Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—D. Mass.: Nordstrom dodges deceptive practices claims over “Compare At” merchandise price tags, (Aug 18, 2015)

By Linda O’Brien, J.D., LL.M.

A consumer failed to allege a legally cognizable injury to pursue claims against retailer Nordstrom for the alleged deceptive and misleading labeling and marketing of merchandise in relation to the retailer’s use of price tags that include “Compare At” prices, the federal district court in Boston has ruled (Shaulis v. Nordstrom Inc., August 14, 2015, Saylor, F.).

Nordstrom Inc. operates a chain of retail department stores, including Nordstrom Rack, its off-price retail division. In November 2014, while shopping at Nordstrom Rack, Judith Shaulis observed merchandise with price tags that stated the price at which the merchandise could be purchased. Above those prices, the tags listed “Compare At” prices. Enticed by the idea of paying significantly less than the “Compare At’ price charged outside of Nordstrom Rack, Shaulis purchased a sweater for $49 that had a “Compare At” price of $218.

Shaulis subsequently filed a class action suit against Nordstrom, alleging that the price tags of Nordstrom Rack merchandise represented “Compare At” prices that did not represent a bona fide price at which Nordstrom formerly sold the products or at which the products were sold elsewhere, in violation of the Massachusetts Consumer Protection Act (Chapter 93A of the Massachusetts General Laws). Specifically, the complaint alleged that Nordstrom misrepresented the existence, nature, and amount of price discounts on products by purporting to offer discounts off of fabricated former prices. Nordstrom moved to dismiss the complaint.

Alleged injury. The court determined that the plaintiff failed to show a cognizable economic injury. To recover under Chapter 93A, a plaintiff is required to show that the defendant’s unfair or deceptive act caused an adverse consequence or loss. Shaulis contended that Nordstrom’s misleading and deceptive marketing caused her to purchase a sweater that she otherwise would not have purchased. According to the court, the plaintiff purchased a sweater for $49 that was in fact worth $49. She did not complain about the quality of the materials or workmanship and did not allege that the sweater was worth less than what she paid for it. Moreover, the sweater was still in the plaintiff’s possession.

The plaintiff’s injury was that she was deceived into believing that she was getting a bargain. Her subjective belief that she did not receive a good value, without more, was insufficient to establish the existence of a Chapter 93A injury, the court concluded.

The case is No. 15-10326-FDS.

Attorneys: S. James Boumil (Boumil Law Offices) for Judith Shaulis. Joseph Duffy (Morgan, Lewis & Bockius LLP) for Nordstrom, Inc.

Companies: Nordstrom Inc.

Cases: Advertising StateUnfairTradePractices MassachusettsNews