Friday, March 03, 2017

Another fake discount allegation survives challenge to plaintiff's theory of harm

Munning v. The Gap, Inc., 2017 WL 733104, No.16-cv-03804 (N.D. Cal. Feb. 24, 2017)

Munning bought a pair of swim trunks from the Gap Factory retail website, and one dress and one sweater from the Banana Republic Factory website, each advertised as being on sale, e.g. “$24.99 32% off/Now $16.99.”   Munning alleged that the prices she paid were unchanged for the entire week following her purchase; one month later, the price of the swim trunks increased by a dollar, while the price of the dress remained unchanged. Thus, she alleged, the three items she purchased “were never sold or offered for sale at the non-discounted, base prices listed on Defendants’ websites” as part of a uniform scheme. She brought claims under California and New Jersey law.

The court found that Munning stated a valid NJCFA claim. “By alleging that products on Defendants’ websites listed crossed-out prices followed by a percentage discount and a new price, Plaintiff has provided enough facts such that it is plausible a reasonable consumer could view the prices as being deceptive.”  She also needed to show an ascertainable loss, though that loss need not be monetary nor pled beyond a reasonable degree of certainty.  There are generally two ways to show ascertainable loss: (1) the benefit-of-the-bargain rule, or (2) the out-of-pocket rule.  Munning sufficiently alleged an out-of-pocket loss by alleging that she wouldn’t have bought anything if she hadn’t believed in the discount.  This was acceptable, even if what she got wasn’t worthless.

Because of that predicate violation, Munning also successfully alleged a violation of the New Jersey TCCWNA, which requires a plaintiff to show that: (1) the plaintiff is a consumer; (2) the defendant is a seller; (3) the defendant gives or displays any written consumer notice or sign; and (4) the notice or sign includes a provision that violates any clearly established legal right of a consumer or responsibility of a seller.

However, Munning’s California UCL and FAL claims were dismissed because those laws provide only for equitable relief (injunctive relief or restitution), and Munning wasn’t entitled to equitable relief because she had an adequate legal remedy, having sufficiently pleaded claims for breach of contract and breach of express warranty, which would allow her to recover damages.

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