Supermarket Fined $200,000 for Mislabeling : Lawsuit: Lucky Stores officials agree to settlement with the county D.A. They say there was no intent to mislead anyone.
Lucky supermarkets agreed Friday to pay $200,000 in fines and penalties to settle a Ventura County lawsuit stemming from its sale of crabless crab salad and cream pies that lacked cream.
“We were not trying to mislead anyone,” said Robert P. Hermanns, Lucky Stores’ executive vice president, referring to the labeling of delicatessen and bakery products that the lawsuit claimed were false.
Assistant Dist. Atty. Colleen Toy White, whose office filed the suit, agreed that “there was not a corporate mentality to do this.”
Three months ago, White had summoned reporters to the same conference room to denounce Lucky for selling “seafood salad with crab” that contained only imitation crab.
Lucky, the state’s second-largest grocery chain, also was faulted for selling as “ham” a cooked-ham-and-water product with 32% added ingredients; labeling as “Virginia ham” cured meat that actually came from New York, and offering “cream pies and cream cakes” that were made with nondairy ingredients instead of cream.
Calling the substitutions “absolutely outrageous,” Dist. Atty. Michael D. Bradbury had accused Lucky of making “a concerted and repeated effort to rip off grocery shoppers.”
On Friday, however, White said the false labeling was caused by “human error and lack of communication.” She said the harsh words used by prosecutors in August were prompted by “many troubling facts found in the investigation.” Since then, she said, the district attorney’s office has received “commitments from Lucky that the problems were taken care of.”
Hermanns acknowledged that Lucky was guilty of using product descriptions “that, upon further scrutiny, left some ambiguity.” He said the violations had occurred at most of the more than 90 Southern California Lucky Food Stores that have bakeries and delicatessens, not just the six stores in Ventura County.
Chief among the offending products, Hermanns said, was an item labeled “seafood salad with crab” that used imitation crab made from a fish known as pollack. Hermanns said the deception began in January, 1990, when a head buyer for Lucky’s delicatessens substituted the artificial crab without making sure that deli signs and labels were changed.
The other mislabelings also occurred when product changes were made “and not adequately followed through,” Hermanns said. “We never knowingly sought to mislead.”
He said no employees were fired over the deception, and he was not sure whether any were disciplined.
The Ventura County agency began to investigate Lucky’s practices in July, 1990, after a consumer complained, officials said.
Investigators with hidden microphones visited Lucky stores and asked employees whether the crab salad really contained crab. Employees uniformly said no, investigators said, despite the deli signs that said the product contained crab. One employee allegedly explained: “It would be too costly for Lucky’s to make and too costly for the consumer to purchase if it was real.”
As part of the settlement, Lucky agreed to a permanent injunction that forbids the chain from claiming that a delicatessen product contains ingredients that are not present.
Under terms of the agreement, signed Friday by Ventura County Superior Court Judge Bruce A. Thompson, copies must be furnished to store managers, deli managers and deli employees within 60 days. The content of the injunction also must be incorporated into training and orientation materials for new employees.
The $200,000 in costs and penalties will be divided among Ventura County agencies, White said. Also, Lucky on Friday gave $5,000 gift certificates to two anti-hunger organizations, Food Share Inc. and Food For All.
Although the district attorney’s office had sought $550,000 in penalties when it filed the suit, White said the $200,000 that Lucky agreed to pay “is substantial for the conduct.”
She said she could not say how much Lucky profited from the deceptive practices, but said the amount was far less than $200,000.