Carter’s, OshKosh Class Action Says Stores use Deceptive Pricing

A new class action lawsuit alleges Carter’s and OshKosh B’gosh stores are using deceptive pricing tactics to boost sales.

Plaintiffs Siobhan Morrow of California and Ashley Gennock of Pennsylvania are suing Carter’s Inc. and OshKosh B’gosh Inc. and their related companies. They say the two retailers are marking merchandise with false “original” prices that, when compared to the advertised “sale” price, create the illusion of a nonexistent bargain.

“The advertised discounts were nothing more than mere phantom markdowns because the represented market prices were artificially inflated and were never the original prices for children’s apparel and accessories sold at Defendants’ retail and/or outlet stores,” the plaintiffs allege.

According to the Carter’s and OshKosh class action lawsuit, the plaintiffs made purchases at defendants’ stores in reliance on these allegedly false representations of a discount. In November 2015, Morrow says, she bought some baby accessories from a Carter’s store in California, then bought two pairs of girl’s jeans from an OshKosh B’gosh store.

All the items she bought were marked as being discounted “50% off,” she says. Morrow claims that Carter’s and OshKosh never offered these items for sale at their supposed original prices and certainly not within 90 days immediately preceding her purchase.

Gennock describes a similar experience at a Carter’s outlet store in Pennsylvania. She says she bought two girls’ dresses marked as being “$2.00 off” the original price of $12.00. Gennock says Carter’s never offered those dresses for sale for $12.00.

The plaintiffs further argue that there can’t be a true “market” price for either of the retailers’ merchandise since it is exclusively branded merchandise sold only at Carter’s and OshKosh stores. Therefore the retail price for those items can be whatever those retailers want it to be.

The Carter’s and OshKosh class action lawsuit alleges that the retailers have violated a slew of consumer protection laws including the Federal Trade Commission Act, California’s Unfair Competition Law, the California False Advertising Law, the California Consumer Legal Remedies Act, the Pennsylvania Unfair Trade Practices and Consumer Protection Law, and similar laws in other states.

If certified, the proposed nationwide plaintiff Class would include everyone who bought items from Carter’s and OshKosh marked as having been discounted down from a supposed “original,” “regular,” or “market” price within the applicable class period. Morrow and Gennock also propose two subclasses to represent customers who live in California and Pennsylvania.

They are seeking an award of damages and restitution of all profits the defendant gained as a result of their allegedly deceptive conduct, plus court costs and attorneys’ fees. They are also asking for a court order prohibiting the defendants from continuing the practices at issue and requiring them to conduct a corrective advertising campaign.

The plaintiffs are represented by Thomas A. Withers and Anthony C. Lake of Gillen Withers & Lake LLC, and by Todd D. Carpenter, Edwin J. Kilpela, and Gary F. Lynch of Carlson Lynch Sweet Kilpela & Carpenter LLP.

The Carter’s and OshKosh Fake Sale Class Action Lawsuit is Siobhan Morrow, et al. v. Carter’s Inc., et al., Case No. 1:16-cv-01485, in the U.S. District Court for the Northern District of Georgia.