Appeals Court Asked to Revive Whole Foods Class Action

A Whole Foods customer is asking the Second Circuit Appeals Court to vacate the dismissal of a proposed class action lawsuit accusing the grocer of overcharging its packaged goods, stating that his regular purchases of cheese and chocolate cupcakes substantiate plausibility of injury.

Frequent Whole Foods shopper Sean John argues that a New York federal judge applied the wrong standard when dismissing the class action lawsuit in March and the putative Class should be allowed to proceed.

John contends the federal court’s dismissal was erroneous since there is plausible evidence that Class Members were injured by the organic grocery chain’s alleged deceptive overpricing practices.

John argues that he does not need to prove he definitively purchased an underweight product or that Whole Foods mislabeled their products. Rather, he only needs to show that it was plausible he and other Class Members were affected by purchasing underweight products from Whole Foods in order to revive the class action lawsuit.

“There is no question that Whole Foods routinely sold underweighted products of the type [John] regularly purchased in 2014 and 2015; there is no attenuated chain of events that must occur before Mr. John suffered an injury,” the appeal brief says. “The only question is whether it is plausible that Mr. John purchased one of the many underweighted products Whole Foods sold New Yorkers.”

Last year, Whole Foods admitted to overstating the weights on certain pre-packaged food products, overcharging customers following a New York City Department of Consumer Affairs investigation.

The DCA concluded that New York Whole Foods stores were guilty of “routinely overstating the weights of its pre-packaged products – including meats, dairy and baked goods – resulting in customers be overcharged.” Whole Foods settled the dispute for $500,000.

A day after the New York City DCA said Whole Foods was overcharging customers in what officials described as “the worst case of mislabeling” city investigators had seen in their careers, plaintiffs Sean John and Joseph Bassolino filed the proposed class action lawsuit against Whole Foods over its “systematic” overpricing.

However, in March a federal court dismissed the class action lawsuit against Whole Foods, finding John and Bassolino lacked standing because they couldn’t provide enough evidence that they personally had been ripped off since the plaintiffs didn’t have the products or the receipts from the items they claimed to have purchased.

The judge stated that the plaintiffs made “a claim solely on probabilistic evidence of injury” and “do not allege that any particular purchase they made was affected by this practice.”

John filed an appeal brief earlier this week to vacate the dismissal, asserting that the district court failed to apply the plausibility standard to the question of whether the case has standing.

According to the appeal, the District Court in dismissing the case noted that it was holding John to a standard substantially higher than plausibility, expecting him to bring a single claim of overpricing related to a specific purchase in order to demonstrate plausibility of injury.

“But [John] is not required to allege that his injury was certain, probable or even likely,” the 44-page appeal brief argues. “Instead, he need only allege that it is plausible that, over the numerous times he purchased the types of products the [Department of Consumer Affairs] identified as being subject to routine underweighting, he purchased at least one underweighted product.”

Whole Foods recently paid fines for a similar situation in its California stores. In 2012, city attorneys for Santa Monica, Los Angeles, and San Diego brought a civil consumer protection case on behalf of California residents for overcharging.

The Whole Foods pricing inaccuracies violated consumer protection laws related to false advertising and unfair competition. The case settled last year, and Whole Foods agreed to pay $800,000 in penalties for pricing errors.

The company further agreed to a pricing accuracy effort in the California stores that included state compliance coordinators, employees at each store to oversee pricing accuracy, and random store audits.

Plaintiff Joseph Bassolino didn’t participate in the appeal.

The plaintiffs are represented by Douglas Gregory Blankinship of Finkelstein Blankinship Frei-Pearson & Garber LLP.

The Whole Foods Overpricing Class Action Lawsuit is Sean John v. Whole Foods Market Inc., Case No. 16-0986, in the U.S. Court of Appeals for the Second District.

UPDATE: On July 18, 2016, the plaintiff filed a second appeal to the Second Circuit Appeals Court to reverse the dismissal, saying a New York Department of Consumer Affairs (DCA) investigation supports his claims.

UPDATE 2: 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.