Newegg must still face pricing lawsuit after Calif. appeals court ruling

By John Breslin | Aug 6, 2018

LOS ANGELES (Legal Newsline) – A false advertising claim against an electronics retailer can continue, a California appeals court has ruled.

The claim, by plaintiff M. George Hansen, centered on his purchase of products from retailer, Newegg.com, and allegations that the consumer bought items based on "fictitious former price information."

The Los Angeles County Superior Court granted Newegg.com Americas Inc. a demurrer, ruling that while the claim may be true, it is so irrelevant that the action should not continue because the plaintiff did not lose any money on the purchases.

The Second Appellate Court, in a unanimous finding penned by Judge Laurie Zelon, reversed the trial court's decision.

While the plaintiff suffered no financial damage, the appeals court stated under that the state's Unfair Competition Law and False Advertising Law "a consumer need only allege that he or she relied on a misrepresentation when purchasing the product."

Hansen alleged the retailer misled "customers to believe they were receiving merchandise at a discounted price," and that he relied on that information to make two purchases worth a total of just under $350.

When asking for a demurrer, Newegg argued that the plaintiff purchased the products at the price they were offered.

The trial court agreed, concluding that Hansen's "complaint showed he had received the product that he ordered at a price he agreed to pay."

It cited a previous case, which was settled in favor of plaintiffs who argued that a product was falsely labeled "Made in the U.S.A.," Hansen did not argue that he "received exactly what he ordered.” The court dismissed the action.

Zelon wrote that "it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. ... And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment."

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