197 F. Supp. 3d 1119
E.D. Wis.2016Background
- Plaintiffs (Wisconsin residents) bought items at Kohl’s stores between March–December 2015 and allege Kohl’s routinely advertises inflated or fabricated “regular/original” prices to create illusory “sale” discounts.
- Plaintiffs seek class relief (Wisconsin class and a putative nationwide/multi-state class) asserting: (1) violation of Wisconsin Deceptive Trade Practices Act (WDTPA), (2) unjust enrichment, (3) multi-state consumer fraud claim, and (4) declaratory and injunctive relief.
- Kohl’s moved to dismiss under Fed. R. Civ. P. 12(b)(6) and 12(b)(1), arguing: omissions/puffery/post-transaction statements are nonactionable under WDTPA; fraud claims lack Rule 9(b) particularity and improperly lump defendants; unjust enrichment is barred by an enforceable purchase contract; plaintiffs lack statutory standing to press other states’ laws; and no justiciable controversy supports declaratory relief.
- The court treated plaintiffs’ amended complaint as the operative pleading, accepted allegations as true for the motion-to-dismiss stage, and evaluated both Rule 12(b)(6) (plausibility/Iqbal‑Twombly) and Rule 12(b)(1) (jurisdictional) arguments.
- The court denied Kohl’s motion in full, holding plaintiffs adequately pleaded actionable affirmative misrepresentations (not mere omissions or puffery), satisfied Rule 9(b) at the pleadings stage, could proceed with unjust enrichment given possible contract avoidance, had standing for the multi‑state/class allegations at this stage, and stated a justiciable controversy for declaratory relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kohl’s price displays and comparisons state an actionable claim under the WDTPA | Kohl’s affirmatively represented false “regular/original” prices and sale comparisons that misled purchasers into paying more or buying when they otherwise would not | Representations were nonactionable because they were omissions, puffery, post‑transaction receipts, or statements made to third parties | Court: Plaintiffs alleged affirmative misrepresentations (not mere omissions) and pleadings support WDTPA claim; puffery arguments do not defeat claims when taken with alleged false price figures |
| Whether fraud allegations meet Rule 9(b) particularity | Plaintiffs identified stores, dates, items, and prices showing who, what, when, where, and how the alleged fraud occurred | Kohl’s says allegations are boilerplate, lump defendants, and fail to allocate specific acts between corporate entities | Court: Complaint sufficiently pleads the required who/what/when/where/how and gives adequate notice to each defendant for pleading purposes |
| Whether unjust enrichment is barred by existence of purchase contracts | Plaintiffs argue contracts may be voidable/unenforceable due to fraudulent inducement, so equitable restitution is available | Kohl’s contends express purchase contracts preclude quasi‑contractual unjust enrichment relief | Court: Denied dismissal; unjust enrichment may proceed because plaintiffs plausibly alleged grounds (fraud) to avoid contracts at this stage |
| Whether plaintiffs can assert multi‑state consumer claims / have statutory standing under other states’ laws | Plaintiffs bring claims individually under Wisconsin law and seek to represent a putative class of similarly injured consumers in other states | Kohl’s argues plaintiffs lack statutory standing to sue under other states’ statutes because they are not within those statutes’ protected classes | Court: Statutory‑standing challenge is premature before class certification; plaintiffs have standing under Wisconsin law and may pursue multi‑state class allegations for now |
| Whether declaratory judgment claim is justiciable and should be dismissed | Plaintiffs seek declaration/injunction to stop allegedly ongoing deceptive pricing practices | Kohl’s contends no actual controversy and that declaratory relief is unnecessary/duplicative | Court: An actual, concrete controversy exists (ongoing scheme alleged); discretionary declaratory/injunctive relief is appropriate at this stage; claim will proceed |
Key Cases Cited
- Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732 (7th Cir.) (Rule 12(b)(6) plausibility standard discussion)
- Spierer v. Rossman, 798 F.3d 502 (7th Cir.) (pleading standards and reasonable inferences on motion to dismiss)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (application of Twombly/Iqbal framework)
- Tietsworth v. Harley‑Davidson, Inc., 270 Wis.2d 146 (Wis. 2004) (WDTPA excludes liability for mere omissions and puffery)
- Novell v. Migliaccio, 309 Wis.2d 132 (Wis. 2008) (purpose and elements of § 100.18 claims)
- Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (courts should consider allegations as a whole, not in isolation)
- Mueller v. Harry Kaufmann Motorcars, Inc., 359 Wis.2d 597 (Wis. Ct. App.) (remedies under § 100.18 and distinction between pecuniary loss and rescission)