Friday, December 16, 2016

Veera v. Banana Republic (Cal. Ct. App. - Dec. 15, 2016)

Here's a nice summary of the opinion, courtesy of Justice Willhite:

"Plaintiffs . . . filed a putative class action against Banana Republic, LLC, a clothing and accessories retailer with stores throughout California, alleging that signs in Banana Republic store windows advertising a 40 percent off sale were false or misleading because they did not disclose that the discount applied only to certain items. . . . In opposition to Banana Republic’s summary judgment motion, plaintiffs produced evidence that in reliance on the allegedly false advertising, they were lured to shop at certain Banana Republic stores and selected various items for purchase at the advertised discount. However, as the items were being rung up at the cash register, plaintiffs were told for the first time that the advertised discount did not apply to their chosen merchandise. Having waited in line to purchase the selected items, and out of frustration and embarrassment, they ultimately bought some (but not all) of the items they chose even though the discount did not apply. The trial court granted summary judgment in favor of Banana Republic, concluding that plaintiffs lacked standing because they failed to raise a triable issue whether they suffered injury in fact and lost money or property. In this appeal by plaintiffs, we conclude that neither the ground cited by the trial court, nor the other grounds raised in Banana Republic’s motion, support summary judgment. Instead, we conclude that on the evidence presented, plaintiffs raised a triable issue whether they lost “money or property sufficient to qualify as injury in fact, i.e., economic injury,” and whether “that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising that is the gravamen of the claim.” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322 (Kwikset).) Therefore, we reverse the judgment."

I'll also say that the underlying facts of the case seem to me to accurately describe how economic injury -- as well as unfair competition -- might well result from allegedly misleading "sale" signs.

Here's one of the plaintiff's story:

"Cherilyn DeAguero testified in her deposition that on November 7, 2010, she and her 14-year-old daughter were driving past a Banana Republic store on Ventura Boulevard in Studio City. DeAguero saw a large red sign in the store window stating in black letters “40 percent off.” She pointed it out to her daughter, and they decided to stop and go shopping. Based on the 40 percent off discount, DeAguero thought she would be able to buy six to eight outfits for her daughter, who required a variety of outfits for auditions in her acting career. . . .

After shopping and trying on outfits for approximately 40 minutes, DeAguero’s daughter chose eight pieces and wore one new outfit out of the dressing room. They went to the register, and the sales clerk began ringing up the items. DeAguero was talking excitedly with the customer behind her, stating “This is great, 40 percent off.” The clerk told her the items she was purchasing were not 40 percent off. DeAguero replied that the sign indicated everything was 40 percent off, but the clerk said the discount did not apply to the items she chose.

DeAguero became embarrassed, noticing that the line behind her was getting long. She found the experience “humiliating,” because she was trying to remain in a budget but did not want to make her daughter return to the dressing room to remove the outfit she was wearing.

She became angry and asked the clerk why the store had “waste[d] [her] time luring [her] in” and which items were 40 percent off. The clerk explained that there were “selected items” throughout the store, even though DeAguero did not see any signs in the store indicating those items.

DeAguero did not ask to speak with a manager because her daughter was embarrassed and was whispering to stop. She ultimately purchased the new items her daughter was wearing because she did not want to embarrass her. She did not buy the other items because they were not 40 percent off."

That's a story that rings familiar -- or at least true -- to me.  Even if you found out at the time that the items weren't 40 percent off, you might still buy them.  If only out of shame.

Now, mind you, the price you paid for the items was still the price that was listed for them.  That's in part why Justice Bigelow dissents.

I'll just mention in passing that people aren't always entirely rational.  Or, to put it more accurately, we often make decisions based upon a series of assessments not all of which can be rationally set forth.

Many, many people will be more inclined to buy a $100 dress if that dress is labelled 40 percent off than they would were that same dress merely listed as $100.  And the industry knows that full well.  That's why "sales" are so popular.  And productive.

Maybe the buyer is making an internal assessment that an $100 dress that originally sold for $167 is a made better -- with higher quality materials -- than a "mere" $100 dress.  Maybe there's some internal joy from getting a "deal".  Maybe there are other things at stake as well.

But having been around people who shop my entire life, I'm confident that "sales" work.  They affect the buyers internal dynamic.  They are persuasive.  And I'd rather be in a world in which "sales" are in fact sales than in a world in which they're not.

Maybe that's irrational.  But it's definitely a desire.