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Ninth Circuit Lowers the Pleading Bar for “Fake Sale” Cases

April 21, 2017

Earlier this week, the Ninth Circuit Court of Appeals reversed a lower court’s decision dismissing a “fake sale” suit for lack of specificity. The class action suit brought by a California consumer alleges that defendant Neiman Marcus engaged in deceptive conduct by selling products at its “Last Call Store” with artificial “Compared to” price tags, when those products were never offered for sale at any point in any traditional Neiman Marcus store. Instead, the products were manufactured strictly for sale at the Last Call Stores, according to the complaint. While the lower court had dismissed the case, reasoning that plaintiff had not provided “evidence that [defendant] advertised that its ‘Last Call’ stores sold merchandise previously for sale at the flagship stores.”  The Ninth Circuit disagreed, noting that “[w]ithout an opportunity to conduct any discovery, [plaintiff] cannot reasonably be expected to have detailed personal knowledge of Neiman Marcus's internal pricing policies.” The Ninth Circuit remanded the case, holding that plaintiff “need not specifically plead facts to which she cannot ‘reasonably be expected to have access.’”

The full decision can be found at:
https://cdn.ca9.uscourts.gov/datastore/memoranda/2017/04/18/15-55890.pdf

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