Judge Certifies J.C. Penney False Advertising Class Action Lawsuit

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A deceptive marketing class action lawsuit against J.C. Penney Corp. Inc. was granted class certification by a California federal judge on Monday over allegations that the retailer falsely advertised deep discounts based on false original prices.

U.S. District Judge Fernando Olguin certified a class of J.C. Penney Customers who purchased at least one private or exclusive branded items advertised at a 30 percent discount from the stated “original” or “regular” price, and have not been refunded for those purchases, while in the state of California from Nov. 5, 2010 and Jan. 31, 2012.

Plaintiff Cynthia Spann filed her J.C. Penney class action lawsuit in February 2012 alleging that the company falsely advertised “‘original,’ ‘sale’ prices and corresponding price discounts for its private branded and exclusive branded apparel and accessories.”

The class period and definition proposed by Spann is the class certified by Judge Olguin.

Specifically, Spann claims that J.C. Penney used “false former prices and false price discounts for its private branded and exclusive branded apparel and accessories” to make the discounts look deeper than they actually were.

For example, she says that she purchased blouses that were marked as having an original price of $30.00 and a sale price of $17.99, but she claims in her false advertising class action lawsuit that “the prevailing retail price for the East Fifth blouses during the three months immediately prior to [her] purchase . . . was no more than $17.99, and not the [advertised] $30.00 ‘original’ price.”

She is charging J.C. Penney with violating several California statutes: the Unfair Competition Law, the False Advertising Law, and the Consumer Legal Remedies Act. She is seeking injunctive relief, restitution, and statutory damages.

J.C. Penney tried to have the false advertising class action lawsuit dismissed, saying that Spann lacked evidence that the purchased items at issue were not worth what she paid for them, but Judge Olguin denied that request in March, arguing that it is likely that if customers knew that the price comparisons were false, they would not have opted to make the purchases they did.

Judge Olguin said that his decision to certify the J.C. Penney class action lawsuit was influenced by the testimony of Brian J. Bergmark, a certified public accountant, by showing that the sales data from the retailer can be analyzed for the class for the purpose of figuring out if the alleged false advertising convinced J.C. Penney customers to pay more for items than if the sales had not been advertised in that way.

“If defendant can prove that its price-comparison advertising scheme did not generate false price comparisons that deceived consumers, then it should welcome class certification,” Judge Olguin wrote.

“In short, proof in this case will produce a common answer as to whether defendant’s price-comparison advertising scheme resulted in false price comparisons for its private and exclusive branded items,” the California federal judge added.

Spann is represented by Matthew J. Zevin of Stanley Law Group, Derek J. Emge of Emge & Associates and David A. Huch of Law Offices of David Huch.

J.C. Penney is represented by Moe Keshavarzi, John Landry and Paul L. Seeley ofSheppard Mullin Richter & Hampton LLP.

The J.C. Penney False Advertising Class Action Lawsuit is Cynthia E. Spann v. J.C. Penney Corp. Inc. et al., Case No. 8:12-cv-00215, in the U.S. District Court for the Central District of California.

UPDATE: According to court documents filed on Nov. 10, 2015, J.C. Penney has agreed to pay $50 million to settle the fake sale price class action lawsuit.

UPDATE 2: On Mar. 1, 2016, the J.C. Penney fake sale class action lawsuit settlement is now open to Class Members. Click here to file a claim or visit www.JCPenneySettlement.com.

UPDATE 3: Top Class Actions viewers who submitted timely and valid claims for the J.C. Penney class action settlement began receiving store vouchers ranging between $87.50 to more than $600! Congratulations to everyone who got PAID!