Wednesday, December 29, 2010

Consumer lacked standing to challenge false claims of discounts

[Hinojos] v. Kohl's Corp., 2010 WL 4916647 (C.D. Cal.)

Kohl’s removed this putative consumer protection class action to federal court. Plaintiff bought items including apparel and luggage from Kohl’s. He alleged that Kohl’s misrepresented the nature and amount of discounts he received, because the supposed “regular” or “original” retail prices were never the prevailing market retail prices, and that Kohl’s misrepresentations induced him to buy from Kohl’s instead of elsewhere.

The court found that plaintiff lacked standing under the UCL or the FAL because he didn’t lose money or property as a result of defendants’ acts. Though he didn’t receive the full value of price discounts, he did receive the merchandise itself, which he didn’t allege was unsatisfactory or worth less than he paid for it. Other cases finding that plaintiffs lost money or property were distinguishable because they dealt with variation in the actual composition, effects, substance or origin of the products at issue. Despite not receiving exactly what he expected, the plaintiff nevertheless received the benefit of the bargain and consequently lacked standing.

Note: many state UCL laws, as well as the FTC’s Guides, explicitly bar misrepresentations about discounts from “normal” prices, regardless of whether the ultimate price is a fair value. Why is that, if consumers receive the benefit of their bargains?

1 comment:

  1. Seems like this case will shut down the class action against Groupon, which is (I believe) being done by the same law firm.