SYLLABUS
This syllabus is not part of the Court’s opinion. It has been prepared by the Office
of the Clerk for the convenience of the reader. It has been neither reviewed nor
approved by the Court and may not summarize all portions of the opinion.
Christa Robey v. SPARC Group LLC (A-50-22) (087981)
Argued November 6, 2023 -- Decided March 25, 2024
SOLOMON, J., writing for the Court.
The core issue in this appeal is whether plaintiffs -- a class of shoppers at the
retail clothing store Aéropostale -- have sufficiently pled that they sustained an
ascertainable loss caused by the alleged “illusory discounts” offered by defendant
SPARC Group LLC -- the owner and operator of Aéropostale -- to withstand
defendant’s motion to dismiss their claims under the Consumer Fraud Act (CFA),
N.J.S.A. 56:8-1 to -227, the Truth in Consumer-Contract, Warranty and Notice Act
(TCCWNA), N.J.S.A. 56:12-14 to -18, and various common law contract rights.
Plaintiffs’ allegations include purchasing a sweatshirt for $23.98 that was
advertised as being 60% off an original price of $59.95, and three t-shirts advertised
as “Buy 1 Get 2 Free” for $29.95. Plaintiffs claim that the items they purchased are
never offered for purchase at the “original” or reference prices listed on the price
tag, thereby rendering the advertised “markdowns” illusory and the reference prices
fictitious. Plaintiffs allege that such practices violate the CFA, TCCWNA, and
several common law contract rights. They seek damages and injunctive relief.
Defendant moved to dismiss plaintiffs’ complaint. The trial court granted
defendant’s motion, observing that the CFA “unmistakably makes a claim of
ascertainable loss a prerequisite for a private cause of action.” The court found that
plaintiffs failed to plead sufficient facts to establish ascertainable loss -- either an
“out-of-pocket” loss or a loss of the “benefit of [their] bargain” -- under the CFA or the
violation of a “clearly established legal right” under TCCWNA.
The Appellate Division reversed. 474 N.J. Super. 593, 598 (App. Div. 2023).
The majority found that plaintiffs were denied the benefit of their bargain because
they “received no value for the offered discount.” Id. at 601-02. The court further
held that, because plaintiffs had adequately alleged that they suffered an
ascertainable loss for CFA purposes, they had also sufficiently pled that they were
“aggrieved consumers” for purposes of TCCWNA and that their other claims should
proceed as well Id. at 603-05. The concurrence agreed that plaintiffs’ claims should
survive but under a theory of out-of-pocket loss. Id. at 606-07.
1
The Court granted defendant’s petition for certification. 254 N.J. 202 (2023).
HELD: A plaintiff can establish an ascertainable loss by demonstrating either an
out-of-pocket loss or a deprivation of the benefit of one’s bargain. The Court does
not find either type of ascertainable loss applicable here because plaintiffs purchased
non-defective, conforming goods with no objective, measurable disparity between
the product they reasonably thought they were buying and what they ultimately
received. Plaintiffs’ CFA claim therefore fails, and, absent an ascertainable loss
pursuant to the CFA, plaintiffs are not “aggrieved consumers” under TCCWNA,
cannot show injury or damages under their common law claims, and are without
claims entitling them to equitable relief.
1. In addition to proscribing certain commercial practices, the CFA provides a
private right of action through which individuals who have fallen victim to a
practice made unlawful by the statute may seek redress. See N.J.S.A. 56:8-19. To
state a claim under that statute, an individual must plead an unlawful practice, an
ascertainable loss, and a causal relationship between the two. An asserted
“ascertainable loss” must be quantifiable or measurable, not hypothetical or illusory.
The Court reviews examples from case law. (pp. 13-18)
2. Here, the Appellate Division correctly found that plaintiffs have adequately pled
allegations of deceptive conduct that violates the CFA because the complaint
sufficiently asserts that the discounts offered were illusory and defendant utilized a
fictitious former price in violation of N.J.S.A. 13:45A-9.6(a) (“Use of a fictitious
former price will be deemed to be a violation of the [CFA].”). The Court does not
disturb that aspect of the Appellate Division’s decision. (pp. 18-19)
3. But plaintiffs’ CFA claim nevertheless fails because they have not pled facts
sufficient to allege ascertainable loss, whether as a loss of the benefit-of-the-bargain
or an out-of-pocket loss. Plaintiffs contend that (1) they would not have purchased
the items but for the use of fictitious former pricing, entitling them to damages equal
to the purchase prices; or (2) they did not receive the value of what was promised,
entitling them to damages equal to the difference between the fictitious “original
price” and the price they actually paid. But plaintiffs do not claim that they
attempted to return the items or that Aéropostale refused to accept such a return.
The facts as pled are thus insufficient to establish an out-of-pocket loss. Plaintiffs
also argue that they suffered an ascertainable loss because they did not receive a
higher-value item for a discounted price, which denied them the benefit of their
bargain. But, unlike in past cases in which a defect was alleged, plaintiffs purchased
and received clothing that was not defective or damaged or worth less than they
paid. Although plaintiffs thought they were receiving clothes that defendant once
sold for more money, the goods plaintiffs received are exactly what they knowingly
purchased -- functioning and usable pants, sweatshirts, and t-shirts. Indeed,
2
plaintiffs do not argue that the items were worth less than the amount they paid.
Plaintiffs thus fail to state a claim for relief under the CFA. (pp. 19-25)
4. To state a TCCWNA claim under the facts presented here, plaintiffs would need
to establish four elements: (1) defendant is a seller (2) who, in writing, entered into
a consumer contract or gave or displayed a consumer warranty, notice, or sign (3)
containing a provision that violates a consumer’s “clearly established legal right,”
(4) and plaintiffs are consumers who were thereby “aggrieved.” See N.J.S.A. 56:12-
15. A consumer must have suffered adverse consequences as a result of the
defendant’s regulatory violation” to be “aggrieved” within the meaning of
TCCWNA. Here, plaintiffs’ alleged harm is premised on the same allegations as
their CFA claim -- use of a fictitious former price. Because plaintiffs have not
incurred an ascertainable loss due to the violation of the fictitious former pricing
regulation, plaintiffs are not monetarily aggrieved for purposes of TCCWNA under
the facts pled and therefore cannot state a claim under TCCWNA. (pp. 25-28)
5. The Court explains why plaintiffs’ common law claims for money damages fail.
Plaintiffs’ claim for injunctive relief under the CFA also fails because a plaintiff
must suffer “an ascertainable loss” to sustain a private cause of action. In effect, the
CFA permits only the Attorney General to bring actions for purely injunctive relief.
The Attorney General, who supported plaintiffs in this matter as amicus, may thus
directly challenge defendant’s conduct as alleged here. (pp. 28-31)
REVERSED. The order dismissing the complaint is REINSTATED.
JUSTICE FASCIALE, dissenting, cites (1) the CFA’s strong remedial
purpose to protect consumers, (2) the Legislature’s intent to cement the CFA as one
of the strongest consumer protection laws in the nation, (3) case precedents, (4)
consumer behavior research, and (5) the insight provided by the Attorney General
appearing as amicus, in expressing the view that plaintiffs here have sufficiently
pleaded that they suffered an ascertainable loss under a benefit-of-the-bargain theory
by showing a loss measurable and quantifiable as the difference between the
reference price on the products and the amount they actually purchased the products
for. Justice Fasciale is also of the view that plaintiffs here suffered an out-of-pocket
loss that is ascertainable -- i.e., the purchase price of the clothing items -- because
they allege that “they would not have purchased the [clothing] items at the prices
they paid had they known the items had not been regularly offered or sold at the
higher list price” and because no attempt to return the items was necessary.
CHIEF JUSTICE RABNER and JUSTICES PATTERSON and PIERRE-
LOUIS join in JUSTICE SOLOMON’s opinion. JUSTICE FASCIALE filed a
dissent in which JUSTICES WAINER APTER and NORIEGA join.
3
SUPREME COURT OF NEW JERSEY
A-50 September Term 2022
087981
Christa Robey and Maureen
Reynolds, on behalf of
themselves and all others.
similarly situated,
Plaintiffs-Respondents,
v.
SPARC Group LLC,
Defendant-Appellant.
On certification to the Superior Court,
Appellate Division, whose opinion is reported at
474 N.J. Super. 593 (App. Div. 2023).
Argued Decided
November 6, 2023 March 25, 2024
Michael D. Meuti (Benesch, Friedlander,
Coplan & Aronoff) of the Ohio, California, and District
of Columbia bars, admitted pro hac vice, argued the
cause for appellant (Sills Cummis & Gross, and Benesch,
Friedlander, Coplan & Aronoff, attorneys; Jeffrey J.
Greenbaum, Charles J. Falletta, Michael S. Carucci,
Michael D. Meuti, Stephanie A. Sheridan and Meegan B.
Brooks (Benesch, Friedlander, Coplan & Aronoff) of the
California bar, admitted pro hac vice, of counsel and on
the briefs).
1
Stephen P. DeNittis argued the cause for respondents
(DeNittis Osefchen Prince, attorneys; Stephen P.
DeNittis, Joseph A. Osefchen, and Shane T. Prince, on
the brief).
Jeffrey S. Jacobson argued the cause for amici curiae the
Chamber of Commerce of the United States of America
and the New Jersey Civil Justice Institute (Faegre
Drinker Biddle & Reath, attorneys; Jeffrey S. Jacobson
and Jennifer G. Chawla, on the brief).
Viviana Hanley, Deputy Attorney General, argued the
cause for amicus curiae Attorney General of New Jersey
(Matthew Platkin, Attorney General, attorney; Jeremy M.
Feigenbaum, Solicitor General, and Angela Cai, Deputy
Solicitor General, of counsel, and Viviana Hanley, Zeyad
A. Assaf, and Monica E. Finke, Deputy Attorneys
General, on the brief).
Jared M. Placitella argued the cause for amicus curiae
New Jersey Association for Justice (Cohen, Placitella &
Roth, attorneys; Jared M. Placitella, of counsel and on the
brief).
Christopher S. Porrino submitted a brief on behalf of
amici curiae National Retail Federation and Retail
Litigation Center, Inc. (Lowenstein Sandler, attorneys;
Christopher S. Porrino and Peter Slocum, on the brief).
JUSTICE SOLOMON delivered the opinion of the Court.
In this case, plaintiffs, a class of shoppers at the retail clothing store
Aéropostale, allege that the store advertised clothing as being discounted
when, in fact, the items had never been offered or sold at the non-discounted
prices, or reference prices, listed. Plaintiffs contend that this practice of
2
“illusory discounts” violates the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1
to -227, the Truth in Consumer-Contract, Warranty and Notice Act
(TCCWNA), N.J.S.A. 56:12-14 to -18, and various common law contract
rights.
It is a violation of the CFA to use fraud, deception, or misrepresentation
in connection with the sale and advertisement of merchandise. Indeed, the
Appellate Division found here -- and defendant SPARC Group LLC does not
contest -- that defendant’s conduct violates the CFA.
