Hobby Lobby Can’t Escape Fake Discount Class Action Lawsuit

Despite Hobby Lobby’s efforts to dismiss it, a class action lawsuit accusing the company of advertising false discounts continues in court.

This week, California U.S. District Judge Gonzalo P. Curiel determined not to dismiss the Hobby Lobby false discount class action lawsuit, saying that it was possible for reasonable consumers to be misled by the store’s adverting, though Hobby Lobby argued that advertising and price labeling was sufficiently clear.

In May 2017, Hobby Lobby was hit with a class action lawsuit claiming that the company advertised fictitious sales and sale pricing to trick consumers into thinking they were receiving a better deal than they actually were.

Plaintiff Christina Chase argued that Hobby Lobby’s pricing strategy violated state and federal law and intentionally misled consumers.

Chase claimed that Hobby Lobby’s practice of displaying posters that read “50% off” and in much smaller type “always,” was misleading. According to the Hobby Lobby class action lawsuit, the sign was designed to indicate to consumers that items in the store would be 50 percent off of an original Hobby Lobby price. Similar signs were posted throughout the store.

Additionally, this advertising was accompanied by allegedly confusing labels on items for sale. Chase states that she purchased a paintbrush and a picture frame, both of which were labeled with an “original price” price tag and a “sale price” price tag for a price that was 50 percent off of the original price. The Hobby Lobby false advertising class action lawsuit alleges that Hobby Lobby used these tactics to intentionally deceive consumers into thinking they were receiving a good deal.

Hobby Lobby countered this argument, saying that the company’s inclusion of the word “always” in the large signs in the store made it clear to consumers that there was no true 50 percent off sale occurring, but that the sign merely advertised that Hobby Lobby prices are 50 percent lower than prices at comparable stores.

Judge Curiel disagreed, stating that although a consumer might be able to understand the distinction between a real discount and just “comparably” lower prices in a flyer or coupon, that they would take some time to study and would presumably include additional clarifying information, no such clarifying information existed on a poster, and even if there had been such information, consumers do not stop to study posters for extended periods of time. So, Curiel determined that reasonable consumers could be deceived by the advertising, and that the case should continue.

Chase is represented by Todd D. Carpenter of Carlson Lynch Sweet Kilpela & Carpenter LLP.

The Hobby Lobby False Adverting Class Action Lawsuit is Christina Chase v. Hobby Lobby Stores Inc., Case No. 3:17-cv-00881-GPC-BLM, in the U.S. District Court for the Southern District of California.