Class Action and Product Insights for Your Business
April 28, 2016 - False Advertising, Class Certification, Class Action, Retail

Been There, Done That: Kohl’s Wins Dismissal of Copycat False Advertising Class Action

A California federal court recently denied a motion to certify a class of Kohl’s customers allegedly misled by false advertising, finding that plaintiff Wendy Chowning’s claim was a copycat of an earlier-filed case, Russell, et al. v. Kohl’s Department Stores, Inc., 5:15-cv-01143 (C.D. Cal., filed June 11, 2015). Chowning v. Kohl’s Department Stores, Inc., Case No. 2:15-cv-08673 (C.D. Cal. April 1, 2016). Judge R. Gary Klausner of the Central District of California, presiding over both actions, initially ruled that the cases were not duplicative because the Chowning plaintiff sought injunctive relief and restitution, while the Russell class was certified for injunctive relief only.  However, after Kohl’s defeated the Chowning plaintiff’s restitution claims at summary judgment, the Court ruled that Chowning no longer differed from Russell, and dismissed the suit.

Same Claims, Different Suits.  The Chowning and Russell plaintiffs presented nearly identical claims, only weeks apart. On June 11, 2015, the Russell plaintiffs filed their putative class action, alleging that Kohl’s comparative-pricing sales tags were a form of false advertising under California’s False Advertising Law (FAL) and Unfair Competition Law (UCL). The Russell plaintiffs claimed that Kohl’s exclusive-brand items displayed two price tags, (1) a “sale” price tag, and (2) a significantly higher “original” price tag, but that the items were never actually sold at the higher “original” price advertised. Instead, plaintiffs alleged, Kohl’s simultaneously displayed both tags to deceive plaintiffs and putative class members into thinking that the “original” price was the true price of the item, and induce them to purchase products at the purported “sale” price.

The next month, on July 21, 2015, Wendy Chowning filed suit in the same court, alleging the same claims against Kohl’s under the FAL, UCL, and Consumer Legal Remedies Act (CLRA), and also seeking monetary restitution and injunctive relief.

Chowning Initially Survives by Seeking Monetary Restitution.  Given the substantial overlap between the two cases, and Russell’s status as the first-filed case, Judge Klausner issued an order in the Chowning action to show cause why it should not be dismissed as duplicative. He declined to the dismiss the action, however, finding that Chowning’s relief sought—restitution in addition to injunctive relief—was sufficient to distinguish the case from Russell.

Though the Russell plaintiffs initially had also sought restitution, Judge Klausner certified their class only as to injunctive relief, ruling that plaintiffs failed to meet their burden to present a viable damages model. Russell, et al. v. Kohl’s Department Stores, Inc., 5:15-cv-01143 (C.D. Cal., Dec. 4, 2015).

Court Rejects Chowning’s Restitution Claims, Denies Class Certification, and Dismisses the Case.  Chowning’s distinguishing factor soon disappeared, however, when on March 15, 2016, Judge Klausner granted Kohl’s motion for partial summary judgment on the issue of restitution, finding that plaintiff’s proposed damages models did not provide a viable measure of restitution. According to the Court, even if Kohl’s did misrepresent the “original” price of an item, Kohl’s is not required to pay restitution as long as the retail value of the item is higher than the price charged. Chowning, et al. v. Kohl’s Department Stores, Inc., 2016 WL 1072129, at *12 (C.D. Cal. Mar. 15, 2016).

In light of this ruling, Judge Klausner found that Chowning was no longer meaningfully different from Russell. Thus, on April 1, 2016, Judge Klausner denied the Chowning plaintiff’s motion for class certification, finding that “the same facts, legal arguments, evidence, and remedies are implicated in both [cases].” The putative Chowning class would therefore be adequately represented as members of the injunctive relief class certified in the Russell action. The court dismissed the case.

Takeaway.Chowning is helpful to defendants fighting copycat actions on identical or similar issues. It demonstrates that, where both the underlying facts and requested remedies in two cases are the same, the first-filed case will win the day.