Christina Spicer  |  March 26, 2015

Category: Consumer News

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nordstromLate last week, a class action lawsuit accusing Nordstrom Inc. of using deceptive marketing at its outlet stores was trimmed by a California federal judge.

Lead plaintiff Kevin Branca alleged in his class action lawsuit that price tags used at Nordstrom’s outlet stores, the Nordstrom Rack, contained “compare at” prices that were artificially inflated to trick consumers into thinking they were receiving a large discount on an item sold at a regular Nordstrom store. Branca argued in the class action lawsuit that the higher prices on the “compare at” tags were false because Nordstrom never intended to sell items sold at its outlet at the higher price.

U.S. District Court Judge Michael M. Anello dismissed Branca’s false advertising claims in the class action lawsuit in an order issued last week. Judge Anello gave the plaintiff two weeks to amend the Nordstrom pricing class action lawsuit, but pointed out that in his initial complaint, the plaintiff had not said that he had seen any advertising from Nordstrom indicating that the company had sold the Rack merchandise at a higher price.

“As currently pled, the court finds that plaintiff has failed to allege sufficient facts demonstrating that Nordstrom Rack’s ‘compare at’ price tag deceived him — much less reasonable consumers — into believing the ‘compare at’ price is the former price at which Nordstrom or other mainline retailers previously sold the merchandise,” Judge Anello wrote in his order. “To the contrary, based on the facts as alleged, it appears that reasonable consumers would likely interpret the ‘compare at’ language on the price tag, standing alone, as a comparable value comparison,” he continued.

Judge Anello explained further that the plaintiff “merely alleges that the ‘Compare At’ prices ‘are fictional amounts intentionally selected so that Nordstrom could advertise phantom markdowns’ and that ‘Nordstrom fraudulently concealed from, and intentionally failed to disclose to, Plaintiff, and others similarly situated the truth about its ‘Compare At’ prices and advertised price discounts from those supposedly former prices.’” However, Judge Anello found that “these conclusory allegations are insufficient,” and that the “[p]laintiff fails to allege any facts, much less with particularity, demonstrating how Nordstrom intentionally yet falsely represented that the ‘Compare At’ price listed on Nordstrom Rack’s price tags constitute the former price at which Nordstrom or other retailers previously sold the item.”

“Moreover,” continued the judge, “ as currently pled, Plaintiff’s allegations do not establish that Nordstrom Rack’s price tags are likely to deceive reasonable consumers into believing the ‘Compare At’ price is the former price at which Nordstrom or other mainline retailers previously sold the same merchandise.”

In his order, Judge Anello also pointed out that under the Federal Trade Commission’s Guides Against Deceptive Pricing, comparable value comparisons indicate that merchandise of similar quality are sold by the advertiser or other merchants at the listed price.

Branca alleges that he purchased three items from a California Nordstrom Rack in July 2013, including a pair of cargo shorts for $29.97 with a “compare at” price of $49.50, a hooded sweatshirt for $29.97 with a “compare at” price of $65.00, and a pair of pants for $79.97 with a “compare at” price of $150.00.

According to the Nordstrom class action lawsuit, Branca seeks to represent a putative Class of Californians who made purchases at a Nordstrom Rack.

Branca is represented by Wayne S. Kreger of the Law Offices of Wayne Kreger PA, Hassan A. Zavareei and Jeffrey D. Kaliel of Tycko & Zavareei LLP, and Jeffrey M. Ostrow of Kopelowitz Ostrow PA.

The Nordstrom Rack Pricing Class Action Lawsuit is Branca v. Nordstrom Inc., Case No. 3:14-cv-02062, in the U.S. District Court for the Southern District of California.

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