Christa Robey and Maureen Reynolds v. SPARC Group, LLC

• Court: Supreme Court of New Jersey
• Decided: March 25, 2024
• Docket: A-50-22
• Status: Published

Opinion

SYLLABUS

This syllabus is not part of the Court’s opinion. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Court and may not summarize all portions of the opinion.

Christa Robey v. SPARC Group LLC (A-50-22) (087981)

Argued November 6, 2023 -- Decided March 25, 2024

SOLOMON, J., writing for the Court.

The core issue in this appeal is whether plaintiffs -- a class of shoppers at the retail clothing store Aéropostale -- have sufficiently pled that they sustained an ascertainable loss caused by the alleged “illusory discounts” offered by defendant SPARC Group LLC -- the owner and operator of Aéropostale -- to withstand defendant’s motion to dismiss their claims under the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -227, the Truth in Consumer-Contract, Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18, and various common law contract rights.

Plaintiffs’ allegations include purchasing a sweatshirt for $23.98 that was advertised as being 60% off an original price of $59.95, and three t-shirts advertised as “Buy 1 Get 2 Free” for $29.95. Plaintiffs claim that the items they purchased are never offered for purchase at the “original” or reference prices listed on the price tag, thereby rendering the advertised “markdowns” illusory and the reference prices fictitious. Plaintiffs allege that such practices violate the CFA, TCCWNA, and several common law contract rights. They seek damages and injunctive relief.

Defendant moved to dismiss plaintiffs’ complaint. The trial court granted defendant’s motion, observing that the CFA “unmistakably makes a claim of ascertainable loss a prerequisite for a private cause of action.” The court found that plaintiffs failed to plead sufficient facts to establish ascertainable loss -- either an “out-of-pocket” loss or a loss of the “benefit of [their] bargain” -- under the CFA or the violation of a “clearly established legal right” under TCCWNA.

The Appellate Division reversed. 474 N.J. Super. 593, 598 (App. Div. 2023). The majority found that plaintiffs were denied the benefit of their bargain because they “received no value for the offered discount.” Id. at 601-02. The court further held that, because plaintiffs had adequately alleged that they suffered an ascertainable loss for CFA purposes, they had also sufficiently pled that they were “aggrieved consumers” for purposes of TCCWNA and that their other claims should proceed as well Id. at 603-05. The concurrence agreed that plaintiffs’ claims should survive but under a theory of out-of-pocket loss. Id. at 606-07. 1 The Court granted defendant’s petition for certification. 254 N.J. 202 (2023).

HELD: A plaintiff can establish an ascertainable loss by demonstrating either an out-of-pocket loss or a deprivation of the benefit of one’s bargain. The Court does not find either type of ascertainable loss applicable here because plaintiffs purchased non-defective, conforming goods with no objective, measurable disparity between the product they reasonably thought they were buying and what they ultimately received. Plaintiffs’ CFA claim therefore fails, and, absent an ascertainable loss pursuant to the CFA, plaintiffs are not “aggrieved consumers” under TCCWNA, cannot show injury or damages under their common law claims, and are without claims entitling them to equitable relief.

1. In addition to proscribing certain commercial practices, the CFA provides a private right of action through which individuals who have fallen victim to a practice made unlawful by the statute may seek redress. See N.J.S.A. 56:8-19. To state a claim under that statute, an individual must plead an unlawful practice, an ascertainable loss, and a causal relationship between the two. An asserted “ascertainable loss” must be quantifiable or measurable, not hypothetical or illusory. The Court reviews examples from case law. (pp. 13-18)

2. Here, the Appellate Division correctly found that plaintiffs have adequately pled allegations of deceptive conduct that violates the CFA because the complaint sufficiently asserts that the discounts offered were illusory and defendant utilized a fictitious former price in violation of N.J.S.A. 13:45A-9.6(a) (“Use of a fictitious former price will be deemed to be a violation of the [CFA].”). The Court does not disturb that aspect of the Appellate Division’s decision. (pp. 18-19)

3. But plaintiffs’ CFA claim nevertheless fails because they have not pled facts sufficient to allege ascertainable loss, whether as a loss of the benefit-of-the-bargain or an out-of-pocket loss. Plaintiffs contend that (1) they would not have purchased the items but for the use of fictitious former pricing, entitling them to damages equal to the purchase prices; or (2) they did not receive the value of what was promised, entitling them to damages equal to the difference between the fictitious “original price” and the price they actually paid. But plaintiffs do not claim that they attempted to return the items or that Aéropostale refused to accept such a return. The facts as pled are thus insufficient to establish an out-of-pocket loss. Plaintiffs also argue that they suffered an ascertainable loss because they did not receive a higher-value item for a discounted price, which denied them the benefit of their bargain. But, unlike in past cases in which a defect was alleged, plaintiffs purchased and received clothing that was not defective or damaged or worth less than they paid. Although plaintiffs thought they were receiving clothes that defendant once sold for more money, the goods plaintiffs received are exactly what they knowingly purchased -- functioning and usable pants, sweatshirts, and t-shirts. Indeed, 2 plaintiffs do not argue that the items were worth less than the amount they paid. Plaintiffs thus fail to state a claim for relief under the CFA. (pp. 19-25)

4. To state a TCCWNA claim under the facts presented here, plaintiffs would need to establish four elements: (1) defendant is a seller (2) who, in writing, entered into a consumer contract or gave or displayed a consumer warranty, notice, or sign (3) containing a provision that violates a consumer’s “clearly established legal right,” (4) and plaintiffs are consumers who were thereby “aggrieved.” See N.J.S.A. 56:12- 15. A consumer must have suffered adverse consequences as a result of the defendant’s regulatory violation” to be “aggrieved” within the meaning of TCCWNA. Here, plaintiffs’ alleged harm is premised on the same allegations as their CFA claim -- use of a fictitious former price. Because plaintiffs have not incurred an ascertainable loss due to the violation of the fictitious former pricing regulation, plaintiffs are not monetarily aggrieved for purposes of TCCWNA under the facts pled and therefore cannot state a claim under TCCWNA. (pp. 25-28)

5. The Court explains why plaintiffs’ common law claims for money damages fail. Plaintiffs’ claim for injunctive relief under the CFA also fails because a plaintiff must suffer “an ascertainable loss” to sustain a private cause of action. In effect, the CFA permits only the Attorney General to bring actions for purely injunctive relief. The Attorney General, who supported plaintiffs in this matter as amicus, may thus directly challenge defendant’s conduct as alleged here. (pp. 28-31)

REVERSED. The order dismissing the complaint is REINSTATED.

JUSTICE FASCIALE, dissenting, cites (1) the CFA’s strong remedial purpose to protect consumers, (2) the Legislature’s intent to cement the CFA as one of the strongest consumer protection laws in the nation, (3) case precedents, (4) consumer behavior research, and (5) the insight provided by the Attorney General appearing as amicus, in expressing the view that plaintiffs here have sufficiently pleaded that they suffered an ascertainable loss under a benefit-of-the-bargain theory by showing a loss measurable and quantifiable as the difference between the reference price on the products and the amount they actually purchased the products for. Justice Fasciale is also of the view that plaintiffs here suffered an out-of-pocket loss that is ascertainable -- i.e., the purchase price of the clothing items -- because they allege that “they would not have purchased the [clothing] items at the prices they paid had they known the items had not been regularly offered or sold at the higher list price” and because no attempt to return the items was necessary.

CHIEF JUSTICE RABNER and JUSTICES PATTERSON and PIERRE- LOUIS join in JUSTICE SOLOMON’s opinion. JUSTICE FASCIALE filed a dissent in which JUSTICES WAINER APTER and NORIEGA join.

3 SUPREME COURT OF NEW JERSEY A-50 September Term 2022 087981

Christa Robey and Maureen Reynolds, on behalf of themselves and all others.

similarly situated,

Plaintiffs-Respondents,

v.

SPARC Group LLC,

Defendant-Appellant.

On certification to the Superior Court, Appellate Division, whose opinion is reported at 474 N.J. Super. 593 (App. Div. 2023).

Argued Decided November 6, 2023 March 25, 2024

Michael D. Meuti (Benesch, Friedlander, Coplan & Aronoff) of the Ohio, California, and District of Columbia bars, admitted pro hac vice, argued the cause for appellant (Sills Cummis & Gross, and Benesch, Friedlander, Coplan & Aronoff, attorneys; Jeffrey J. Greenbaum, Charles J. Falletta, Michael S. Carucci, Michael D. Meuti, Stephanie A. Sheridan and Meegan B. Brooks (Benesch, Friedlander, Coplan & Aronoff) of the California bar, admitted pro hac vice, of counsel and on the briefs).

1 Stephen P. DeNittis argued the cause for respondents (DeNittis Osefchen Prince, attorneys; Stephen P. DeNittis, Joseph A. Osefchen, and Shane T. Prince, on the brief).

Jeffrey S. Jacobson argued the cause for amici curiae the Chamber of Commerce of the United States of America and the New Jersey Civil Justice Institute (Faegre Drinker Biddle & Reath, attorneys; Jeffrey S. Jacobson and Jennifer G. Chawla, on the brief).

Viviana Hanley, Deputy Attorney General, argued the cause for amicus curiae Attorney General of New Jersey (Matthew Platkin, Attorney General, attorney; Jeremy M. Feigenbaum, Solicitor General, and Angela Cai, Deputy Solicitor General, of counsel, and Viviana Hanley, Zeyad A. Assaf, and Monica E. Finke, Deputy Attorneys General, on the brief).

