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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