Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—ND. Cal.: Individualized determinations of reliance precluded class certification, (Mar 12, 2014)

By Jody Coultas, J.D.

California consumer protection law claims filed against Safeway, Inc. by an online delivery customer were not appropriate for class certification because individualized inquiries would be required to determine whether each class member relied on the allegedly misrepresentations, the federal district court in San Francisco has held (Rodman v. Safeway, Inc., March 9, 2014, Tigar, J.).

When using Safeway.com, customers select items for home delivery, and Safeway employees or contractors then select the customer’s items at brick-and-mortar Safeway stores and deliver them to the customer. When registering for Safeway.com, customers check a box on the bottom of the registration page indicating that they agreed to a set of “Special Terms,” which displays on a different page, to which the registration page hyperlinks. The prices a customer pays for items at Safeway.com were the same as prices in the store from which the items were selected (Pick Store), with a few specific exceptions. On or about April 12, 2010, Safeway changed its pricing formula, adding a markup of $0.10 per each increment of $0.99 that the item cost in the Pick Store.

A customer sought to certify California consumer protection law class action claims on behalf of “all persons in the United States who: (1) registered to purchase groceries through Safeway.com at any time prior to November 15, 2011, and (2) purchased groceries at any time through Safeway.com that were subject to the price markup implemented on or about April 12, 2010.”

Individualized issues regarding the statutory claims predominate over common questions because it appears that an overwhelming majority of Safeway.com customers did not view the alleged misrepresentations. To establish the reliance necessary to maintain a class action challenging a misrepresentation, everyone in the class must have viewed the allegedly misleading advertising, unless the advertising was part of an extensive and long-term campaign. Because the customer did not allege such an advertising campaign, individual questions concerning each class members’ actual reliance were required. Also, less than five percent of Safeway.com registrants actually clicked through to view the Special Terms on which the customer’s claims relied. The argument that customers clicked the box indicating that they agreed to the Special Terms even if they did not actually view the terms was a potentially viable contractual argument, but did not affect the consumer protection law claims.

The court did certify the customer’s breach of contract class action. The class representative and proposed counsel established their typicality and adequacy to represent the proposed class.

The case is No. 11-cv-03003-JST.

Attorneys: James C Shah (Shepherd, Finkelman, Miller and Shah, LLP) for Michael Rodman. Brian R. Blackman (Sheppard Mullin Richter & Hampton LLP) for Safeway, Inc.

Companies: Safeway Inc.

Cases: StateUnfairTradePractices CaliforniaNews