Nordstrom Wins 'Compare at' Pricing Case
But it was on sale!
If that cost-saving expression doesn't sound familiar, then you haven't been to Nordstrom Rack. Every true shopper -- or shopper's spouse -- knows these things.
Judith Shaulis, however, had a problem with it. She bought a sweater for $49.97, which had a "compare at" price tag of $218. Joined by a class of other Nordstrom shoppers, she sued for deceptive advertising in Shaulis v. Nordstrom, Inc.
Shaulis sued in state court, alleging fraud, breach of contract, and violations of the Massachusetts Consumer Protection Act. She said that no retailer ever sold the sweater for $218, and that the tag was used to mislead customers.
Nordstrom removed the case to federal court and filed a motion to dismiss. The district court gave her two chances to amend the complaint, then dismissed it for failure to state a legal injury.
On appeal, the U.S. First Circuit Court of Appeals affirmed. The judges credited the trial court with a "well-reasoned decision," recognizing that Nordstrom's pricing scheme was deceptive but that the plaintiff had no injury.
"To state a viable claim, the plaintiff must allege that she has suffered an 'identifiable harm' caused by the unfair or deceptive act that is separate from the violation itself," the court said.
Shaulis argued that she was injured when she was induced to purchase the sweater because "she would rather have the money" than the sweater. But the court said Section 93A of the Massachusetts Consumer Protection Act requires an injury separate from the deceptive act.
It was not the first time Nordstrom has dealt with the issue. In California, a federal judge dismissed a false advertising claim against the retailer because a "reasonable consumer" would not believe that the "compare at" price was an actual sales price.
- United States First Circuit Cases (FindLaw's Cases & Codes)
- Top 6 Cases From the First Circuit April 2017 (FindLaw's U.S. First Circuit Blog)
- Judge Erred in Ruling on Issue Not Raised (FindLaw's U.S. First Circuit Blog)