Lawsuit over the price of a cardigan sweater unravels in federal court

A federal appeals court today tossed a lawsuit by a woman who claimed Nordstrom Rack owed her lots of money because of what she said was a bogus "compare at" price on the $49.97 sweater she bought at its Boylston Street store in 2014.

In a lawsuit originally filed in state court, Judith Shaulis said she never would have bought the sweater had she known it didn't originally sell for $218, as alleged on its price tag and so the chain fraudulently induced her to buy it by promising her savings of 77%. In fact, she charged, she never would have even traveled to the store had she known that and so part of her damages should include her travel costs to and from the store.

The US Court of Appeals for the First Circuit agreed it would be wrong for Nordstrom Rack to say the sweater originally went for $218 if it didn't. But that was the only thread in Shaulis's action the court agreed with.

Taking its cue from the Massachusetts consumer-protection law and recent decisions by Massachusetts courts, the justices upheld a 2015 decision by a federal judge to dismiss the case - in which Shaulis had also asked to be named lead plaintiff in a class action - because Shaulis did not prove she suffered actual harm from the sweater purchase.

The court said the sweater was not poorly made and Nordstrom Rack didn't try to disguise it as an offering from a fancy-shmancy designer. The court added that the store did not break a contract with her, because it said it would sell her that sweater for $49.97, and it did.

Shaulis's alleged "injury" is only that Nordstrom tricked her into believing that she was getting a bargain, and not ... that the product itself was deficient in some objectively identifiable way. That perceived adverse impact -- as the district court put it, "the subjective belief as to the nature of the value [Shaulis] received" -- does not state a legally cognizable economic injury under Chapter 93A [the state consumer-protection law] because it fails to identify anything objective that Shaulis bargained for that she did not, in fact, receive.

The court did agree that stores should not make up bogus "compare at" prices, but said that Shaulis's remedy for that should have been a complaint to the state Attorney General's office, which does have the power to heavily fine stores found making false claims like that.

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One day, in second grade, Louise noticed someone had thrown away a perfectly good, if but slightly dirty, white cardigan sweater. She brought it over to show Dawn and I, and with an intonation suggesting it was something scandalous, Louise said, "Somebody threw a sweater in the garbage!"

Of course, we thought it was absolutely hilarious, but suggested Louise tell our teacher, Mrs. Woods, about the sweater. And so, Louise did just that, presenting the sweater and saying with the same scandal-implying intonation, "Miz Wood! Somebody threw a sweater in the garbage!"

Mrs. Woods looked down at Louise and the sweater and said, "We don't have a garbage in this room, Louise. It's called a wastepaper basket."

Mrs. Woods held up the sweater to the class, repeatedly asking who it belonged to, but when no one claimed it, she told Louise to bring the sweater down to the principal's office, where there was a lost-and-found box. Every day, some lucky student would have the privilege of bringing the box around to each of the dozen classrooms in the old school, and hold up each lost item for everyone to see.

The next day, some kid we didn't know from the fourth or fifth grade came by with the lost-and-found box. He first held up a couple of hats and mittens nobody claimed, and then he held up the sweater. Dawn and I immediately burst into hysterical laughter, which quickly spread across the classroom; perhaps even a bit to Mrs. Woods too. Still, no one claimed the sweater, so the kid went on his way.

The next day, the same thing happened, and again the next day, and the day after that, again, and again. Any initial amusement Mrs. Woods might have had, quickly dissipated as the days and weeks went on, while the class was finding it funnier and funnier each time.

We never knew in which order the lost items would be pulled from the box, and it was a usually a different student bringing it around each day. The class would be watching with total attention and anticipation as each glove or scarf was held up. That in itself might seem strange to the lost-and-found carrier, but then when the screams of laughter would suddenly erupt whenever the "Sweater in the Garbage" was shown, they had no idea why!

Finally. Mrs. Woods had enough. The next day when the sweater was displayed, she told the lost-and-found carrier, "You don't have to bring that sweater around here anymore, because nobody here owns it."

Sadly, Dawn and I never saw the sweater again, but we laughed and laughed for many years about the day when "Somebody threw a sweater in the garbage!"

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Double loss for the attorney in the case

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Shaulis's lawyer is S. James Boumil of Lowell. Also yesterday, the court dismissed a lawsuit he filed for another woman making a similar case against Kohl's.

The court didn't get into much detail on its reasoning in that decision, basically citing the Shaulis case, but it did spend a fair amount of time dismissing that woman's particular claim that she was owed money for gas and depreciation for the 20-mile round-trip drive to the Hingham Kohl's, on the theory that "she was 'induced' to travel to Kohl's by its 'advertising in general' and its 'reputation' of 'amazing prices.' "

Nopers, the court ruled. State law has no such "induced travel" section, and no Massachusetts court has ever allowed such a thing.

I've added the court's decision in this case to the original post.

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Retailers are liars

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As someone who worked in retail for 35 years, I can tell you that most discounts and price comparisons are simply lies. The alleged "regular" price is a price never charged, and thus the discount and the price comparison are lies. Lawmakers have tried and failed to change this practice with some successes and more failures.
Buyer beware.

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The real villains are the

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The real villains are the lawyers, grasping at potential class-action profits. The "plaintiffs" are their puppets.

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Just like "outlet" stores

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A lot of people still think that the outlet stores (Eddie Bauer outlet, Talbots outlet, J.Crew outlet, etc.) are selling merch from the "regular" stores at a discount. But outlet stores (most of them at least) are just regular stores with their own merchandise, usually inferior in fabric, design, and construction. The stuff might be a little cheaper than the regular stores, and you can get good deals, but it's not an "outlet" in the classic sense.

Still think the lawsuits are frivolous. Do we really expect retailers to not lie to us? No, I don't think they should be allowed to do it, but we all have way more important things to worry about.

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