Court Dismisses Class Action Claims for Fraud in Sale of “Aged” Beef

A federal court in Ohio has dismissed the putative class action claims filed by a woman who alleged that Kroger Co. deceived the public by selling its beef as aged, when it was actually selling beef packaged and shipped almost immediately after slaughter. St. Clair v. Kroger Co., No. 7-03798 (N.D. Ohio, decided October 14, 2008). The case was originally filed in state court and removed on defendant’s motion under the Class Action Fairness Act of 2005 (CAFA). Because the plaintiff failed to allege that Kroger had prior notice that its conduct was “deceptive or unconscionable,” the court was compelled under Ohio’s Consumer Sales Practices Act (CSPA) to dismiss the class claims. Prior notice, under the law, must be “in the form of a rule adopted by the state Attorney General or a judicial decision made publicly available,”
neither of which was referred to in the complaint

So ruling, the court declined to dismiss the claims on the basis of the “primary jurisdiction” doctrine, which applies when a court and administrative agency have concurrent jurisdiction over the same matter. It disagreed with Kroger that USDA’s authority to regulate the labeling of meat products made it a more appropriate place for adjudication. According to the court, “[d]etermining whether Kroger marketed and labeled its beef in a false and misleading way does not require specialized knowledge of the meat industry or the body of regulations of the USDA. My role—and the role of the jury—is to determine whether Kroger complied with already clear regulations.”

While the court was inclined to dismiss plaintiff’s individual claims for lack of jurisdiction once the class claims were dismissed, it noted that CAFA does not indicate “whether a federal court retains jurisdiction over an individual matter after the court has dismissed a class action or denied class certification.” Thus, the court decided to “give plaintiff leave to undertake to show cause as to why I continue to have subject matter jurisdiction over her individual claim. In the alternative, plaintiff can accept dismissal of her individual CPSA claim without prejudice.” The court also dismissed plaintiff’s breach of warranty claim under the Uniform Commercial Code because she did not provide defendant with reasonable notice of its alleged breach before filing her lawsuit.