Why it matters
In an important development for retailers coping with the new trend of deceptive pricing class actions, a Massachusetts federal court judge threw out a suit against Kohl's Department Stores over "comparison prices."
Given the trend of deceptive pricing litigation sweeping courts across the country, the decision in this case is a positive sign for retailers facing such cases. The court was clear: even if the plaintiff regretted her purchase, "it appears that she paid $40.78 for items that were, in fact, worth $40.78," the judge wrote. "The fact that plaintiff may have been manipulated into purchasing the items because she believed she was getting a bargain does not necessarily mean she suffered economic harm."
Ellen Mulder visited a Kohl's store in Hingham, Massachusetts, in November 2014. According to her complaint, she observed at least two price tags that displayed comparison prices: one represented the manufacturer's suggested retail price as having been $55 and another displayed an undefined comparison price of $26. The products were listed as being on sale for $29.99 and $17.99, respectively.
"Enticed by the idea of paying significantly less than the comparison pricing price," Mulder purchased both items. She then filed suit alleging violations of the Massachusetts state law and the Federal Trade Commission Act as well as fraud, breach of contract, and unjust enrichment. In response, Kohl's filed a motion to dismiss.
Finding that Mulder suffered no harm, U.S. District Court Judge F. Dennis Saylor granted the motion.
"[I]t is superficially appealing to conclude that plaintiff has suffered a cognizable 'injury' under the law," the court said. "The requirements of misrepresentation and causation have been met: plaintiff alleges that she was unfairly induced into making a purchase that she would not have made, but for the misrepresentation. And the transaction was arguably to her detriment; she would rather have her money—which she could use to purchase other things—than the items." But this was insufficient, Judge Saylor wrote.
"The law requires more than misrepresentation, causation, and a potential remedy: it requires a legally cognizable 'injury,' " the court said. "There does not appear to be such an injury here. Plaintiff has not suffered an economic injury; among other things, she has suffered no loss, and there is no sum of money that could be awarded to her that could 'compensate' her without providing a windfall."
For similar reasons, the court dismissed Mulder's claims of breach of contract, fraud, and unjust enrichment. Because proposed amendments to the complaint would be futile, the court also denied Mulder's request to file an amended version and granted Kohl's motion to dismiss on all counts.
To read the order in Mulder v. Kohl's Department Stores, Inc., click here.