Federal Appeals Court Rules Customers Can Sue Stores For False Discount Claims

The Ninth Circuit Court of Appeals has ruled that customers are entitled to sue retailers who inflate prices in order to claim massive sale discounts. The ruling came in the case of a California man who sued Kohl's over luggage and shirt prices.

“Price advertisements matter,” Judge Stephen Reinhardt wrote for a three-judge panel. “When a consumer purchases merchandise on the basis of false price information, and when the consumer alleges that he would not have made the purchase but for the misrepresentation, he has standing to sue.” Antonio S. Hinojos filed the lawsuit, alleging he would not have made several purchases at Kohl's if he had known the prices did not represent actual markdowns. Hinojos said he purchased Samsonite luggage that was advertised as 50% off its “original” price of $299.99, Chaps Solid Pique polo shirts that were marked down 39% from their “original” price of $36 and other items that were advertised as being substantially reduced in price.