However, to state a CFA claim, private plaintiffs -- in contrast to the
Attorney General -- must show that they suffered an “ascertainable loss of
moneys or property, real or personal, as a result of the use or employment by
another person of any . . . practice declared unlawful under” the CFA.
N.J.S.A. 56:8-19; Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 473
(1988). The core issue before this Court is whether plaintiffs have sufficiently
pled that they sustained an ascertainable loss -- that is, a “loss that is
quantifiable or measurable.” Thiedemann v. Mercedes-Benz USA, LLC, 183
N.J. 234, 248 (2005).
A plaintiff can establish an ascertainable loss by demonstrating either an
out-of-pocket loss or a deprivation of the benefit of one’s bargain. Ibid. “Out-
of-pocket damages represent the difference between the price paid and the
3
actual value received,” while “benefit-of-the-bargain principles allow
‘recovery for the difference between the price paid and the value of the
property had the representations been true.’” Finderne Mgmt. Co. v. Barrett,
402 N.J. Super. 546, 574 (App. Div. 2008) (quoting Correa v. Maggiore, 196
N.J. Super. 273, 284 (App. Div. 1984)). The trial court determined that
plaintiffs could not show either form of ascertainable loss and dismissed their
complaint; the Appellate Division reversed, although the appellate court split
as to the applicable form of loss.
We do not find either type of ascertainable loss applicable here.
Plaintiffs cannot assert a “quantifiable or measurable” loss because they
purchased non-defective, conforming goods with no objective, measurable
disparity between the product they reasonably thought they were buying and
what they ultimately received. Plaintiffs’ CFA claim therefore fails.
Additionally, absent an ascertainable loss pursuant to the CFA, plaintiffs
are not “aggrieved consumers” under TCCWNA, cannot show injury or
damages under their common law claims, and are thus without claims entitling
them to equitable relief.
We therefore reverse the judgment of the Appellate Division and
reinstate the trial court’s order dismissing the complaint.
4
I.
A.
In June 2021, plaintiffs, on behalf of themselves and all others similarly
situated, filed a six-count class action complaint against defendant SPARC
Group LLC, owner and operator of Aéropostale. The complaint details that
plaintiff Christa Robey purchased a sweatshirt for $23.98 that was advertised
as being 60% off an original price of $59.95, and three t-shirts advertised as
“Buy 1 Get 2 Free” for $29.95. Plaintiff Maureen Reynolds purchased a pair
of pants for $18.25 that were advertised as being 50% off an original price of
$36.50. Plaintiffs claim that the items they purchased “on sale” are never
offered for purchase at the “original” or reference prices listed on the price tag,
thereby rendering the advertised “markdowns” illusory and the reference
prices fictitious.
Count One of plaintiffs’ complaint alleges that such false advertisements
violate the CFA because they are an “unconscionable commercial practice”
proscribed in N.J.S.A. 56:8-2 and because they contravene certain state and
federal pricing regulations. Plaintiffs seek treble damages, reasonable
attorneys’ fees, and filing fees and costs under the CFA. Count Two alleges
that defendant violated TCCWNA by offering illusory discounts via “consumer
notices,” i.e., signs and price tags. Plaintiffs seek statutory damages of $100
5
per class member, as well as actual damages and attorney’s fees under
TCCWNA. Counts Three, Four, and Five allege breaches of contract, the
implied covenant of good faith and fair dealing, and express warranty,
respectively. Finally, plaintiffs seek a declaratory judgment and class-wide
injunctive relief under the Uniform Declaratory Judgment Act, N.J.S.A. 2A:16-
50 to -62.
Defendant moved to dismiss plaintiffs’ complaint pursuant to Rule 4:6-
2(e). The trial court granted defendant’s motion, observing that the CFA
“unmistakably makes a claim of ascertainable loss a prerequisite for a private
cause of action.”
The court found plaintiffs failed to plead sufficient facts to establish
either an “out-of-pocket” loss or a loss of the “benefit of [their] bargain.”
First, the trial court found that there was no out-of-pocket loss given that
plaintiffs did not receive “products that were unsuitable for their intended use,
or [plead] that they needed to incur extra expenses because of defendant’s
alleged misrepresentations.” Second, absent a showing that the goods were
defective, nonconforming, or worth less than what plaintiffs paid, the trial
court determined the losses were illusory and hypothetical under the benefit-
of-the-bargain theory. Thus, the court found no ascertainable loss under the
CFA.
6
The trial court concluded that, without an ascertainable loss under the
CFA, the violations of the CFA alleged cannot form the basis of a violation of
a “clearly established legal right” under TCCWNA. The court also found that
the federal and state pricing regulations on which plaintiffs rely do not provide
a private cause of action and therefore could not form the basis of a claim
under TCCWNA. Finally, the court found that plaintiffs had not pled facts
sufficient to invoke N.J.A.C. 13:45-9.6, which proscribes the use of “fictitious
former prices” to make an offered price seem more appealing. Finding that
plaintiffs had not shown that defendant violated a clearly established legal
right, the trial court determined that plaintiffs “received the exact merchandise
that they bargained for at prices they agreed to pay” and were thus not
“aggrieved consumers.” Therefore, the trial court found that plaintiffs’
TCCWNA claim necessarily failed.
B.
The Appellate Division disagreed and reversed the trial court’s
judgment. Robey v. SPARC Grp. LLC, 474 N.J. Super. 593, 598 (App. Div.
2023).
The Appellate Division held that plaintiffs sufficiently pled an
ascertainable loss under the CFA, finding that plaintiffs were denied the
benefit of their bargain and suffered a “real and quantifiable” loss -- in the
7
amount of the supposed markdowns, or “illusory discounts” -- because they
“received no value for the offered discount.” Id. at 601-02, 606. The court
further held that, because plaintiffs had adequately alleged that they suffered
an ascertainable loss for CFA purposes, they had also sufficiently pled that
they were “aggrieved consumers” for purposes of TCCWNA. Id. at 603.
Noting that the trial court’s dismissal of plaintiffs’ common law claims rested
on its conclusion that plaintiffs had failed to adequately plead deprivation of
the benefit-of-the-bargain, the Appellate Division reversed as to those counts
as well. Id. at 603-04. Finally, the appellate court held that it was error to
dismiss plaintiffs’ claims for a declaratory judgment and injunctive relief. Id.
at 604-05.
Judge Berdote Byrne concurred in the judgment, agreeing that plaintiffs’
pleadings were adequate but expressed the view that they demonstrated an out-
of-pocket loss, not the loss of the benefit of a bargain. Id. at 606-07 (Berdote
Byrne, J.S.C. (temporarily assigned), concurring). Judge Berdote Byrne
explained that “plaintiffs suffered an ascertainable loss and monetary damages
[insofar as] they would not have purchased the items . . . had they known the
items had not been regularly offered at the higher list price.” Id. at 608
(omission in original). Thus, in Judge Berdote Byrne’s view, plaintiffs “do not
have the right to receive the difference between their out-of-pocket costs and
8
the fictitiously advertised price,” which “would put plaintiffs in a significantly
better economic position than they would have been in this situation,” but
instead have a right to a refund of the purchase prices they paid, which would
place plaintiffs “in the same economic position they were prior to the
litigation.” Id. at 608-09.
We granted defendant’s petition for certification. 254 N.J. 202 (2023).
We also granted leave to participate as amici curiae to the National Retail
Federation, the Retail Litigation Center, the Chamber of Commerce of the
United States, the New Jersey Civil Justice Institute, the Attorney General of
New Jersey, and the New Jersey Association for Justice.
II.
A.
Before us, defendant argues that consumers do not suffer an
ascertainable loss when they receive a non-defective and as-advertised product
at the agreed-upon price and do not allege that the products purchased are
substantively different or worth less than what they believed they purchased.
Defendant maintains that plaintiffs did not suffer a loss under the benefit-of-
the-bargain theory of damages because they received the exact items that they
sought to buy at the prices they sought to pay. Similarly, defendant contends
that plaintiffs’ out-of-pocket theory of loss fails because the items are not
9
worthless and because plaintiffs do not allege that they paid more than the
goods are worth. Thus, defendant argues that plaintiffs’ CFA claims must fail
even though defendant does not challenge the Appellate Division’s
determination that the pricing practices at issue violate the CFA.
Defendant likewise argues that, because plaintiffs have not shown that
they suffered an ascertainable loss under the CFA, plaintiffs are necessarily not
“aggrieved consumers” under TCCWNA. Defendant further maintains that
plaintiffs’ common law contract claims must fail because they did not suffer
any loss. Lastly, defendant contends that, without a viable claim for damages,
plaintiffs have no basis for relief under the Uniform Declaratory Judgment Act.
The National Retail Federation and the Retail Litigation Center jointly
represent that many courts in other jurisdictions have held that the loss of a
discount is not an ascertainable loss if the goods were conforming and worth
their advertised value. The Chamber of Commerce and the New Jersey Civil
Justice Institute claim that defendant’s conduct did not violate the fictitious
former pricing regulation, N.J.A.C. 13:45A-9.6(a).
B.
Plaintiffs urge the Court to uphold the Appellate Division’s
determination that they have stated viable claims under the CFA -- and thus, by
extension, under TCCWNA and the common law. As to ascertainable loss,
10
plaintiffs claim that (1) the average consumer reasonably interprets prices to
represent the quality and value of goods sold; (2) the goods they purchased
were never sold at the reference prices indicated; (3) they purchased the goods
in reliance on misrepresentations; and (4) the true objective quality, value, and
worth of the goods purchased is less than what the reference prices
represented.
Plaintiffs claim that they have adequately pled benefit-of-the-bargain
damages by declaring that the goods purchased lacked the objective value and
quality the reference prices represented; they seek damages measured by the
difference between the purchase prices and the reference prices. Additionally,
plaintiffs assert that they have sufficiently pled out-of-pocket losses by stating
that defendant’s misrepresentations induced them to make purchases they
would not have made and to pay more for the goods than they otherwise would
have had they known the goods’ true value.
The Attorney General primarily argues that plaintiffs suffered benefit-of-
the-bargain damages and should be allowed to seek injunctive relief on behalf
of other consumers.
III.
We are mindful that this matter is before us on a Rule 4:6-2(e) motion to
dismiss for failure to state a claim, which requires us to review de novo “the
11
legal sufficiency of the facts alleged on the face of the complaint.” Baskin v.
P.C. Richard & Son, LLC, 246 N.J. 157, 171 (2021) (quoting
Dimitrakopoulous v. Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl, P.C.,
237 N.J. 91, 107 (2019)). The test for determining the adequacy of a pleading
is “whether a cause of action is ‘suggested’ by the facts,” giving the pleader
the benefit of every reasonable inference. Printing Mart-Morristown v. Sharp
Elecs. Corp., 116 N.J. 739, 746 (1989) (quoting Velantzas v. Colgate-
Palmolive Co., 109 N.J. 189, 192 (1988)). In doing so, we must search the
complaint “thoroughly ‘and with liberality to ascertain whether the fundament
of a cause of action may be gleaned even from an obscure statement of claim,
opportunity being given to amend if necessary.’” Baskin, 246 N.J. at 171
(quoting Printing Mart, 116 N.J. at 746).
