Patrick Camasta v. Jos. A. Bank Clothiers, Inc.
2014 U.S. App. LEXIS 14871, 761 F.3d 732, 2014 WL 3765935 (2014)
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Rule of Law:
A consumer fraud claim under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) that "sounds in fraud" must meet the heightened pleading standard of Federal Rule of Civil Procedure 9(b), requiring particularity as to the circumstances of the fraud. Furthermore, a private plaintiff must plead facts showing actual pecuniary loss, not merely speculative harm or unrealized expectations from a sale.
Facts:
- Jos. A. Bank Clothiers, Inc. (JAB) is a retailer of men's clothing and accessories.
- On July 27, 2012, Patrick E. Camasta went to a JAB retail store after seeing an advertisement for 'sale prices' for certain items.
- At the store, JAB offered a 'buy one shirt, get two shirts free' promotion.
- Camasta participated in the promotion, purchasing six shirts for a total of $167 before tax by buying one shirt for $79.50 and another for $87.50.
- After the purchase, Camasta came to believe that the 'sale' was not a temporary price reduction but rather JAB's normal retail price.
- Camasta asserted that had he known the advertised sale was not a limited-time offer, he would not have purchased the shirts or would have shopped around for a better price.
Procedural Posture:
- Patrick E. Camasta filed a class action complaint against Jos. A. Bank Clothiers, Inc. (JAB) in an Illinois state court.
- JAB removed the case to the U.S. District Court for the Northern District of Illinois.
- The district court granted JAB's motion to dismiss the original complaint without prejudice and gave Camasta leave to file an amended complaint.
- Camasta filed a First Amended Complaint.
- JAB again moved to dismiss the complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).
- The district court granted JAB's motion and dismissed the First Amended Complaint with prejudice.
- Camasta, as appellant, appealed the dismissal to the U.S. Court of Appeals for the Seventh Circuit.
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Issue:
Does a complaint alleging a retailer's advertised 'sale prices' are actually its normal retail prices, in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, state a claim for relief when it fails to specify the details of the allegedly fraudulent advertisement and does not plead facts showing actual pecuniary loss?
Opinions:
Majority - Bauer, Circuit Judge.
No. A complaint alleging fraudulent sales practices under the ICFA fails to state a claim if it does not meet the heightened pleading standard of Rule 9(b) by specifying the 'who, what, when, where, and how' of the alleged fraud, and fails to allege facts demonstrating actual pecuniary damages. Camasta’s complaint is grounded in fraud, thus implicating the stringent pleading requirements of Rule 9(b), which he failed to meet. His allegations about the advertisement were vague, and he failed to provide particulars as to how he discovered the alleged fraudulent scheme. Simply providing a list of JAB's prior sales does not establish that any particular sale was fraudulent. Additionally, Camasta failed to plead 'actual damage,' a requirement for a private action under the ICFA. He received the merchandise he paid for at the price he agreed to pay, and his claim that he could have found a better price elsewhere is speculative and conclusory. Without pleading actual pecuniary loss, his claim fails.
Analysis:
This decision reinforces the high bar for pleading consumer fraud claims in federal court, particularly those based on deceptive pricing strategies. By holding that claims 'sounding in fraud' under state consumer protection statutes must meet the particularity requirements of FRCP 9(b), the court makes it more difficult for plaintiffs to survive a motion to dismiss without a thorough pre-complaint investigation. The ruling also solidifies the standard for 'actual damages,' clarifying that a plaintiff's subjective feeling of being misled or the speculative possibility of a better deal elsewhere does not constitute the necessary pecuniary loss. This precedent protects retailers from vague, unsupported lawsuits based on frequent but not necessarily deceptive sales promotions.
