Tempest v. Safeway, Inc.

District Court, N.D. California·Decided July 16, 2025·No. 3:24-cv-06553·Unknown

Opinion

MICHAEL TEMPEST, et al., Case No. 24-cv-06553-JSC

Plaintiffs, ORDER RE: MOTION TO COMPEL v. ARBITRATION

SAFEWAY, INC., Re: Dkt. No. 33 Defendant.

Plaintiffs, members of Safeway, Inc.’s rewards program, seek to represent a class of Safeway Rewards members who purchased wine advertised at a members-only price. (Dkt. No. 30-1 ¶ 83.) Plaintiffs allege Safeway “deceives its customers by offering false discounts on its wine prices when, in fact, Safeway’s sale prices are not temporary at all but are instead Safeway’s price of the wine that is always available to every consumer as part of its free [rewards] program available at checkout.” (Dkt. No. 30-1 ¶ 29.) Now pending before the Court is Safeway’s motion to compel arbitration. Having carefully considered the parties’ submissions, and with the benefit of oral argument on July 3, 2025, the Court DENIES Safeway’s motion to compel arbitration. On the record before the Court, no reasonable trier of fact could find Plaintiffs formed an agreement to arbitrate with Safeway. Plaintiffs Michael Tempest, LaDiamond Harvey, Sarah McGregor Horner, Brionna Brouhard, Kerry McCarty, Hillary Beam, and Christopher Lundt are residents of California, Oregon, and the District of Columbia. (Id. ¶¶ 8-14.) All are members of Safeway’s “free U.” (Id. ¶ 19.) “Members are eligible to receive purported price discounts on products available for purchases in-store as long as they use their account number at checkout.” (Id. ¶ 21.) Plaintiffs purchased wine that “was advertised as marked down from a reference price, as a time-limited discount promotion for Safeway Rewards members.” (Id. ¶ 45.) Plaintiffs believed they were “buying wine at a temporary discounted sale price and had therefore saved money on the purchase by making it during the time-period for the sale that Safeway consistently included in its shelf advertising.” (Id. ¶ 46.) In fact, Plaintiffs were “not actually buying wine at lower prices than ordinarily offered—as the wine is always offered at the discount price to all consumers (who can become members at check out for free).” (Id. ¶ 34.) Plaintiffs filed suit in September 2024. (Dkt. No. 1.) In November 2024, Safeway moved to compel arbitration. (Dkt. No. 20.) The Court granted the parties’ stipulation permitting Plaintiffs to file an amended complaint, (Dkt. No. 26), which Plaintiffs did. (Dkt. No. 27.) Plaintiffs subsequently filed the operative second amended complaint (“SAC”). (Dkt. No. 30.) They bring claims on behalf of a putative nationwide class and California, Oregon, and D.C. subclasses alleging violations of (1) California False Advertising Law, (2) California Unfair Competition Law, (3) California Consumer Legal Remedies Act, (4) Oregon Unlawful Trade Practices Act, and (5) District of Columbia Consumer Protection Procedures Act. (Id. at 26-38.) Plaintiffs also allege breach of contract, unjust enrichment, and fraud. (Id. at 31-34.) In April 2025, Safeway moved to dismiss the SAC and to compel arbitration. (Dkt. Nos. 32, 33.) III. RELEVANT FACTS RE: TERMS OF USE “In May 2024, all Safeway for U members were sent an e-mail notifying them that the applicable Terms of Use had been updated as of May 6, 2024.” (Dkt. No. 33-1 ¶ 3.) The email’s subject line read “We’ve Updated our Terms of Use.” (Dkt. No. 33-4 at 2.) The body of the email included the following language: “Our Terms of Use contain important information about your relationship with us, including that disputes between us will be arbitrated, instead of class actions 1 From: Safeway To ahbersonseraiteam 2 subject: PROOFS aero ermsandconditions -op— 19: We've Updated Our Terms of Use 3 4 SAFEWAY (9. At Albertsons Companies, we're committed to the best possible 5 experience for our customers. 6 terns apply to new customers nomedtely ahd are eftective fom May 6 2024 for ou continuing customers. Our Terms of Use contain important information about your 7 tact ations or untrle that disputes between us will be arbitrated, instead of g We encourage you to regularly review our Terms of Use.

10 Shop Safeway for U Sign In I f ®oevd 12 Ud.)

13 Greg Borup—the Director of Customer & Merchandising Insights at Albertson’s

v 14 || Companies, Inc., a parent company of Safeway—reviewed Albertson’s business records. (Dkt.

15 No. 33-1 4] 1-2.) He attests the email described above “was successfully delivered to the email Q 16 address ... associated with an account belonging to Michael Tempest, on May 9, 2024. There

2 17 || was no error with transmission of the Email to the subject email address.” (/d. ¥ 4.) Mr. Borup

18 submits the same attestation for the other plaintiffs, stating the email was successfully delivered to 19 Ms. Harvey, Ms. McGregor Horner, Ms. Brouhard, Ms. McCarty, Ms. Beam, and Mr. Lundt 20 between May 7 and May 9, 2024. Cd. 5-10.) 21 “By clicking anywhere within the hyperlink box, the user is automatically directed to the 22 Terms of Use,” which begin in bold font with notice of the arbitration provision: 23 ATTENTION: THESE TERMS OF USE CONTAIN A MANDATORY ARBITRATION PROVISION THAT, AS 24 FURTHER ADDRESSED IN SECTION 24BELOW AND OUR DISPUTE RESOLUTION TERMS REQUIRES THE USE 25 OF ARBITRATION ON AN INDIVIDUAL BASIS TO RESOLVE DISPUTES. THIS MEANS THAT YOU AND THE COMPANY 26 (AS DEFINED BELOW) ARE EACH GIVING UP THE RIGHT TO SUE EACH OTHER IN COURT OR IN CLASS ACTIONS OF ANY 27 KIND. IN ARBITRATION, THERE IS NO JUDGE OR JURY. 28 ((Dkt. No. 33-2 J 11; Dkt. No. 33-3 at 2.) Section 24, in turn, states “all claims arising from or

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