CFA claims (and TCCWNA claims premised upon CFA claims) are
“essentially . . . fraud claim[s],” Hoffman v. Hampshire Labs, Inc., 405 N.J.
Super. 105, 112 (App. Div. 2009), and are accordingly subject to the
heightened pleading standard in Rule 4:5-8(a), which requires that the
“particulars of the wrong . . . shall be stated insofar as practicable.” With
those standards in mind, we turn first to plaintiffs’ CFA claims.
12
IV.
A.
Enacted in 1960, L. 1960, c. 39, the CFA provides for relief to
consumers who have been harmed by fraudulent practices in the marketplace
by making the use of those practices “unlawful,” Furst v. Einstein Moomjy,
Inc., 182 N.J. 1, 11 (2004). To that end, the CFA broadly prohibits the use of
“unconscionable or abusive” commercial practices, as well as “deception,
fraud, false pretense, false promise, misrepresentation, or the knowing
concealment, suppression, or omission of any material fact with intent that
others rely” thereon. N.J.S.A. 56:8-2. We have interpreted the CFA to protect
against three forms of unlawful practices: “knowing misrepresentations,
omissions of material fact, and violations of administrative regulations.”
Furst, 182 N.J. at 11. Relevant here, the “[u]se of a fictitious former price”
violates N.J.A.C. 13:45A-9.6(a), a regulation promulgated under the CFA, and
is therefore made unlawful by the statute.
In addition to proscribing certain commercial practices, the CFA
provides a private right of action through which individuals who have fallen
victim to a practice made unlawful by the statute may seek redress:
Any person who suffers any ascertainable loss of
moneys or property, real or personal, as a result of the
use or employment by another person of any method,
act or practice declared unlawful under this act . . . may
13
bring an action . . . . In any action under this section
the court shall, in addition to any other appropriate
legal or equitable relief, award threefold the damages
sustained by any person in interest.
[N.J.S.A. 56:8-19.]
To state a claim under the CFA, an individual must plead an unlawful
practice, an ascertainable loss, and a causal relationship between the two.
Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557 (2009) (citing Int’l Union
of Operating Eng’rs Local No. 68 Welfare Fund v. Merck & Co., Inc., 192 N.J.
372, 389 (2007)).
N.J.S.A. 56:8-19 specifically refers to an “ascertainable loss of moneys
or property, real or personal.” In construing the meaning of “ascertainable
loss,” we have held that the loss must be “‘quantifiable or measurable,’ not
‘hypothetical or illusory.’” D’Agostino v. Maldonado, 216 N.J. 168, 185
(2013) (quoting Thiedemann, 183 N.J. at 248). In other words, private
plaintiffs need to “demonstrate a cognizable and calculable claim of loss due to
the alleged CFA violation.” Thiedemann, 183 N.J. at 249. As we explained in
Thiedemann, “an ‘estimate of damages, calculated within a reasonable degree
of certainty’ will suffice to demonstrate an ascertainable loss.” Ibid. (quoting
Cox v. Sears Roebuck & Co., 138 N.J. 2, 22 (1994)).
In CFA cases alleging fraud, misrepresentation, or deception in selling or
advertising, demonstrating “either out-of-pocket loss or . . . loss in value will
14
suffice to meet the ascertainable loss hurdle and will set the stage for
establishing the measure of damages.” Id. at 248. As we noted in D’Agostino,
ascertainable loss and damages are separate concepts. 216 N.J. at 192 (“There
is no calculation of ‘damages sustained’ unless the ascertainable loss
requirement is first satisfied.”).
A consumer suffers an immediate, out-of-pocket loss or expense when an
item purchased is essentially unusable for its intended purpose or causes
buyers to incur additional costs. For example, in Lee v. Carter-Reed Co., LLC,
the consumer plaintiffs were misled into purchasing diet pills based on the
seller’s representations of their effectiveness; the pills did not work. 203 N.J.
496, 510-11 (2010). We held that, subject to proving the drugs’ defects at trial,
the plaintiffs pled an out-of-pocket ascertainable loss of the full purchase price
of each bottle because the goods were allegedly “worthless” for their
advertised purpose. Id. at 527-28. Lee applied the principle that the entire
purchase price of an item is recoverable as an out-of-pocket loss when a seller
misrepresents the item’s essential qualities and the item received is ultimately
worthless for its intended purpose. Ibid.
Conversely, in Thiedemann, we held that customers whose vehicles were
repaired under warranty, at no cost to the customers, did not sustain an out-of-
pocket loss because there was no difference between the purchase price and the
15
value received after the cars were repaired. 183 N.J. at 251-53. Also
illustrative is Meshinsky, in which we held that a prospective buyer did not
suffer an out-of-pocket loss caused by a seller’s forgery of the buyer’s
signature on a loan application because the buyer never made a payment on the
transaction and the seller eventually repaid the bank. 110 N.J. at 475 n.4.
When a consumer claims that there is a difference in value between an
item as advertised and the item as delivered, but the item is not worthless, the
benefit-of-the-bargain theory of damages is applicable. Mladenov v. Wegmans
Food Mkts., Inc., 124 F. Supp. 3d 360, 375 (D.N.J. 2015) (“A benefit-of-the-
bargain theory requires that the consumer be misled into buying a product that
is ultimately worth less than the product that was promised.”). That is, a
consumer suffers a benefit-of-the-bargain loss when the consumer receives less
than what was bargained for.
For example, in Thiedemann, the plaintiffs purchased Mercedes-Benz
vehicles sold with defective fuel gauges. 183 N.J. at 240. The company
repaired the defect for free under warranty, but the plaintiffs sued and alleged
that receipt of the defective vehicle violated the CFA and deprived them of the
benefit of their bargain, i.e., a non-defective vehicle. Id. at 243, 250. We
disagreed and granted summary judgment in favor of Mercedes-Benz. Id. at
255. Stressing that “[t]he ascertainable loss requirement operates as an
16
integral check upon the balance struck by the CFA between the consuming
public and sellers of goods,” we reasoned that the bargain between the parties
in that case anticipated and provided for the possibility of defects by including
free warranty service to ensure that the vehicles remained fully operable. Id.
at 251. Because Mercedes-Benz cured the defect pursuant to the bargained-for
warranty, the consumers were not deprived of an operable vehicle. Ibid. We
rejected, and deemed “too speculative,” the plaintiffs’ argument that there is a
future hypothetical diminution in the vehicle’s value because it once needed a
fuel gauge replaced. Id. at 252.
The court in Smajlaj v. Campbell Soup Co. also focused on what the
consumer received in a transaction to determine whether it was objectively less
than what the consumer bargained for. 782 F. Supp. 2d 84, 99 (D.N.J. 2011).
There, the plaintiffs suffered a benefit-of-the-bargain loss when they purchased
canned soup that was falsely advertised as having “25% less sodium” than
regular soup but did not actually contain less sodium. Ibid. That was
sufficient to establish a benefit-of-the-bargain loss because the plaintiffs did
not receive what was promised, i.e., reduced-sodium soup. Ibid. Thus, in both
Thiedemann and Smajlaj, the courts compared what consumers actually
received to what they could objectively expect to receive, based on their
17
bargain, to determine whether the allegations were sufficient to show an
“ascertainable loss.”
The dissent cites dicta in Smajlaj to support its erroneous contention that
an illusory loss may constitute ascertainable damages under the CFA. Post at
___ (slip op. at 18 ). There was no such illusory loss in Smajlaj; there, the
plaintiffs did not receive the product that they bargained for -- soup containing
the promised “25% less sodium.” 782 F. Supp. 2d at 99.
Similarly, the dissent mistakenly cites to Bosland, post at ___ (slip op. at
16), in support of its contention that plaintiffs’ loss was not illusory. In
Bosland, the purchaser of a motor vehicle was charged a $117 nonitemized
service fee that included an undisclosed document service fee, in violation of
the CFA and TCCWNA. 197 N.J. at 548. The issue before the Court
concerned whether a demand for refund of the overcharge was required as a
prerequisite to establishing an ascertainable loss; it was not. Id. at 561. The
amount of the loss was easily quantifiable -- the amount of the overcharge.
Notwithstanding the liberality of the construction afforded the CFA,
ascertainable means ascertainable -- “quantifiable or measurable,” D’Agostino,
216 N.J. at 185 (quoting Thiedemann, 183 N.J. at 248) -- and illusory means
illusory.
18
B.
Here, plaintiffs’ CFA claim fails because they cannot show either a loss
of the benefit-of-the-bargain or an out-of-pocket loss.
The Appellate Division correctly found that plaintiffs have adequately
pled allegations of deceptive conduct that violates the CFA because the
complaint sufficiently asserts that the discounts offered were illusory and
defendant utilized a fictitious former price. Robey, 474 N.J. Super. at 600.
Plaintiffs alleged in their complaint that defendant never offered the
items purchased at their “reference price,” thereby rendering the “reference
price” fictitious. Defendant does not contest the Appellate Division’s holding
that plaintiffs adequately pled that defendant utilized a fictitious former price
in violation of N.J.S.A. 13:45A-9.6(a), and we do not disturb that aspect of the
Appellate Division’s decision. See N.J.S.A. 13:45A-9.6(a) (“Use of a
fictitious former price will be deemed to be a violation of the [CFA].”). But
plaintiffs have not pled facts sufficient to allege an ascertainable loss. 1
1
Because we agree with the Appellate Division that the disputed pricing practice
violates a regulation promulgated under the CFA, N.J.A.C. 13:45A-9.6(a), we need
not reach the question whether plaintiffs have adequately pled violations of the
additional state and federal regulations they cite, but do not explain, in support of
their claims for relief under the CFA and TCCWNA. Those claims cannot succeed
because plaintiffs have not sufficiently pled ascertainable loss or that they are
aggrieved consumers, as the CFA and TCCWNA respectively require.
Furthermore, the federal regulations cited are guidelines -- “administrative
19
Plaintiffs’ pricing claims are inherently different from CFA claims we
have considered in the past. See, e.g., Cox, 138 N.J. at 2 (near-worthless
repair work performed without necessary permits); Furst, 182 N.J. at 1
(delivery of defective and non-conforming goods). Here, plaintiffs do not
allege that they purchased defective or deficient goods, or that the items they
received are worthless or even worth less than the price paid. Indeed,
plaintiffs do not dispute that the items they bought are precisely what they
intended to purchase. Rather, plaintiffs contend that (1) they would not have
purchased the items but for the use of fictitious former pricing, entitling them
to damages equal to the purchase prices; or (2) they did not receive the value
of what was promised, entitling them to damages equal to the difference
between the fictitious “original price” and the price they actually paid.
