5/4/2016 11:35:01 AM 16CV15125
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7 IN THE CIRCUIT COURT OF THE STATE OF OREGON 8 IN AND FOR THE COUNTY OF MULTNOMAH 9
10 SCHEARON STEWART and JASON ) STEWART individually and on behalf of all ) Case No. 11 other similarly-situated persons, ) ) PLAINTIFFS' COMPLAINT AND DEMAND 12 Plaintiffs, ) FOR JURY TRIAL ) 13 vs. ) CLASS ACTION ) 14 ALBERTSON'S, Inc., a foreign limited ) UNLAWFUL TRADE PRACTICES ACT liability company; and SAFEWA Y, Inc., a ) (ORS 646.608) EQUITABLE RELIEF 15 foreign business corporation ) ) CLAIMS NOT SUBJECT TO 16 Defendants. ) MANDATORY ARBITRATION ) 17 ------) 18
19 Plaintiffs allege:
20 PRELIMINARY STATEMENT
21 1.
22 Every day, Albertson's and Safeway grocery stores in Oregon make special price offers
23 on their meat products. These special offers are available to consumers every day, in every store.
24 The meat products, which rotate, are sold as a special "Buy One, Get One Free," or similarly,
25 "Buy One, Get Two Free." The "free" product is prominently promoted on special point-of-sale
26 I ads and on the packaging ofthe product itself. But Albertson's and Safeway have found a way to
Page 1 -PLAINTIFFS' COMPLAINT AND DEMAND FOR JURY TRIAL
David F. Sugerman I Attorney, PC 707 SW Washington St, Suite 600 - Portland, Oregon 97205 Phone 503.228.6474 I Fa.x 503.228.2556 1 make consumers pay for the seemingly "free" product.
2 When Albertson's and Safeway stores offer meat products under these promotions, they
3 raise the unit prices of the original meat product above the regular retail price. Thus, consumers
4 are actually paying for the meat that is sold as "free" in these special sales. In other words,
5 Safeway and Albertson's stores raise the unit price of the original meat, such that consumers are
6 paying substantially more for the original product to cover the cost of the "free" product. As a
7 result, consumers making purchases under these promotions are not getting a free product.
8 Instead, they are paying more per pound than regularly-priced meat, and they are buying more
9 meat in order to obtain the illusory "free" product. These "free" sales constitute unfair and
10 deceptive practices. The Oregon Unlawful Trade Practices Act and implementing regulations
11 prohibit these practices. Schearon Stewart and Jason Stewart ("Plaintiffs" or "Stewarts") bring
12 this action on behalf of themselves and similarly situated consumers. For the present, they seek
13 only equitable relief, including an injunction. As of the date of commencement of this action,
14 plaintiffs have given the notice required by ORCP 32H. Should Defendants fail to comply with
15 ORCP 321, Plaintiffs will amend this complaint to add claims for damages.
16 PARTIES 17 2.
18 Safeway, Inc. is a foreign corporation that operates retail supermarkets in Oregon under
19 the Safeway tradename. Albertson's, Inc. is a foreign corporation that both owns Safeway, Inc.
20 and separately operates retail supermarkets in Oregon under the Albertson's tradename. Based
21 on information and belief, Albertson's Inc. put in place the pricing practices at issue in
22 Albertson's and Safeway stores.
23 3.
24 Plaintiff Schearon Stewart is a resident of the State of Oregon. He shops at the Safeway
25 store in Sherwood, Oregon, where he bought chicken legs on the "Buy One, Get Two Free"
26 program. His most recent purchase was on April 18, 2016. Plaintiff Jason Stewart (no relation) is
Page 2 -PLAINTIFFS' COMPLAINT AND DEMAND FOR JURY TRIAL
David F. Sugerman I Attorney, PC 707 SW Washington St, Suite 600 Portland, Oregon 97205 Phone 503.228.6474 I Fax 503.228.2556 1 a resident of the State of Oregon. He shops at the Safeway store on Pacific Highway in Tigard,
2 Oregon, where he bought chicken breast and beef eye of round on the "Buy One, Get Two Free"
3 program. His most recent purchase was of chicken on April 23, 2016.
