendant in addition to the credits. The judgment concluded without any award of court costs (“sans frais de justice”). Substantively, the successful party is the plaintiff representative and the class, who obtain a binding compensation program and judicial recognition of the settlement’s fairness, as well as their counsel, whose fees are approved. The total monetary burden on Doordash, and thus the total settlement value ordered in favour of the successful side, consists of up to $357,000 in credits for class members and $107,000 in approved fees and disbursements for class counsel, for a combined total of $464,000; no additional, quantifiable court costs or separate damages beyond this aggregate figure were awarded.