Jared M. Placitella argued the cause for amicus curiae New Jersey Association for Justice (Cohen, Placitella & Roth, attorneys; Jared M. Placitella, of counsel and on the brief).

Christopher S. Porrino submitted a brief on behalf of amici curiae National Retail Federation and Retail Litigation Center, Inc. (Lowenstein Sandler, attorneys; Christopher S. Porrino and Peter Slocum, on the brief).

JUSTICE SOLOMON delivered the opinion of the Court.

In this case, plaintiffs, a class of shoppers at the retail clothing store

Aéropostale, allege that the store advertised clothing as being discounted

when, in fact, the items had never been offered or sold at the non-discounted

prices, or reference prices, listed. Plaintiffs contend that this practice of

2 “illusory discounts” violates the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1

to -227, the Truth in Consumer-Contract, Warranty and Notice Act

(TCCWNA), N.J.S.A. 56:12-14 to -18, and various common law contract

rights.

It is a violation of the CFA to use fraud, deception, or misrepresentation

in connection with the sale and advertisement of merchandise. Indeed, the

Appellate Division found here -- and defendant SPARC Group LLC does not

contest -- that defendant’s conduct violates the CFA.

However, to state a CFA claim, private plaintiffs -- in contrast to the

Attorney General -- must show that they suffered an “ascertainable loss of

moneys or property, real or personal, as a result of the use or employment by

another person of any . . . practice declared unlawful under” the CFA.

N.J.S.A. 56:8-19; Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 473

(1988). The core issue before this Court is whether plaintiffs have sufficiently

pled that they sustained an ascertainable loss -- that is, a “loss that is

quantifiable or measurable.” Thiedemann v. Mercedes-Benz USA, LLC, 183

N.J. 234, 248 (2005).

A plaintiff can establish an ascertainable loss by demonstrating either an

out-of-pocket loss or a deprivation of the benefit of one’s bargain. Ibid. “Out-

of-pocket damages represent the difference between the price paid and the

3 actual value received,” while “benefit-of-the-bargain principles allow

‘recovery for the difference between the price paid and the value of the

property had the representations been true.’” Finderne Mgmt. Co. v. Barrett,

402 N.J. Super. 546, 574 (App. Div. 2008) (quoting Correa v. Maggiore, 196

N.J. Super. 273, 284 (App. Div. 1984)). The trial court determined that

plaintiffs could not show either form of ascertainable loss and dismissed their

complaint; the Appellate Division reversed, although the appellate court split

as to the applicable form of loss.

We do not find either type of ascertainable loss applicable here.

Plaintiffs cannot assert a “quantifiable or measurable” loss because they

purchased non-defective, conforming goods with no objective, measurable

disparity between the product they reasonably thought they were buying and

what they ultimately received. Plaintiffs’ CFA claim therefore fails.

Additionally, absent an ascertainable loss pursuant to the CFA, plaintiffs

are not “aggrieved consumers” under TCCWNA, cannot show injury or

damages under their common law claims, and are thus without claims entitling

them to equitable relief.

We therefore reverse the judgment of the Appellate Division and

reinstate the trial court’s order dismissing the complaint.

4 I.

A.

In June 2021, plaintiffs, on behalf of themselves and all others similarly

situated, filed a six-count class action complaint against defendant SPARC

Group LLC, owner and operator of Aéropostale. The complaint details that

plaintiff Christa Robey purchased a sweatshirt for $23.98 that was advertised

as being 60% off an original price of $59.95, and three t-shirts advertised as

“Buy 1 Get 2 Free” for $29.95. Plaintiff Maureen Reynolds purchased a pair

of pants for $18.25 that were advertised as being 50% off an original price of

$36.50. Plaintiffs claim that the items they purchased “on sale” are never

offered for purchase at the “original” or reference prices listed on the price tag,

thereby rendering the advertised “markdowns” illusory and the reference

prices fictitious.

Count One of plaintiffs’ complaint alleges that such false advertisements

violate the CFA because they are an “unconscionable commercial practice”

proscribed in N.J.S.A. 56:8-2 and because they contravene certain state and

federal pricing regulations. Plaintiffs seek treble damages, reasonable

attorneys’ fees, and filing fees and costs under the CFA. Count Two alleges

that defendant violated TCCWNA by offering illusory discounts via “consumer

notices,” i.e., signs and price tags. Plaintiffs seek statutory damages of $100

5 per class member, as well as actual damages and attorney’s fees under

TCCWNA. Counts Three, Four, and Five allege breaches of contract, the

implied covenant of good faith and fair dealing, and express warranty,

respectively. Finally, plaintiffs seek a declaratory judgment and class-wide

injunctive relief under the Uniform Declaratory Judgment Act, N.J.S.A. 2A:16-

50 to -62.

Defendant moved to dismiss plaintiffs’ complaint pursuant to Rule 4:6-

2(e). The trial court granted defendant’s motion, observing that the CFA

“unmistakably makes a claim of ascertainable loss a prerequisite for a private

cause of action.”

The court found plaintiffs failed to plead sufficient facts to establish

either an “out-of-pocket” loss or a loss of the “benefit of [their] bargain.”

First, the trial court found that there was no out-of-pocket loss given that

plaintiffs did not receive “products that were unsuitable for their intended use,

or [plead] that they needed to incur extra expenses because of defendant’s

alleged misrepresentations.” Second, absent a showing that the goods were

defective, nonconforming, or worth less than what plaintiffs paid, the trial

court determined the losses were illusory and hypothetical under the benefit-

of-the-bargain theory. Thus, the court found no ascertainable loss under the

CFA.

6 The trial court concluded that, without an ascertainable loss under the

CFA, the violations of the CFA alleged cannot form the basis of a violation of

a “clearly established legal right” under TCCWNA. The court also found that

the federal and state pricing regulations on which plaintiffs rely do not provide

a private cause of action and therefore could not form the basis of a claim

under TCCWNA. Finally, the court found that plaintiffs had not pled facts

sufficient to invoke N.J.A.C. 13:45-9.6, which proscribes the use of “fictitious

former prices” to make an offered price seem more appealing. Finding that

plaintiffs had not shown that defendant violated a clearly established legal

right, the trial court determined that plaintiffs “received the exact merchandise

that they bargained for at prices they agreed to pay” and were thus not

“aggrieved consumers.” Therefore, the trial court found that plaintiffs’

TCCWNA claim necessarily failed.

B.

The Appellate Division disagreed and reversed the trial court’s

judgment. Robey v. SPARC Grp. LLC, 474 N.J. Super. 593, 598 (App. Div.

2023).

The Appellate Division held that plaintiffs sufficiently pled an

ascertainable loss under the CFA, finding that plaintiffs were denied the

benefit of their bargain and suffered a “real and quantifiable” loss -- in the

7 amount of the supposed markdowns, or “illusory discounts” -- because they

“received no value for the offered discount.” Id. at 601-02, 606. The court

further held that, because plaintiffs had adequately alleged that they suffered

an ascertainable loss for CFA purposes, they had also sufficiently pled that

they were “aggrieved consumers” for purposes of TCCWNA. Id. at 603.

Noting that the trial court’s dismissal of plaintiffs’ common law claims rested

on its conclusion that plaintiffs had failed to adequately plead deprivation of

the benefit-of-the-bargain, the Appellate Division reversed as to those counts

as well. Id. at 603-04. Finally, the appellate court held that it was error to

dismiss plaintiffs’ claims for a declaratory judgment and injunctive relief. Id.

at 604-05.

Judge Berdote Byrne concurred in the judgment, agreeing that plaintiffs’

pleadings were adequate but expressed the view that they demonstrated an out-

of-pocket loss, not the loss of the benefit of a bargain. Id. at 606-07 (Berdote

Byrne, J.S.C. (temporarily assigned), concurring). Judge Berdote Byrne

explained that “plaintiffs suffered an ascertainable loss and monetary damages

[insofar as] they would not have purchased the items . . . had they known the

items had not been regularly offered at the higher list price.” Id. at 608

(omission in original). Thus, in Judge Berdote Byrne’s view, plaintiffs “do not

have the right to receive the difference between their out-of-pocket costs and

8 the fictitiously advertised price,” which “would put plaintiffs in a significantly

better economic position than they would have been in this situation,” but

instead have a right to a refund of the purchase prices they paid, which would

place plaintiffs “in the same economic position they were prior to the

litigation.” Id. at 608-09.

We granted defendant’s petition for certification. 254 N.J. 202 (2023).

We also granted leave to participate as amici curiae to the National Retail

Federation, the Retail Litigation Center, the Chamber of Commerce of the

United States, the New Jersey Civil Justice Institute, the Attorney General of

New Jersey, and the New Jersey Association for Justice.

II.

Before us, defendant argues that consumers do not suffer an

ascertainable loss when they receive a non-defective and as-advertised product

at the agreed-upon price and do not allege that the products purchased are

substantively different or worth less than what they believed they purchased.

Defendant maintains that plaintiffs did not suffer a loss under the benefit-of-

the-bargain theory of damages because they received the exact items that they

sought to buy at the prices they sought to pay. Similarly, defendant contends

that plaintiffs’ out-of-pocket theory of loss fails because the items are not

9 worthless and because plaintiffs do not allege that they paid more than the

goods are worth. Thus, defendant argues that plaintiffs’ CFA claims must fail

even though defendant does not challenge the Appellate Division’s

determination that the pricing practices at issue violate the CFA.

