Veera v. Banana Republic, LLC
211 Cal. Rptr. 3d 769
Cal. Ct. App.2016Background
- Plaintiffs (DeAguero and the Boses) saw large Banana Republic window signs advertising "40 percent off" and entered stores because of that advertised discount.
- After selecting items and waiting in line, each plaintiff was told at checkout that their chosen items were not included in the 40% promotion.
- Embarrassed or pressured by lines and social discomfort, plaintiffs purchased some items at full price and alleged they overpaid due to misleading advertising.
- Plaintiffs sued under the UCL, FAL, and CLRA alleging deceptive advertising/bait-and-switch and sought class relief; defendant moved for summary judgment.
- Trial court granted summary judgment for Banana Republic, finding plaintiffs lacked standing because they suffered no "money or property" loss from the alleged misrepresentation.
- The Court of Appeal reversed, holding plaintiffs raised triable issues of economic injury and causation sufficient for standing and for trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing — economic injury under Prop 64 (UCL/FAL) | Plaintiffs lost money by buying items at full price they would have bought at the advertised discount; that difference is economic injury. | No cognizable economic loss: plaintiffs knew items were not discounted before purchase, so they suffered no loss "as a result of" the advertising. | Reversed. Plaintiffs raised a triable issue that paying full price (vs. advertised price) was economic injury. |
| Causation / reliance | Plaintiffs relied on advertising to enter, shop, select items, and wait in line; that chain and resulting pressure substantially caused the purchases. | Reliance broken because plaintiffs learned the true price before consummating the purchases, so misrepresentation did not cause the loss. | Reversed. Court held reliance/causation can be satisfied where misleading ads led to the shopping/selection process and pressure that substantially contributed to purchase. |
| Merits — whether signs were misleading | Plaintiffs testified to observing broad "40% off" signage with no qualifying disclosures; ergo a triable fact issue exists. | Banana Republic produced promotion materials and declarations claiming limited or qualified offers for certain dates/items. | Reversed. Evidence conflicted; credibility/resolution left for trial. |
| Injunctive relief / mootness | Plaintiffs sought injunctive relief and restitution/class relief. | Banana Republic argued lack of standing and uncertainty whether conduct continued so injunctive relief unwarranted. | Not reached in detail; court reversed summary judgment and remanded; it did not decide injunctive relief on merits. |
Key Cases Cited
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal. 2011) (Prop 64 requires plaintiff to show injury in fact and loss of money or property caused by challenged practice)
- In re Tobacco II Cases, 46 Cal.4th 298 (Cal. 2009) (misrepresentation-based UCL/FAL claims require showing the misrepresentation was an immediate cause of the injury-producing conduct)
- Medrazo v. Honda of North Hollywood, 205 Cal.App.4th 1 (Cal. Ct. App. 2012) (plaintiff showed injury when required disclosure was omitted and she paid a higher price; supports standing where consumer lacked required price information when shopping)
- Chern v. Bank of America, 15 Cal.3d 866 (Cal. 1976) (knowledge of true terms before consummation can defeat certain claims; distinguished by majority here)