A Pennsylvania resident has sued Safeway, Inc. on behalf of a putative nationwide class of consumers who placed online orders for the home delivery of groceries and were allegedly charged about 10 percent more for each item in addition to a delivery fee. Rodman v. Safeway, Inc., No. 11-03003 (N.D. Cal., filed June 17, 2011). According to the complaint, Safeway assures consumers that they will pay the same prices for home-delivered goods that they would pay in the store. An “FAQ” section of Safeway’s website allegedly states “You will be charged the prices charged in the store on the day your order is picked and delivered.” Believing that the prices charged for his initial online order were high, the plaintiff apparently compared the prices for his second order with in-store prices and found that prices for 10 of 14 items included the “secret” add-on cost. Alleging breach of contract, violations…
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A federal court in California has denied Safeway, Inc.’s motion to dismiss or stay proceedings alleging that it has an obligation to use information in its loyalty card customer database to provide email notice about produce recalls ordered by the Food and Drug Administration (FDA) or U.S. Department of Agriculture. Hensley-Maclean v. Safeway, Inc., No. 11-1230 (N.D. Cal., order entered June 13, 2011). Additional details about the case, which was first filed in state court, appear in Issue 380 of this Update. The grocery company argued that the “primary jurisdiction doctrine” or “equitable abstention” required the court to dismiss or stay the litigation “until and unless regulatory agencies have had the opportunity to consider and adopt appropriate rules governing the obligations a grocery store has with respect to providing its customers notice of such recalls.” According to Safeway, the Food Safety Modernization Act requires FDA to develop notice guidelines by…
The Alabama House of Representatives has passed a bill (HB193) that would prohibit people from filing lawsuits against establishments such as restaurants or grocery stores for selling them food that allegedly made them fat. The Commonsense Consumption Act, approved May 3, 2011, by a 75-20 vote, bars “civil actions against manufacturers, packers, distributors, carriers, holders, sellers, marketers, or advertisers of food products that comply with applicable statutory and regulatory requirements based on claims arising out of weight gain, obesity, a health condition associated with weight gain or obesity, or other generally known condition caused by or allegedly likely to result from long-term consumption of food.” Spearheaded by Representative Mike Jones (R-Andalusia), the bill is headed for debate in the Alabama Senate.
A Florida court has reportedly denied the motion to dismiss filed by organic and natural foods grocery chain Whole Foods Market in a case alleging that the company sold frozen vegetables harvested in a polluted area by the forced labor of Chinese prisoners. Se. Consumer Alliance Inc. v. Whole Foods Market Group Inc., No. 2009-92727-CA-01 (Fla. Cir. Ct., 11th Cir.) decided April 20, 2011). The company purportedly certifies and sells the vegetables as organic. The plaintiffs, who are apparently seeking a declaration that the company violated deceptive marketing law, have twice amended their complaint to bring new claims, including deceptive trade practices and false advertising. Plaintiffs’ counsel Bruce Baldwin was quoted as saying, “They’re the biggest organic retailer in America with the biggest certifier in China working for them. They knew, but they kept selling the Chinese frozen vegetables as if there was no problem at all.” See Law360, April 21,…
Montana and California residents have sued Safeway, Inc. in a California state court on behalf of a putative nationwide class of customers that the company allegedly failed to notify about tainted food recalls despite the ability to contact purchasers of contaminated products through its “club card” loyal customer program. Hensley-Maclean v. Safeway, Inc., No. __ (Cal. Super. Ct., Alameda Cty., filed February 2, 2011). Backed by the Center for Science in the Public Interest (CSPI), the plaintiffs allege that they purchased Salmonella-tainted peanut butter and egg products from the grocery and learned only by chance on the news or from neighbors that the products were subject to a recall. According to the complaint, the company’s club card program gives the grocery contact information for participating customers and a history of the purchases they have made. The plaintiffs allege, “Many of Safeway’s competitors already use their own customer data to notify their…