Defendant likewise argues that, because plaintiffs have not shown that

they suffered an ascertainable loss under the CFA, plaintiffs are necessarily not

“aggrieved consumers” under TCCWNA. Defendant further maintains that

plaintiffs’ common law contract claims must fail because they did not suffer

any loss. Lastly, defendant contends that, without a viable claim for damages,

plaintiffs have no basis for relief under the Uniform Declaratory Judgment Act.

The National Retail Federation and the Retail Litigation Center jointly

represent that many courts in other jurisdictions have held that the loss of a

discount is not an ascertainable loss if the goods were conforming and worth

their advertised value. The Chamber of Commerce and the New Jersey Civil

Justice Institute claim that defendant’s conduct did not violate the fictitious

former pricing regulation, N.J.A.C. 13:45A-9.6(a).

Plaintiffs urge the Court to uphold the Appellate Division’s

determination that they have stated viable claims under the CFA -- and thus, by

extension, under TCCWNA and the common law. As to ascertainable loss,

10 plaintiffs claim that (1) the average consumer reasonably interprets prices to

represent the quality and value of goods sold; (2) the goods they purchased

were never sold at the reference prices indicated; (3) they purchased the goods

in reliance on misrepresentations; and (4) the true objective quality, value, and

worth of the goods purchased is less than what the reference prices

represented.

Plaintiffs claim that they have adequately pled benefit-of-the-bargain

damages by declaring that the goods purchased lacked the objective value and

quality the reference prices represented; they seek damages measured by the

difference between the purchase prices and the reference prices. Additionally,

plaintiffs assert that they have sufficiently pled out-of-pocket losses by stating

that defendant’s misrepresentations induced them to make purchases they

would not have made and to pay more for the goods than they otherwise would

have had they known the goods’ true value.

The Attorney General primarily argues that plaintiffs suffered benefit-of-

the-bargain damages and should be allowed to seek injunctive relief on behalf

of other consumers.

III.

We are mindful that this matter is before us on a Rule 4:6-2(e) motion to

dismiss for failure to state a claim, which requires us to review de novo “the

11 legal sufficiency of the facts alleged on the face of the complaint.” Baskin v.

P.C. Richard & Son, LLC, 246 N.J. 157, 171 (2021) (quoting

Dimitrakopoulous v. Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl, P.C.,

237 N.J. 91, 107 (2019)). The test for determining the adequacy of a pleading

is “whether a cause of action is ‘suggested’ by the facts,” giving the pleader

the benefit of every reasonable inference. Printing Mart-Morristown v. Sharp

Elecs. Corp., 116 N.J. 739, 746 (1989) (quoting Velantzas v. Colgate-

Palmolive Co., 109 N.J. 189, 192 (1988)). In doing so, we must search the

complaint “thoroughly ‘and with liberality to ascertain whether the fundament

of a cause of action may be gleaned even from an obscure statement of claim,

opportunity being given to amend if necessary.’” Baskin, 246 N.J. at 171

(quoting Printing Mart, 116 N.J. at 746).

CFA claims (and TCCWNA claims premised upon CFA claims) are

“essentially . . . fraud claim[s],” Hoffman v. Hampshire Labs, Inc., 405 N.J.

Super. 105, 112 (App. Div. 2009), and are accordingly subject to the

heightened pleading standard in Rule 4:5-8(a), which requires that the

“particulars of the wrong . . . shall be stated insofar as practicable.” With

those standards in mind, we turn first to plaintiffs’ CFA claims.

12 IV.

Enacted in 1960, L. 1960, c. 39, the CFA provides for relief to

consumers who have been harmed by fraudulent practices in the marketplace

by making the use of those practices “unlawful,” Furst v. Einstein Moomjy,

Inc., 182 N.J. 1, 11 (2004). To that end, the CFA broadly prohibits the use of

“unconscionable or abusive” commercial practices, as well as “deception,

fraud, false pretense, false promise, misrepresentation, or the knowing

concealment, suppression, or omission of any material fact with intent that

others rely” thereon. N.J.S.A. 56:8-2. We have interpreted the CFA to protect

against three forms of unlawful practices: “knowing misrepresentations,

omissions of material fact, and violations of administrative regulations.”

Furst, 182 N.J. at 11. Relevant here, the “[u]se of a fictitious former price”

violates N.J.A.C. 13:45A-9.6(a), a regulation promulgated under the CFA, and

is therefore made unlawful by the statute.

In addition to proscribing certain commercial practices, the CFA

provides a private right of action through which individuals who have fallen

victim to a practice made unlawful by the statute may seek redress:

Any person who suffers any ascertainable loss of moneys or property, real or personal, as a result of the use or employment by another person of any method, act or practice declared unlawful under this act . . . may 13 bring an action . . . . In any action under this section the court shall, in addition to any other appropriate legal or equitable relief, award threefold the damages sustained by any person in interest.

[N.J.S.A. 56:8-19.]

To state a claim under the CFA, an individual must plead an unlawful

practice, an ascertainable loss, and a causal relationship between the two.

Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557 (2009) (citing Int’l Union

of Operating Eng’rs Local No. 68 Welfare Fund v. Merck & Co., Inc., 192 N.J.

372, 389 (2007)).

N.J.S.A. 56:8-19 specifically refers to an “ascertainable loss of moneys

or property, real or personal.” In construing the meaning of “ascertainable

loss,” we have held that the loss must be “‘quantifiable or measurable,’ not

‘hypothetical or illusory.’” D’Agostino v. Maldonado, 216 N.J. 168, 185

(2013) (quoting Thiedemann, 183 N.J. at 248). In other words, private

plaintiffs need to “demonstrate a cognizable and calculable claim of loss due to

the alleged CFA violation.” Thiedemann, 183 N.J. at 249. As we explained in

Thiedemann, “an ‘estimate of damages, calculated within a reasonable degree

of certainty’ will suffice to demonstrate an ascertainable loss.” Ibid. (quoting

Cox v. Sears Roebuck & Co., 138 N.J. 2, 22 (1994)).

In CFA cases alleging fraud, misrepresentation, or deception in selling or

advertising, demonstrating “either out-of-pocket loss or . . . loss in value will 14 suffice to meet the ascertainable loss hurdle and will set the stage for

establishing the measure of damages.” Id. at 248. As we noted in D’Agostino,

ascertainable loss and damages are separate concepts. 216 N.J. at 192 (“There

is no calculation of ‘damages sustained’ unless the ascertainable loss

requirement is first satisfied.”).

A consumer suffers an immediate, out-of-pocket loss or expense when an

item purchased is essentially unusable for its intended purpose or causes

buyers to incur additional costs. For example, in Lee v. Carter-Reed Co., LLC,

the consumer plaintiffs were misled into purchasing diet pills based on the

seller’s representations of their effectiveness; the pills did not work. 203 N.J.

496, 510-11 (2010). We held that, subject to proving the drugs’ defects at trial,

the plaintiffs pled an out-of-pocket ascertainable loss of the full purchase price

of each bottle because the goods were allegedly “worthless” for their

advertised purpose. Id. at 527-28. Lee applied the principle that the entire

purchase price of an item is recoverable as an out-of-pocket loss when a seller

misrepresents the item’s essential qualities and the item received is ultimately

worthless for its intended purpose. Ibid.

Conversely, in Thiedemann, we held that customers whose vehicles were

repaired under warranty, at no cost to the customers, did not sustain an out-of-

pocket loss because there was no difference between the purchase price and the

15 value received after the cars were repaired. 183 N.J. at 251-53. Also

illustrative is Meshinsky, in which we held that a prospective buyer did not

suffer an out-of-pocket loss caused by a seller’s forgery of the buyer’s

signature on a loan application because the buyer never made a payment on the

transaction and the seller eventually repaid the bank. 110 N.J. at 475 n.4.

When a consumer claims that there is a difference in value between an

item as advertised and the item as delivered, but the item is not worthless, the

benefit-of-the-bargain theory of damages is applicable. Mladenov v. Wegmans

Food Mkts., Inc., 124 F. Supp. 3d 360, 375 (D.N.J. 2015) (“A benefit-of-the-

bargain theory requires that the consumer be misled into buying a product that

is ultimately worth less than the product that was promised.”). That is, a

consumer suffers a benefit-of-the-bargain loss when the consumer receives less

than what was bargained for.

For example, in Thiedemann, the plaintiffs purchased Mercedes-Benz

vehicles sold with defective fuel gauges. 183 N.J. at 240. The company

repaired the defect for free under warranty, but the plaintiffs sued and alleged

that receipt of the defective vehicle violated the CFA and deprived them of the

benefit of their bargain, i.e., a non-defective vehicle. Id. at 243, 250. We

disagreed and granted summary judgment in favor of Mercedes-Benz. Id. at

255. Stressing that “[t]he ascertainable loss requirement operates as an

16 integral check upon the balance struck by the CFA between the consuming

public and sellers of goods,” we reasoned that the bargain between the parties

in that case anticipated and provided for the possibility of defects by including

free warranty service to ensure that the vehicles remained fully operable. Id.

at 251. Because Mercedes-Benz cured the defect pursuant to the bargained-for

warranty, the consumers were not deprived of an operable vehicle. Ibid. We

rejected, and deemed “too speculative,” the plaintiffs’ argument that there is a

future hypothetical diminution in the vehicle’s value because it once needed a

fuel gauge replaced. Id. at 252.

