160 F. Supp. 3d 1096
E.D. Wis.2016Background
- Plaintiff Victor Le (California) alleges Kohl’s (Wisconsin corp.) runs a nationwide deceptive “original price / sale price” scheme that induces purchases or higher payments.
- Le purchased at Kohl’s stores in California in 2015 and brought a putative class action asserting UCL and CLRA claims (California class), WDTPA (nationwide), a multi-state consumer-laws claim (40 states + D.C.), and unjust enrichment (Wisconsin or alternatively California law).
- Kohl’s moved to dismiss under Fed. R. Civ. P. 12(b)(1) and 12(b)(6), challenging restitution damages under UCL/CLRA, Article III standing for injunctive relief and out-of-state claims, WDTPA application, and unjust enrichment viability.
- The court framed the core questions as (1) whether restitution under UCL/CLRA is limited to a price-to-value formula; (2) whether Le adequately pled loss; (3) Article III standing for injunctive and multi-state claims; and (4) viability of unjust enrichment under Wisconsin and California law.
- The court accepted Le’s factual allegations as true for the motion-to-dismiss context and denied Kohl’s motion in full, holding Le adequately pleaded cognizable loss and standing and that alternative restitution measures and unjust enrichment/quasi-contract claims may proceed pending further factual development.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper measure of restitution under California UCL/CLRA | UCL/CLRA permit measures beyond price-to-value (full restitution, transaction-value, disgorgement of profits); method is fact-dependent | Restitution must be price paid minus value received; Le did not plead value received so restitution claim fails | Court: restitution is not confined to price-to-value; method is fact-intensive and premature to decide at pleading stage; claim survives |
| Entitlement to injunctive relief (Article III standing) | Company-wide, pervasive, continuous scheme creates realistic likelihood of future harm despite plaintiff’s awareness | Plaintiff’s awareness of the scheme defeats redressability; no realistic threat of future harm | Court: awareness does not automatically defeat standing for injunction where defendant’s misconduct is alleged company-wide and ongoing; standing met |
| Standing to assert non-California / multi-state claims | Le alleges he was injured by the nationwide scheme and the court can redress by restitution; choice-of-law and class issues belong at certification | Le lacks Article III standing to assert laws of states where he was not injured | Court: under Seventh Circuit precedent (Morrison), Le has constitutional standing to pursue multi-state claims at pleading stage; choice-of-law and certification addressed later |
| Unjust enrichment (Wisconsin and California) | Pleads quasi-contract/unjust enrichment in the alternative; contracts may be voidable due to deception | Wisconsin: express purchase contracts bar unjust enrichment; California: no standalone unjust enrichment cause of action | Court: Wisconsin claim survives because contracts may be voidable; California unjust-enrichment/quasi-contract claim survives at pleading stage per Ninth Circuit (Astiana) guidance |
Key Cases Cited
- Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732 (7th Cir. 2014) (standing/injunctive-relief framework and awareness-of-practice discussion)
- Pulaski & Middleman, LLC v. Google, Inc., 802 F.3d 979 (9th Cir. 2015) (alternative restitution measure focused on what purchaser would have paid had full information been provided)
- Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134 (Cal. 2003) (restitution concept under California UCL)
- Cortez v. Purolator Air Filtration Prods. Co., 23 Cal.4th 163 (Cal. 2000) (restitution under UCL and equitable powers explained)
- In re Tobacco Cases II, 240 Cal.App.4th 779 (Cal. Ct. App. 2015) (discussion of price-to-value and that it is not necessarily the exclusive restitution measure)
- Morrison v. YTB Int’l, Inc., 649 F.3d 533 (7th Cir. 2011) (permitting out-of-state plaintiffs to have Article III standing to sue under a state’s consumer statute; distinction between standing and choice-of-law)
- Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753 (9th Cir. 2015) (unjust-enrichment/quasi-contract claim may be pleaded in the alternative under California law)