Antitrust Law Daily Wrap Up, ADVERTISING—E.D.N.Y.: Suit alleging Under Armour’s outlet stores’ pricing was deceptive gets dismissed, (Sep 15, 2025)

By Donielle Tigay Stutland, J.D.

The consumer failed to show that she overpaid for the item or that the item was defective.

The federal district court for the Eastern District of New York dismissed a class action lawsuit brought against retailer Under Armour alleging that that the store’s outlets’ pricing was deceptive and misleading to consumers. The consumer’s suit alleged that Under Armour’s outlet stores advertised inflated "original" prices that were never charged, misleading consumers into thinking they were getting bigger savings than they were. The court concluded that the consumer failed to show an injury under both the purchase-price theory and the price-premium theory and dismissed the consumer’s suit (Rappaport v. Under Armour, Inc., No. 2:24-cv-07558-HG (E.D.N.Y. Sept. 11, 2025)).

Background. A consumer brought a class action suit challenging the pricing practices at Under Armour’s outlet locations. The suit “challenges defendant’s alleged practice of pricing its products in a way that misleads buyers into believing that they are getting a steep discount on products when, in fact, there is no discount at all.” The consumer alleges that she purchased an item at an Under Armour “outlet” location which was displayed alongside materials that indicated the item was marked for an additional 50% off an original price (or “reference price”) of $34.97, for a price of $17.48 (the “discount price”), leading her to believe “she was receiving a significant discount on the item she had chosen.” However, the consumer alleges further that this discount was part of a “fake discount scheme” that not only deceived her into purchasing the sports bra that “was worth less than the amount she paid for it”, but also “artificially inflated consumer demand,” which enables Defendant to charge higher prices for the “supposedly discounted” products they offer at its Under Armour Factory stores (the “outlet stores”) and online at underarmour.com/en-us/c/outlet/ (the “outlet website”).

Counsel for the consumer “conducted a large-scale, comprehensive investigation” to conclude the “objective measure by which Plaintiff [and other consumers]” overpaid for the products they purchased from Defendant’s outlet stores and website. The consumer brought a class action suit against the retailer alleging its conduct violates various New York consumer protection laws, specifically, the New York Consumer Protection from Deceptive Acts and Practices Act, GBL § 349, and New York False Advertising Act, GBL § 350, in addition to the s the Federal Trade Commission Act (“FTCA”), 15 U.S.C. § 52(a).

The retailer filed a motion to dismiss the complaint.

Standing. The court began its analysis by reviewing the retailer’s argument that the consumer lacked standing to bring her claims. The retailer argued that the consumer lacks standing because she has not adequately alleged an injury for purposes of her GBL §§ 349 and 350 claims and, therefore, lacks standing to bring this action under the Article III. Second, the retailer argued that the consumer lacks standing to assert any claims concerning transactions on or through the retailer’s outlet website (the “web-based claims”) because she does not allege that she made purchases from the retailer’s online store and does not allege that she encountered the retailer’s pricing practices online.

The court found that the consumer did have Article III standing. “Such an allegation that a plaintiff would not have purchased a product or would not have paid the same amount comfortably satisfies the injury-in-fact prong of Article III standing.”

The court also found that the web-based claims “implicate[] the same set of concerns” as the allegations concerning Defendant’s in-store conduct. Defendant’s argument that the web-based claims are not precisely the same as the in-store claims is too literal. Plaintiff has adequately pleaded an injury-in-fact necessary for Article III standing and sufficiently met the requirements necessary for her to bring the web based claims on behalf of putative class members.

New York Claims. The retailer next argued that the suit be dismissed because the consumer failed to allege an adequate injury under New York’s consumer protection laws. The court noted, “Although the Court has concluded that Plaintiff adequately pleaded an injury-in-fact for purposes of Article III standing, whether Plaintiff has properly alleged an injury for [her GBL] §§ 349 and 350 claims requires a separate inquiry.” To adequately plead an injury under the applicable New York laws, “a plaintiff must allege that, on account of a materially misleading practice, she purchased a product and did not receive the full value of her purchase.” Here, the consumer alleged that she “sustained an ascertainable loss in the form of the total purchase price she paid for the merchandise in question because she would not have purchased the product if it had not been for Defendant’s allegedly false advertising (the “purchase-price theory”).” Second, the consumer claims that she sustained economic injury because the retailer’s allegedly false reference prices caused her to pay an “inflated price” or “price premium” for the merchandise (the “price-premium theory”).

The court highlighted that New York law rejects the purchase-price theory of injury because it “impermissibly combines the deception (the appearance of a bargain) with injury (there was no actual bargain).”

As to the price-premium theory, first the court noted that the consumer failed to plead that the item she purchased was defective or of inferior quality. Wrote the court, “Plaintiff does not adequately allege a unique quality for which she paid a premium, nor does she allege that the product she purchased was otherwise defective.” She may have been disappointed, but “disappointed bargain-hunters do not suffer any actual injuries or damages simply because they did not get as good a deal as they expected.”

The consumer offered a “regression analysis” to prove overpayment, however, the court rejected this approach. The court found that the consumer’s “experts’ analysis does not provide an objective measure by which [Plaintiff was] overcharged.” The court noted that a similar analysis for valuation was rejected by the court in Premium Brands. The court concluded that the consumer’s “allegations are too speculative, even at this stage, to sustain a claim that Defendant inflated its prices above some objective market value.”

The court found that the consumer failed to allege an injury under the purchase-price theory or the price-premium theory. The court dismissed the claims under GBL §§ 349 and 350.

The Case is No. 2:24-cv-07558-HG.

Judge: Gonzalez, H.

Attorneys: Gary F. Lynch (Lynch Carpenter, LLP) for Linda Rappaport. Andrew Ramiro Escobar (Seyfarth Shaw LLP) for Under Armour, Inc.

Companies: Under Armour, Inc.

Cases: Advertising StateUnfairTradePractices NewYorkNews