The court in Smajlaj v. Campbell Soup Co. also focused on what the

consumer received in a transaction to determine whether it was objectively less

than what the consumer bargained for. 782 F. Supp. 2d 84, 99 (D.N.J. 2011).

There, the plaintiffs suffered a benefit-of-the-bargain loss when they purchased

canned soup that was falsely advertised as having “25% less sodium” than

regular soup but did not actually contain less sodium. Ibid. That was

sufficient to establish a benefit-of-the-bargain loss because the plaintiffs did

not receive what was promised, i.e., reduced-sodium soup. Ibid. Thus, in both

Thiedemann and Smajlaj, the courts compared what consumers actually

received to what they could objectively expect to receive, based on their

17 bargain, to determine whether the allegations were sufficient to show an

“ascertainable loss.”

The dissent cites dicta in Smajlaj to support its erroneous contention that

an illusory loss may constitute ascertainable damages under the CFA. Post at

___ (slip op. at 18 ). There was no such illusory loss in Smajlaj; there, the

plaintiffs did not receive the product that they bargained for -- soup containing

the promised “25% less sodium.” 782 F. Supp. 2d at 99.

Similarly, the dissent mistakenly cites to Bosland, post at ___ (slip op. at

16), in support of its contention that plaintiffs’ loss was not illusory. In

Bosland, the purchaser of a motor vehicle was charged a $117 nonitemized

service fee that included an undisclosed document service fee, in violation of

the CFA and TCCWNA. 197 N.J. at 548. The issue before the Court

concerned whether a demand for refund of the overcharge was required as a

prerequisite to establishing an ascertainable loss; it was not. Id. at 561. The

amount of the loss was easily quantifiable -- the amount of the overcharge.

Notwithstanding the liberality of the construction afforded the CFA,

ascertainable means ascertainable -- “quantifiable or measurable,” D’Agostino,

216 N.J. at 185 (quoting Thiedemann, 183 N.J. at 248) -- and illusory means

illusory.

18 B.

Here, plaintiffs’ CFA claim fails because they cannot show either a loss

of the benefit-of-the-bargain or an out-of-pocket loss.

The Appellate Division correctly found that plaintiffs have adequately

pled allegations of deceptive conduct that violates the CFA because the

complaint sufficiently asserts that the discounts offered were illusory and

defendant utilized a fictitious former price. Robey, 474 N.J. Super. at 600.

Plaintiffs alleged in their complaint that defendant never offered the

items purchased at their “reference price,” thereby rendering the “reference

price” fictitious. Defendant does not contest the Appellate Division’s holding

that plaintiffs adequately pled that defendant utilized a fictitious former price

in violation of N.J.S.A. 13:45A-9.6(a), and we do not disturb that aspect of the

Appellate Division’s decision. See N.J.S.A. 13:45A-9.6(a) (“Use of a

fictitious former price will be deemed to be a violation of the [CFA].”). But

plaintiffs have not pled facts sufficient to allege an ascertainable loss. 1

1 Because we agree with the Appellate Division that the disputed pricing practice violates a regulation promulgated under the CFA, N.J.A.C. 13:45A-9.6(a), we need not reach the question whether plaintiffs have adequately pled violations of the additional state and federal regulations they cite, but do not explain, in support of their claims for relief under the CFA and TCCWNA. Those claims cannot succeed because plaintiffs have not sufficiently pled ascertainable loss or that they are aggrieved consumers, as the CFA and TCCWNA respectively require. Furthermore, the federal regulations cited are guidelines -- “administrative

19 Plaintiffs’ pricing claims are inherently different from CFA claims we

have considered in the past. See, e.g., Cox, 138 N.J. at 2 (near-worthless

repair work performed without necessary permits); Furst, 182 N.J. at 1

(delivery of defective and non-conforming goods). Here, plaintiffs do not

allege that they purchased defective or deficient goods, or that the items they

received are worthless or even worth less than the price paid. Indeed,

plaintiffs do not dispute that the items they bought are precisely what they

intended to purchase. Rather, plaintiffs contend that (1) they would not have

purchased the items but for the use of fictitious former pricing, entitling them

to damages equal to the purchase prices; or (2) they did not receive the value

of what was promised, entitling them to damages equal to the difference

between the fictitious “original price” and the price they actually paid.

Based on our review of the record, we are satisfied, as was the trial

court, that plaintiffs did not plead sufficient facts to establish an ascertainable

loss under either theory. Nowhere in the complaint do plaintiffs allege facts

supporting an out-of-pocket loss, i.e., that the products they purchased were

worthless or unsuitable for their intended use, or that they have spent or will

spend additional funds following their purchases to make the items usable for

interpretations of law administered by the Commission for the guidance of the public.” The corresponding federal statutory provisions, 15 U.S.C. §§ 45 and 46, do not provide any private right of action. 20 their intended purpose. See Lee, 203 N.J. at 528 (finding that the plaintiffs

suffered an out-of-pocket loss each time a class member purchased a dietary

supplement pill that did not provide the benefits represented -- reduction of

belly fat -- and was therefore worthless); Cox, 138 N.J. at 22 (finding that the

plaintiff suffered an ascertainable loss when an employee of the defendant

performed hazardous and shoddy work on the plaintiff’s kitchen, requiring the

plaintiff to incur the cost of repairing the work).

Instead, plaintiffs allege that they suffered an out-of-pocket loss of the

purchase price because they either would not have bought the items at the

prices that they ultimately paid, or they would not have purchased the goods at

all but for defendant’s misleading and deceptive advertising. Although

plaintiffs allege that they never would have purchased the items, plaintiffs do

not claim that they attempted to return the items or that Aéropostale refused to

accept such a return. The facts as pled are thus insufficient to establish an out-

of-pocket loss. Accordingly, plaintiffs are not entitled to receive a refund of

the purchase prices.

Plaintiffs also argue that they suffered an ascertainable loss because they

did not receive a higher-value item for a discounted price, which denied them

the benefit of their bargain. Put another way, plaintiffs allege that they did not

receive the savings that defendant advertised. But plaintiffs do not allege that

21 the items purchased were materially different from what was promised --

wearable pants, t-shirts, and a sweatshirt, as advertised. Nor have they alleged

any dissatisfaction with or defects in the items purchased. To support their

claim of a loss of the benefit of the bargain, plaintiffs rely principally on Furst.

The Attorney General would also have us decide this issue on Furst principles.

But Furst is inapposite for several reasons.

In Furst, the plaintiff buyer purchased a five-thousand-dollar Ireloom

carpet from a retailer at a discounted price, and the retailer delivered a

damaged and smaller-than-advertised carpet. 182 N.J. at 8-9. The defendant

offered the plaintiff a refund of the sale price or a similar carpet at an

additional cost but refused to replace the carpet with a conforming one at the

sale price the plaintiff paid. Id. at 9. The plaintiff sued, and the defendant did

not contest the trial court’s finding that its conduct violated the CFA. Ibid.

The issue on appeal was how to calculate damages after the showing of an

ascertainable loss had already been made. Id. at 9-10. In other words, Furst

concerned the damages recoverable for an ascertainable loss, not whether the

plaintiffs suffered a loss in the first place, as is the case here. Ibid.; see

D’Agostino, 216 N.J. at 192 (explaining that loss and damages “have separate

functions in the analysis”).

22 We agreed with the trial court and the Appellate Division that “when a

merchant violates the [CFA] by delivering defective goods and then refusing to

provide conforming goods, a customer’s ascertainable loss is the replacement

value of those goods.” Furst, 182 N.J. at 10. In coming to that conclusion, we

considered what measure of damages would make the consumer whole -- the

carpet’s replacement value (or fair market value), or the discounted purchase

price? We held that “[t]he merchant who promises to deliver a product at a

particular price must, at the option of the consumer, either deliver the product

or render its replacement value.” Id. at 14.

In contrast, plaintiffs here are not entitled to benefit-of-the-bargain

damages because they suffered no loss -- they purchased and received clothing

that was not defective or damaged or worth less than they paid. D’Agostino,

216 N.J. at 192 (“There is no calculation of ‘damages sustained’ unless the

ascertainable loss requirement is first satisfied.”) (quoting Thiedemann, 183

N.J. at 247). Furst would be instructive here if the items plaintiffs purchased

turned out to be non-conforming or materially different from what they

thought they were purchasing. However, plaintiffs have not made those

allegations. Although plaintiffs thought they were receiving clothes that

defendant once sold for more money, the goods plaintiffs received are exactly

what they knowingly purchased -- functioning and usable pants, sweatshirts,

23 and t-shirts. Indeed, plaintiffs do not argue that the items were worth less than

the amount they paid; they do not contend, for example, that the $23.98

sweatshirt was not worth $23.98 or that the $18.25 pants were not worth

$18.25. There is thus no reason to calculate damages under Furst’s benefit of

the bargain principles.

Like the plaintiffs in Thiedemann, whose loss -- a subjective allegation

of their vehicle’s diminished value -- was not “ascertainable” within the

meaning of the CFA, plaintiffs here objectively received what they paid for.

Accordingly, we find that plaintiffs’ allegations, assumed to be true, do not

establish a cognizable ascertainable loss under a benefit-of-the-bargain theory.

