Unreported / Non-Citable
Background
Shawnna Montes brought a putative class action in the Eastern District of Washington against SPARC Group, LLC, which operates Aéropostale. Under the Washington Consumer Protection Act (CPA), she alleged that she bought leggings for $6.00 after the company misrepresented that they typically sold for $12.50. She pleaded that she would not have bought them but for the false sale price advertising, that she did not enjoy the advertised discount, that the items were worth less than the represented price, and that she paid a price premium. The district court dismissed the complaint under Rule 12(b)(6), with prejudice and without leave to amend. On appeal she framed her claims as a purchase price theory, a benefit of the bargain theory and a price premium theory.
Because the appeal raised unsettled questions of Washington law, the Ninth Circuit certified to the Washington Supreme Court whether a consumer who pays the advertised price suffers an injury in business or property under the CPA when a misrepresentation about the discount, comparative price or price history induced the purchase. The state court answered on April 2, 2026, addressing each theory. The case was then resubmitted and decided on October 21, 2026.
The Court’s Holding
The panel affirmed dismissal of the purchase price and benefit of the bargain theories. Following the Washington Supreme Court, it held that a consumer does not suffer an injury to her business or property when she buys, obtains and keeps the fungible product she sought, even though the seller misrepresented the product's price history. The state court reasoned that the mere fact of a retail transaction does not imply economic loss, and that being manipulated into buying because she believed she was getting a bargain does not necessarily mean she suffered economic harm.
The majority reversed as to the price premium theory. It read the state court as holding that the theory may be cognizable when supported by sufficient facts, for example where the product received was less valuable than advertised. Montes had not alleged the leggings' value, the missing element. The state court had also pointed to a factual concession in her opposition brief that the leggings had the monetary value she paid. The majority held that this was not a proper basis for affirming, because a court deciding a Rule 12(b)(6) motion may not look beyond the complaint to opposition papers. It added that she had not fully conceded the point, since she described an actual value of between $5.00 and $6.00. Because an amendment alleging the true value could save the claim, the district court abused its discretion in denying leave to amend.
The disposition affirms in part, reverses in part and remands for leave to amend. It does not hold that the price premium claim is adequately pleaded or will succeed. Judge Collins concurred in the judgment in part and dissented in part. He would have affirmed in full, reading the state court as rejecting the theory that a false discount shifted demand and inflated the market price, and as requiring facts showing an objective misrepresented difference in the product. He found no sign Montes could allege one, concluded amendment would be futile, and said the remand defies the state court's answer.
Key Takeaways
- A consumer who buys and keeps a fungible product at the advertised price does not suffer a CPA injury merely because the seller misrepresented its price history.
- A price premium theory survives only if the plaintiff alleges facts showing the product was worth less than the price paid, which the original complaint did not do.
- On a Rule 12(b)(6) motion, statements in an opposition brief cannot defeat the complaint, so a purported concession there did not justify dismissal with prejudice.
- The panel divided over whether the state court rejected the price premium theory as a matter of law or found it only factually unsupported, and the remand leaves open whether Montes can plead and prove it.
Why It Matters
The memorandum shows how the Ninth Circuit applied Washington's answer to false-discount class actions under the CPA. Being induced to buy and losing the promised discount do not establish injury when the buyer received the product she wanted. Only a theory alleging an actual shortfall in value remains potentially available.
Because the disposition is unpublished, it is not precedent except as provided by Ninth Circuit Rule 36-3. Its practical value lies in its pleading-stage treatment, especially the rule that opposition-brief statements cannot defeat a complaint. The partial dissent shows that how far the state court foreclosed a price premium theory remains contested, and on remand the sufficiency of any amended allegations will need to be decided.