4 JURISDICTION AND VENUE 5 4.
6 Defendants conduct regular and sustained business across the Oregon, including in
7 Multnomah County. This court has jurisdiction over claims arising under the Oregon Unlawful
8 Trade Practices Act (UTPA). ORS 646.638.
9 CLASS ALLEGATIONS
10 5.
11 The class consists of all consumers who, within one year before the date of the filing of
12 the Complaint, bought meat products sold on buy one/get one free, or buy one/get two or get
13 three free basis ("BOGO Sales") at Oregon Albertson's grocery stores or Oregon Safeway
14 grocery stores, using the Safeway Club Card at Safeway Stores and coupons at Albertson's
15 grocery stores. The products at issue include petite beef sirloin, boneless pork chops, boneless
16 chicken, boneless, skinless chicken breasts, chicken legs, beef bottom round, and beef eye of
17 round. The exact products, including the precise numbers of units sold, can be confirmed through
18 Defendants' extensive electronic records logged with every purchase. Excluded from the class
19 are all attorneys for the class; officers and directors of either Defendant, including officers and
20 directors of any entity with an ownership interest in either defendant; any judge who sits on the
21 case; and all jurors and alternate jurors who sit on the case.
22 6.
23 Based on information and belief, every day within the class period, Defendants have
24 rotating BOGO meat promotions in their grocery meat departments. The Safeway BOGO meat
25 promotions require loyalty cards, which Safeway refers to as its "Club Card." Each Club Card
26 has a unique number.
Page 3 -PLAINTIFFS' COMPLAINT AND DEMAND FOR JURY TRIAL
David F. Sugerman I Attorney, PC 707 SW Washington St, Suite 600 - Portland, Oregon 97205 Phone 503.228.6474 I Fax 503.228.2556 1 7.
2 Items included in these BOGO meat promotions have various names and may be
3 minimally prepared-e.g., seasoned or cut. They include the following beef products: petite
4 sirloin, beefbotiom round, and beef eye of round; the following pork products: boneless pork
5 chops; and the following chicken products: boneless skinless chicken breasts and chicken
6 quarters (leg and thigh).
7 8.
8 Defendants sell the same meat products at regular Club Card prices that are lower than
9 the BOGO prices. When they do this, Defendants sometimes sell the same product under
10 different names. For example, boneless, skinless chicken breast is sold at regular Club Card
11 prices and also under the BOGO program. Recently, Safeway sold boneless, skinless chicken
12 breasts to Club Card members for $1.99 per pound. At the same time, Safeway sold seasoned
13 boneless, skinless chicken breasts for $9.99 per pound in a Buy 1, Get 2 Free promotion.
14 9.
15 Common BOGO items include petite sirloin, sometimes cut thin and sometimes
16 seasoned. When it is not part of the BOGO program, "petite sirloin" may be sold as "round tip
17 steak," "sirloin petite roast," or as "beef sirloin petite steak boneless." Similarly, in the BOGO
18 program, Defendants commonly sell "pork chops boneless," often seasoned. When it is not in the
19 BOGO program, "pork chops boneless" are sold as "pork loin chops." The use of different
20 names does not change the fact that the same cut of meat is being sold at a much higher unit
21 price in the BOGO promotion and is sold outside of the BOGO promotion for substantially less
22 per pound.
23 10.
24 At times, the BOGO program's meat products may be minimally prepared. For example
25 the chicken breast and pork chops are often sold with seasoning, and some of the meat products
26 are sold "thin-sliced." These minimal differences and services are offered to all customers at no
Page 4 -PLAINTIFFS' COMPLAINT AND DEMAND FOR JURY TRIAL
David F. Sugerman I Attorney, PC 707 SW Washington St, Suite 600 - Pordand, Oregon 97205 Phone 503.228.6474 I Fax 503.228.2556 1 charge. Specifically, Safeway tells consumers, "We'll season or marinade [sic] your selection,
2 exactly how you like it, at no charge." Safeway also will "trim your [meat] purchase to your
3 exact specifications." http://www.safeway.comlShopStores/The-Market-SJ -Meat -Seafood.page
4 (accessed Mar. 11,2016). Similarly, Albertsons will custom cut meat upon request.