This holding is consistent with the majority of decisions by other state and

federal courts that have addressed whether plaintiffs suffered a cognizable

injury as a result of deceptive pricing under various state consumer protection

laws. See, e.g., Leigh-Pink v. Rio Props., LLC, 512 P.3d 322, 327 (Nev. 2022)

(“Where a plaintiff received the value of their purchase, we conclude that they

cannot demonstrate that they did not receive the benefit of their bargain or

show any out-of-pocket losses, because the value of the goods or services they

received is equal to the value that they paid.”); Shaulis v. Nordstrom Inc., 865

F.3d 1, 12 (1st Cir. 2017) (finding plaintiffs suffered no loss where the

“product itself was [not] deficient in some objectively identifiable way”);

24 Gerboc v. Context Logic, Inc., 867 F.3d 675, 681 (6th Cir. 2017) (holding that

plaintiff had no “actual damages” under Ohio law because “[plaintiff] got what

he paid for: a $27 item that was offered as a $27 item and that works like a

$27 item”); Kim v. Carter’s Inc., 598 F.3d 362, 364 (7th Cir. 2010) (finding the

plaintiffs “got the benefit of their bargain and suffered no harm” under Illinois

law when “they agreed to pay a certain price for Carter’s clothing, which they

do not allege was defective or worth less than what they actually paid”);

Hennessey v. Gap, Inc., 86 F.4th 823, 828 (8th Cir. 2023) (“[I[n cases where

plaintiff was fraudulently induced to purchase a product that was no different

in quality than defendant represented at the time of sale, . . . there is no

ascertainable loss under [Missouri law] because the price paid was both the

represented value and the value of the product plaintiff received.”).

Having determined that plaintiffs have failed to state a claim for relief

under the CFA, we turn to their TCCWNA claim.

The Legislature enacted TCCWNA in 1981, L. 1981, c. 454, “to prevent

deceptive practices in consumer contracts,” Dugan v. TGI Fridays, Inc., 231

N.J. 24, 67 (2017). By passing TCCWNA, the Legislature did not create new

legal rights but sought to require sellers to acknowledge already existing

“clearly established consumer rights” by providing new remedies for violations

25 of those rights. See Spade v. Select Comfort Corp., 232 N.J. 504, 515-16

(2018); see also Governor’s Statement on Signing A. 1660 (Jan. 11, 1982)

(noting that TCCWNA would “strengthen[ ] provisions of the [CFA]”). The

rights and responsibilities enforceable by TCCWNA are, therefore, drawn from

and established by other legislation. Shelton v. Restaurant.com, 214 N.J. 419,

432 (2013).

TCCWNA prohibits sellers from engaging in conduct proscribed

elsewhere:

No seller, lessor, creditor, lender or bailee shall in the course of his business offer to any consumer or prospective consumer or enter into any written consumer contract or give or display any written consumer warranty, notice or sign . . . which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller . . . as established by State or Federal law at the time the offer is made or the consumer contract is signed or the warranty, notice or sign is given or displayed.

[N.J.S.A. 56:12-15.]

It further provides a cause of action through which consumers aggrieved by

means of a proscribed practice may seek recovery: “Any person who violates

the provisions of this act shall be liable to the aggrieved consumer for a civil

penalty of not less than $100.00 or for actual damages, or both at the election

of the consumer, together with reasonable attorney’s fees and court costs.”

N.J.S.A. 56:12-17 (emphasis added). 26 Thus, to state a TCCWNA claim under the facts presented here,

plaintiffs would need to establish four elements: (1) defendant is a seller (2)

who, in writing, entered into a consumer contract or gave or displayed a

consumer warranty, notice, or sign (3) containing a provision that violates a

consumer’s “clearly established legal right,” (4) and plaintiffs are consumers

who were thereby “aggrieved.” See Pisack v. B & C Towing, Inc., 240 N.J.

360, 379 (2020); N.J.S.A. 56:12-15, -17.

We clarified in Spade that a consumer must have “suffered adverse

consequences as a result of the defendant’s regulatory violation” to be

“aggrieved” within the meaning of TCCWNA. 232 N.J. at 523-24. “In the

absence of evidence that the consumer suffered adverse consequences as a

result of defendant’s regulatory violation, a consumer is not an ‘aggrieved

consumer’ for purposes of” the statute. Id. at 524.

Here, plaintiffs’ alleged harm is premised on the same allegations as

their CFA claim -- use of a fictitious former price. Because we determine that

plaintiffs have not incurred an ascertainable loss of money or property due to

the violation of the fictitious former pricing regulation, N.J.A.C. 13:45A-

9.6(a), plaintiffs are not monetarily aggrieved for purposes of TCCWNA under

27 the facts pled. 2 The monetary loss analysis does not yield a different result in

this context, and plaintiffs do not allege non-monetary harm. See id., at 523

(explaining that a consumer may suffer non-monetary harm if, for example,

“untimely delivery and misleading ‘no refunds’ language leaves [the]

consumer without furniture needed for a family gathering”). Accordingly, we

determine that plaintiffs are not aggrieved consumers and therefore cannot

state a claim under TCCWNA.

VI.

We briefly address plaintiffs’ common law claims. First, to state a claim

for breach of contract, a plaintiff must assert that a defendant’s alleged breach

“caused a loss to the plaintiffs.” Goldfarb v. Solimine, 245 N.J. 326, 338

(2021) (quoting Globe Motor Co. v. Igdalev, 225 N.J. 469, 482 (2016)).

Because plaintiffs here have not alleged an ascertainable loss for the reasons

discussed above, their contract claim fails.

Second, to breach the implied covenant of good faith and fair dealing, a

defendant must have “engaged in some conduct that denied the benefit of the

bargain originally intended by the parties.’” Brunswick Hills Racquet Club,

Inc. v. Route 18 Shopping Ctr. Assocs., 182 N.J. 210, 225 (2005) (emphasis

2 We reject the invitation by the parties to opine on whether ascertainable loss is coextensive with the “aggrieved consumer” requirement under TCCWNA, non-monetary or otherwise. 28 added). Again, because plaintiffs received the benefit of their bargain and did

not suffer an ascertainable loss, plaintiffs’ claim for breach of the implied

covenant of good faith and fair dealing fails.

Finally, to state a claim for breach of express warranty, a plaintiff must

establish “the failure of the goods to perform as warranted.” Ford Motor

Credit Co., LLC v. Mendola, 427 N.J. Super. 226, 242 (App. Div. 2012)

(quoting Spring Motors Distribs., Inc. v. Ford Motor Co., 98 N.J. 555, 586

(1985)); see Furst, 182 N.J. at 13 (explaining that damages for breach of an

express warranty is “the remedy for a buyer who has accepted defective

goods”). Because the items accepted by plaintiffs were not defective or non-

conforming, there is no breach of express warranty.

VII.

Plaintiffs also seek injunctive relief. To explain why that relief is

unavailable -- even though the pricing practices challenged are indeed

unlawful under the CFA -- we briefly review the history of the statute.

In its original form, the Legislature vested only the Attorney General

with enforcement power under the CFA. See Weinberg v. Sprint Corp., 173

N.J. 233, 248 (2002) (discussing the broad investigative and enforcement

powers the Legislature afforded to the Attorney General to accomplish the

objectives of the CFA). In 1971, however, the Legislature amended the CFA to

29 allow private actions by injured consumers. L. 1971, c. 247, § 7 (codified at

N.J.S.A. 56:8-19).

The addition of a private right of action, as we explained in Weinberg,

makes it easier to compensate victims for their actual loss, 173 N.J. at 249, and

the treble damages provision punishes the wrongdoer and creates an incentive

for attorneys to take cases involving less substantial losses. Ibid. As noted

previously, however, unlike the Attorney General, a plaintiff must suffer “an

ascertainable loss,” caused by the unlawful conduct, to sustain a private cause

of action under the CFA. N.J.S.A. 56:8-19.

That rule applies both to claims and to requests for injunctive relief

under the CFA. See Laufer v. U.S. Life Ins. Co., 385 N.J. Super. 172, 185

(App. Div. 2006) (“Once this threshold standing requirement” -- i.e., pleading

ascertainable loss -- “is satisfied, the plaintiff can pursue ‘all available

remedies, including an injunction, . . . even if the plaintiff ultimately loses on

his damage claim but does prove an unlawful practice under the Act.’”)

(quoting Weinberg, 173 N.J. at 253)). Therefore, although plaintiffs and their

amici are technically correct that the CFA relaxes traditional standards for

injunctive relief, their ability to act as “private attorneys general,” Lemelledo

v. Beneficial Mgmt. Corp. of Am., 150 N.J. 255, 268 (1997), is reliant on their

ability to plead an ascertainable loss, see Weinberg, 173 N.J. at 250 (“The

30 express language of the statute requires a private party to have a claim that he

or she has suffered an ascertainable loss of money or property in order to bring

a cause of action under the Act. In effect, the Act permits only the Attorney

General to bring actions for purely injunctive relief.”). Because plaintiffs here

cannot plead ascertainable loss, they cannot seek an injunction for themselves,

or others similarly situated under the CFA.

We emphasize that the Attorney General, who supported plaintiffs in this

matter as amicus, does not need to establish an ascertainable loss to bring an

enforcement action to enjoin conduct violative of the CFA and may challenge

defendant’s conduct as alleged here. Indeed, the dissent makes a strong case

for why the Attorney General should choose to exercise his power and

authority to seek a court order prohibiting businesses from employing illusory

discounts and fictitious former prices.

VIII.

