Antitrust Law Daily Wrap Up, ADVERTISING—D. Minn.: Best Buy granted dismissal of allegedly deceptive sale price claims, (Jun 8, 2016)

By Jody Coultas, J.D.

A customer failed to plead with particularity that Best Buy Co., Inc. induced him to purchase a microwave by misrepresenting the microwave’s "regular" price so that he believed he was purchasing it a discounted price, according to the federal district court in St. Paul, Minnesota. Thus, the court dismissed the customer’s complaint without prejudice (Nunez v. Best Buy Co., Inc., June 7, 2016, Frank, D.).

The consumer purchased a microwave from a Best Buy store based on his belief that Best Buy had discounted the price by $20. Best Buy allegedly misrepresented the "regular" price of the microwave as part of a broad scheme of fraudulent price advertising that Best Buy implemented from its corporate offices. The consumer filed various Minnesota and California false advertising and consumer protection law claims against Best Buy.

In support of his claims, the consumer relied on a study by Consumers’ Checkbook/Center for the Study of Services (CSS), a nonprofit organization. The CSS Study found that at Best Buy, two items were always on sale (although one of them was discontinued after 10 weeks); two other items were offered at sale prices about half of the time; the others were offered at sale prices one-third of the time or less.

The consumers’ claims failed to meet the Federal Rule of Civil Procedure 9(b) particularity standard, according to the court. The complaint did not provide specific facts about Best Buy’s alleged fraudulent advertising with respect to the microwave purchase or the advertising. There was no evidence regarding the date of purchase, the model of the microwave, or the specific store where the purchase was made. Without knowing where the microwave was purchased, Best Buy could not determine the price at which it sold the microwave during the three months preceding the purchase. Also, the consumer did not specify whether he relied upon a price tag in a store, a paper flyer, an e-mail, or a price listed on Best Buy’s website.

The consumer alleged that Best Buy’s retail price for the microwave during the three months immediately prior to the purchase was not the $199.99 regular price advertised. However, the consumer did not specifically allege that the facts underlying this allegation were within Best Buy’s knowledge. The consumer also failed to provide sufficient evidence for this allegation. He did not, for example, allege that the price of the microwave was something other than $199.99 on any specific date prior to his purchase of the microwave.

The CSS study did not support the consumers’ claims so as to save the pleadings, according to the court. The study findings did not support the argument that Best Buy offered all or even most of its products at discounted prices for periods of three months or more, and did not suggest that Best Buy did so with respect to the microwave at issue.

The case is No. 15-3965 (DWF/SER).

Attorneys: Edward Kirksey Wood, Jr. (Wood Law Firm, LLC) for Randy Nunez. Anne M. Lockner (Robins Kaplan LLP) for Best Buy Co., Inc. and Best Buy Stores, L.P.

Companies: Best Buy Co., Inc.; Best Buy Stores, L.P

Cases: Advertising StateUnfairTradePractices MinnesotaNews