Sixth Circuit Requires Actual Economic Injury for Price Comparison Class Actions

by BakerHostetler
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Earlier this week, the Sixth Circuit flatly rejected a bid by a consumer to recover damages allegedly caused by Wish.com’s advertised price comparisons (opinion available here). The online marketplace uses struck-through manufacturers’ suggested retail prices next to products’ purchase prices, which plaintiff Gerboc alleged are misleading and caused him injury when he purchased a pair of $27 speakers that appeared to have been marked down from $300.

Affirming in full the Northern District of Ohio’s dismissal, the Sixth Circuit emphasized that Gerboc suffered no injury (as required by each of his claims for unjust enrichment, breach of the Ohio Consumer Sales Practices Act (OCSPA), and fraud) because the product he purchased and received was exactly what he bargained for: a pair of speakers at a price of $27. He did not allege that the speakers were defective or of lower quality than advertised, or that he was in any way unhappy with the speakers themselves. And even if Wish.com had never sold the speakers for $300 and the price comparison was determined to be misleading, Gerboc could litigate that issue only as an individual OCSPA claim where noneconomic damages are available; OCSPA class actions allow recovery only of economic damages, which the court determined the plaintiff could not establish. The court stated:

[Gerboc] got what he paid for: a $27 item that was offered as a $27 item and that works like a $27 item. A 90% discount from $27 was not part of the deal; no line struck through the speakers’ purchase price, and none of the various website images that Gerboc has attached to his filings mention such a discount. At most, he bargained for the right to have the speakers for 90% less than $300, not the right to have them for that much less than what (even he agrees) they were actually worth.

In reaching this decision, the Sixth Circuit joins the First and Seventh Circuits in requiring actual economic injury stemming from price comparisons in order to state a claim. In practice, this requires consumers to allege that the purchased product is defective or that they didn’t get what they paid for. In doing so, the court expressly addressed and rejected the Ninth Circuit’s contrary approach, which interprets California consumer protection statutes to allow recovery of economic damages so long as the price comparison induced consumers to purchase a product they would not otherwise have purchased.

The gravamen of this decision is that price comparison class actions in the Sixth Circuit require a plaintiff to demonstrate some deficiency with the purchased product; bare allegations of misleading discounts should no longer suffice. This is good news for retailers across the circuit, and for the commonsense notion that no injury results from ordinary consumer transactions in which consumers get what they bargained for.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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