retail/outlet claims for Vineyard Vines scrape past motion to dismiss

Casio v. Vineyard Vines, LLC, 2021 WL 466039, 19-CV-5135 (JMA) (AYS) (E.D.N.Y. Feb. 9, 2021)

Plaintiff alleged falsity in pricing/tags in defendant’s outlet stores. The products allegedly “purport to be identical” to those sold in the “retail” stores, “shar[ing] similar product line names” and “similar style numbers” to their “retail” store counterparts. The price tags list a “suggested retail” price followed by “our price.” But, “[d]espite their similarity in appearance and classification, the Outlet Products are of distinctly lower quality, evinced through the care tags.” Thus, there was a misrepresentation about quality. Plaintiffs sought to represent New York and New Hampshire classes.

The court declined to hold that the tags weren’t misleading as a matter of law, but expressed doubt that plaintiffs could ultimately prevail.

Defendant argued that a reasonable consumer would “understand that outlet retail stores typically are stocked with merchandise produced specifically for outlets that, while not necessarily of lower quality, may be produced at lower cost to the manufacturer for various reasons.” But the court couldn’t evaluate the truth of this argument at this stage. While prior cases have held that “the retail history of clothing (e.g., whether it was offered for sale in a traditional store before being sold in an outlet store) is generally not” material, the falsity here was alleged to be the quality of the goods, which indeed is material.

Defendant argued that the word “retail,” as used on the contested price tags, is clear and unambiguous and describes the sale of goods at a general level, not an indication that products of the same quality were sold at its “retail” stores. This too couldn’t be resolved on a motion to dismiss. “Defendant itself recognizes the level of imprecision with which it uses the term ‘retail’ by conceding at least one instance on its own website where it makes a distinction between gift card use in its ‘retail’ versus ‘outlet’ stores.” Nor was plaintiffs’ alleged understanding “esoteric.” Other district courts have described similar divisions by describing stores as “outlet stores” and “retail stores.”

Defendant then argued that plaintiffs failed to allege quality differences. The court was not about to resolve factual questions about whether the “Chappy” product line in outlet stores could be compared to the “Chappy” product line offered in defendant’s “boutique” stores.

Likewise, plaintiffs sufficiently pled a cognizable injury based on the purportedly lower quality of the products they purchased, though the court warned that discovery might very well disprove that theory.   

Magnuson-Moss Warranty Act claims were, however, dismissed: the retail price label wasn’t an express warranty of quality. And plaintiffs lacked standing to seek injunctive relief.