Clark v. Eddie Bauer LLC
371 Or 177 (2023)
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Rule of Law:
Under Oregon's Unlawful Trade Practices Act (UTPA), a consumer can suffer an 'ascertainable loss' when they are induced to purchase a product based on a retailer's misrepresentation about its price history or comparative prices, even if there is no misrepresentation regarding the product's character or quality.
Facts:
- Eddie Bauer LLC and Eddie Bauer Parent, LLC operate Eddie Bauer Outlet chain stores that sell branded clothing.
- More than 90% of the products offered at the outlet stores are manufactured exclusively for sale at those stores and are not sold elsewhere.
- Eddie Bauer advertises clothing at its outlet stores as being sold at a substantial discount, typically between 40 percent and 70 percent off.
- With limited exceptions, the clothing sold at outlet stores is never sold, at any location, at the 'list' (non-sale) price shown on the product's original tag; it is only ever sold at 'discounted' prices.
- In 2017, Susan Clark purchased a 'Fleece Zip' for $19.99 (advertised 50% off an original tag price of $39.99) from an Eddie Bauer outlet store in Oregon.
- Susan Clark also purchased a 'Microlight Jacket' for $49.99 (advertised on sale from a tag price of $99.99) from the same store.
- In 2018, Susan Clark returned the Microlight Jacket and used the $49.99 credit to purchase a 'StormDown Jacket' for $99.99 (advertised with an additional 50% discount from a sticker price of $199.99, which itself was reduced from a list price of $229.00).
- Susan Clark alleged that she would not have made any of these three purchases if she had known that the goods were not, in fact, being sold at a discount.
Procedural Posture:
- Susan Clark filed a class action complaint in federal district court, alleging Eddie Bauer LLC and Eddie Bauer Parent, LLC violated multiple provisions of the Oregon Unlawful Trade Practices Act (UTPA).
- Eddie Bauer LLC and Eddie Bauer Parent, LLC moved to dismiss the complaint, arguing that Susan Clark failed to allege an 'ascertainable loss of money or property' as required by the UTPA.
- The federal district court granted the motion to dismiss, ruling that the complaint did not allege that Eddie Bauer had made false representations about the character or quality of the garments, which the court deemed essential for an ascertainable loss.
- Susan Clark appealed the district court’s ruling to the United States Court of Appeals for the Ninth Circuit (appellant).
- The Ninth Circuit Court of Appeals, finding that Oregon case law did not definitively resolve the question of what constitutes an 'ascertainable loss' under these circumstances, certified a question of Oregon law to the Supreme Court of the State of Oregon.
- The Supreme Court of the State of Oregon accepted the certified question.
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Issue:
Does a consumer suffer an 'ascertainable loss' under ORS 646.638(1) when the consumer purchased a product that the consumer would not have purchased at the price that the consumer paid but for a violation of ORS 646.608 (related to misrepresentations about price), if the violation arises from a representation about the product’s price, comparative price, or price history, but not about the character or quality of the product itself?
Opinions:
Majority - DeHOOG, J.
Yes, a consumer suffers an 'ascertainable loss' under ORS 646.638(1) when they purchase a product that they would not have purchased at the price paid but for a retailer's misrepresentation about the product's price, comparative price, or price history, even if the misrepresentation is not about the product's character or quality. The court explained that the UTPA's legislative history indicates a broad legislative intent to encourage private enforcement and liberally protect consumers, not just remedy traditional economic losses. 'Ascertainable loss' means any 'determinable loss,' even one not precisely measurable, and is not limited to showing that a product's objective market value is less than the price paid. The court referenced its prior decision in Weigel v. Ron Tonkin Chevrolet Co., which suggested that ascertainable loss could be established by proving a product was not what was bargained for, even without diminished value, and approvingly quoted a Connecticut Supreme Court case stating that a consumer suffers a loss 'whenever a consumer has received something other than what he bargained for.' The court rejected the argument that 'ascertainable loss' requires a misrepresentation about the product's characteristics or quality, noting that the UTPA prohibits many unfair practices unrelated to quality. It also distinguished and rejected the rationale of out-of-state cases (like Shaulis v. Nordstrom, Inc.) that conflate a deceptive act with the injury; instead, when a person spends money they would not have spent due to deception, that expenditure is the 'ascertainable loss' resulting from the violation.
Analysis:
This decision significantly broadens the scope of 'ascertainable loss' under Oregon's UTPA, making it easier for consumers to seek redress for deceptive pricing practices. It establishes that the injury can stem from the consumer's decision to purchase, rather than solely from a diminution in the product's inherent value or quality. This ruling strengthens consumer protection against 'phantom markdowns' or misleading 'compare at' prices, aligning Oregon with a more expansive view of consumer injury in false advertising cases. It suggests increased litigation against retailers employing such pricing schemes, emphasizing the importance of accurate price representations in consumer transactions.