Based on our review of the record, we are satisfied, as was the trial
court, that plaintiffs did not plead sufficient facts to establish an ascertainable
loss under either theory. Nowhere in the complaint do plaintiffs allege facts
supporting an out-of-pocket loss, i.e., that the products they purchased were
worthless or unsuitable for their intended use, or that they have spent or will
spend additional funds following their purchases to make the items usable for
interpretations of law administered by the Commission for the guidance of the
public.” The corresponding federal statutory provisions, 15 U.S.C. §§ 45 and 46,
do not provide any private right of action.
20
their intended purpose. See Lee, 203 N.J. at 528 (finding that the plaintiffs
suffered an out-of-pocket loss each time a class member purchased a dietary
supplement pill that did not provide the benefits represented -- reduction of
belly fat -- and was therefore worthless); Cox, 138 N.J. at 22 (finding that the
plaintiff suffered an ascertainable loss when an employee of the defendant
performed hazardous and shoddy work on the plaintiff’s kitchen, requiring the
plaintiff to incur the cost of repairing the work).
Instead, plaintiffs allege that they suffered an out-of-pocket loss of the
purchase price because they either would not have bought the items at the
prices that they ultimately paid, or they would not have purchased the goods at
all but for defendant’s misleading and deceptive advertising. Although
plaintiffs allege that they never would have purchased the items, plaintiffs do
not claim that they attempted to return the items or that Aéropostale refused to
accept such a return. The facts as pled are thus insufficient to establish an out-
of-pocket loss. Accordingly, plaintiffs are not entitled to receive a refund of
the purchase prices.
Plaintiffs also argue that they suffered an ascertainable loss because they
did not receive a higher-value item for a discounted price, which denied them
the benefit of their bargain. Put another way, plaintiffs allege that they did not
receive the savings that defendant advertised. But plaintiffs do not allege that
21
the items purchased were materially different from what was promised --
wearable pants, t-shirts, and a sweatshirt, as advertised. Nor have they alleged
any dissatisfaction with or defects in the items purchased. To support their
claim of a loss of the benefit of the bargain, plaintiffs rely principally on Furst.
The Attorney General would also have us decide this issue on Furst principles.
But Furst is inapposite for several reasons.
In Furst, the plaintiff buyer purchased a five-thousand-dollar Ireloom
carpet from a retailer at a discounted price, and the retailer delivered a
damaged and smaller-than-advertised carpet. 182 N.J. at 8-9. The defendant
offered the plaintiff a refund of the sale price or a similar carpet at an
additional cost but refused to replace the carpet with a conforming one at the
sale price the plaintiff paid. Id. at 9. The plaintiff sued, and the defendant did
not contest the trial court’s finding that its conduct violated the CFA. Ibid.
The issue on appeal was how to calculate damages after the showing of an
ascertainable loss had already been made. Id. at 9-10. In other words, Furst
concerned the damages recoverable for an ascertainable loss, not whether the
plaintiffs suffered a loss in the first place, as is the case here. Ibid.; see
D’Agostino, 216 N.J. at 192 (explaining that loss and damages “have separate
functions in the analysis”).
22
We agreed with the trial court and the Appellate Division that “when a
merchant violates the [CFA] by delivering defective goods and then refusing to
provide conforming goods, a customer’s ascertainable loss is the replacement
value of those goods.” Furst, 182 N.J. at 10. In coming to that conclusion, we
considered what measure of damages would make the consumer whole -- the
carpet’s replacement value (or fair market value), or the discounted purchase
price? We held that “[t]he merchant who promises to deliver a product at a
particular price must, at the option of the consumer, either deliver the product
or render its replacement value.” Id. at 14.
In contrast, plaintiffs here are not entitled to benefit-of-the-bargain
damages because they suffered no loss -- they purchased and received clothing
that was not defective or damaged or worth less than they paid. D’Agostino,
216 N.J. at 192 (“There is no calculation of ‘damages sustained’ unless the
ascertainable loss requirement is first satisfied.”) (quoting Thiedemann, 183
N.J. at 247). Furst would be instructive here if the items plaintiffs purchased
turned out to be non-conforming or materially different from what they
thought they were purchasing. However, plaintiffs have not made those
allegations. Although plaintiffs thought they were receiving clothes that
defendant once sold for more money, the goods plaintiffs received are exactly
what they knowingly purchased -- functioning and usable pants, sweatshirts,
23
and t-shirts. Indeed, plaintiffs do not argue that the items were worth less than
the amount they paid; they do not contend, for example, that the $23.98
sweatshirt was not worth $23.98 or that the $18.25 pants were not worth
$18.25. There is thus no reason to calculate damages under Furst’s benefit of
the bargain principles.
Like the plaintiffs in Thiedemann, whose loss -- a subjective allegation
of their vehicle’s diminished value -- was not “ascertainable” within the
meaning of the CFA, plaintiffs here objectively received what they paid for.
Accordingly, we find that plaintiffs’ allegations, assumed to be true, do not
establish a cognizable ascertainable loss under a benefit-of-the-bargain theory.
This holding is consistent with the majority of decisions by other state and
federal courts that have addressed whether plaintiffs suffered a cognizable
injury as a result of deceptive pricing under various state consumer protection
laws. See, e.g., Leigh-Pink v. Rio Props., LLC, 512 P.3d 322, 327 (Nev. 2022)
(“Where a plaintiff received the value of their purchase, we conclude that they
cannot demonstrate that they did not receive the benefit of their bargain or
show any out-of-pocket losses, because the value of the goods or services they
received is equal to the value that they paid.”); Shaulis v. Nordstrom Inc., 865
F.3d 1, 12 (1st Cir. 2017) (finding plaintiffs suffered no loss where the
“product itself was [not] deficient in some objectively identifiable way”);
24
Gerboc v. Context Logic, Inc., 867 F.3d 675, 681 (6th Cir. 2017) (holding that
plaintiff had no “actual damages” under Ohio law because “[plaintiff] got what
he paid for: a $27 item that was offered as a $27 item and that works like a
$27 item”); Kim v. Carter’s Inc., 598 F.3d 362, 364 (7th Cir. 2010) (finding the
plaintiffs “got the benefit of their bargain and suffered no harm” under Illinois
law when “they agreed to pay a certain price for Carter’s clothing, which they
do not allege was defective or worth less than what they actually paid”);
Hennessey v. Gap, Inc., 86 F.4th 823, 828 (8th Cir. 2023) (“[I[n cases where
plaintiff was fraudulently induced to purchase a product that was no different
in quality than defendant represented at the time of sale, . . . there is no
ascertainable loss under [Missouri law] because the price paid was both the
represented value and the value of the product plaintiff received.”).
Having determined that plaintiffs have failed to state a claim for relief
under the CFA, we turn to their TCCWNA claim.
V.
The Legislature enacted TCCWNA in 1981, L. 1981, c. 454, “to prevent
deceptive practices in consumer contracts,” Dugan v. TGI Fridays, Inc., 231
N.J. 24, 67 (2017). By passing TCCWNA, the Legislature did not create new
legal rights but sought to require sellers to acknowledge already existing
“clearly established consumer rights” by providing new remedies for violations
25
of those rights. See Spade v. Select Comfort Corp., 232 N.J. 504, 515-16
(2018); see also Governor’s Statement on Signing A. 1660 (Jan. 11, 1982)
(noting that TCCWNA would “strengthen[ ] provisions of the [CFA]”). The
rights and responsibilities enforceable by TCCWNA are, therefore, drawn from
and established by other legislation. Shelton v. Restaurant.com, 214 N.J. 419,
432 (2013).
TCCWNA prohibits sellers from engaging in conduct proscribed
elsewhere:
No seller, lessor, creditor, lender or bailee shall in the
course of his business offer to any consumer or
prospective consumer or enter into any written
consumer contract or give or display any written
consumer warranty, notice or sign . . . which includes
any provision that violates any clearly established legal
right of a consumer or responsibility of a seller . . . 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.
[N.J.S.A. 56:12-15.]
It further provides a cause of action through which consumers aggrieved by
means of a proscribed practice may seek recovery: “Any person who violates
the provisions of this act shall be liable to the aggrieved consumer for a civil
penalty of not less than $100.00 or for actual damages, or both at the election
of the consumer, together with reasonable attorney’s fees and court costs.”
N.J.S.A. 56:12-17 (emphasis added).
26
Thus, to state a TCCWNA claim under the facts presented here,
plaintiffs would need to establish four elements: (1) defendant is a seller (2)
who, in writing, entered into a consumer contract or gave or displayed a
consumer warranty, notice, or sign (3) containing a provision that violates a
consumer’s “clearly established legal right,” (4) and plaintiffs are consumers
who were thereby “aggrieved.” See Pisack v. B & C Towing, Inc., 240 N.J.
360, 379 (2020); N.J.S.A. 56:12-15, -17.
We clarified in Spade that a consumer must have “suffered adverse
consequences as a result of the defendant’s regulatory violation” to be
“aggrieved” within the meaning of TCCWNA. 232 N.J. at 523-24. “In the
absence of evidence that the consumer suffered adverse consequences as a
result of defendant’s regulatory violation, a consumer is not an ‘aggrieved
consumer’ for purposes of” the statute. Id. at 524.
Here, plaintiffs’ alleged harm is premised on the same allegations as
their CFA claim -- use of a fictitious former price. Because we determine that
plaintiffs have not incurred an ascertainable loss of money or property due to
the violation of the fictitious former pricing regulation, N.J.A.C. 13:45A-
9.6(a), plaintiffs are not monetarily aggrieved for purposes of TCCWNA under
27
the facts pled. 2 The monetary loss analysis does not yield a different result in
this context, and plaintiffs do not allege non-monetary harm. See id., at 523
(explaining that a consumer may suffer non-monetary harm if, for example,
“untimely delivery and misleading ‘no refunds’ language leaves [the]
consumer without furniture needed for a family gathering”). Accordingly, we
determine that plaintiffs are not aggrieved consumers and therefore cannot
state a claim under TCCWNA.
VI.
We briefly address plaintiffs’ common law claims. First, to state a claim
for breach of contract, a plaintiff must assert that a defendant’s alleged breach
“caused a loss to the plaintiffs.” Goldfarb v. Solimine, 245 N.J. 326, 338
(2021) (quoting Globe Motor Co. v. Igdalev, 225 N.J. 469, 482 (2016)).
Because plaintiffs here have not alleged an ascertainable loss for the reasons
discussed above, their contract claim fails.
Second, to breach the implied covenant of good faith and fair dealing, a
defendant must have “engaged in some conduct that denied the benefit of the
bargain originally intended by the parties.’” Brunswick Hills Racquet Club,
Inc. v. Route 18 Shopping Ctr. Assocs., 182 N.J. 210, 225 (2005) (emphasis
2
We reject the invitation by the parties to opine on whether ascertainable loss
is coextensive with the “aggrieved consumer” requirement under TCCWNA,
non-monetary or otherwise.
28
added). Again, because plaintiffs received the benefit of their bargain and did
not suffer an ascertainable loss, plaintiffs’ claim for breach of the implied
covenant of good faith and fair dealing fails.