For the reasons set forth above, we reverse the Appellate Division’s

judgment, and reinstate the trial court’s order dismissing plaintiffs’ complaint.

CHIEF JUSTICE RABNER and JUSTICES PATTERSON and PIERRE- LOUIS join in JUSTICE SOLOMON’s opinion. JUSTICE FASCIALE filed a dissent in which JUSTICES WAINER APTER and NORIEGA join.

31 Christa Robey and Maureen Reynolds, on behalf of themselves and all others similarly situated,

JUSTICE FASCIALE, dissenting.

Imagine going to the mall to buy a coat. You enter your first store, and

you find one you like. The price tag says, “70 percent off, originally sold for

$1,000.” What do you do? You stop shopping and buy the coat. The store

presented you with a great deal: pay $300 for a coat worth $1,000. You not

only like the coat, but you reasonably believe that the store promised you $700

in savings. You later learn that the store tricked you into buying the coat by

misrepresenting its value as $1,000. The fact is that the store never sold the

coat for $1,000; they had only sold it for $300. You did not receive the benefit

of what you bargained for, nor did you receive what you were promised.

Moreover, but for the fake discount, you would not have purchased the coat.

Therefore, you suffered a quantifiable and measurable (not merely illusory) ascertainable loss under a benefit-of-the-bargain theory and, arguably, also

under an out-of-pocket loss theory.

That hypothetical is not a fanciful story -- plaintiffs sufficiently pleaded

almost identical allegations. The only differences are the clothing items and

the amounts paid. Here, the class action complaint should never have been

dismissed under Rule 4:6-2(e) for failure to plead ascertainable loss.

Respectfully, not only does the majority’s decision fail to uphold important

and long-standing remedial principles that have guided New Jersey Consumer

Fraud Act (CFA) cases for decades, but it also does not adequately consider

the precepts we outlined in Furst v. Einstein Moomjy, Inc., 182 N.J. 1 (2004),

acknowledge substantial consumer behavior research, or give sufficient weight

to the Attorney General’s support for plaintiffs’ position. Plaintiffs’

allegations in their 60-page complaint more than sufficiently demonstrate

ascertainable loss. And consequently, plaintiffs should have the opportunity to

move past the pleading stage and attempt to prove their CFA allegations, along

with their other claims. 1

Thus, I respectfully dissent.

1 As the appellate court found, because plaintiffs sufficiently pleaded ascertainable loss under a benefit-of-the-bargain theory, their remaining claims should be reinstated as well. 2 I.

When reviewing an order dismissing a complaint for failure to state a

claim under Rule 4:6-2(e), we must search “the complaint in depth and with

liberality to ascertain whether the fundament of a cause of action may be

gleaned even from an obscure statement of claim.” Green v. Morgan Props.,

215 N.J. 431, 452 (2013) (emphases added) (quoting Printing Mart-

Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989)). At the early

pleadings stage in the litigation, we must accept as true the facts as pleaded in

the complaint. Smith v. SBC Commc’ns, Inc., 178 N.J. 265, 268-69 (2004).

We need not be “concerned with the ability of plaintiffs to prove their

allegation[s].” Printing Mart, 116 N.J. at 746 (highlighting that for the

purposes of a Rule 4:6-2(e) analysis, “plaintiffs are entitled to every

reasonable inference of fact”).

Even applying Rule 4:5-8(a)’s requirement that a heightened pleading

standard is required on dismissal motions when allegations of fraud exist, the

allegations in plaintiffs’ lengthy and detailed complaint easily satisfy our

heightened pleading rules.

3 II.

Plaintiffs Christa Robey and Maureen Reynolds filed a class action

lawsuit against defendant, SPARC Group LLC, alleging a long-standing

deceptive pricing scheme perpetrated by Aéropostale -- a retail store that

defendant owns and operates. Plaintiffs pleaded in multiple counts various

causes of action including, as pertinent here, that defendant violated the CFA

by engaging in affirmative acts (unconscionable commercial practices,

deceptive advertising, and misrepresentations) and by violating N.J.A.C.

13:45A-9.6, which provides that “[u]se of a fictitious former price will be

deemed to be a violation of the [CFA].” Plaintiffs Robey and Reynolds further

alleged as to their CFA claim that they suffered ascertainable loss because they

did not receive “the claimed value of [their] purchase[s]” and that they would

not have purchased the items but for the intentionally advertised illusory

discounts.

Thus, we are reviewing an order under Rule 4:6-2(e) that dismissed CFA

allegations.

When reviewing CFA claims, our Court has repeatedly stressed the

CFA’s broad remedial purpose and the Legislature’s manifest intent in

4 enacting the CFA to protect consumers from fraudulent commercial practices

in the marketplace. See Thiedemann v. Mercedes-Benz USA, LLC, 183 N.J.

234, 245 (2005) (“The Legislature enacted the CFA in 1960 to address rampant

consumer complaints about fraudulent practices in the marketplace and to

deter such conduct by merchants.”); All the Way Towing, LLC v. Bucks Cnty.

Int’l, Inc., 236 N.J. 431, 434 (2019) (noting that the CFA “is a powerful

‘legislative broadside against unsavory commercial practices’ in the

marketplace” (quoting Real v. Radir Wheels, Inc., 198 N.J. 511, 514 (2009))).

With the CFA’s purpose in mind, “[c]ourts have emphasized that like

most remedial legislation, the [CFA] should be construed liberally in favor of

consumers.” Cox v. Sears Roebuck & Co., 138 N.J. 2, 15 (1994) (emphasis

added); DeSimone v. Springpoint Senior Living, Inc., ___ N.J. ___, ___ (2024)

(slip op. at 11) (“The CFA is remedial legislation, which the ‘courts liberally

enforce . . . to fulfill its objective to protect consumers from prohibited

unconscionable acts by sellers.’” (omission in original) (quoting All the Way

Towing, LLC, 236 N.J. at 434)). Failure to faithfully apply the CFA’s

undisputed remedial purpose harms consumers.

C.

Importantly, plaintiffs are pursuing their claims as private parties under

the CFA. The CFA “initially conferred enforcement power exclusively on the

5 Attorney General,” Thiedemann, 183 N.J. at 245, but as part of an amendment

in 1971, the CFA “authoriz[ed] a private right of action” -- “arguably the

greatest expansion of the CFA,” DeSimone, ___ N.J. at ___ (slip op. at 12).

N.J.S.A. 56:8-19 authorizes this private right of action and provides that

if a party were to succeed in showing “any ascertainable loss of moneys or

property, real or personal, as a result of the use or employment by another

person of any method, act, or practice declared unlawful under this act,” then a

“court shall, in addition to any other appropriate legal or equitable relief,

award threefold the damages sustained by any person in interest . . . [and] also

award reasonable attorneys’ fees, filing fees and reasonable costs of suit.”

The private right of action under the CFA cannot be underappreciated or

misunderstood. As this Court expressly stated in Bosland v. Warnock Dodge,

Inc., the legislative history reveals that the enactment of the private right of

action was intended to make the CFA “one of the strongest consumer

protection laws in the nation.” 197 N.J. 543, 555 (2009) (emphasis added)

(quoting Governor’s Press Release for A. 2402, at 1 (Apr. 19, 1971)). It also

was intended to “provide easier access to the courts for the consumer.” Ibid.

(quoting Governor’s Press Release for A. 2402, at 2 (June 29, 1971)). We

have explicitly recognized that “[t]he private right of action is integral to

fulfilling the [CFA’s] legislative purposes, and by allowing recovery of

6 attorneys’ fees and costs, private attorneys are incentivized to bring CFA

claims, thereby reducing the enforcement burdens that otherwise would fall on

the State.” Sun Chem. Corp. v. Fike Corp., 243 N.J. 319, 330 (2020) (second

alteration in original) (internal quotations and citations omitted). Thus, the

private cause of action “greatly reduce[s]” “[t]he primary risk of

underenforcement” of the CFA, Lemelledo v. Beneficial Management Corp. of

America, 150 N.J. 255, 269-70 (1997), and “the burdens on the Division of

Consumer Affairs,” Cox, 138 N.J. at 15 (quoting Governor’s Press Release for

A. 2402, at 2 (June 29, 1971)).

Further, the award of attorneys’ fees outlined in N.J.S.A. 56:8-19 was to

encourage and provide an “incentive for members of the bar to become

‘private attorneys general’ . . . to enlarge fraud-fighting authority.” Perez v.

Professionally Green, LLC, 215 N.J. 388, 402 (2013) (omission in original)

(quoting Gonzalez v. Wilshire Credit Corp., 207 N.J. 557, 585 (2011)). And

importantly, the remedies outlined in N.J.S.A. 56:8-19 are “not only to make

whole the victim’s loss, but also to punish the wrongdoer and to deter others

from engaging in similar fraudulent practices.” Furst, 182 N.J. at 12.

This case is particularly illustrative of why the Legislature allowed for

private causes of action under the CFA. The Attorney General, an

unquestionably integral part of the CFA’s enforcement, appeared as amicus

7 curiae in support of plaintiffs’ position and advocated at oral argument that

there are simply too many fictitious pricing violations in the marketplace for

the Attorney General to be able to prosecute them all. Therefore, without

private parties like plaintiffs bringing actions against wrongdoers engaging in

fictitious pricing schemes, the Attorney General will continue to be burdened,

wrongdoers will not be deterred, and these unlawful practices will continue to

run rampant in the marketplace, just as studies have reported. Those avoidable

pitfalls contravene the CFA’s remedial purposes. And as an essential part to

the enforcement of the CFA, the Attorney General’s position on this issue is

profoundly significant, a sentiment the majority fails to meaningfully

consider. 2

D.

