Antitrust Law Daily Wrap Up, ADVERTISING—S.D. Ohio.: Class claims against Jos. A Bank for false price advertising fail, (Aug 20, 2014)

By Linda O’Brien, J.D., LL.M.

In a putative class action by consumers against clothier Jos. A. Bank for the alleged false advertising of its regular prices, the plaintiffs failed to adequately allege damages for a class action under Ohio Consumer Sales Practices Act, the federal district court in Columbus, Ohio has held (Johnson v. Jos. A. Bank Clothier, Inc., August 19, 2014, King, N.).

Jos. A. Bank Clothiers operates a national chain of retail clothing stores. Frequently, the clothier advertises sales in television commercials, mailings, social media, email, telephone calls, and in-store advertising in which the purchaser of one suit at “regular” price received a specified number of additional suits for free. Matthew Johnson and Charles Patterson each purchased a suit from Jos. A. Bank at the purported regular price of $795 and, based on the advertised sale at the time, was promised three “free” suits.

Johnson and Patterson filed a putative class action suit against Jos. A. Bank, alleging that the company’s price practice qualified as a deceptive act or practice under the Ohio Consumer Sales Practices Act (OCSPA). Specifically, the plaintiffs alleged that the suits were almost never sold at the “regular” price. The “regular” price allegedly was illusory because the “regular price” for each purchased suit was vastly inflated above the true regular market price routinely paid by consumers in order to pass along the costs of the “free” suits. The defendant’s motion to dismiss the class allegations was granted. After the plaintiffs filed an amended complaint, the defendant moved for dismissal of the amended complaint.

OCSPA. The court found that the plaintiffs’ amended complaint failed to allege actual injury or damage as a result of the alleged OCSPA violation. The OCSPA prohibits a supplier from committing an unfair or deceptive act or practice in connection with a consumer transaction. To maintain a class action in connection with an OCSPA violation, a plaintiff must allege actual damages that were a proximate result of the defendant’s deceptive act.

The plaintiffs based their damages claim on a theory of loss of the benefit of the advertised bargain – of four suits each with a market value of $795, which was the deal promised. The plaintiffs did not allege that they did not receive four suits in exchange for payment of $795 or that the four suits received were collectively worth less than $795, the court noted. Agreeing with the defendant, the court stated that the plaintiffs did not incur pecuniary or out-of-pocket losses and that the regular price for four suits must be calculated as $795, the amount actually paid for the four suits. Since the plaintiffs were unable to assign a dollar amount to their claimed actual damages without unreasonable speculation, the amended complaint failed to allege actual injury or damage as a result of the alleged OCSPA violation, the court concluded.

The case is No. 2:13-cv-756.

Attorneys: Daniel Frech (Spangenberg Shibley & Liber LLP) for Matthew B. Johnson and Charles Patterson. Michael N. Ungar (Ulmer and Berne LLP) for Jos. A. Bank Clothiers, Inc.

Companies: Jos. A. Bank Clothiers, Inc.

Cases: Advertising StateUnfairTradePractices OhioNews