Dooney & Bourke Wins Dismissal of False Advertising Class Action Suit Over Factory Outlet Prices

On July 22, 2016, Judge Jeffrey T. Miller of the United States District Court for the Southern District of California dismissed a lawsuit brought on behalf of a putative class of retail customers against Cravath client Dooney & Bourke, Inc. (“D&B”), alleging false advertising practices in violation of state consumer protection laws. Plaintiff claimed that D&B falsely advertises discounted prices on bags and fashion accessories sold in its retail factory outlet stores, misleading customers by inflating and misrepresenting retail prices with “phantom markdowns” on products that are made exclusively for the factory outlet stores and are never sold at the original advertised prices.

In dismissing the suit, Judge Miller held that plaintiff failed to allege sufficient facts to support (1) claims of negligent misrepresentation or an illegal price scheme under California’s Unfair Competition Law, False Advertising Law and Consumer Legal Remedies Act and (2) her standing to sue under the consumer protection laws of 40 other states and the District of Columbia. Plaintiff declined to amend her complaint.

Cravath partner Roger G. Brooks argued the motion to dismiss. The Cravath team also included partner J. Wesley Earnhardt and associates Alexander J. Scolnik, Christopher J. Gessner and Charles E. Loeser. The case is Dooney & Bourke, Inc. ‑ Rael v. Dooney & Bourke, Inc., No. 16‑cv‑00371 (S.D. Cal.).