Safeway Settles With Bay Area Cities In Unfair Business Practices Suit

Several Bay Area district attorneys today announced a $2.25 million settlement with Pleasanton-based Safeway Inc. of a lawsuit that alleged the grocery chain sometimes charged customers more than its advertised and posted prices.

The settlement was signed by Marin County Superior Court Judge Roy Chernus on Wednesday, the same day that nine county district attorneys filed a lawsuit alleging that Pleasanton-based Safeway engaged in unfair business practices.

The counties whose district attorneys participated include Alameda, Fresno, Napa, Sacramento, Santa Cruz, Solano, Sonoma and Ventura in addition to Marin.

Under the pact, Safeway did not admit to any liability or violations of law, but agreed to a permanent injunction prohibiting it from making false or misleading statements or charging prices above those advertised or displayed.

Marin County District Attorney Ed Berberian, who led the lawsuit, said, “We believe consumers need to be sure they will be treated in a fair manner. I think Safeway agrees.”

Berberian said the simultaneous lawsuit and settlement followed several months of negotiations and provided a way to have a court-supervised injunction in place.

The settlement also requires Safeway to pay $2.25 million in fines and restitution to the nine counties and the state. Most of the money — $2 million, or $222,000 per county – will be divided equally among the consumer fraud units of the nine district attorneys.

A state consumer protection fund will receive $50,000, and the remaining $200,000 will go to reimburse state and county weights and measures offices for their expenses in investigating the case.

Berberian said the disbursement of the funds to consumer protection agencies was made under a state law that requires that procedure when it is impractical to identify and reimburse customers.

Safeway spokeswoman Wendy Gutshall said, “This settlement came about because of our inconsistency in communicating and applying our scan guarantee to our customers.

“It is not about excessive overcharges or price accuracy issues,” Gutshall maintained.

“Ssfeway has one of the best price accuracy rates in the nation, something we are very proud of. As part of the settlement, Safeway will take additional steps to make our scan guarantee policy more visible to our customers and well-understood by our employees,” Gutshall said.

The March 5 lawsuit alleged that Safeway was violating a 2008 settlement in an earlier lawsuit led by the Napa County district attorney, which required Safeway to maintain a price accuracy policy.

The new lawsuit alleged that Safeway sometimes charged prices that were higher than its lowest advertised prices, misrepresented the weight of Safeway-branded products, and posted signs in stores that conveyed the impression that certain produce was “locally grown” when it had in fact come from outside of California.

Napa County District Attorney Gary Lieberstein said in a statement, “It is unfortunate that major retailers such as Safeway continue these unfair business practices even after prior lawsuits have expressly forbidden them to do so.

“This judgment will hopefully send a message to other major retailers not to engage in similar deceptive practices and that doing otherwise will subject them to significant penalties and litigation costs,” Lieberstein said.

Julia Cheever, Bay City News

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