Finally, to state a claim for breach of express warranty, a plaintiff must
establish “the failure of the goods to perform as warranted.” Ford Motor
Credit Co., LLC v. Mendola, 427 N.J. Super. 226, 242 (App. Div. 2012)
(quoting Spring Motors Distribs., Inc. v. Ford Motor Co., 98 N.J. 555, 586
(1985)); see Furst, 182 N.J. at 13 (explaining that damages for breach of an
express warranty is “the remedy for a buyer who has accepted defective
goods”). Because the items accepted by plaintiffs were not defective or non-
conforming, there is no breach of express warranty.
VII.
Plaintiffs also seek injunctive relief. To explain why that relief is
unavailable -- even though the pricing practices challenged are indeed
unlawful under the CFA -- we briefly review the history of the statute.
In its original form, the Legislature vested only the Attorney General
with enforcement power under the CFA. See Weinberg v. Sprint Corp., 173
N.J. 233, 248 (2002) (discussing the broad investigative and enforcement
powers the Legislature afforded to the Attorney General to accomplish the
objectives of the CFA). In 1971, however, the Legislature amended the CFA to
29
allow private actions by injured consumers. L. 1971, c. 247, § 7 (codified at
N.J.S.A. 56:8-19).
The addition of a private right of action, as we explained in Weinberg,
makes it easier to compensate victims for their actual loss, 173 N.J. at 249, and
the treble damages provision punishes the wrongdoer and creates an incentive
for attorneys to take cases involving less substantial losses. Ibid. As noted
previously, however, unlike the Attorney General, a plaintiff must suffer “an
ascertainable loss,” caused by the unlawful conduct, to sustain a private cause
of action under the CFA. N.J.S.A. 56:8-19.
That rule applies both to claims and to requests for injunctive relief
under the CFA. See Laufer v. U.S. Life Ins. Co., 385 N.J. Super. 172, 185
(App. Div. 2006) (“Once this threshold standing requirement” -- i.e., pleading
ascertainable loss -- “is satisfied, the plaintiff can pursue ‘all available
remedies, including an injunction, . . . even if the plaintiff ultimately loses on
his damage claim but does prove an unlawful practice under the Act.’”)
(quoting Weinberg, 173 N.J. at 253)). Therefore, although plaintiffs and their
amici are technically correct that the CFA relaxes traditional standards for
injunctive relief, their ability to act as “private attorneys general,” Lemelledo
v. Beneficial Mgmt. Corp. of Am., 150 N.J. 255, 268 (1997), is reliant on their
ability to plead an ascertainable loss, see Weinberg, 173 N.J. at 250 (“The
30
express language of the statute requires a private party to have a claim that he
or she has suffered an ascertainable loss of money or property in order to bring
a cause of action under the Act. In effect, the Act permits only the Attorney
General to bring actions for purely injunctive relief.”). Because plaintiffs here
cannot plead ascertainable loss, they cannot seek an injunction for themselves,
or others similarly situated under the CFA.
We emphasize that the Attorney General, who supported plaintiffs in this
matter as amicus, does not need to establish an ascertainable loss to bring an
enforcement action to enjoin conduct violative of the CFA and may challenge
defendant’s conduct as alleged here. Indeed, the dissent makes a strong case
for why the Attorney General should choose to exercise his power and
authority to seek a court order prohibiting businesses from employing illusory
discounts and fictitious former prices.
VIII.
For the reasons set forth above, we reverse the Appellate Division’s
judgment, and reinstate the trial court’s order dismissing plaintiffs’ complaint.
CHIEF JUSTICE RABNER and JUSTICES PATTERSON and PIERRE-
LOUIS join in JUSTICE SOLOMON’s opinion. JUSTICE FASCIALE filed a
dissent in which JUSTICES WAINER APTER and NORIEGA join.
31
Christa Robey and Maureen
Reynolds, on behalf of
themselves and all others
similarly situated,
Plaintiffs-Respondents,
v.
SPARC Group LLC,
Defendant-Appellant.
JUSTICE FASCIALE, dissenting.
Imagine going to the mall to buy a coat. You enter your first store, and
you find one you like. The price tag says, “70 percent off, originally sold for
$1,000.” What do you do? You stop shopping and buy the coat. The store
presented you with a great deal: pay $300 for a coat worth $1,000. You not
only like the coat, but you reasonably believe that the store promised you $700
in savings. You later learn that the store tricked you into buying the coat by
misrepresenting its value as $1,000. The fact is that the store never sold the
coat for $1,000; they had only sold it for $300. You did not receive the benefit
of what you bargained for, nor did you receive what you were promised.
Moreover, but for the fake discount, you would not have purchased the coat.
Therefore, you suffered a quantifiable and measurable (not merely illusory)
ascertainable loss under a benefit-of-the-bargain theory and, arguably, also
under an out-of-pocket loss theory.
That hypothetical is not a fanciful story -- plaintiffs sufficiently pleaded
almost identical allegations. The only differences are the clothing items and
the amounts paid. Here, the class action complaint should never have been
dismissed under Rule 4:6-2(e) for failure to plead ascertainable loss.
Respectfully, not only does the majority’s decision fail to uphold important
and long-standing remedial principles that have guided New Jersey Consumer
Fraud Act (CFA) cases for decades, but it also does not adequately consider
the precepts we outlined in Furst v. Einstein Moomjy, Inc., 182 N.J. 1 (2004),
acknowledge substantial consumer behavior research, or give sufficient weight
to the Attorney General’s support for plaintiffs’ position. Plaintiffs’
allegations in their 60-page complaint more than sufficiently demonstrate
ascertainable loss. And consequently, plaintiffs should have the opportunity to
move past the pleading stage and attempt to prove their CFA allegations, along
with their other claims. 1
Thus, I respectfully dissent.
1
As the appellate court found, because plaintiffs sufficiently pleaded
ascertainable loss under a benefit-of-the-bargain theory, their remaining claims
should be reinstated as well.
2
I.
When reviewing an order dismissing a complaint for failure to state a
claim under Rule 4:6-2(e), we must search “the complaint in depth and with
liberality to ascertain whether the fundament of a cause of action may be
gleaned even from an obscure statement of claim.” Green v. Morgan Props.,
215 N.J. 431, 452 (2013) (emphases added) (quoting Printing Mart-
Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989)). At the early
pleadings stage in the litigation, we must accept as true the facts as pleaded in
the complaint. Smith v. SBC Commc’ns, Inc., 178 N.J. 265, 268-69 (2004).
We need not be “concerned with the ability of plaintiffs to prove their
allegation[s].” Printing Mart, 116 N.J. at 746 (highlighting that for the
purposes of a Rule 4:6-2(e) analysis, “plaintiffs are entitled to every
reasonable inference of fact”).
Even applying Rule 4:5-8(a)’s requirement that a heightened pleading
standard is required on dismissal motions when allegations of fraud exist, the
allegations in plaintiffs’ lengthy and detailed complaint easily satisfy our
heightened pleading rules.
3
II.
A.
Plaintiffs Christa Robey and Maureen Reynolds filed a class action
lawsuit against defendant, SPARC Group LLC, alleging a long-standing
deceptive pricing scheme perpetrated by Aéropostale -- a retail store that
defendant owns and operates. Plaintiffs pleaded in multiple counts various
causes of action including, as pertinent here, that defendant violated the CFA
by engaging in affirmative acts (unconscionable commercial practices,
deceptive advertising, and misrepresentations) and by violating N.J.A.C.
13:45A-9.6, which provides that “[u]se of a fictitious former price will be
deemed to be a violation of the [CFA].” Plaintiffs Robey and Reynolds further
alleged as to their CFA claim that they suffered ascertainable loss because they
did not receive “the claimed value of [their] purchase[s]” and that they would
not have purchased the items but for the intentionally advertised illusory
discounts.
Thus, we are reviewing an order under Rule 4:6-2(e) that dismissed CFA
allegations.
B.
When reviewing CFA claims, our Court has repeatedly stressed the
CFA’s broad remedial purpose and the Legislature’s manifest intent in
4
enacting the CFA to protect consumers from fraudulent commercial practices
in the marketplace. See Thiedemann v. Mercedes-Benz USA, LLC, 183 N.J.
234, 245 (2005) (“The Legislature enacted the CFA in 1960 to address rampant
consumer complaints about fraudulent practices in the marketplace and to
deter such conduct by merchants.”); All the Way Towing, LLC v. Bucks Cnty.
Int’l, Inc., 236 N.J. 431, 434 (2019) (noting that the CFA “is a powerful
‘legislative broadside against unsavory commercial practices’ in the
marketplace” (quoting Real v. Radir Wheels, Inc., 198 N.J. 511, 514 (2009))).
With the CFA’s purpose in mind, “[c]ourts have emphasized that like
most remedial legislation, the [CFA] should be construed liberally in favor of
consumers.” Cox v. Sears Roebuck & Co., 138 N.J. 2, 15 (1994) (emphasis
added); DeSimone v. Springpoint Senior Living, Inc., ___ N.J. ___, ___ (2024)
(slip op. at 11) (“The CFA is remedial legislation, which the ‘courts liberally
enforce . . . to fulfill its objective to protect consumers from prohibited
unconscionable acts by sellers.’” (omission in original) (quoting All the Way
Towing, LLC, 236 N.J. at 434)). Failure to faithfully apply the CFA’s
undisputed remedial purpose harms consumers.
C.
Importantly, plaintiffs are pursuing their claims as private parties under
the CFA. The CFA “initially conferred enforcement power exclusively on the
5
Attorney General,” Thiedemann, 183 N.J. at 245, but as part of an amendment
in 1971, the CFA “authoriz[ed] a private right of action” -- “arguably the
greatest expansion of the CFA,” DeSimone, ___ N.J. at ___ (slip op. at 12).
N.J.S.A. 56:8-19 authorizes this private right of action and provides that
if a party were to succeed in showing “any ascertainable loss of moneys or
property, real or personal, as a result of the use or employment by another
person of any method, act, or practice declared unlawful under this act,” then a
“court shall, in addition to any other appropriate legal or equitable relief,
award threefold the damages sustained by any person in interest . . . [and] also
award reasonable attorneys’ fees, filing fees and reasonable costs of suit.”
The private right of action under the CFA cannot be underappreciated or
misunderstood. As this Court expressly stated in Bosland v. Warnock Dodge,
Inc., the legislative history reveals that the enactment of the private right of
action was intended to make the CFA “one of the strongest consumer
protection laws in the nation.” 197 N.J. 543, 555 (2009) (emphasis added)
(quoting Governor’s Press Release for A. 2402, at 1 (Apr. 19, 1971)). It also
was intended to “provide easier access to the courts for the consumer.” Ibid.
