Last month, Judge Valerie Caproni of the Southern District of New York dismissed with prejudice a putative deceptive pricing class action filed against Burberry. This is the first decision within the Second Circuit to determine whether shoppers claiming to have been victimized by discount price advertising in outlet stores have suffered actual injury for purposes of Article III standing.
During the past few years, there has been a virtual explosion of consumer class action lawsuits asserting claims against retailers for allegedly fraudulent outlet store price discount advertising. The crux of these claims is that the retailer, through the use of “Was,” “MSRP,” “Compare at” or similar terms on price tags or in store signage, usually at outlet stores, has misled shoppers into believing they are getting a bargain, when they are not. The lawsuits generally do not claim the items purchased were not worth the price paid for them.
Federal courts across the country have grappled with the question of whether the plaintiffs in these cases suffered any actual injury.
Most of these cases have been brought in California, and the answer to that question both from California state appellate courts and the Ninth Circuit has been yes. These decisions hold that if deceptive price advertising caused an individual to purchase an item that he or she otherwise would not have purchased, or would have purchased elsewhere, there is an actual Article III injury.
But last year, the First and Sixth Circuits came out the other way. In Shaulis v. Nordstrom, 864 F.3d 1 (1st Cir. 2017), and Mulder v. Kohl’s Department Stores, 865 F.3d 17 (2017), the First Circuit held that a...
