TRENTON, N.J. (Legal Newsline) - Class action lawyers can't pursue claims against the clothing retailer Aeropostale that alleged customers were hurt by "sales" prices.
The lawsuit, which recently made its way to the New Jersey Supreme Court, said prices were marked down from costs that were never actually charged, depriving them of the benefit of their bargain.
The Appellate Division had said they established standing to sue under the Consumer Fraud Act, the Truth in Consumer-Contract, Warranty and Notice Act and other contract laws.
The Supreme Court reversed on March 25 in an opinion authored by Justice Lee Solomon. He wrote that while a plaintiff can establish an ascertainable loss by demonstrating a deprivation of the benefit of one's bargain, that didn't happen in the Aeropostale case.
"(P)laintiff purchased non-defective, conforming goods with no objective, measurable disparity between the product they reasonably thought they were buying and what they ultimately received," the court held.
And even though the plaintiffs sufficiently plead allegations of CFA violations, their claim still failed because they alleged no ascertainable loss, Solomon said.
Various groups offered amicus briefs, like the U.S. Chamber of Commerce and the New Jersey Civil Justice Insitute supporting the defendant, while state Attorney General Matthew Platkin and the state's trial lawyer group supporting the plaintiff.
"Nowhere in the complaint do plaintiffs allege facts supporting an out-of-pocket loss, i.e., that the products they purchased were worthless or unsuitable for their intended use, or that they have spent or will spend additional funds following their purchases to make the items usable for their intended purpose," Solomon wrote.
The decision split the court 4-3, with Justice Douglas Fasciale authoring a dissenting opinion. He claimed the majority failed to uphold the principles that have guided CFA cases in the past.
"The Attorney General, an unquestionably integral part of the CFA's enforcement,... advocated at oral argument that there are simply too many fictitious pricing violations in the marketplace for the Attorney General to be able to prosecute them all," Fasciale wrote.
"Therefore, without private parties like plaintiffs bringing actions against wrongdoers engaging in fictitious pricing schemes, the Attorney General will continue to be burdened, wrongdoers will not be deterred, and these unlawful practices will continue to run rampant in the marketplace, just as studies have reported."
Denittis Osefchen Prince represented the plaintiffs.