5 http://www.albertsonsmarket.comlpage/dept/meatseafood (accessed Mar. 17,2016).
6 11.
7 In all events, the minimal processing-seasoning and thin-slicing-add no value because
8 Defendants provide the same minimal processing for free on non-BOGO meat products.
9 12.
10 Based on information and belief, contrary to the language of the free product offer, the
11 BOGO products are not actually free. When Defendants offer a BOGO item, on a "Buy 1, get 2
12 free" basis, the consumer should receive the second and third units free if she or he first buys one
13 unit. However, if a consumer purchases only two units when faced with a "Buy 1, get 2 free"
14 offer, the consumer is charged full price for the second item. It is not free. 15 13.
16 Based on information and belief, while the products rotate, the BOGO sales program runs
17 365 days per year in each of Defendants' stores in Oregon. 18 14.
19 Based on information and belief, there are approximately 99 Safeway stores in Oregon,
20 and approximately 24 Albertson's stores in Oregon. All of the stores BOGO meat programs
21 operate under central policies put in place by Albertson's. The only significant difference
22 between the two brands BOGO programs is that Safeway's BOGO meat program operates in
23 conjunction with its Club Card program, while Albertson's BOGO meat program uses coupons. 24 15.
25 In March 2016, Defendants offered for sale in Oregon the following meat products
I BOGO and non-BOGO:
Page 5 -PLAINTIFFS' COMPLAINT AND DEMAND FOR JURY TRIAL
David F. Sugerman I Attorney, PC 707 S\XI Washington St, Suite 600 Portland, Oregon 97205 Phone 503.228.6474 I Fa.,x 503.228.2556 1
2 Item Non-BOGO Price BOGO Price 3 USDA Choice Beef Eye of $6.99/1b. $12.99/1b (thin) 4 Round Steak 5 Beef Bottom Round Steak $4.99/lb. $14.99Ilb (seasoned) 6 Chicken Breast Skinless/ $1.88/1b.; $9.99/1b (seasoned) 7 Boneless $2.29/1b. 8 Pork Chops Boneless $4.49/1b. $12.99Ilb (seasoned) 9 USDA Choice Beef Petite Sirloin $3.97/1b. $16.99/1b (seasoned) 10 $12.99/lb (unseasoned) 11
12 16.
13 The BOGO sales programs violate the Oregon Unlawful Trade Practices Act ("UTPA")
14 and give rise to class claims for violations ofORS 646.6081(j) and (1)(s). Further, Defendants'
15 practices violate OAR 13 7 -020-0015 in ways that give rise to class claims under ORS
16 646.608(1)(u). The claims under these provisions of the UTPA are common to the class.
17 17.
18 The class is so numerous that joinder is impracticable. The exact size of the class and the 19
20 class's pecuniary losses can be calculated from Defendants' sales records.
21 18.
22 There are questions of fact and law common to the class, in that each member has 23 suffered ascertainable loss as a direct result of Defendants' violations of OAR 137-020-0015(2) 24 and as a result of these violations ofORS 646.608 (1)(i), l(s), and leu). Common questions of 25 26
Page 6 -PLAINTIFFS' COMPLAINT AND DEMAND FOR JURY TRIAL
David F. Sugerman I Attorney, PC 707 S\X' Washington St, Suite 600 Portland, Oregon 97205 Phone 503.228.6474 I Fax 503.228.2556 law and fact predominate over any questions affecting only individual class members. Common 1 2 questions include:
3 A. Whether Defendants may lawfully raise the per-unit price of meat products when they
4 rotate the products into the BOGO programs;
5 B. Whether Defendants' minimal processing with otherwise free or de minimis value 6 add-ons (e.g., thin slicing, seasoning, breading) allow Defendants to raise the prices 7 of the BOGO products; 8 C. Whether Defendants' BOGO programs violate ORS 646.608(1)(j); 9 10 D. Whether Defendants' programs violate ORS 646.608(1)(s);
11 E. Whether Defendants' programs violate ORS 646.608(1)(u);
12 F. Whether, under the facts of these claims, Plaintiff and the class must prove reliance as 13 to any or all of the alleged violations; 14 G. If so, whether reliance may be proved on a class-wide basis; 15 H. Whether Plaintiffs and class members are entitled to equitable and injunctive relief; 16 17 1. Whether an injunction to prevent future harm is appropriate in this case;