Unlike enforcement actions brought by the Attorney General, which do

not require a demonstration that the challenged practices caused ascertainable

loss to a consumer, it is well-settled that a party pursuing a private cause of

action under N.J.S.A. 56:8-19 must demonstrate “(1) an unlawful practice, (2)

2 Clearly the Attorney General has authority to pursue fictitious pricing violations in the marketplace without any showing of ascertainable loss. We understand his participation in this case as amicus to underscore how seriously the Attorney General takes the enforcement of laws prohibiting fictitious pricing schemes. 8 an ‘ascertainable loss,’ and (3) ‘a causal relationship between the unlawful

conduct and the ascertainable loss.’” Lee v. Carter-Reed Co., L.L.C., 203 N.J.

496, 521 (2010) (quoting Bosland, 197 N.J. at 557). And importantly, “[i]n

considering these requirements, we have been careful to interpret the CFA, and

its prima facie proof requirements, so as to be faithful to the [CFA]’s broad

remedial purposes.” Bosland, 197 N.J. at 555 (emphasis added); see also

Thiedemann, 183 N.J. at 247 (noting -- unlike what occurred here -- that “the

prima facie proofs necessary for a private cause of action under the CFA must

be applied compatibly with the CFA’s remedial nature”).

That brings me to the important matter at hand. With the above long-

standing legal principles in mind -- standards that were generally reiterated in

the allegations of the complaint 3 -- plaintiffs successfully pleaded the required

elements of a private CFA claim.

3 For example, plaintiffs’ complaint states:

179. The [CFA] is a remedial statute which the New Jersey Supreme Court has repeatedly held must be construed liberally in favor of the consumer to accomplish its deterrent and protective purposes. . . .

....

201. As with other terms of the [CFA], the term “ascertainable loss” is to be construed liberally in favor 9 III.

First, as the majority holds, plaintiffs sufficiently pleaded “an unlawful

practice.” Ante at ___ (slip op. at 19). It is well-settled that unlawful

practices under the CFA “fall into three general categories: affirmative acts,

knowing omissions, and regulation violations.” Cox, 138 N.J. at 17. The

Division of Consumer Affairs regulations expressly provide that “[u]se of a

fictitious former price will be deemed to be a violation of the [CFA].”

N.J.A.C. 13:45A-9.6(a). A “fictitious former price” is defined as “an

artificially inflated price for an item or items of merchandise established for

the purpose of enabling the advertiser to subsequently offer the item or items

at a large reduction.” N.J.A.C. 13:45A-9.1.

Accepting the allegations in the complaint as true, Robey and Reynolds

bought products on sale with the expectations of obtaining promised bargains,

but those expectations were never realized. For instance, during one shopping

trip to Aéropostale, Robey viewed a sign that falsely advertised a “hoodie” as

on sale for 60 percent off of $59.95, the reference price. Relying on these

advertised misrepresentations, Robey purchased the “hoodie” at a price of

$23.98. Based on the store’s purposely misleading sale advertisements and

of the consumer in order to carry out the [CFA]’s broad remedial purposes . . . . 10 reference prices, Robey reasonably believed she was purchasing a “hoodie”

that was “worth and had the value of $59.95,” but at a bargain of $23.98,

therefore saving $35.97. Similarly, Reynolds went to Aéropostale and viewed

a sign that deceptively advertised pants for 50 percent off, but with an untrue

reference price of $36.50. Once again, relying on these misrepresentations,

Reynolds purchased the pants for $18.25, believing she obtained a discount of

$18.25 and that the pants were valued at $36.50.

What Robey, Reynolds, and other Aéropostale consumers did not know

at the time of their purchase was that, as alleged in the complaint, Aéropostale

was actively deceiving its consumers about its advertised discounts. After a

six-year investigation conducted by plaintiffs’ counsel, plaintiffs alleged that

the discounts Aéropostale advertised were “always false” and “illusory,” and

the list or reference prices provided on the clothing’s price tags were “false

and inflated.” Plaintiffs alleged with specificity -- notably, enough to satisfy

the heightened pleading standard for fraud cases -- how their investigation

revealed that “for most of the products that A[é]ropostale advertise[d] with a

discount or with a ‘free’ offer, A[é]ropostale ha[d] never -- not even for a

single day -- offered the product at the list price in its stores without a discount

or ‘free’ offer.”

11 I agree with the majority that the Appellate Division correctly found that

plaintiffs adequately pleaded -- in my view, well beyond adequately pleaded --

allegations of unconscionable deceptive conduct that violates the CFA. Ante

at ___ (slip op. at 19). But it is imperative that I highlight a point the majority

has not mentioned: the widespread problem of fictitious pricing in the

marketplace nationwide.

According to a recently published research article, “the practice of

fictitious pricing within the United States has not gone away but instead ‘has

proliferated,’ is ‘prevalent,’ and is ‘pervasive,’” which the authors of the

article note is evident by the fact that there are “dozens of lawsuits” in state

and district courts attempting to combat the practice. Richard Staelin, Joel E.

Urbany & Donald Ngwe, Competition and the Regulation of Fictitious Pricing,

87 J. of Mktg. 826, 827 (2023) (citations omitted). News outlets have recently

reported on fictitious pricing schemes among major companies as well,

showing the issue is widespread. See Jaclyn Peiser, A Common, Illegal Tactic

Retailers Use to Lure Customers, Wash. Post (Nov. 21, 2023),

https://www.washingtonpost.com/business/2023/11/21/fake-sale-deceptive-

pricing/ (discussing how many retailers engage in fictitious pricing and why

consumers “fall” for it); Patrick Coffee, Thought You Saved $60 on that

Vacuum Cleaner? Think Again, Wall St. J. (Aug. 24, 2023), https://www.wsj.

12 com/articles/thought-you-saved-60-on-that-vacuum-cleaner-think-again-

c89ce344 (highlighting that deceptive or fictitious pricing is “making a

comeback” and that there is now increased litigation around deceptive pricing

practices for large retail stores); Kristin Schwab, Retailers are Stuck in a Cycle

of Constant Sales, Marketplace (Jan. 17, 2024), https://www.marketplace.org/

2024/01/17/retailers-are-stuck-in-a-cycle-of-constant-sales/ (stressing that

“retailers can hide behind deals to carry out shady business practices” and that

with retailers constantly advertising sales, consumers will “truly never know if

a deal is too good to be true”).

Thus, retailers like Aéropostale are allegedly using fictitious pricing -- a

known CFA violation -- as a deceptive scheme to influence consumer behavior

and choices, with seemingly very few repercussions.

IV.

Second, and central to this appeal, plaintiffs successfully alleged that

they suffered “an ascertainable loss” because of defendant’s deceptive pricing

scheme. Plaintiffs alleged that they received neither the discounts nor the

represented value of the items they were promised or expected. And

importantly, plaintiffs did not make those allegations summarily. Plaintiffs

alleged with specificity that:

13 92. . . . customers suffered an ascertainable loss and monetary damages because they did not enjoy the actual discounts A[é]ropostale represented and promised to them.

93. . . . customers suffered an ascertainable loss and monetary damages because the items they purchased were not in fact worth the inflated amount that A[é]ropostale represented to them. In fact, the items did not normally sell for, and were not actually worth, the fictitious and invented list price that Aéropostale printed on its price tags and on its website.

Plaintiffs also alleged that they “failed to receive the full benefit of the

purported discounts offered by [d]efendant” and “did not receive the claimed

value of [their] purchase, but rather received items worth far less than the

value claimed by [d]efendant.” (emphasis added). Moreover, plaintiffs

alleged that they suffered an ascertainable loss because plaintiffs “would not

have made any purchases from [d]efendant’s A[é]ropostale stores at all but for

the false promises by [d]efendant that [p]laintiffs were receiving merchandise

at a significant discount.” As made clear by plaintiffs on appeal, those claims,

in essence, allege two theories of ascertainable loss: benefit-of-the-bargain

theory and out-of-pocket loss theory.

Plaintiffs reinforced those allegations by referencing academic research

and studies to support their contentions -- research the majority fails to

mention. This body of research helps remove any suggestion that plaintiffs’

14 ascertainable loss is somehow not “quantifiable or measurable,” or that it is

somehow “hypothetical or illusory.” Plaintiffs specifically alleged that:

32. Decades of academic research [have] established that the use of reference prices, such as those utilized by A[é]ropostale, materially impacts consumers’ behavior. A reference price affects a consumer’s perception of the value of the transaction, the consumer’s willingness to make the purchase, and the amount of money the consumer is willing to pay for the product.

33. Indeed, sellers understand that a product’s “regular” or “reference” price -- the price at which it is typically sold in the marketplace -- matters to consumers, as does a representation that a product is on “sale” or is discounted.

34. . . . consumers are much more likely to purchase an item if they are told that it is being offered at a “sale” or discounted price that is lower than the price at which the seller previously sold the product, and/or where consumers are told that an item is worth much more than what they are currently being asked to pay for it. As the old adage says, “everyone loves a bargain.”

And in support of those allegations, plaintiffs cite to ten consumer behavior

research articles in their complaint.

