Judge Grants Summary Judgement to Safeway Delivery Class

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A California federal judge has granted summary judgment to a class action lawsuit filed against Safeway Inc. saying that Safeway did breach its contract with its online customers by covertly increasing the prices of groceries on its online grocery delivery service.

In addition, U.S. District Judge Jon Tigar said that Safeway will have to pay the difference between its online prices and in-store prices from April 2010 to the present, in spite of attempted changes made to the terms of agreement.

Safeway was hit with the class action lawsuit over its home delivery service in June 2011 by plaintiff Michael Rodman, who used Safeway’s grocery delivery service started to learn that the online prices were higher than those in the local brick-and-mortar grocery store.

Rodman claimed in his class action lawsuit that the prices were about 10 percent higher than the in-store prices, and that “Safeway does not disclose that consumers will be charged higher prices for items ordered through Safeway.com.

“Indeed, to the contrary, it specifically represents that consumers will be charged the same amount for items as the in-store price at the time of purchase,” the Safeway class action lawsuit stated, adding that “consumers have no way of knowing that Safeway has overcharged them” unless they visit a store the same day their online purchases are delivered.

After the court denied Safeway’s motion to dismiss the class action lawsuit on Nov. 1, 2011, Safeway revised the “Special Terms” for online shoppers on Nov. 15, 2011 to say: “‘Please note before shopping online at [Safeway.com] that online and physical store prices, promotions and offers may differ.'”

However, the grocery store did not notify customers of this change until it sent an email on Aug. 29, 2012 to customers who had opened an email from Safeway.com in the previous six months, and “this email did not reference the Special Terms.”

The Safeway class action lawsuit charged the grocery store with violating California’s Unfair Competition Law, Consumer Legal Remedies Act, False Advertising Law and breach of contract.

The Safeway class action lawsuit received class certification on March 9 for the breach of contract charges, while dismissing the other three charges.

The class was defined as “All persons in the United States who: (1) registered to purchase groceries through Safeway.com at any time prior to Nov. 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.”

Judge Tigar concluded that “the Special Terms promise that, with the exception of the actually disclosed special charges and delivery fees, the prices charged for Safeway.com products will be those charged in the physical store where groceries are delivered.

“Since Safeway actually marked up the charges for the in-store prices beyond the disclosed delivery and special charges, the Court grants summary judgement that Safeway breached its contract with its customers,” the California federal judge added.

Even though Safeway changed the terms on Nov. 15, 2011, Judge Tigar said since Safeway did not notify customers of the changes to the terms that “Class Members safeway.com use continued to be governed by the Special Terms that were operative at the time of their registration, which promised price parity.”

Judge Tigar said that he also disagrees with Safeway that the August 2012 email is sufficient “notice of the change to the Special Terms” since the email was not sent to all class members only those who had opened a Safeway.com email in the last six months.

“Even following that date, Class Members safeway.com use continued to be governed by the Special Terms that were operative at the time of their registration, which promised price parity,” the judge wrote.

Judge Tigar ruled that “the Class is entitled to damages for purchases which occurred after the Special Terms were amended on Nov. 15, 2011,” and that “Safeway is liable to plaintiff and the Class for the aggregate amount of the online mark-up from April 12, 2010, through the present.”

The Safeway Delivery Service Class Action Lawsuit is Michael Rodman v. Safeway Inc., Case No. 11-cv-03003-JST, in the U.S. District Court for the Northern District of California.

UPDATE: On Feb. 12, a California federal judge ruled that Class Members of the Safeway grocery delivery class action lawsuit include consumers who were registered on the store’s website as of 2006. A website has been established with more information about the class action lawsuit. Click here or visit www.SafewayGroceryDeliveryClassAction.com for details.

UPDATE 2: On Oct. 4, 2016, Safeway was ordered to pay $516,000 in discovery sanctions to a Class of grocery shoppers who claim they overpaid for online purchases.

UPDATE 3: December 2017, a $42 million judgment against Safeway is now being distributed to qualifying Class Members who were allegedly overcharged for online grocery delivery service. Learn more here.

UPDATE 4: On July 15, 2019, Top Class Actions viewers started receiving checks in the mail from the Safeway online delivery judgement worth as much as $2,289.83. Congratulations to everyone who got PAID!