Background
Shawnna Montes purchased “Seriously Soft Heathered High-Rise Leggings” from Aéropostale’s website on January 9, 2021, for $6.00. The product page displayed a struck-out price of $12.50, leading Montes to believe the leggings were on sale from a regular price of $12.50. Unknown to Montes, Aéropostale had offered the leggings at the advertised regular price of $12.50 for only one day in the preceding six months. She received the leggings as advertised and kept them.
Montes filed a putative class action in federal court under the Washington Consumer Protection Act (CPA), alleging that Aéropostale engaged in a widespread false discounting scheme by advertising perpetual “sales” with inflated list prices. She advanced three theories of economic injury: (1) the purchase price theory—she would not have bought the leggings had she known the list price was fake; (2) the benefit of the bargain theory—she failed to receive the bargain advertised; and (3) the price premium theory—she paid more than she would have absent the deceptive scheme.
The federal district court dismissed the complaint, finding no cognizable injury because Montes did not allege the leggings were worth less than the $6.00 she paid. The Ninth Circuit Court of Appeals certified the following question to the Washington Supreme Court: whether a consumer who purchases a product because of a misrepresentation about the product’s price, discount, or price history suffers an injury to “business or property” under the CPA when paying the advertised price.
The Court’s Holding
The Washington Supreme Court held that a consumer does not suffer a cognizable injury to “business or property” under the CPA when she purchases and receives a fungible product at its advertised price merely because the seller misrepresented the product’s price history or regular price. The Court emphasized that “business or property” injury means economic loss, not subjective disappointment or frustrated expectations.
Under CPA precedent, economic injury occurs only when a product is objectively different from or worth less than what was advertised. The Court rejected all three of Montes’s theories. She did not allege the leggings differed in quality, composition, usefulness, or any objective metric from those advertised. She did not allege they were worth less than $6.00. In fact, she acknowledged the leggings had actual value of $5.00 to $6.00—the price range Aéropostale regularly charged. The misrepresentation related solely to price history, which is abstract and does not affect the economic value of an identical, fungible item. “The market determines the fair market value,” not the seller’s claims about past pricing.
The Court found Montes’s injury more accurately characterized as “dashed expectations,” which do not constitute “business or property” injury. The Court cited approvingly to the New Jersey Supreme Court’s similar holding in Robey v. SPARC Group LLC, involving identical allegations against the same defendant, and noted that most courts interpreting similar state consumer protection laws reject purchase price and benefit of the bargain theories in comparable contexts.
Key Takeaways
- False advertising about a product’s price history or prior list price does not automatically create a CPA injury if the consumer receives the product at the advertised price.
- A consumer must allege that the product received was objectively different from or worth less than what was advertised to establish economic injury under the CPA.
- Subjective disappointment, frustrated expectations, and the fact that a consumer was deceived or tricked into a purchase do not constitute “business or property” injury absent economic loss.
- For fungible consumer goods, a seller’s abstract claims about value do not create objective differences between otherwise identical items; the market—not the seller’s representations—determines fair market value.
Why It Matters
This decision significantly clarifies the scope of private rights of action under the Washington CPA. While false discount advertising may violate the statute’s prohibition on unfair or deceptive practices, the decision establishes that such violations do not automatically entitle consumers to damages. The ruling aligns Washington law with the majority approach taken by other state courts interpreting comparable consumer protection statutes, providing predictability for retailers while preserving the CPA’s core function of addressing actual economic harms.
The decision also preserves the Attorney General’s broader enforcement powers under the CPA—the AG need not prove causation or injury when prosecuting violations and may pursue false discounting schemes through administrative or equitable remedies even where private consumers cannot show economic loss. For plaintiff’s attorneys, the decision underscores that misrepresentation about value or price history, standing alone, will not support damages without an allegation that the product itself was substandard, defective, or economically worthless.