Background
Michelle Cortez Gomez bought a portable speaker from Kohl’s website for $99.99, advertised as $30 off a regular price of $129.99. She alleged Kohl’s had never sold the speaker at the stated regular price before her purchase and offered it at the $99.99 price for nearly 75% of the following three months. Cortez alleged she would not have purchased the speaker had she known the claimed discount was not genuine.
Cortez sued under Wisconsin’s Unfair Trade Practices Act on behalf of a proposed nationwide class of online purchasers of items advertised with sale, clearance, or percentage-off prices compared with higher original or regular prices. She invoked the Class Action Fairness Act. The district court dismissed for lack of subject-matter jurisdiction, concluding that because Cortez did not allege the speaker was defective or worth less than she paid, she could not show a pecuniary loss or satisfy CAFA’s $5 million amount-in-controversy requirement.
The Court’s Holding
The Seventh Circuit did not decide whether Cortez had alleged a compensable pecuniary loss under Wisconsin law. Instead, it certified that unresolved state-law question to the Wisconsin Supreme Court and stayed further proceedings.
The court found genuine uncertainty over whether a consumer falsely induced by unlawful price-comparison advertising suffers a loss equal to the purchase price, subject perhaps to an offset for the product’s value, or must show that the product was worth less than the amount paid. The answer controls whether Cortez can meet CAFA’s amount-in-controversy requirement, and the court concluded that the issue is important, likely to recur, and materially affects Wisconsin retailers and consumers.
Key Takeaways
- The Seventh Circuit certified, rather than resolved, the meaning of “pecuniary loss” under Wisconsin Statute § 100.20(5) for false sale-price advertising.
- The certified question asks what loss, if any, a consumer suffers when a product is falsely advertised as on sale in violation of Wisconsin’s price-comparison regulations.
- The Wisconsin Supreme Court’s answer may determine whether the proposed class action can satisfy CAFA’s $5 million jurisdictional threshold.
Why It Matters
The decision leaves unresolved a significant question about remedies for fictitious reference pricing in Wisconsin. A ruling that the purchase itself can constitute a compensable loss could expand exposure for retailers using regular-price comparisons; a benefit-of-the-bargain rule could limit claims where buyers received products worth what they paid.
Because the case concerns both statutory damages and federal class-action jurisdiction, the Wisconsin Supreme Court’s answer may shape not only consumer claims under the WUTPA but also whether similar proposed class actions can proceed in federal court.