iIn recent years, consumers filed a spate of class actions claiming that retailers misrepresented the retail price on discounted goods to mislead consumers into thinking they were obtaining a bargain. Many of those cases settled or were dismissed for lack of injury because plaintiffs failed to allege that the purchased item was deficient in an objectively identifiable way.
The dismissal of one such class action against Eddie Bauer, however, has remained on appeal for several years after the Ninth Circuit certified a question of statutory interpretation to the Oregon Supreme Court. The Oregon Supreme Court answered that a consumer’s decision to purchase a product based on the retailer’s misrepresentation as to price history or sales price, even without showing a misrepresentation as to some characteristic or quality of the product, could constitute an “ascertainable loss” under the Oregon Uniform Trade Practices Act. With the certified question answered, a unanimous Ninth Circuit panel allowed the plaintiffs’ “purchase price theory” of monetary damages to proceed. Clark v. Eddie Bauer LLC, No. 21-35334, 2024 WL 177755 (9th Cir. Jan. 17, 2024).
The panel split 2-1, however, regarding the plaintiff’s claims for forward-looking injunctive relief. The majority concluded the plaintiff had Article III standing to pursue injunctive relief based on Ninth Circuit precedent in Davidson v. Kimberly-Clark Corp., 889 F.3d 956 (9th Cir. 2018). In Davidson, a plaintiff sought injunctive relief against a manufacturer who had falsely advertised wet wipes as “flushable.” The Davidson court held thatthe plaintiff’s “inability to rely on the validity of the information advertised on the wipes despite her desire to purchase” them amounted to a “concrete informational injury.”The Clark majority acknowledged that Davidson had been “called into question” by the Supreme Court’s decision in TransUnion v. Ramirez, 594 U.S. 413 (2021), but declined to find that the decisions were “clearly irreconcilable.” Relying on Davidson, the Clark majority found that the consumer’s allegations that she “would shop at” Eddie Bauer again “if she could have confidence regarding the truth of Eddie Bauer’s prices and the value of its products” and thus she “will be harmed if, in the future, she is left to guess as to whether Eddie Bauer is providing a legitimate sale or not,” were sufficient to establish concrete injury.
Judge Bea disagreed, finding that Davidson had been “fatally undercut” by TransUnion. According to Judge Bea, the consumer’s alleged “injury”—that she is unable to rely on Eddie Bauer’s future marketing representations, despite her desire to do so, because Eddie Bauer deceived her in the past—does not have a historical or common-law analogue and thus does not establish a “concrete” harm. Like the plaintiffs in TransUnion, Clark did not allege that she failed to receive “required information,” she wasn’t suing under a public-disclosure law, and she did not allege the misrepresentations would cause monetary harm in the future. To the contrary, her lack of intent to shop at Eddie Bauer until she could trust its representations demonstrated that no harm was imminent.
Eddie Bauer has petitioned the Ninth Circuit for rehearing en banc, citing TransUnion and decisions from the Second, Third and Seventh Circuits that conflict with Davidson. Given the sharply divided panel decision and the split among circuits, this case may make its way to the Supreme Court if the Ninth Circuit does not reverse itself.
