KFC fails to end suit over chicken-and-sides coupons

Yum! Brands Inc. and its KFC unit must face claims by consumers that the company failed to honor coupons for free grilled chicken meals after a promotion was announced by television talk show host Oprah Winfrey.

U.S. District Judge James F. Holderman in Chicago rejected a request by the company for dismissal of the four lawsuits filed last year and consolidated before him, ruling that the consumers had set forth a "plausible claim for common law fraud."

Louisville, Kentucky-based Yum and KFC launched the offer for their new grilled chicken product in May 2009. Winfrey announced the give-away on her show. She and KFC made coupons redeemable for two pieces of chicken, two sides and a biscuit available on their websites, according to the court.

While more than 10 million coupons were printed, according to Holderman's ruling, the KFC outlets stopped redeeming them only two days into a scheduled two-week promotion, telling customers they could apply for a "rain check" through the internet.

About 5.7 million people were allegedly denied free meals otherwise retailing for $3.99, making the suit worth more than $22 million.

"The promotion proved to be too much of a good thing," according to a consolidated complaint filed with the court in February. "Faced with high demand for the free meals, KFC stopped honoring the coupons almost immediately."

"We provided millions of free Kentucky Grilled Chicken meals around the country when the offer was announced in 2009," KFC spokeswoman Laurie Schalow said in an e-mailed statement. "Due to the overwhelming response, we distributed millions of rain check coupons for the holders of valid coupons who we were unable to serve during the offer period."

Seeking dismissal, KFC and Yum! told Holderman of the rain check offer, asserting that it cured any alleged breach.

"Plaintiffs' allegations, taken as true, plausibly suggest that Defendants' 'raincheck program' was not a cure, but a requirement for additional performance," Holderman wrote.

The judge's decision was posted to the court's website on July 9.

The plaintiffs allege violations of consumer protection laws in Illinois, Michigan and California. They're seeking class action -- or group -- certification together with compensatory and punitive damages of at least $25 million.

The case is In Re Kentucky Grilled Chicken Coupon Marketing and Sales Practices Litigation, 09cv7670, in the Northern District of Illinois (Chicago).