(quoting Governor’s Press Release for A. 2402, at 2 (June 29, 1971)). We
have explicitly recognized that “[t]he private right of action is integral to
fulfilling the [CFA’s] legislative purposes, and by allowing recovery of
6
attorneys’ fees and costs, private attorneys are incentivized to bring CFA
claims, thereby reducing the enforcement burdens that otherwise would fall on
the State.” Sun Chem. Corp. v. Fike Corp., 243 N.J. 319, 330 (2020) (second
alteration in original) (internal quotations and citations omitted). Thus, the
private cause of action “greatly reduce[s]” “[t]he primary risk of
underenforcement” of the CFA, Lemelledo v. Beneficial Management Corp. of
America, 150 N.J. 255, 269-70 (1997), and “the burdens on the Division of
Consumer Affairs,” Cox, 138 N.J. at 15 (quoting Governor’s Press Release for
A. 2402, at 2 (June 29, 1971)).
Further, the award of attorneys’ fees outlined in N.J.S.A. 56:8-19 was to
encourage and provide an “incentive for members of the bar to become
‘private attorneys general’ . . . to enlarge fraud-fighting authority.” Perez v.
Professionally Green, LLC, 215 N.J. 388, 402 (2013) (omission in original)
(quoting Gonzalez v. Wilshire Credit Corp., 207 N.J. 557, 585 (2011)). And
importantly, the remedies outlined in N.J.S.A. 56:8-19 are “not only to make
whole the victim’s loss, but also to punish the wrongdoer and to deter others
from engaging in similar fraudulent practices.” Furst, 182 N.J. at 12.
This case is particularly illustrative of why the Legislature allowed for
private causes of action under the CFA. The Attorney General, an
unquestionably integral part of the CFA’s enforcement, appeared as amicus
7
curiae in support of plaintiffs’ position and advocated at oral argument that
there are simply too many fictitious pricing violations in the marketplace for
the Attorney General to be able to prosecute them all. Therefore, without
private parties like plaintiffs bringing actions against wrongdoers engaging in
fictitious pricing schemes, the Attorney General will continue to be burdened,
wrongdoers will not be deterred, and these unlawful practices will continue to
run rampant in the marketplace, just as studies have reported. Those avoidable
pitfalls contravene the CFA’s remedial purposes. And as an essential part to
the enforcement of the CFA, the Attorney General’s position on this issue is
profoundly significant, a sentiment the majority fails to meaningfully
consider. 2
D.
Unlike enforcement actions brought by the Attorney General, which do
not require a demonstration that the challenged practices caused ascertainable
loss to a consumer, it is well-settled that a party pursuing a private cause of
action under N.J.S.A. 56:8-19 must demonstrate “(1) an unlawful practice, (2)
2
Clearly the Attorney General has authority to pursue fictitious pricing
violations in the marketplace without any showing of ascertainable loss. We
understand his participation in this case as amicus to underscore how seriously
the Attorney General takes the enforcement of laws prohibiting fictitious
pricing schemes.
8
an ‘ascertainable loss,’ and (3) ‘a causal relationship between the unlawful
conduct and the ascertainable loss.’” Lee v. Carter-Reed Co., L.L.C., 203 N.J.
496, 521 (2010) (quoting Bosland, 197 N.J. at 557). And importantly, “[i]n
considering these requirements, we have been careful to interpret the CFA, and
its prima facie proof requirements, so as to be faithful to the [CFA]’s broad
remedial purposes.” Bosland, 197 N.J. at 555 (emphasis added); see also
Thiedemann, 183 N.J. at 247 (noting -- unlike what occurred here -- that “the
prima facie proofs necessary for a private cause of action under the CFA must
be applied compatibly with the CFA’s remedial nature”).
That brings me to the important matter at hand. With the above long-
standing legal principles in mind -- standards that were generally reiterated in
the allegations of the complaint 3 -- plaintiffs successfully pleaded the required
elements of a private CFA claim.
3
For example, plaintiffs’ complaint states:
179. The [CFA] is a remedial statute which the New
Jersey Supreme Court has repeatedly held must be
construed liberally in favor of the consumer to
accomplish its deterrent and protective purposes. . . .
....
201. As with other terms of the [CFA], the term
“ascertainable loss” is to be construed liberally in favor
9
III.
First, as the majority holds, plaintiffs sufficiently pleaded “an unlawful
practice.” Ante at ___ (slip op. at 19). It is well-settled that unlawful
practices under the CFA “fall into three general categories: affirmative acts,
knowing omissions, and regulation violations.” Cox, 138 N.J. at 17. The
Division of Consumer Affairs regulations expressly provide that “[u]se of a
fictitious former price will be deemed to be a violation of the [CFA].”
N.J.A.C. 13:45A-9.6(a). A “fictitious former price” is defined as “an
artificially inflated price for an item or items of merchandise established for
the purpose of enabling the advertiser to subsequently offer the item or items
at a large reduction.” N.J.A.C. 13:45A-9.1.
Accepting the allegations in the complaint as true, Robey and Reynolds
bought products on sale with the expectations of obtaining promised bargains,
but those expectations were never realized. For instance, during one shopping
trip to Aéropostale, Robey viewed a sign that falsely advertised a “hoodie” as
on sale for 60 percent off of $59.95, the reference price. Relying on these
advertised misrepresentations, Robey purchased the “hoodie” at a price of
$23.98. Based on the store’s purposely misleading sale advertisements and
of the consumer in order to carry out the [CFA]’s broad
remedial purposes . . . .
10
reference prices, Robey reasonably believed she was purchasing a “hoodie”
that was “worth and had the value of $59.95,” but at a bargain of $23.98,
therefore saving $35.97. Similarly, Reynolds went to Aéropostale and viewed
a sign that deceptively advertised pants for 50 percent off, but with an untrue
reference price of $36.50. Once again, relying on these misrepresentations,
Reynolds purchased the pants for $18.25, believing she obtained a discount of
$18.25 and that the pants were valued at $36.50.
What Robey, Reynolds, and other Aéropostale consumers did not know
at the time of their purchase was that, as alleged in the complaint, Aéropostale
was actively deceiving its consumers about its advertised discounts. After a
six-year investigation conducted by plaintiffs’ counsel, plaintiffs alleged that
the discounts Aéropostale advertised were “always false” and “illusory,” and
the list or reference prices provided on the clothing’s price tags were “false
and inflated.” Plaintiffs alleged with specificity -- notably, enough to satisfy
the heightened pleading standard for fraud cases -- how their investigation
revealed that “for most of the products that A[é]ropostale advertise[d] with a
discount or with a ‘free’ offer, A[é]ropostale ha[d] never -- not even for a
single day -- offered the product at the list price in its stores without a discount
or ‘free’ offer.”
11
I agree with the majority that the Appellate Division correctly found that
plaintiffs adequately pleaded -- in my view, well beyond adequately pleaded --
allegations of unconscionable deceptive conduct that violates the CFA. Ante
at ___ (slip op. at 19). But it is imperative that I highlight a point the majority
has not mentioned: the widespread problem of fictitious pricing in the
marketplace nationwide.
According to a recently published research article, “the practice of
fictitious pricing within the United States has not gone away but instead ‘has
proliferated,’ is ‘prevalent,’ and is ‘pervasive,’” which the authors of the
article note is evident by the fact that there are “dozens of lawsuits” in state
and district courts attempting to combat the practice. Richard Staelin, Joel E.
Urbany & Donald Ngwe, Competition and the Regulation of Fictitious Pricing,
87 J. of Mktg. 826, 827 (2023) (citations omitted). News outlets have recently
reported on fictitious pricing schemes among major companies as well,
showing the issue is widespread. See Jaclyn Peiser, A Common, Illegal Tactic
Retailers Use to Lure Customers, Wash. Post (Nov. 21, 2023),
https://www.washingtonpost.com/business/2023/11/21/fake-sale-deceptive-
pricing/ (discussing how many retailers engage in fictitious pricing and why
consumers “fall” for it); Patrick Coffee, Thought You Saved $60 on that
Vacuum Cleaner? Think Again, Wall St. J. (Aug. 24, 2023), https://www.wsj.
12
com/articles/thought-you-saved-60-on-that-vacuum-cleaner-think-again-
c89ce344 (highlighting that deceptive or fictitious pricing is “making a
comeback” and that there is now increased litigation around deceptive pricing
practices for large retail stores); Kristin Schwab, Retailers are Stuck in a Cycle
of Constant Sales, Marketplace (Jan. 17, 2024), https://www.marketplace.org/
2024/01/17/retailers-are-stuck-in-a-cycle-of-constant-sales/ (stressing that
“retailers can hide behind deals to carry out shady business practices” and that
with retailers constantly advertising sales, consumers will “truly never know if
a deal is too good to be true”).
Thus, retailers like Aéropostale are allegedly using fictitious pricing -- a
known CFA violation -- as a deceptive scheme to influence consumer behavior
and choices, with seemingly very few repercussions.
IV.
A.
Second, and central to this appeal, plaintiffs successfully alleged that
they suffered “an ascertainable loss” because of defendant’s deceptive pricing
scheme. Plaintiffs alleged that they received neither the discounts nor the
represented value of the items they were promised or expected. And
importantly, plaintiffs did not make those allegations summarily. Plaintiffs
alleged with specificity that:
13
92. . . . customers suffered an ascertainable loss and
monetary damages because they did not enjoy the
actual discounts A[é]ropostale represented and
promised to them.
93. . . . customers suffered an ascertainable loss and
monetary damages because the items they purchased
were not in fact worth the inflated amount that
A[é]ropostale represented to them. In fact, the items
did not normally sell for, and were not actually worth,
the fictitious and invented list price that Aéropostale
printed on its price tags and on its website.
Plaintiffs also alleged that they “failed to receive the full benefit of the
purported discounts offered by [d]efendant” and “did not receive the claimed
value of [their] purchase, but rather received items worth far less than the
value claimed by [d]efendant.” (emphasis added). Moreover, plaintiffs
alleged that they suffered an ascertainable loss because plaintiffs “would not
have made any purchases from [d]efendant’s A[é]ropostale stores at all but for
the false promises by [d]efendant that [p]laintiffs were receiving merchandise
at a significant discount.” As made clear by plaintiffs on appeal, those claims,
in essence, allege two theories of ascertainable loss: benefit-of-the-bargain
theory and out-of-pocket loss theory.
Plaintiffs reinforced those allegations by referencing academic research
and studies to support their contentions -- research the majority fails to
mention. This body of research helps remove any suggestion that plaintiffs’
14
ascertainable loss is somehow not “quantifiable or measurable,” or that it is
somehow “hypothetical or illusory.” Plaintiffs specifically alleged that:
32. Decades of academic research [have] established
that the use of reference prices, such as those utilized
by A[é]ropostale, materially impacts consumers’
behavior. A reference price affects a consumer’s
perception of the value of the transaction, the
consumer’s willingness to make the purchase, and the
amount of money the consumer is willing to pay for the
product.
33. Indeed, sellers understand that a product’s
“regular” or “reference” price -- the price at which it is
typically sold in the marketplace -- matters to
consumers, as does a representation that a product is on
“sale” or is discounted.
34. . . . consumers are much more likely to purchase an
item if they are told that it is being offered at a “sale”
or discounted price that is lower than the price at which
the seller previously sold the product, and/or where
consumers are told that an item is worth much more
than what they are currently being asked to pay for it.
