Safeway Faces Lawsuit Due To Hidden Fees Related To Portland Clean Energy Tax

By Meerah Powell (OPB)
Oct. 22, 2019 7 p.m.

Safeway is facing a class action lawsuit after a Portland store charged a customer an undisclosed fee.

Joshua Gagnier thought he paid the advertised $3.33 for a bottle of wine at the Safeway on 122nd Avenue when he noticed an extra $0.03 on his receipt.


Michael Fuller, Gagnier's attorney, said that hidden surcharge was passed along to customers to cover Safeway's obligation to the Portland Clean Energy Initiative — a tax on some large companies doing business in the city that went into effect Jan. 1.

Related: What You Need To Know About Portland Clean Energy Measure 26-201

It applies to businesses that make more than $1 billion in gross revenue nationally and $500,000 in Portland. A 1% tax will apply to the gross revenue generated specifically in Portland.


Proponents of the tax expect it to raise more than $30 million annually for clean energy projects and jobs.

The tax does not apply to items such as groceries, utilities, medicine or health care services.

“In an effort to profit and to obtain an unfair advantage over its competitors, Safeway misled thousands of Oregon customers into paying unlawful hidden surcharges on certain non-grocery items,” the lawsuit states.

“A store is free to charge any surcharge or additional charge they want on top of an advertised price, so long as they disclose that on the shelf,” Fuller said. “Safeway is ripping off thousands of customers by advertising one price on the shelf and then charging another higher price at the register.”

Fuller said his client’s claim falls under the Oregon Unlawful Trade Practices Act, an Oregon law that states, among other principles, that businesses cannot falsely advertise prices. Fuller is calling for other Safeway customers to file claims if they also paid similar surcharges.

He is representing clients in another class action lawsuit against AT&T for passing Clean Energy surcharges onto its customers, even though that lawsuit states the company doesn’t have to pay the tax because of an exemption for utility companies.

Safeway did not immediately respond to request for comment.