Safeway Customers Defeat Arbitration Bid in Wine Discount Suit

Safeway Inc. lost its bid to arbitrate customers’ claims that the supermarket deceptively advertises limited-time discounted wine to its rewards members, but the sales never actually end.

Safeway didn’t establish any actual or constructive notice of its offer or its terms to arbitrate disputes as a matter of law, the US District Court for the Northern District of California ruled Wednesday, rejecting the supermarket’s bid to arbitrate the case. The company had sent an email in May 2024 to all rewards members, notifying them of new terms of use, which included that disputes “will be arbitrated, instead of class actions of jury trials.”

Safeway doesn’t cite—and the court isn’t aware of—any case holding that a consumer has constructive notice of an arbitration offer based solely on an email of which the consumer is unaware, the order said. “The Court’s conclusion that receipt of an email offer is required to form a contract is consistent with Ninth Circuit precedent,” Judge Jacqueline Scott Corley said for the court.

Safeway customers brought claims on behalf of a nationwide class and California, Oregon, and D.C. subclasses, alleging that “Safeway deceives its wine-drinking Rewards members by offering false discounts on its wine prices.”

“Safeway creates the illusion of a sale by advertising wine as ordinarily offered for sale at one price” that is then discounted for members,” the complaint said.

The lawsuit alleged violations of California False Advertising Law, Unfair Competition Law, and Consumer Legal Remedies Act; Oregon Unlawful Trade Practices Act; and D.C. Consumer Protection Procedures Act. They also alleged breach of contract, unjust enrichment, and fraud.

“It is undisputed no plaintiff had actual notice of Safeway’s email offer,” the court said. Under California law, Corley said, “there must be actual or constructive notice” of the contract offer “and the parties must manifest mutual assent.”

In resolving a motion to compel arbitration under the Federal Arbitration Act, a court’s inquiry is limited to whether a valid agreement to arbitrate exists and, if it does, whether the agreement encompasses the dispute at issue, Corley said.

The parties’ disagreement is whether a valid argument to arbitrate exists, according to the court. While Safeway claims that all customers received an email notifying them of the change in terms of service and “continued to make purchases in which they sought and received the benefits of their loyalty accounts” afterwards, the customers allege that a “one-way email notice did not create an enforceable contract requiring arbitration.”

A motion to dismiss was also filed by Safeway, which is still pending before the court.

Safeway didn’t immediately respond to a request for comment.

Smith Krivoshey PC, Tycko & Zavareei LLP, and Bursor & Fisher PA represent the class. Benesch Friedlander Coplan & Aronoff LLP represents Safeway.

The case is Tempest v. Safeway Inc., N.D. Cal., No. 3:24-cv-06553, 7/16/25.