BOSTON (Legal Newsline) - Kohl’s will not have to continue defending itself against a class action lawsuit that alleges it advertises false sale prices, as the U.S. District Court for the District of Massachusetts recently dismissed the case.
Ellen Mulder, the plaintiff in the case, alleged that Kohl’s advertised false sale prices. According to her complaint she was enticed to buy products from Kohl’s because of the sales price of the item, which was printed alongside what Kohl’s represented as manufacturer suggested retail prices.
“Doesn’t it stand to reason that before you buy a product you want to know what the price is?” said James O’Connor, a partner at Nickless, Phillips and O’Connor who handles consumer protection cases and other litigation for plaintiffs.
Mulder alleged that the non-sale prices were never charged by Kohl’s or other retailers in the marketplace. She filed suit under the Federal Trade Commission Act and Massachusetts State Law, alleging breach of contract, fraud and unjust enrichment.
“It’s about fairness and deception, and the point of the statute is to prevent businesses from acting unfairly or deceptively in their dealings with consumers,” O’Connor said.
Kohl’s responded with a mission to dismiss. Kohl’s did not return requests for comment regarding his case.
The court sided with Kohl’s and dismissed the case, finding that the plaintiff had not suffered an injury under the law.
“For consumers, there is not a requirement of economic loss under the unfair and deceptive practices act,” O’Connor said. “What is required is an adverse consequence.”
The opinion written by Judge F. Dennis Saylor stated that misrepresentation and causation had been met, but that the law required more than that. The law requires a legally cognizable injury.
“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,” Saylor wrote.
When Mulder requested the opportunity to file an amended complaint, the court rejected her motion and dismissed on all counts.
"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," he wrote.
The court’s decision is a positive development for retailers, because it reaffirms the need for plaintiffs to prove harm in order to have their cases heard.
Massachusetts does have price disclosure regulations under 904 CMR 3. These state that failure to disclose price and failure to disclose sale price is a deceptive act. It also states that no claim can be made that a product is being offered at a sale price if this is not the case.
“It’s not a matter of whether the prices are fair,” O’Connor said. “It’s whether or not they are properly disclosed.”
Last year, a similar case against Nordstrom Rack was dismissed when the plaintiff could not plead injury to the courts satisfaction. That case, Shaulis v. Nordstrom, Inc., is currently being appealed in the U.S. Court of Appeals for the First Circuit.