18 J. Whether Defendants acted recklessly or knowingly as set forth in ORS 64.638(1) and
19 ORS 646.638(8), such that Plaintiffs and members of the class are entitled to recover
20 statutory damages of $200; and 21 K. Whether Plaintiffs and the class are entitled to recover attorneys' fees and costs for 22 violations of the UTPA under ORS 646.638(1). 23 19. 24 25 The claims of the named Plaintiffs are typical of the claims of the class in that: 26 Each bought meat products through the BOGO
Page 7 -PLAINTIFFS' COMPLAINT AND DEMAND FOR JURY TRIAL
David F. Sugerman I Attorney, PC 707 SW Washington St, Suite 600 Portland, Oregon 97205 Phone 503.228.6474 I Fa." 503.228.2556 B. All claims involve the same conduct and the same alleged violations of OAR 137- 1 2 020-0015 and ORS 646.608;
3 C. The pricing practices of raising BOGO products unit prices operate in a standardized
4 fashion in all of Defendants' Oregon grocery stores;
5 D. The injuries suffered by the named Plaintiffs and the class members differ only in the 6 amounts of pecuniary losses and number of transactions per class member; and 7 E. The named Plaintiffs' claims for relief are based upon the same legal theories as are 8 the claims of the class members. 9
10 20.
11 The named Plaintiffs will fairly and adequately protect and represent the interests of the
12 class in that: 13 A. Their claims are typical of the claims of the class members; 14 B. They are represented by attorneys who are have extensive experience handling class 15 actions under the Unlawful Trade Practices Act, who are qualified and competent, 16 17 and who will vigorously prosecute this litigation; and
18 C. Their interests are not antagonistic or in conflict with the interests of the class
19 members.
20 21. 21 A class action is superior to other available methods for the fair and efficient adjudication 22 of this case in that: 23 A. Common questions of law and fact predominate over factors affecting only individual 24 25 members;
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Page 8 -PLAINTIFFS' COMPLAINT AND DEMAND FOR JURY TRIAL
David F. Sugerman I Attorney, PC 707 SW Washington St, Suite 600 Portland, Oregon 97205 Phone 503.228.6474 I Fax 503.228.2556 B. As far as Plaintiffs know, no class action that purports to include Oregon consumers 1 2 suffering the same injury has been commenced;
3 C. Individual class members have little interest in controlling the litigation, due to the
4 high cost of individual action, the relatively small amounts of damages suffered by 5 any individual Plaintiff; and because Plaintiffs and their attorneys will vigorously 6 pursue the claims; 7 D. The forum is desirable, as Defendants do business in Multnomah County; 8 E. A class action will be an efficient method of adjudicating the claims of the class 9
10 members who have suffered relatively small monetary damages, as a result of the
11 same conduct by defendants;
12 F. In the aggregate, class members have claims for relief that are significant in scope 13 relative to the expense of litigation; 14 G. Injunctive relief will prevent further ongoing harm to Plaintiffs and class members; 15 H. The availability electronic data will facilitate proof of class members' claims, 16 17 processing of those claims, and distributions of any recoveries;
18 I. As to customers who paid cash and for whom there are fewer records, to the extent
19 that class members cannot be located, their monies may be distributed through a cy
20 pres process under ORCP 32 O. 21 22 ALLEGATIONS COMMON TO ALL CLAIMS
23 22.
24 At all times in the class period, Defendants have had in place a BOGO meat sales 25 program that operates at its Oregon Albertson's and Safeway grocery stores. 26
Page 9 -PLAINTIFFS' COMPLAINT AND DEMAND FOR JURY TRIAL
David F. Sugerman I Attorney, PC 707 SW Washington St, Suite 600 - Portland, Oregon 97205 Phone 503.228.6474 I Fax 503.228.2556 1 23.
