Montes v. Sparc Group LLC, 2026 WL 900481, No. 104162-4, ---
P.3d ----, 2026 WL 900481 (Wash. Apr. 2, 2026)
Interpreting the Washington Consumer Protection Act, the state
supreme court held, over a dissent, that buying products that are falsely
advertised as discounted doesn’t cause actionable injury if the products aren’t
worth less than was paid for them. This answered a question certified by the 9th
Circuit. (California law is otherwise.)
“Any person who is injured in his or her business or
property” may sue to enforce the CPA. Only economic losses count as injuries to
“business or property” under the CPA—noneconomic losses, such as “personal
injury, ‘mental distress, embarrassment, and inconvenience,’ ” do not
count.
Montes alleged that she purchased $6.00 leggings at their
advertised $6.00 price because they were discounted from the advertised regular
price of $12.50; but in fact the leggings had rarely sold for $12.50. Since she
received the product she sought to obtain, and didn’t allege that its non-price
qualities differed from those advertised, she had no claim even if the reason
for her purchase was that the seller misrepresented the product’s price
history.
The court rejected three theories of injury: (1) the class “would
not have purchased the items at the prices they paid had they known the items
had not been regularly offered at the higher list price” (the “purchase price”
theory); (2) they didn’t receive the benefit of the bargain: they “did not
enjoy the actual discounts Aéropostale represented and promised them”; and (3) the
deceptive pricing scheme inflated demand, which in turn inflated prices: “[b]ut
for the false advertising scheme, Aéropostale would have had to charge less
money for its products in order to enjoy the same level of demand for its
products.” These were just disappointed
expectations. “Without more, the mere fact of a retail transaction does not
imply economic loss.”
The majority followed the New Jersey Supreme Court: “even
though Aéropostale’s alleged practices violated the state’s CFA, even though
those practices violated a specific state regulation barring false discount
advertising, and even though New Jersey consumer protection law recognizes the
purchase price and benefit of the bargain theories of loss, plaintiffs failed
to establish that the violation caused an ascertainable loss under either of
those theories.” The AG could act, but not a private plaintiff.
And the complaint’s allegations didn’t support the theory
that the deceptive pricing scheme inflated the market price of the leggings she
bought. Plaintiff conceded the leggings had the monetary value that she paid
for them: “the Leggings that Ms. Montes received had an actual value of between
$5.00 and $6.00—the price range Aéropostale regularly offered them for sale.”
The dissent would have read the CPA more broadly. Montes could
establish injury through a “price premium” theory by proving that the deceptive
or misleading price history artificially increased demand for the leggings,
causing an increase in the product’s market price. “The Ninth Circuit does not
ask us whether Montes will prevail in her CPA claim, specifically whether she
can quantify and prove damages. The majority imports a requirement for such
proof into its injury analysis and in doing so narrows the scope of cognizable
injuries under the CPA”:
Taking the allegations in the
complaint as true, Montes would not have spent $6 on this pair of leggings if
she had known the product’s true price history. To view this as a pure
causation question would “render absurd conclusions” because it is Aéropostale’s
affirmative misrepresentation that led Montes to purchase the leggings, and it
is the purchase itself that constitutes a cognizable injury in these
circumstances. Stated differently, Montes’s property interest was diminished
because Aéropostale’s misrepresentation prevented her from, for instance,
spending $6 elsewhere on another item; she is not required to prove that the
leggings are not worth $6.
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