As the old adage says, “everyone loves a bargain.”
And in support of those allegations, plaintiffs cite to ten consumer behavior
research articles in their complaint.
B.
Despite plaintiffs’ specific and detailed allegations, the majority
concludes, contrary to the Attorney General’s formidable contentions in his
merits brief and at oral argument before us, that plaintiffs failed to plead that
they suffered an ascertainable loss. Ante at ___ (slip op. at 18). I respectfully
15
disagree. “An ascertainable loss is a loss that is ‘quantifiable or measurable’;
it is not ‘hypothetical or illusory.’” Lee, 203 N.J. at 522 (quoting Thiedemann,
183 N.J. at 248). We have articulated that “[t]he CFA does not demand that a
plaintiff necessarily point to an actually suffered loss or to an incurred loss,
but only to one that is ‘ascertainable.’” Bosland, 197 N.J. at 559. And “[i]n
cases involving breach of contract or misrepresentation, either out-of-pocket
loss or a demonstration of loss in value will suffice to meet the ascertainable
loss hurdle and will set the stage for establishing the measure of damages.”
Thiedemann, 183 N.J. at 248.
C.
This Court has acknowledged that because a plain meaning cannot be
ascribed to the term “ascertainable loss” and legislative history does not
“shed[] direct light” on its meaning, “[w]e must look to the clear objectives of
the [CFA] itself, informed by well-established remedies available in a typical
breach-of-contract case, to find the meaning of ascertainable loss.” Furst, 182
N.J. at 11. Thus, a court’s analysis of ascertainable loss “is informed by basic
principles of contract law” including, as we have recognized in Furst and as
the majority identifies, the benefit-of-the-bargain theory. Id. at 13; see ante at
___ (slip op. at 16). That is where I begin.
16
Under a benefit-of-the-bargain theory, “the innocent party must be given
the ‘benefit of his bargain’ and placed in ‘as good a position as he would have
been in had the contract been performed.’” Furst, 182 N.J. at 13 (quoting
Scully v. US WATS, Inc., 238 F.3d 497, 512 (3d Cir. 2001)). In other words,
“the innocent party has a right to damages ‘based on his expectation interest as
measured by . . . the loss in the value to him’ caused by the breaching party’s
nonperformance.” Ibid. (omission in original) (quoting Restatement (Second)
of Contracts § 347(a) (Am. Law Inst. 1981)). Thus, the benefit-of-the-bargain
theory is applicable, as the majority precisely identifies, “[w]hen a consumer
claims that there is a difference in value between an item as advertised and the
item as delivered, but the item is not worthless.” Ante at ___ (slip op. at 16).
In Smajlaj v. Campbell Soup Co., 782 F. Supp. 2d 84, 99 (D.N.J. 2011),
an opinion on which the majority relies, the United States District Court for
the District of New Jersey applied the benefit-of-the-bargain theory to
determine ascertainable loss under the New Jersey CFA. There, the late Judge
Jerome B. Simandle insightfully explained that the benefit-of-the-bargain
theory “requires nothing more than that the consumer was misled into buying a
product that was ultimately worth less to the consumer than the product he was
promised.” Ibid. Thus, in agreement with the majority, to determine
ascertainable loss utilizing a benefit-of-the-bargain theory, we compare “what
17
consumers actually received to what they would objectively expect to receive,
based on their bargain.” Ante at ___ (slip op. at 17).
The majority, however, asserts that plaintiffs do not sufficiently allege
an ascertainable loss under the benefit-of-the-bargain theory because the items
plaintiffs received were not alleged to be “defective,” “damaged,” or “worth
less than they paid.” Ante at ___ (slip op. at 23). Instead, as the majority
contends, the plaintiffs received exactly what they were promised and
purchased. Ante at ___ (slip op. at 23). But, in his well-reasoned opinion,
Judge Simandle correctly pointed out that even though it “is often the case that
the difference between the promised product and the product actually received
is some defect or flaw in the product, there is no requirement that the product
actually received be defective or deficient in any way other than that it is not
what was promised.” Campbell Soup Co., 782 F. Supp. 2d at 99; see also
Union Ink Co., Inc. v. AT&T Corp., 352 N.J. Super. 617, 646 (App. Div.
2002) (“An ascertainable loss occurs when a consumer receives less than what
was promised.”). That is indeed what plaintiffs alleged here.
And in Thiedemann, we stated that as to the plaintiffs’ benefit-of-the-
bargain claims, the plaintiffs would need to provide evidence “to support or
infer a quantifiable loss” because “subjective assertions without more are
insufficient to satisfy the requirement of an ascertainable loss that is expressly
18
necessary for access to the CFA remedies.” 183 N.J. at 252. Of course, a
consumer’s expectations of what was promised must be objective and
reasonable. But as Judge Simandle aptly explained in Campbell Soup Co., if a
“consumer received a product that ‘was worth objectively less than what one
could reasonably expect,’ then that type of defeated expectation is an injury.”
782 F. Supp. 2d at 99-100. Plaintiffs adequately alleged that their reasonable
expectations were not met because they “did not enjoy the actual discounts
Aéropostale represented and promised to them,” and that, based on the
reference price, “the items they purchased were not in fact worth the inflated
amount that Aéropostale represented to them.” On a Rule 4:6-2(e) motion, we
must accept those allegations as true.
Our reasoning in Furst and consumer behavior research further supports
my conclusion that, here, plaintiffs pleaded ascertainable loss utilizing a
benefit-of-the-bargain theory. Plaintiffs alleged that they did not receive what
they reasonably expected -- an expectation premised on what Aéropostale
falsely promised, and further, the loss plaintiffs suffered as a result is
objectively measurable and quantifiable.
To illustrate this, I first turn to our discussion in Furst which itself is
centered on consumer behavior and perception, and how courts can reasonably
quantify the “replacement value” of an item to assess the damages warranted
19
for a CFA claim. 4 Furst, 182 N.J. at 14-18. In concluding that the regular list
price on an item’s price tag may be evidence of replacement value, the Furst
Court emphasized that “[m]erchants understand that one of the central tenets
of market psychology is that consumers do not want to pay full retail price and
are always in search of the best deal.” Id. at 17 (emphasis added). Relying on
consumer behavior studies, the Furst Court candidly discussed how placing a
reference price and a sales price on a particular item “focuses consumers’
attention on the difference between the two prices. This leads to a perception
of greater value concerning the purchase of the product.” Ibid. (quoting Bruce
L. Alford & Abhijit Biswas, The Effects of Discount Level, Price
Consciousness and Sale Proneness on Consumers’ Price Perception and
Behavioral Intention, 55 J. Bus. Res. 775, 775 (2002)).
4
The majority distinguishes Furst stating that, unlike this appeal concerning
ascertainable loss, the Furst Court focused on the award of damages, and that
“[t]here is no calculation of ‘damages sustained’ unless the ascertainable loss
requirement is first satisfied.” D’Agostino v. Maldonado, 216 N.J. 168, 192
(2013). But the majority respectfully failed to consider another aspect of
D’Agostino -- that “‘[a]scertainable loss’ and ‘damages sustained’ are not . . .
unrelated to one another.” Ibid. (emphases added). The Court goes on to state
that “[i]n a given case, the same quantifiable loss of money or other property,
suffered by the plaintiff as a result of the defendant’s CFA violation, may
serve both purposes in the analysis, consistent with the statute’s remedial
intent and the requirement of proving damages with certainty.” Id. at 193
(emphasis added).
20
In addition, like my original hypothetical concerning a consumer being
induced into purchasing a purportedly $1,000 coat offered for $300,
“consumers are less likely to search other retail locations and have an
increased likelihood of purchase” when fictitious pricing like that of
Aéropostale’s exists. Ibid. (quoting Alford & Biswas, 55 J. Bus. Res. at 775).
Recognizing that consumers have a “commonsense desire to buy at a reduced
price,” ibid., and that retailers are “expected to know the value of the
merchandise they place for sale to the public,” id. at 18, this Court held that
[t]he strong remedial policy undergirding the [CFA]
leads us to conclude that the regular price advertised on
the sales sticker is a relevant benchmark from which to
impute replacement value. Accordingly, there will be
a rebuttable presumption that the regular price on the
sales sticker is the replacement value of the [item].
[Id. at 18-19 (emphasis added) (citation omitted).]
To support the assertion of this rebuttable presumption, we noted in Furst how
[w]e are mindful that misleading advertising is a
deceptive commercial practice. It is a deceptive
practice under the [CFA] for a retailer to artificially
inflate the price for an item of merchandise for the
purpose of advertising the item at a large reduction. . . .
[W]e believe that an unscrupulous merchant might
pause before inflating a regular price on a sales sticker
if that price was evidence of replacement value.
Therefore, the rebuttable presumption that regular price
equals replacement value may deter some merchants
who might otherwise inflate the regular price to make
the sale more appealing to the public.
21
[Id. at 20 (emphasis added) (citations omitted).]
And in interpreting the Division of Consumer Affairs’ regulations defining a
“former price in ‘a price reduction advertisement,’” we stated unequivocally
that “the regular price must bear some relationship to what the retailer
considered to be the market value of the merchandise ‘in the recent, regular
course of his business.’” Id. at 16-17 (quoting B. Sanfield, Inc. v. Finlay Fine
Jewelry Corp., 258 F.3d 578, 580 (7th Cir. 2001)).
In other words, we recognized in Furst that a reference price or former
price may be equated with the value of an item. See 182 N.J. at 18-19. Thus,
contrary to the majority’s apparent conclusion that plaintiffs held subjective
and unreasonable expectations about the items’ value, and applying what this
Court has said in Furst, it is objectively reasonable for a consumer to believe
that a former price or reference price is illustrative of the value of an item. See
also Hinojos v. Kohl’s Corp., 718 F.3d 1098, 1105-06 (9th Cir. 2013)
(discussing that to some consumers “a product’s ‘regular’ or ‘original’ price
matters; it provides important information about the product’s worth and the
prestige that ownership of that product conveys”). Notably, this behavior
where a consumer equates a reference price with value is exactly “why
retailers . . . have an incentive to advertise false ‘sales.’” Id. at 1106.
22
If a plaintiff pleads that the retailer’s reference price represented to the
consumer was false or inflated, then the consumer has been deceived and has
shown ascertainable loss by the consumer’s objective reasonable belief that
they received an item of less value than what the retailer represented and
promised. Furst illustrates how this Court has prioritized deterring the
deceptive practice of fictitious pricing, see 182 N.J. at 20, and I would uphold
those long-standing principles by reinstating plaintiffs’ complaint.
Lastly, recent consumer behavior research analyzing fictitious pricing
and its impact on consumers provides additional support that plaintiffs
sufficiently pleaded an objective, reasonable, and measurable ascertainable
loss. Despite being acknowledged in plaintiffs’ complaint, the majority fails to
consider the body of research showing (1) how consumers equate a product’s
former price with its value and quality, and (2) that consumers place value on
the bargain itself. 5
In his article centered on fictitious pricing, Professor David Adam
Friedman discusses how “[a] higher fictitious ‘former price’ disingenuously
5
Plaintiffs cite ten articles in their complaint to support their allegations. I
build upon the research plaintiffs provide to include more published articles in
this dissent to illustrate how this body of academic research continues to grow
nationally, adding further support to plaintiffs’ allegations that consumer
behavior is greatly impacted by this deceptive practice.
