District Court Rules Online Agreement Does Not Bind Customers to Unknown Future Contract Terms

Class Action Internet Commerce

On December 10, the U.S. District Court for the Northern District of California granted plaintiff’s motion for partial summary judgment in a class action suit filed against a large grocery chain. Plaintiff claims that the grocer’s online prices for groceries were approximately 10 percent higher than those in its stores and alleged causes of action for breach of contract and under California’s Unfair Competition Law, Consumer Legal Remedies Act, and False Advertising Law. A class was certified for the breach of contract claim on March 9, 2014. In granting summary judgment on the breach of contract claim, the Court found that the grocer breached its agreement with consumers because its terms of use promised that the online prices and in-store prices would be identical. Furthermore, the Court rejected the grocer’s claims that class members should not be allowed to recover damages for the period after it made revisions to its terms of use where it noted the pricing disparities. The Court stated, “even in light of [customer’s] agreement to the Special Terms at the time of registration, customers’ assent to the revised Terms cannot be inferred from their continued use of the [grocer’s online service] when they were never given notice that the Special Terms had been altered.” Rodman v Safeway Inc., No 11-cv-03003-JST (N.D. Cal. Dec. 10, 2014).