DCA Probe Supports Whole Foods Mispricing Claims, Appeal Says

A Whole Foods shopper is asking the Second Circuit Appeals Court to reverse a lower court’s ruling to dismiss a proposed class action lawsuit alleging the high-end grocery chain overcharged New York city customers by mislabeling the weight on prepackaged foods.

In March, Whole Foods won a dismissal of plaintiffs’ Sean John and Joseph Bassolino’s proposed class action lawsuit despite a troubling pattern of overpricing as indicated by a New York Department of Consumer Affairs (DCA) investigation.

The Whole Foods class action lawsuit, which was originally filed in state court in June 2015 and transferred to federal court, alleged specifically that Whole Foods mislabeled the weight of pre-packaged food products – including meats, dairy, and baked goods.

Essentially, the store listed a weight that was heavier than the actual weight of the product sold, the complaint stated.

But U.S. District Court Judge Paul Englemayer tossed out the case on March 1, 2016, with prejudice because he said that the plaintiffs forgot to save their receipts and could therefore not prove that the chocolate cupcakes, cheese and other products purchased at two New York Whole Foods’ locations had been mislabeled and that John and Bassolino could not demonstrate a “concrete and particularized” harm caused by their purchases.

Further, the judge also ruled that the DCA probe, which found that Whole Foods has mislabeled some 89 percent of prepackaged foods, fell short of proving systematic overweighting.

However, John told the Second Circuit Court Tuesday the decision to dismiss should be reversed for two reasons: the District Court did not apply the plausibility standard in determining if John adequately pleaded he was injured and because the dismissal of the Whole Foods overcharging class action lawsuit was with prejudice.

John argues that he only needed to plead facts to bring a claim for injury plausible for standing purpose.  As such, he claims he sufficiently showed that more than likely he purchased an underweight pre-packaged product from Whole Foods.

Stating that the Court must draw all reasonable inferences from the alleged facts, John contends that the District Court failed to do so.  For example, John referenced in the Whole Foods class action lawsuit that the DCA publicly stated that the grocer was guilty of systematic overcharges owing to underweighted products.

In providing evidence of the DCA’s probe into Whole Foods’ alleged overcharging of underweighted products, the District Court should have drawn the reasonable inference that when John alleged he regularly bought chocolate cupcakes and cheeses – the very products the DCA tested as part of their investigation, according to a Whole Foods employee.

“Had the District Court drawn all reasonable inferences from the facts alleged in Mr. John’s favor, it would have concluded that he stated a plausible claim for injury,” the appeal brief states.

Sean John and Joseph Bassolino are represented by Douglas Gregory Blankinship of Finkelstein Blankinship Frei-Pearson & Garber LLP.

The Whole Foods Mispricing Class Action Lawsuit is John v. Whole Foods Market Group Inc., Case No. 16-986, in the U.S. Court of Appeals for the Second District.

UPDATE: On June 2, 2017, the 2nd U.S. Circuit Court of Appeals revived a class action lawsuit alleging Whole Foods overcharges customers for prepackaged foods, finding that the New York federal court handling the case erred when it determined the plaintiffs failed to plausibly allege they suffered an injury.