2 Products sold under the BOGO program are prominently marked and marketed as "Buy
3 1, Get 1 Free" or "Buy 1, Get 2 Free." The products are grouped in a particular meat case with
4 prominent signs highlighting the program.
5 24.
6 Based on information and belief, the same pricing practices take place in Oregon
7 Albertson's stores, though consumers in those stores do not present loyalty cards. Instead, they
8 present readily available coupons.
9 25.
10 OAR 137-020-00 IS prohibits the sale of free goods when the costs of the "free" goods
11 are passed on to consumers. The rule defines "free" items as those that are, "without charge or
12 cost, monetary or otherwise, to the recipient* * * *." OAR 13 7 -020-00 IS(1 )(b). Additional items
13 included-here seasoning, thin-slicing, and breading-are evaluated based on whether the
14 consumer can purchase a similar product without the additional purchase of other goods. Official
15 Commentary, OAR 137-020-001S(1). The regulation likewise defines "regular price" as, "the
16 price, in the same quantity, quality and with the same service, at which the seller * * * has openly
17 sold * * * the product * * * in Oregon in the most recent and regular course of business, for a
18 reasonably substantial period of time, i.e., a 30-day period, prior to the offer****." 19 26.
20 Defendants' pricing violates OAR 137-020-001S(2) in one or more of the following
21 ways:
22 A. Defendants use "free" in an unfair and deceptive fashion by pricing the BOGO items
23 at prices higher than the regular price in violation of OAR 137-020-001S(2)(a)(C);
24 B. Defendants engage in deceptive or misleading practices by failing to disclose that
25 their add-ons are otherwise available for free and thus do not allow the per unit price
26 increases in violation of OAR 137-020-001S(2)(a)(D);
Page 10 -PLAINTIFFS' COMPLAINT AND DEMAND FOR JURY TRIAL
David F. Sugerman I Attorney, PC 707 SW \l(,Tashington St, Suite 600 - Pordand, Oregon 97205 Phone 503.228.6474 I Fax 503.228.2556 1 C. Defendants engage in deceptive or misleading practices by altering product names to
2 thwart price comparison in violation of OAR 137-020-0015(2)(a)(D);
3 D. Defendants engage in deceptive or misleading practices because the product which is
4 prominently marked "free" is not free in violation of OAR 137-020-0015(2)(a)(D);
5 E. Defendants engage in deceptive or misleading practices by increasing per unit prices
6 over comparable product available at regular prices to the same customers in violation
7 of OAR 137-020-;0015(2)(a)(D); and
8 F. Defendants engage in deceptive or misleading practices because the meat can be
9 purchased for a lesser price without the "free" meat special, in violation of OAR 13 7-
10 020-0015(2)(a)(B)
11 CLAIM FOR RELIEF-VIOLATION OF ORS 646.608
12 First Count-willful violation
13 27.
14 Defendants willfully violated ORS 646.608 in one or more ofthe following ways that
15 caused ascertainable losses to Plaintiffs and class members:
16 A. Defendants engaged in unlawful pricing practices by raising BOGO program meat
17 products above regular prices in violation of OAR 137-020-0015 and thereby violated
18 ORS 646.608(l)(u);
19 B. Defendants make false or misleading representations of fact concerning the existence
20 of or amounts of price reductions in violation of ORS 646.608(1 )0); and
21 C. Defendants make false or misleading representations of fact concerning the offering
22 price of goods in violation of ORS 646.608(1)(s).
23 28.
24 As a result of these violations of these UTP A, Plaintiffs and members of the class
25 suffered ascertainable losses, in that they paid more for meat, they did not receive free meat, and 26
Page 11 -PLAINTIFFS' COMPLAINT AND DEMAND FOR JURY TRIAL
David F. Sugerman I Attorney, PC 707 SW Washington St, Suite 600 - Portland, Oregon 97205 Phone 503.228.6474 I Fax 503.228.2556 1 they bought more meat than they otherwise would have purchased without the deceptive
2 designation of "free" product.
3 29.
4 Based on information and belief, the conduct alleged continues to this day. Plaintiffs and
5 the proposed class seek an injunction to ensure cessation of the unlawful trade practices. ORS
6 646.636.
