UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
Case No. ll-cv-03003-JST
AMENDED ORDER GRANTING PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT
Re: ECFNo. 223
I. INTRODUCTION
In this class action, Plaintiff Michael Rodman (“Plaintiff’ or “Rodman”) and members of the certified class, bring a single breach of contract action against Defendant Safeway, Inc. (“Defendant” or “Safeway”). Plaintiff argues that Defendant breached the terms of the parties’ agreement by charging higher prices for groceries on its online Safeway.com delivery service than it charged in the stores where the groceries were selected. Both Plaintiff and Defendant have filed cross-motions for partial summary judgment on the Class’s breach of contract claim. The matter came for hearing on September 11,2014.
II. BACKGROUND
A. Undisputed Facts and Procedural History
Since 2006, Safeway has operated an online grocery delivery service on its website, Safeway.com. Prior to placing a delivery order with Safeway.com, customers must register for an account. Exh, 7 to Declaration of Timothy Mathews (“Matthews Deci.”) (ECF No. 171-9); see also ECF No. 194-5 at 2 (ECF No. 194-5) (“Safeway does not dispute that customers must agree
to the Special Terms as part of their registration process”). As part of that registration process, a registrant must click a box that states, “Check this box if you agree to the Terms and Conditions.”
Id.
The referenced Special Terms of Use (“Special Terms”) contain the following language:
Customer Agreement
[...]
Your use of the . . . [Safeway] online service and the Site constitute your agreement to the terms and conditions set forth below.
[...]
Notwithstanding any statements on the . . . [Safeway.com] web pages or elsewhere, these Terms and Conditions are the agreement between you and . .. [Safeway],
[...]
Responsibilities
If [Safeway] accepts your order, [Safeway] shall, in return for your payment, provide the Product that you order through the online shopping service. The Product shall be delivered to you ... at the delivery address you designate. Your payment for the Product and shipping and delivery, including any applicable sales taxes, is due upon completion of the checkout and delivery of your order ....
The total amounts you shall pay for the Product per each order shall be the sums of the respective prices for the items you select and submit via the online order form, plus all applicable sales taxes and shipping charges, if any, as reported to you as the “TOTAL” in the delivery receipt.
[..]
Product Pricing and Service Charges
The prices quoted on our web site at the time of your order are estimated prices only. You will be charged the prices quoted for Products you have selected for purchase at the time your order is processed at checkout. The actual order value cannot be determined until the day of delivery because the prices quoted on the Web site are likely to vary either above or below the prices in the store on the date your order is filled and delivered.
[••]
A service (delivery) fee applies to all orders, no matter how small or large, and is nonrefundable. The service fee covers the costs associated with each order. Please see “about deliveries” in the customer help section for applicable charges.
[...]
[Safeway.com] Communications
On occasion, [Safeway.com] may need to contact you regarding your account or a significant business issue. These communications will be marked “Special service notification: Please read.”
[..]
Delivery
. . . We reserve the right not to deliver items that your local store, where your groceries are selected, deem to be excessive in quantity.
[...]
Applicable Law
These Terms and Conditions and the order form, collectively constituting the sole and entire agreement between Safeway and you regarding the online shopping services, are governed by laws of the State of California without regard to conflict of laws and rules. The parties agree to jurisdiction and venue for any dispute hereunder solely in Pleasanton, California and Alameda County, California.
L ]
Changes to Terms and Conditions
[Safeway] reserves the right to, from time to time, with or without
notice to you, in [Safeway’s] sole discretion, amend the Terms and Conditions for use and purchases regarding the online shopping services. Any amendment by [Safeway] will be effective only as to orders you place after [Safeway’s] revisions of these Terms and Conditions as displayed on the Web site. [Safeway] will plan to notify you of any material amendments to these Terms and Conditions; however, it is your responsibility to review the Terms and Conditions before submitting each order. [Safeway] has no responsibility to notify you of any changes before any such changes are effective.
[...]
Terms and Conditions Govern
These Terms and Conditions, as amended from time to time, shall be the sole terms of the agreement between you and [Safeway] regarding your online purchases. All statements otherwise made on the Web site, or otherwise, are intended only for you convenience and do not form and are not included in our Agreement or the terms for your purchase.
Once registered, customers place orders for home delivery by browsing selections and
prices displayed on the website. Declaration of Steve Guthrie (“Guthrie Deci.”) Hl1 (ECF No.
175). For each item, the online store describes the item, displays its image, and displays a price
next to the item. Id. !12. Customers select a delivery time, which can be several days after the
order is placed online. Id. Hl 4. Groceries are then selected from a physical Safeway store and delivered to the customer. Prices for products in Safeway’s physical stores, and in its online store, change frequently. Declaration of Michael McCready (“McCready Deci.”) 1 6 (ECF No. 172-6).
As initially operated, Safeway.com “generally priced the items sold in the online store the same as the brick-and-mortar store from which the items were picked and delivered,” although “[t]his pricing was never exactly the same due to exceptions ..., such as manager specials.” Id.
In April 2010, Safeway instituted a new pricing model for regular retail, non-promotional items on Safeway.com, instituting “a markup applied to the prices charged in the price zone of the physical
store from which the customer’s order is picked and delivered.” Id. Hl 9-10. “If the price of an item is between $0.00 and $0.99, the markup adds $0.10, from a $1.00 to $1.99, the markup adds
$0.20 cents, from $2.00 to $2,99 the markup adds $0.30 cents, and so on,” Id. H 10. Under this
new structure, the prices displayed for items on the Safeway.com website displayed this marked-
up price. Id. H 11
Plaintiff Rodman, who used the Safeway.com delivery service and later discovered the prices were higher than those in his local store, brought suit, alleging causes of action for breach of contract and under California’s Unfair Competition Law, Consumer Legal Remedies Act, and False Advertising Law. Plaintiff argued that he understood the Special Terms to promise the same prices in the local stores as were charged on the website, and Safeway argued that his claims failed as a matter of law. On November 1,2011, the Court denied Safeway’s motion to dismiss Plaintiffs claims. 2011 WL 5241113 (ECF No. 38).
On November 15,2011, Safeway revised the Special Terms to include the following language: “Please note before shopping online at [Safeway.com] that online and physical store prices, promotions, and offers may differ.” Exh. 42 to Matthews Deci. (ECF No. 171-44). “All references to ‘store’, ‘online’, ‘website’, or ‘on line store’ as used herein refer to the ... Online Shopping Services only unless expressly stated.” Id. Safeway did not contact Safeway.com registrants to notify them that it had amended the Special Terms. Exh. 9 to Matthews Deci., at 288:13-18 (ECF No. 170-9). On August 29,2012, Safeway sent an email to customers who had opened an email from Safeway.com in the last six months, informing them that “Grocery delivery prices, promotions, discounts, and offers may differ from your local store.” ECF No. 175-5 at 2. This email also did not reference the Special Terms. Id.
On March 9,2014, the Court granted Plaintiff’s motion to certify a class for purposes of bringing the breach of contract action, although not for the CLRA, UCL and FAL causes of action. 2014 WL 988992 (ECF No. 163). The class is comprised of: “All persons in the United States who: (1) registered to purchase groceries through Safeway.com at any time prior to November 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.” Id. These motions followed.
B. Jurisdiction
This Court has jurisdiction pursuant to 28 U.S.C. § 1332(d)(2) & (6), the Class Action Fairness Act of2005 (“CAFA”), since there are 100 or more Proposed Class Members, the amount in controversy exceeds $5,000,000, and at least one plaintiff and defendant are citizens of different states.