California Court Tosses Deceptive Pricing Action

Advertising Law

In the latest deceptive pricing class action, a California federal court dismissed a challenge to LensCrafters’ marketing for prescription lenses.

Sandra Seegert visited one of LensCrafters’ 130 California stores in April 2017 and observed a sign advertising “40% Off Lenses with Frame Purchase.” She then bought frames for $120 and lenses for $179 (a 40 percent discount from the original price of $298.34). After reportedly believing she received a “good deal,” Seegert later changed her mind and filed suit against the company.

She claimed that she did not in fact receive a bona fide discount because the prescription lenses she purchased were never offered for sale or sold at their original price within the 90-day period immediately preceding her purchase and that at no time did LensCrafters offer the prescription lenses for sale at the regular price, either alone or in conjunction with the purchase of eyeglass frames.

To back up her allegations, Seegert had investigators check out the pricing practices at five LensCrafters stores in San Diego, where they found the “40% Off” deal was uniform. She pointed to this uniformity as confirmation the defendant was engaged in offering illusory discounts in violation of the state’s Unfair Competition Law, False Advertising Law and Consumer Legal Remedies Act.

LensCrafters moved to dismiss, arguing that the plaintiff failed to sufficiently plead that its promotion was deceptive. U.S. District Court Judge Jeffrey T. Miller agreed.

“Plaintiff alleges that the lenses ‘were never offered at full price’ and never sold at the original price either with or without the purchase of eyeglass frames and, therefore, the promotion is materially deceptive,” the court said. “In large part, Plaintiff argues that these conclusory allegations are sufficient … to describe the nature of the consumer fraud with particularity because Plaintiff’s counsel conducted a pre-suit investigation.”

Not so fast, the court said. The Federal Rules of Civil Procedure, specifically Rule 9(b), require “Plaintiff to plead her fraud claims with particularity,” the court wrote. “This requires a plaintiff to conduct a pre-complaint investigation ‘in sufficient depth to assure that the charge of fraud is responsible and supported.’ Plaintiff’s artfully pled and conclusory allegations fail to comply with Rule 9(b).

“Plaintiff specifically alleges that LensCrafters never sells its lenses at the full or original price, with or without the purchase of eyeglass frames, such that its promotion is materially deceptive and misleading,” Judge Miller wrote. “The so-called … investigation by Plaintiff’s counsel … ‘confirmed’ and ‘concluded’ that ‘the prescription lenses were priced with false discounts from illusory “regular” or reference prices,’ and never sold at the original price, with or without the purchase of eyeglass frames. These conclusory allegations are insufficient to state a claim under Rule 9(b), particularly in light of the apparently inadequate pre-complaint investigation.”

The court took issue with the fact that the investigators did not make an actual purchase.

“[I]t is virtually inconceivable that the investigators did not attempt to purchase, or otherwise cause to be purchased, prescription lenses, without also purchasing eyeglass frames, or to take other affirmative steps to investigate the central claim,” the court said. “While the parties have likely expended substantial resources to date, conspicuously absent from the allegations in the [complaint] is any reference to a purchase or an attempted purchase of comparable lenses, without frames. Such a straight-forward effort would not have required the commencement of formal discovery, as asserted by Plaintiff, and would provide particular facts to support or negate Plaintiff’s central claim that LensCrafters never sells prescription lenses at the original price.”

Refusing to permit the plaintiff to conduct discovery to gather more information about the defendant’s pricing practices, the court granted LensCrafters’ motion to dismiss, albeit with leave to amend.

To read the order in Seegert v. Luxottica Retail North America, Inc., click here.

Why it matters: Deceptive pricing lawsuits continue to fill the courts, challenging everything from price tags to the cost of items at outlet stores to sales promotions like the one at issue in the case against LensCrafters. Although LensCrafters scored a victory with a dismissal of the putative class action, the court allowed the plaintiff to amend her lawsuit and provided a road map for what it would take to survive the next motion to dismiss.



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