Walmart has unveiled a plan to provide healthier food choices at reduced prices, setting specific targets for lowering sodium, trans fats and added sugars in thousands of packaged foods by 2015. Joined by first lady Michelle Obama at an event in Washington, D.C., the major grocer outlined key elements of the initiative that built on her “Let’s Move” campaign to make healthy choices more convenient and affordable. The initiative includes (i) reducing sodium by 25 percent in grain products, luncheon meats, salad dressings, and frozen entrees; (ii) reducing added sugars by 10 percent in dairy items, sauces and fruit drinks; (iii) removing “all remaining industrially produced trans fats” in packaged foods; (iv) making healthier choices more affordable through a “variety of sourcing, pricing and transportation and logistics initiatives”; (v) developing “strong criteria for a simple front-of-package seal” to identify “truly healthier food options”; (vi) “providing solutions to address food deserts…
U.S. Senator Charles Schumer (D-N.Y.) has asked the Food and Drug Administration, Environmental Protection Agency and Consumer Product Safety Commission (CPSC) “to investigate and ban reusable shopping bags that contain higher than acceptable levels of lead.” According to a November 18, 2010, press release, Schumer issued letters to the agencies after third-party testing purportedly revealed “higher than acceptable levels of lead” in reusable grocery bags manufactured in China. The senator has expressed concern that “food products come into direct contact with these bags and long-term exposure can pose serious health and environmental risks.” Schumer’s announcement also cited “several reports” claiming that “a significant number of reusable shopping bags contained over 100 parts per million (PPM) in heavy metals. In some cases, bags contained as many as 5 times the allowable limits.” These reports evidently suggested that “the paint on lead-filled bags has the ability to peal and flake off, coming into direct…
Finding the plaintiffs’ state-law claims preempted, a federal court in California has dismissed a putative class action alleging that the Kroger Co. falsely labeled its margarine and graham crackers as “0g Trans Fat per serving” and “a Cholesterol Free Food,” when they actually contain various hydrogenated oils. Red v. The Kroger Co., No. 10-01025 (C.D. Cal., decided September 2, 2010). According to the court, the Food and Drug Administration has promulgated specific regulations on the use of these terms, and because the products at issue comply with the requirements under which the terms can be used, the plaintiffs’ claims are expressly preempted under the National Labeling and Education Act of 1990. In the court’s words, “Plaintiffs cannot escape the fact that they seek to enjoin exactly what federal law expressly permits.” Alleging the violation of California consumer protection statues, the plaintiffs had sought an order compelling the defendant to (i) cease…
The Ninth Circuit Court of Appeals has determined that an agreement among grocery chains in Southern California to share profits during an anticipated labor strike was anticompetitive in violation of the Sherman Act and rejected defendants’ argument that the violation could be excused because the agreement was designed to be used as an economic weapon in a labor dispute. California v. Safeway, Inc., Nos. 08 55671, 08-55708 (9th Cir., decided August 17, 2010). According to the court, despite the limited duration of the agreement and the fact that the groceries involved constituted, at most, 70 percent of the market, the agreement was anticompetitive because it removed all incentive to compete by providing lower prices or better service to consumers. The court disagreed that the defendants needed the pact to effectively bargain with striking employees. In this regard, the court stated, “Defendants claim no purpose for their agreement beyond strengthening their hands…
The Federal Trade Commission (FTC) recently took action on the divestiture of certain Whole Foods Market Inc.’s assets as part of the consent order that concluded antitrust litigation the agency brought to challenge Whole Foods’ 2007 acquisition of Wild Oats Market, Inc. According to an FTC news release, the Whole Foods divestiture trustee sought approval to sell three Wild Oats stores and certain intellectual property. FTC commissioners approved the sale of Wild Oats stores in Kansas City, Missouri; Boulder, Colorado; and Portland, Maine. While allowing the sale of Wild Oats’ and Alfalfa Markets’ intellectual property to proceed as to Luberski, Inc., and A-M Holdings, LLC, the FTC denied a proposal to sell their intellectual property to Topco Associates LLC, apparently finding that this sale would not satisfy the purposes of intellectual property divestiture. See FTC Press Release, June 18, 2010; Naturalproductsmarketplace.com, June 21, 2010.
