Wish.com False Advertising Class Action Goes Before Sixth Circuit

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

An Ohio man who alleges the creator of the Wish.com advertises fake discounts on its website is urging the Sixth Circuit appeals court to revive his recently dismissed class action allegations.

On March 18, 2016, plaintiff Max Gerboc filed a class action complaint against ContextLogic Inc. alleging that when he purchased portable Bluetooth speakers from Wish.com for $27, he was given the impression that the speakers were regularly priced at $300.

Wish.com is a website and mobile application where consumers can buy thousands of types of products, ranging from home goods to apparel.  ContextLogic is the creator and operator of Wish.com.

Gerboc alleged that ContextLogic falsely represented that the portable Bluetooth speakers were regularly priced $300, and falsely represented a savings of 91 percent off the regular price, “in an effort to induce customers to purchase products from its Website.”

He claimed that this was an unfair and deceptive advertising practice designed to mislead him “and other consumers by including bogus reference prices in its website advertising, in violation of” Ohio’s Consumer Sales Practices Act (CSPA). He also sued for breach of contract, fraud, and unjust enrichment claims, and sought certification for the class action lawsuit.

ContextLogic removed the case to the Northern District of Ohio, then moved to dismiss, alleging, among other things, that Gerboc’s “failure to allege actual damages defeats [his] class action claim.” Gerboc opposed, but the district court agreed with ContextLogic, and on Nov. 4, 2016, dismissed his class action claim, finding that Gerboc alleged “no actual damages and, in the absence of actual damages,” a consumer cannot maintain a class action under Ohio’s CSPA.

Additionally, the court dismissed Gerboc’s other claims for fraud and unjust enrichment, ruling that Gerboc failed to alleged that Context misrepresented the “benefits” of the portable Bluetooth speakers or failed to process the order.

However, Gerboc requested the court to certify the ruling so that he could appeal the dismissal of the other claims. His request for the interlocutory appeal was granted in December.

In his appeal to the Sixth Circuit filed Monday, Gerboc argued that his claims for unjust enrichment should be revived.

The first issue plaintiff Max Gerboc argued in support of his appeal to revive his claims for unjust enrichment, was that he conferred a benefit on ContextLogic when he paid for the portable Bluetooth speakers he purchased on Wish.com. According to Gerboc, ContextLogic made a profit from his purchase and retained that benefits.

“Because the defendant was unjustly enriched, the plaintiff is entitled to restitution, which is measured not by the plaintiff’s loss, but by the defendant’s gain — the profits gained from its deceptive marketing scheme,” Gerboc told the appellate court.

Gerboc also asserts that the District Court erred in dismissing the Class claims for violations of Ohio’s CSPA due to a lack of actual damages. The appeal noted that in a CSPA class action, Class Members are entitled to receive restitution and that disgorgement of net profits is an appropriate measure of restitution.

Finally, the appeals brief told the Sixth Circuit that the lower court was wrong in finding that Gerboc and the Class have no damages, and thereby the dismissal of fraud and CSPA claims was erroneous. Gerboc argued that a “promised discount is material to a consumer transaction.”

“Here, the Defendant’s business model is premised on consumers receiving a great deal – in the Plantiff’s case, a 91% discount from the $300 reference price posted on the Defendant’s website. But the item he purchased never had a retail value of $300 because it was never sold at that price. Therefore, the Plaintiff never received the discount.”

Gerboc is represented by Nicole T. Fiorelli and Patrick J. Perotti of Dworken & Bernstein Co. LPA.

The Wish.com False Advertising Class Action Lawsuit is Max Gerboc v. ContextLogic Inc., Case No. 16-4734, in the U.S. Court of Appeals for the Sixth Circuit.