7 30.
8 Plaintiffs and the class are also entitled to equitable relief in the form of an accounting,
9 restitution, and-unless agreed upon by Defendants-an order to preserve data related to these
10 claims. ORS 646.638(1). Plaintiffs and the class are also entitled to recover interest and
11 attorneys' fees and costs. ORS 646.638(3).
12 Second Count-Reckless or knowing violation 13 31.
14 Plaintiffs incorporate and re-allege paragraphs 1-26 and 28-30.
15 32.
16 Defendants engaged in the conduct at issue in this case in reckless disregard of the
17 requirements ofORS 646.608(1) and OAR 137-020-0015 and/or with knowledge that their
18 BOGO pricing practices violated the cited statute and rules. As a result, Plaintiffs and the class
19 have suffered the previously described ascertainable losses.
20 NOTICE OF INTENTION TO CLAIM DAMAGES
21 33.
22 Plaintiffs have provided notice as required by ORCP 32H. Unless Defendants comply
23 with ORCP 321, Plaintiffs will amend the complaint to add claims for actual damages under the
24 first count and statutory damages under the second count. ORCP 32J. As well, Plaintiffs may
25 later seek punitive damages.
Page 12 -PLAINTIFFS' COMPLAINT AND DEMAND FOR JURY TRIAL
David F. Sugerman I Attorney, PC 707 S\'\/ Washington St, Suite 600 - Porrland, Oregon 97205 Phone 503.228.6474 I F~'{ 503.228.2556 1 WHEREFORE, Plaintiffs seek judgment against Defendants and the following relief:
2 1. Unless otherwise agreed to by Defendants, an order directing them to preserve class
3 members' electronic records;
4 2. An order certifying this matter as a class action pursuant to ORCP 32;
5 3. On Plaintiffs' claim for relief for violation of the UTPA, ORS 646.608: an injunction
6 prohibiting Defendants from continuing the BOGO program pricing practices that
7 violate OAR 137-020-0015 and ORS 646.608 through misleading use of the term
8 "free" and through increasing unit prices; equitable relief in the form of an order
9 requiring an accounting, restitution, interest, and attorneys' fees and costs; and
10 4. Such other relief as the Court may deem just. 11
12 DATED this 4th day of May, 2016.
13
14 By:----=~~_-+--=:::::::~::::::.....------15 David F. Sugerman, o. 86298 16 DAVID F. SUGE TTORNEY, PC 707 SW Washington Street, Suite 600 17 Portland, OR 97205 Telephone (503) 228-6474 18 Email: [email protected] 19 Tim Alan Quenelle, OSB No. 93400 20 TIM QUENELLE, PC 21 415 North State Street, Suite 132 Lake Oswego, OR 97034 22 Telephone (503) 675-4330 Email: [email protected] 23
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Page 13 -PLAINTIFFS' COMPLAINT AND DEMAND FOR JURY TRIAL
David F. Sugerman I Attorney, PC 707 SW Washington St, Suite 600 - Pordand, Oregon 97205 Phone 503.228.6474 I Fax 503.228.2556 Stephen Gardner, OSB No: 152523 1 Stanley Law Group 2 6116 N. Central Expwy Dallas, TX 75206 3 Phone: (214) 443-4300 Facsimile: (214) 443-0358 4 Email: [email protected] 5 Attorneys for Plaintiffs 6
7 DEMAND FOR JURY TRIAL
8 Plaintiffs demand trial by jury as to each issue to which they and the class are entitled to a
9 jury trial.
10
11 DATED this 4th day of May, 2016.
12
13 BY:--I~""";;;;~ __-+--I--~~ ___ 14 David . Sugerman, OS N. 6298 15 DAVID F. SUGERMA ORNEY, PC 707 SW Washington Street, Suite 600 16 Portland, OR 97205 Telephone (503) 228-6474 17 Email: [email protected] 18
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Page 14 -PLAINTIFFS' COMPLAINT AND DEMAND FOR JURY TRIAL
David F. Sugerman I Attorney, PC 707 SW Washington St, Suite 600 - Portland, Oregon 97205 Phone 503.228.6474 I Fax 503.228.2556