retail/outlet claims for Vineyard Vines scrape past motion to dismiss

Casio v. Vineyard Vines, LLC, 2021 WL 466039, 19-CV-5135
(JMA) (AYS) (E.D.N.Y. Feb. 9, 2021)

Plaintiff alleged falsity in pricing/tags in defendant’s
outlet stores. The products allegedly “purport to be identical” to those sold
in the “retail” stores, “shar[ing] similar product line names” and “similar
style numbers” to their “retail” store counterparts. The price tags list a
“suggested retail” price followed by “our price.” But, “[d]espite their
similarity in appearance and classification, the Outlet Products are of
distinctly lower quality, evinced through the care tags.” Thus, there was a
misrepresentation about quality. Plaintiffs sought to represent New York and
New Hampshire classes.

The court declined to hold that the tags weren’t misleading
as a matter of law, but expressed doubt that plaintiffs could ultimately

Defendant argued that a reasonable consumer would
“understand that outlet retail stores typically are stocked with merchandise
produced specifically for outlets that, while not necessarily of lower quality,
may be produced at lower cost to the manufacturer for various reasons.” But the
court couldn’t evaluate the truth of this argument at this stage. While prior
cases have held that “the retail history of clothing (e.g., whether it was
offered for sale in a traditional store before being sold in an outlet store)
is generally not” material, the falsity here was alleged to be the quality of
the goods, which indeed is material.

Defendant argued that the word “retail,” as used on the
contested price tags, is clear and unambiguous and describes the sale of goods
at a general level, not an indication that products of the same quality were
sold at its “retail” stores. This too couldn’t be resolved on a motion
to dismiss. “Defendant itself recognizes the level of imprecision with which it
uses the term ‘retail’ by conceding at least one instance on its own website
where it makes a distinction between gift card use in its ‘retail’ versus ‘outlet’
stores.” Nor was plaintiffs’ alleged understanding “esoteric.” Other district
courts have described similar divisions by describing stores as “outlet stores”
and “retail stores.”

Defendant then argued that plaintiffs failed to allege
quality differences. The court was not about to resolve factual questions about
whether the “Chappy” product line in outlet stores could be compared to the
“Chappy” product line offered in defendant’s “boutique” stores.

Likewise, plaintiffs sufficiently pled a cognizable injury based
on the purportedly lower quality of the products they purchased, though the
court warned that discovery might very well disprove that theory.   

Magnuson-Moss Warranty Act claims were, however, dismissed:
the retail price label wasn’t an express warranty of quality. And plaintiffs
lacked standing to seek injunctive relief.

from Blogger

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