Unmitigated Chutzpah: The CSPI's Merchantability Claim Against Safeway
Ken posted about some general issues related to the Center for Science in the Public Interest’s claims against Safeway related to the decision not to use its Club Card data to publicize recalls. Hidden among the claims, however, is a claim for breach of the warranty of merchantability that is so breathtakingly extensive it requires a separate post.
The breadth of this claim is astounding. To see why, you must understand two things. First, this is a class action. CPSI and its lawyers seek to represent “All Customers who bought Recalled Products, and whom Safeway did not advise that they bought Recalled Products, for a period of four years prior to the date this complaint is filed until the date of class certification.” “Recalled Products” are those subject to a Class I recall from the FDA or the USDA. I presume the four years states the applicable statute of limitations. If the class were certified, these lawyers would represent everyone in the class.
Second, the count of the complaint that deals with the warranty of merchantability has nothing to do with the requested relief that has garnered so much publicity. It is unrelated entirely to the use of the Club Card to notify customers about recalls. It is a straight breach of contract action. Put simply, these lawyers purport to represent every single person who had a Safeway Club Card, for the value of their Recalled Products. The complaint expressly makes no claim for any injury other than the economic injury of a breach of contract; no one is alleged to have gotten sick, let alone died. Indeed, one of the named plaintiffs consumed some of the eggs subject to recall, apparently without adverse health effects.
Moreover, and this is important to understand, these are not Safeway’s recalls. They are in nearly every case recalls instituted by someone up the food chain. The class consists of everyone Safeway didn’t notify, but the named plaintiffs in fact became aware of both recalls through other means: news reports, a letter mailed by another retailer who had sold similar products, a “neighborhood listserv.” Upon becoming aware of the recalls, there was nothing stopping either plaintiff, who, according to the very complaint their lawyers have filed on their behalf, “frequently shops at her local Safeway store”, from asking for a refund. I suspect Safeway would have granted it without complaint or hassle.
But no. Instead, we need a class action. Who is in the class? Everyone who never got notice from Safeway of the recalls, even though they may have (like both named class plaintiffs) received notice from other means. The parties actually responsible for these recalls purposely put that information out onto the news channels; blogs like this one tend to spread the word gratis when recalls occur. Anyone concerned about the food they buy can check numerous news sources, including the FDA’s own website, for news about recalls. I often walk into the office in the morning to be asked, “did you hear about the latest recall?” This stuff isn’t hidden under a pillow somewhere.
By being subjected to the class action, though, Safeway may be in a dilemma. It really doesn’t want to pay consumers twice (nor should it have to). But how is Safeway, now that the class action has been filed, to know that it will not be required to pay twice, once when the consumer comes to the customer service desk at his or her local store and again when the class action is settled? The answer is that it can’t. Which may make Safeway less likely to pay the consumer at the customer service desk. Is that really the result that is in the best interests of the purported class?
My guess, however, is that this won’t happen. Both because Safeway doesn’t want to have a few thousand store managers explaining to real live customers that some lawyers in California make it impossible to refund your two dollars, and because Safeway’s lawyers, despite the unmitigated chutzpah of CSPI in claiming the right to represent all Safeway’s customers wherever located in connection with their refund rights, think the chance of class certification on this issue is of vanishingly low probability.
Hurdles Faced By Plaintiffs In Class Action Lawsuit for Sale and Marketing of Cold and Flu Medications Containing Vitamin C
By Guest Blogger Tyler Anderson
On November 2, we blogged about the FDA warning letter issued to Procter and Gamble for its unlawful marketing of Vicks cold and flu medications containing Vitamin C. On November 4, 2009, a putative class action lawsuit was filed against Procter and Gamble in the U.S. District Court for the Southern District of Ohio (Sixth Circuit) alleging Procter and Gamble violated federal and state consumer protection laws through false and misleading advertising practices regarding the two Vicks products mentioned in the FDA warning letter.
Regardless of the merits of their case, the plaintiffs in this action may have a hard time obtaining their desired relief. In Count 1 of the complaint, the plaintiffs allege Proctor and Gamble violated the consumer protection laws of 43 separate states. The Seventh Circuit’s holding in its Bridgestone/Firestone decision (J. Easterbrook) and its progeny, suggests that under FRCP 23(b)(3), such a class action is unmanageable. Courts point to the impracticability of one court applying the divergent laws of differing jurisdictions in circumstances such as those at bar.
“Plausibility” pleading standards (see recent discussion of Wright v. General Mills) present additional hurdles. Applying Twombly as the court did in the Wright case, to survive a motion to dismiss the plaintiffs would need to make plausible, non-conclusory allegations that the plaintiffs purchased the Vicks products because they contained Vitamin C and the cost of the product with the Vitamin C was greater than it would have been without. No such allegations exist here, so applying the holdings of Twombly and Wright to this claim indicates that it may be subject to dismissal.
“Reliance” may be yet another avenue to dismiss the action (at least in part). Many state consumer fraud statutes require reliance. This means that the plaintiffs would be required to show that each plaintiff in the action bought the product in reliance on the purported fraudulent statement. Because purchasing decisions are individual decisions, proving reliance on a class-wide basis would be an individual inquiry that would predominate over issues of fact common to the class, which would negate class treatment.
Maple Leaf Foods: A Case Study in the Persistence of Memory
Maple Leaf Foods is Canada's largest food processor, and as the name implies, it traces its history a long way with our neighbor to the north. It has always prided itself on its food safety procedures.
Last year, as was widely reported, more than 20 people all across Canada died from listeriosis traced to one of Maple Leaf's processing plants in Toronto. A huge recall of Maple Leaf products was ordered. Recently, the company settled class action cases for a reported $27 million.
Perhaps Maple Leaf thought that put it all behind them. Hardly. A Thomson-Reuters article described how Maple Leaf considers itself well-placed in the current economic environment. The story is 11 paragraphs long. Five of the paragraphs tell the company's story. Six of the paragraphs, including the lead paragraph and the final five, are concerned in whole or in part with the listeriosis outbreak, plus a new recall of frankfurters and hot dogs.
People have long memories. The article in today's Wall Street Journal that peanut butter sales in the four weeks ending February 21 dropped 13.3% compared to the same period last year is just another indication of that.
