Kirtland & Packard LLP has obtained an important appellate decision for consumers purchasing clothing at factory outlet stores. On April 18, 2017, the Ninth Circuit Court of Appeals issued a decision reversing the California District Court’s order dismissing plaintiff Linda Rubenstein’s claims against Neiman Marcus for violation of several of California’s consumer protection statutes. In her complaint against Neiman Marcus filed in the District Court, Ms. Rubenstein had alleged that Neiman Marcus engaged in a misleading business practice by using deceptive reference pricing for items sold at its “Neiman Marcus Last Call” factory outlet stores. Specifically, Ms. Rubenstein alleged she was misled because the price tags for the clothes sold at the factory outlet stores contained a higher “compared to” reference price that the factory outlet clothes had never actually sold for. She also alleged the clothing at the “Last Call” store was designed and manufactured exclusively for sale at the factory outlet stores and was actually of inferior quality to clothing sold at Neiman Marcus’s flagship retail stores. Based on this, Ms. Rubenstein had alleged she was misled into believing she was getting a good deal on Neiman Marcus brand-name clothing at its factory outlet store, when she actually was not. In its April 18, 2017 decision, the Ninth Circuit Court of Appeals decided it was improper for the District Court to dismiss Ms. Rubenstein’s consumer protection claims, and that she is entitled to pursue her claims against Neiman Marcus in the District Court and present her case at trial.
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