Sale Sign 3

Daniel O’Neill (Flickr)

There’s a new tool for deceptive pricing class actions challenging “up to __%” savings promotional messaging:  A new lawsuit filed in New Jersey alleges that the clothing retailer’s “up to _% off” promotional messaging violates New Jersey’s consumer protection laws. The plaintiff sued Jos. A. Bank under the New Jersey Truth in Consumer Contract, Warranty and Notice Act (TCCWNA), N.J. Stat. § 56:12-15. This once-forgotten statute has recently been in the limelight, invoked in numerous class actions due to its generous civil penalties provision providing “not less than $100.00 or for actual damages, or both” at the choice of the consumer, plus attorney’s fees. See N.J. Stat § 56:12-17.

The TCCWNA provides standing to consumers who have suffered no financial loss or injury against sellers if the plaintiff can show that he or she was provided with or shown a warranty, contract, or notice that “includes any provision that violates a clearly established legal right of a consumer or responsibility of a seller, lessor, creditor, lender or bailee as established by State or Federal law at the time the offer is made or the consumer contract is signed or the warranty, notice or sign is given or displayed.”  According to the plaintiff, Jos. A. Bank’s practice of advertising savings of up to 70% off, when items in fact ranged from 30% to 70% off (and most were at the lower end of the range), violated section 13:45A-9.5 of the New Jersey Administrative Code, which provides that an advertiser who offers merchandise for sale at a savings of a percentage or range of percentages (e.g., “save 20% or 20% to 50% off”) must:

  1. state the minimum percentage reduction as conspicuously as the maximum percentage reduction when applicable (e.g., by using the same size print); AND
  2. set forth the basis upon which the minimum percentage reduction was established, which can be substantiated pursuant to N.J. Admin. Code § 13:45A9.6(b), in close proximity to the percentage reduction. Use of terms such as “competitor’s price” or “our regular price” or other words of similar import must be used to designate the basis for the former price.

Section (b) of the provision provides an exception for percentage-off discounts made in accordance with N.J. Admin. Code 13:45A–9.8. Contrary to these requirements, plaintiff contends that the percentage discount of the item he purchased was not disclosed in any place prior to his purchase and was not disclosed on his receipt.

In addition, plaintiff alleges that these practices violated the New Jersey Consumer Fraud Act (NJCFA), N.J.S.A. § 56:8-1. Plaintiff claims that the NJCFA “requires merely a causal nexus between the false statement and the purchase, not actual reliance.” See Complaint. By advertising savings of “up to 70% off,” but discounting individual items at a much lower percentage without disclosing the range of discounts available, plaintiff alleges that JoS. A. Bank’s practices constitute “sharp and unconscionable commercial practices relating to the sale of goods” in violation of the NJCFA. Plaintiff seeks disgorgement, punitive and statutory damages, injunctive relief, and attorney’s fees.

Retailers in New Jersey should take note. While the TCCWNA was enacted more than thirty years ago, it has only recently attracted the attention of the plaintiffs’ bar because plaintiffs can allege violations of any clearly established legal right or responsibility and seek statutory damages (and attorney’s fees) without any allegations of financial loss or injury. Allegations under the NJCFA are equally novel for a deceptive pricing class action, and, according to plaintiff, do not require any showing of reliance. Violations of frequently ignored sections of code such as the New Jersey Administrative Code provision cited by Leese in his Complaint can become fodder for litigation. New Jersey law imposes a requirement on retailers that is rarely followed in practice – the requirement to state the minimum percentage reduction of savings when making an “up to” claim – leaving many retailers vulnerable to a similar lawsuit. New Jersey is not the only state that requires advertisers to disclose the minimum price reduction when advertising a range of percentage discounts. Connecticut (Conn. State Agency Regs., § 42-110b-12a(e)), Illinois (14 Ill. Admin. Code  470.240), Massachusetts (940 CMR 6.05(11)), and Missouri (15 CSR 60-7.060) all similarly require that the advertiser clearly and conspicuously disclose the lowest discount.

For more details, see the Complaint, filed in February. Leese v. Jos. A. Bank Clothiers Inc., No. L-0437-17 (N.J. Super. Ct.)