23
causes the consumer to attach a higher level of value to an item than it would
have had the pricing been honest,” and describes how “[c]onsumers may also
use a former reference price as a signal of quality.” David Adam Friedman,
Reconsidering Fictitious Pricing, 100 Minn. L. Rev. 921, 934-35 (2016). More
specifically, Professor Friedman explains that
[i]f the price signal is genuine -- i.e., the good was once
offered in a bona fide manner at a higher price, the
advertised discount communicates the availability of a
true bargain. . . . If the signal proves false, however,
the consumer transacts on a false association of quality.
[Id. at 935 (emphasis added).]
Mark Armstrong and Yongmin Chen further discuss in their article on
discount pricing two reasons why a consumer is more willing to purchase an
item with a discounted price as compared to a low initial price: (1) “a high
initial price can indicate the seller has chosen to supply a high-quality product”
and (2) “when a seller with limited stock runs a clearance sale, later consumers
infer that unsold stock has higher expected quality when its initial price was
higher.” Mark Armstrong & Yongmin Chen, Discount Pricing, 58 Econ.
Inquiry 1614, 1614 (2020).
Moreover, researchers Richard Staelin, Joel E. Urbany, and Donald
Ngwe recently published a study on fictitious pricing and explained how there
is “robust and empirically documented observation[s] that when most
24
consumers buy a product, they consider not only the actual transaction price
. . . but also the expected savings relative to some normal (reference) price.”
Staelin, Urbany, & Ngwe, 87 J. of Mktg. at 830. The researchers explain that
an “attractive deal” has the ability “to disrupt search and encourage a
consumer to stop [searching for goods] even earlier, since the deal increases
the perceived utility of the offering and, thus, the offering is more likely to
meet or exceed the expected value of the consumer’s outside option.” Id. at
831 (citations omitted); see also Gorkan Ahmetoglu, Adrian Furnham, &
Patrick Fagan, Pricing Practices: A Critical Review of their Effects on
Consumer Perceptions and Behaviour, 21 J. of Retailing & Consumer Servs.
696, 699 (2014) (discussing how numerous studies taken together illustrate
that “the presence of a reference price increases consumers’ deal valuations
and purchase intentions and can lower their search intentions as compared to
the case where a reference price is absent”).
D.
Taking into consideration (1) the CFA’s strong remedial purpose to
protect consumers, (2) the Legislature’s intent to cement the CFA as “one of
the strongest consumer protection laws in the nation” by creating a private
right of action to assist in reducing the Attorney General’s enforcement
burdens, Bosland, 197 N.J. at 555 (emphasis added), (3) our case precedents,
25
(4) consumer behavior research, and (5) the invaluable practical insight
provided by the Attorney General appearing as amicus, it is clear to me that
plaintiffs here have sufficiently pleaded that they suffered an ascertainable loss
under a benefit-of-the-bargain theory after being deceived by Aéropostale’s
fictitious pricing scheme.
Contrary to the majority’s view, plaintiffs’ ascertainable loss is objective
and reasonable. As alleged in the complaint, plaintiffs reasonably believed --
when viewing the discounts advertised and promised by Aéropostale -- that the
products were worth a higher value but were being sold at a discounted price,
yielding a certain amount of savings. Based on our reasoning in Furst and
consumer behavior research, it is apparent that these beliefs are common and
reasonable among consumers. In fact, that is exactly why retailers engage in
the deceptive practice of fictitious pricing. See Hinojos, 718 F.3d at 1106;
Furst, 182 N.J. at 17 (“Merchants draw consumers into their stores by holding
sales events . . . that promise the regular value of a product at a reduced
price.”).
Although plaintiffs do not allege that they received “defective” products
(i.e., non-wearable clothing), as was the case in Furst, a “defective” or
“flawed” product is not always required to show ascertainable loss under the
benefit-of-the-bargain theory. See Campbell Soup Co., 782 F. Supp. 2d at 99
26
(“[T]here is no requirement that the product actually received be defective or
deficient in any way other than that it is not what was promised.”). It is
enough at the motion-to-dismiss stage that plaintiffs alleged they “received
items worth far less than the value claimed by [d]efendant.” (emphasis added).
Moreover, what Aéropostale promised based on the information it provided
(i.e., reference prices), were products worth a higher value and a realization in
savings. Plaintiffs received neither and, therefore, contrary to the majority’s
conclusion, plaintiffs did not receive “exactly what they knowingly
purchased.” Ante at ___ (slip op. at 23).
And importantly, plaintiffs’ ascertainable loss is measurable and
quantifiable as the difference between the reference price on the products and
the amount they actually purchased the products for -- i.e., reference price
minus (-) purchase price equals (=) ascertainable loss. Applying that formula
to the facts alleged in the complaint concerning the “hoodie” Robey purchased,
Robey’s ascertainable loss can be quantified by looking at the difference
between $59.95 (the reference price) and what she paid for the “hoodie,”
$23.98 (the purchase price), which equals $35.97. That equation, one that the
Attorney General urges this Court to utilize, would be similarly applied to the
additional factual allegations made by plaintiffs.
27
Although the majority identifies that other jurisdictions have declined to
hold that consumers are injured by rampant fictitious pricing schemes, we
must not forget the legislative history and intent surrounding the enactment of
the CFA’s private cause of action: “to ‘give New Jersey one of the strongest
consumer protection laws in the nation.’” Bosland, 197 N.J. at 555 (emphasis
added).
V.
Although the issue of whether plaintiffs have pleaded out-of-pocket loss
need not be reached given my conclusions that plaintiffs have sufficiently
pleaded ascertainable loss under the benefit-of-the-bargain theory, I cannot
ignore Judge Maritza Berdote Byrne’s thoughtful concurring opinion that
plaintiffs sufficiently pleaded an ascertainable loss under the out-of-pocket
loss theory. See Robey v. SPARC Grp. LLC, 474 N.J. Super. 593, 606 (App.
Div. 2023) (Berdote Byrne, J.S.C. (temporarily assigned), concurring).
Therefore, I will briefly discuss the applicability of out-of-pocket loss theory
to the present case.
“[O]ut-of-pocket loss . . . will suffice to meet the ascertainable loss
hurdle . . . .” Thiedemann, 183 N.J. at 248. A plaintiff can suffer an out-of-
pocket loss that is ascertainable and that is equated to the purchase price of the
product when the plaintiff purchases a completely worthless item. See Lee,
28
203 N.J. at 527-28 (concluding that when representations about a product are
“baseless” then the out-of-pocket loss is the purchase “of the worthless
product”). A plaintiff may also illustrate an out-of-pocket loss if they spent
money to repair a defective product. See Thiedemann, 183 N.J. at 251-52.
The majority correctly asserts that the present case is distinguishable
from past decisions, ante at ___ (slip op. at 20-21), but it does not adequately
consider Dugan v. TGI Fridays, Inc., 231 N.J. 24 (2017). In Dugan, where the
plaintiffs brought a class action CFA claim against a restaurant that did not list
the price of beverages on its menus, we noted that “[i]ndividual plaintiffs may
be able to establish ascertainable loss and causation by showing that they
would not have purchased the beverages or would have spent less money on
them had they been informed of their cost.” Id. at 60. Here, plaintiffs allege --
and we must accept the allegations as true at this stage -- that “they would not
have purchased the [clothing] items at the prices they paid had they known the
items had not been regularly offered or sold at the higher list price,” or had
they been informed that the discounts were false. Therefore, plaintiffs here
suffered an out-of-pocket loss that is ascertainable, i.e., the purchase price of
the clothing items.
Other jurisdictions have adopted this approach or similar approaches to
out-of-pocket loss. In Munning v. Gap, Inc., a case with substantially similar
29
facts to the present appeal, the United States District Court for the Northern
District of California interpreted the New Jersey CFA and held that the
plaintiffs sufficiently pleaded an out-of-pocket loss because the plaintiffs
alleged that they would not have purchased the products if the plaintiffs knew
that the discounts were false, even though the items the plaintiffs purchased
were not worthless. 238 F. Supp. 3d 1195, 1201 (N.D. Cal. 2017).
Moreover, in Hinojos, the United States Court of Appeals for the Ninth
Circuit, interpreting California law, held “that 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 . . . because he has suffered an
economic injury.” 718 F.3d at 1107. Although standing to sue under
California law is slightly different than the ascertainable loss requirement
under the CFA, the general principles regarding harm and loss to the consumer
apply.
And most recently in Clark v. Eddie Bauer LLC, another case with
similar facts to the present case, the Oregon Supreme Court held that, under
Oregon law, “when a person acts in response to [a store’s] deception by
spending money that the person would not otherwise have spent, the person
has been injured to the extent of the purchase price as a result of that
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deception.” 532 P.3d 880, 893 (Or. 2023) (emphasis added). In other words,
if a “plaintiff paid money . . . for articles of clothing that she would not have
bought had she known their true price history,” then “[t]he money that [the]
plaintiff is out as a result is her ‘loss.’” Id. at 891 (emphasis added).
Thus, here, because plaintiffs alleged that they would not have
purchased the items had they known the discounts were false, they arguably
sufficiently pleaded an out-of-pocket loss that would equate to the purchase
price of the items.
The fact that plaintiffs did not allege that they attempted to return the
items is of no moment, especially at this stage in the litigation. Our decision
in Bosland is instructive of this point. We held in Bosland that “the CFA does
not require a consumer, who has been victimized by a practice which the
statute is designed to remedy, to seek a refund from the offending merchant as
a prerequisite to filing a complaint.” 197 N.J. at 547-48. Importantly, we
emphasized that interpreting the CFA to require a pre-suit demand “would
potentially permit practices, that the statute is designed to deter, . . . to
continue unabated and unpunished.” Id. at 561. We maintained that “[s]uch
an analysis of the CFA would limit relief by making it available only to those
consumers who are alert enough to ask for a refund, while allowing the
offending merchant to reap a windfall.” Ibid.
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Thus, our precedent does not support the notion that for plaintiffs here to
successfully plead ascertainable loss under an out-of-pocket loss theory, they
must have attempted to return the items. Just because plaintiffs could have
returned the items and “theoretically, could have secured complete relief in no
way diminishes the fact that” plaintiffs “sustained an immediate quantifiable
loss” when they were tricked into purchasing items they otherwise would not
have paid for due to defendant’s misrepresentations. Id. at 559.
VI.
Echoing our sentiments from twenty years ago in Furst, the CFA “cannot
be construed to allow an offending merchant to benefit from his own
deception.” 182 N.J. at 14. I would have let this case proceed in the ordinary
course: discovery, motion practice if warranted, then trial. I therefore dissent.
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