Rhodes v. Kroger Co.
2019 Ark. 174
| Ark. | 2019Background
- In 2015 Rhodes filed a putative class action under Ark. Code Ann. § 4-75-501(a)(2) alleging Kroger discriminated by offering discounts (Kroger Plus Card and senior discounts) unevenly.
- Kroger moved to dismiss; defendants Tyson and Scherrey were dismissed; Kroger remained; case oscillated between state and federal court before returning to Pulaski County Circuit Court.
- In April 2017 the Arkansas Legislature enacted Act 850, amending § 4-75-501 to exempt discounts offered equally to all purchasers or to specified nondiscriminatory groups, and made the amendment retroactive to January 1, 2012.
- Kroger moved for judgment on the pleadings arguing (1) Act 850 exempted its programs and (2) the functional-availability doctrine (buyer failed to use an available discount) barred Rhodes’s claim.
- The circuit court granted Kroger’s motion to dismiss; Rhodes appealed. The Arkansas Supreme Court affirmed dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 4-75-501 originally created a vested right barring retroactive application of Act 850 | Rhodes: § 4-75-501 created vested right to equal pricing; Act 850 is substantive and cannot apply retroactively | Kroger: Act 850 either clarifies or validly applies; alternatively, plaintiff failed on merits | Court: § 4-75-501 is a penal statute and did not create vested private rights; but Act 850 is substantive and cannot be applied retroactively (court nonetheless affirmed dismissal on other grounds) |
| Whether the functional-availability doctrine applies to § 4-75-501 claims | Rhodes: doctrine (from Robinson-Patman antitrust law) should not apply; APDA is consumer-protection not antitrust | Kroger: doctrine negates a discrimination claim when discounts are equally offered but not accepted by buyer | Court: Functional-availability rationale is applicable; where discounts were uniformly offered and plaintiffs willfully refused to use them, no violation stated |
| Whether the complaint adequately alleged Kroger ‘‘willfully refuse[d] or fail[ed] to allow’’ discounts (mens rea) for senior discounts | Rhodes: allegations of disparate prices suffice to state claim | Kroger: complaint lacks allegation that senior purchasers asked for discount and were willfully denied | Court: Complaint fails to plead willful refusal or mens rea; dismissal proper |
| Whether dismissal on pleadings was an abuse of discretion | Rhodes: factual disputes remain; dismissal improper | Kroger: pleadings show legal insufficiency | Court: No abuse; dismissal with prejudice appropriate when claim legally insufficient |
Key Cases Cited
- Nebraska Nat. Bank v. Walsh, 68 Ark. 433 (1900) (discussing purpose and construction of penal statutes)
- Lands'n Pulaski, LLC v. Ark. Dep't of Corrections, 372 Ark. 40 (2007) (motion for judgment on pleadings standard)
- English v. Robbins, 452 S.W.3d 566 (Ark. 2014) (distinguishing substantive vs. procedural statutes and retroactivity limits)
- GSS, LLC v. CenterPoint Energy Gas Transmission Co., 432 S.W.3d 583 (Ark. 2014) (abuse-of-discretion definition)
- Bouldis v. U.S. Suzuki Motor Corp., 711 F.2d 1319 (6th Cir. 1983) (functional-availability doctrine explained)
- Smith Wholesale Co. v. R.J. Reynolds Tobacco Co., 477 F.3d 854 (6th Cir. 2007) (functional availability negates essential elements of price-discrimination claim)
- Metro Ford Truck Sales, Inc. v. Ford Motor Co., 145 F.3d 320 (5th Cir. 1998) (discount equally available to all purchasers is not price discrimination)