Despite plaintiffs’ specific and detailed allegations, the majority

concludes, contrary to the Attorney General’s formidable contentions in his

merits brief and at oral argument before us, that plaintiffs failed to plead that

they suffered an ascertainable loss. Ante at ___ (slip op. at 18). I respectfully 15 disagree. “An ascertainable loss is a loss that is ‘quantifiable or measurable’;

it is not ‘hypothetical or illusory.’” Lee, 203 N.J. at 522 (quoting Thiedemann,

183 N.J. at 248). We have articulated that “[t]he CFA does not demand that a

plaintiff necessarily point to an actually suffered loss or to an incurred loss,

but only to one that is ‘ascertainable.’” Bosland, 197 N.J. at 559. And “[i]n

cases involving breach of contract or misrepresentation, either out-of-pocket

loss or a demonstration of loss in value will suffice to meet the ascertainable

loss hurdle and will set the stage for establishing the measure of damages.”

Thiedemann, 183 N.J. at 248.

This Court has acknowledged that because a plain meaning cannot be

ascribed to the term “ascertainable loss” and legislative history does not

“shed[] direct light” on its meaning, “[w]e must look to the clear objectives of

the [CFA] itself, informed by well-established remedies available in a typical

breach-of-contract case, to find the meaning of ascertainable loss.” Furst, 182

N.J. at 11. Thus, a court’s analysis of ascertainable loss “is informed by basic

principles of contract law” including, as we have recognized in Furst and as

the majority identifies, the benefit-of-the-bargain theory. Id. at 13; see ante at

___ (slip op. at 16). That is where I begin.

16 Under a benefit-of-the-bargain theory, “the innocent party must be given

the ‘benefit of his bargain’ and placed in ‘as good a position as he would have

been in had the contract been performed.’” Furst, 182 N.J. at 13 (quoting

Scully v. US WATS, Inc., 238 F.3d 497, 512 (3d Cir. 2001)). In other words,

“the innocent party has a right to damages ‘based on his expectation interest as

measured by . . . the loss in the value to him’ caused by the breaching party’s

nonperformance.” Ibid. (omission in original) (quoting Restatement (Second)

of Contracts § 347(a) (Am. Law Inst. 1981)). Thus, the benefit-of-the-bargain

theory is applicable, as the majority precisely identifies, “[w]hen a consumer

claims that there is a difference in value between an item as advertised and the

item as delivered, but the item is not worthless.” Ante at ___ (slip op. at 16).

In Smajlaj v. Campbell Soup Co., 782 F. Supp. 2d 84, 99 (D.N.J. 2011),

an opinion on which the majority relies, the United States District Court for

the District of New Jersey applied the benefit-of-the-bargain theory to

determine ascertainable loss under the New Jersey CFA. There, the late Judge

Jerome B. Simandle insightfully explained that the benefit-of-the-bargain

theory “requires nothing more than that the consumer was misled into buying a

product that was ultimately worth less to the consumer than the product he was

promised.” Ibid. Thus, in agreement with the majority, to determine

ascertainable loss utilizing a benefit-of-the-bargain theory, we compare “what

17 consumers actually received to what they would objectively expect to receive,

based on their bargain.” Ante at ___ (slip op. at 17).

The majority, however, asserts that plaintiffs do not sufficiently allege

an ascertainable loss under the benefit-of-the-bargain theory because the items

plaintiffs received were not alleged to be “defective,” “damaged,” or “worth

less than they paid.” Ante at ___ (slip op. at 23). Instead, as the majority

contends, the plaintiffs received exactly what they were promised and

purchased. Ante at ___ (slip op. at 23). But, in his well-reasoned opinion,

Judge Simandle correctly pointed out that even though it “is often the case that

the difference between the promised product and the product actually received

is some defect or flaw in the product, there is no requirement that the product

actually received be defective or deficient in any way other than that it is not

what was promised.” Campbell Soup Co., 782 F. Supp. 2d at 99; see also

Union Ink Co., Inc. v. AT&T Corp., 352 N.J. Super. 617, 646 (App. Div.

2002) (“An ascertainable loss occurs when a consumer receives less than what

was promised.”). That is indeed what plaintiffs alleged here.

And in Thiedemann, we stated that as to the plaintiffs’ benefit-of-the-

bargain claims, the plaintiffs would need to provide evidence “to support or

infer a quantifiable loss” because “subjective assertions without more are

insufficient to satisfy the requirement of an ascertainable loss that is expressly

18 necessary for access to the CFA remedies.” 183 N.J. at 252. Of course, a

consumer’s expectations of what was promised must be objective and

reasonable. But as Judge Simandle aptly explained in Campbell Soup Co., if a

“consumer received a product that ‘was worth objectively less than what one

could reasonably expect,’ then that type of defeated expectation is an injury.”

782 F. Supp. 2d at 99-100. Plaintiffs adequately alleged that their reasonable

expectations were not met because they “did not enjoy the actual discounts

Aéropostale represented and promised to them,” and that, based on the

reference price, “the items they purchased were not in fact worth the inflated

amount that Aéropostale represented to them.” On a Rule 4:6-2(e) motion, we

must accept those allegations as true.

Our reasoning in Furst and consumer behavior research further supports

my conclusion that, here, plaintiffs pleaded ascertainable loss utilizing a

benefit-of-the-bargain theory. Plaintiffs alleged that they did not receive what

they reasonably expected -- an expectation premised on what Aéropostale

falsely promised, and further, the loss plaintiffs suffered as a result is

objectively measurable and quantifiable.

To illustrate this, I first turn to our discussion in Furst which itself is

centered on consumer behavior and perception, and how courts can reasonably

quantify the “replacement value” of an item to assess the damages warranted

19 for a CFA claim. 4 Furst, 182 N.J. at 14-18. In concluding that the regular list

price on an item’s price tag may be evidence of replacement value, the Furst

Court emphasized that “[m]erchants understand that one of the central tenets

of market psychology is that consumers do not want to pay full retail price and

are always in search of the best deal.” Id. at 17 (emphasis added). Relying on

consumer behavior studies, the Furst Court candidly discussed how placing a

reference price and a sales price on a particular item “focuses consumers’

attention on the difference between the two prices. This leads to a perception

of greater value concerning the purchase of the product.” Ibid. (quoting Bruce

L. Alford & Abhijit Biswas, The Effects of Discount Level, Price

Consciousness and Sale Proneness on Consumers’ Price Perception and

Behavioral Intention, 55 J. Bus. Res. 775, 775 (2002)).

4 The majority distinguishes Furst stating that, unlike this appeal concerning ascertainable loss, the Furst Court focused on the award of damages, and that “[t]here is no calculation of ‘damages sustained’ unless the ascertainable loss requirement is first satisfied.” D’Agostino v. Maldonado, 216 N.J. 168, 192 (2013). But the majority respectfully failed to consider another aspect of D’Agostino -- that “‘[a]scertainable loss’ and ‘damages sustained’ are not . . . unrelated to one another.” Ibid. (emphases added). The Court goes on to state that “[i]n a given case, the same quantifiable loss of money or other property, suffered by the plaintiff as a result of the defendant’s CFA violation, may serve both purposes in the analysis, consistent with the statute’s remedial intent and the requirement of proving damages with certainty.” Id. at 193 (emphasis added). 20 In addition, like my original hypothetical concerning a consumer being

induced into purchasing a purportedly $1,000 coat offered for $300,

“consumers are less likely to search other retail locations and have an

increased likelihood of purchase” when fictitious pricing like that of

Aéropostale’s exists. Ibid. (quoting Alford & Biswas, 55 J. Bus. Res. at 775).

Recognizing that consumers have a “commonsense desire to buy at a reduced

price,” ibid., and that retailers are “expected to know the value of the

merchandise they place for sale to the public,” id. at 18, this Court held that

[t]he strong remedial policy undergirding the [CFA] leads us to conclude that the regular price advertised on the sales sticker is a relevant benchmark from which to impute replacement value. Accordingly, there will be a rebuttable presumption that the regular price on the sales sticker is the replacement value of the [item].

[Id. at 18-19 (emphasis added) (citation omitted).]

To support the assertion of this rebuttable presumption, we noted in Furst how

[w]e are mindful that misleading advertising is a deceptive commercial practice. It is a deceptive practice under the [CFA] for a retailer to artificially inflate the price for an item of merchandise for the purpose of advertising the item at a large reduction. . . . [W]e believe that an unscrupulous merchant might pause before inflating a regular price on a sales sticker if that price was evidence of replacement value. Therefore, the rebuttable presumption that regular price equals replacement value may deter some merchants who might otherwise inflate the regular price to make the sale more appealing to the public.

21 [Id. at 20 (emphasis added) (citations omitted).]

And in interpreting the Division of Consumer Affairs’ regulations defining a

“former price in ‘a price reduction advertisement,’” we stated unequivocally

that “the regular price must bear some relationship to what the retailer

considered to be the market value of the merchandise ‘in the recent, regular

course of his business.’” Id. at 16-17 (quoting B. Sanfield, Inc. v. Finlay Fine

Jewelry Corp., 258 F.3d 578, 580 (7th Cir. 2001)).

In other words, we recognized in Furst that a reference price or former

price may be equated with the value of an item. See 182 N.J. at 18-19. Thus,

contrary to the majority’s apparent conclusion that plaintiffs held subjective

and unreasonable expectations about the items’ value, and applying what this

Court has said in Furst, it is objectively reasonable for a consumer to believe

that a former price or reference price is illustrative of the value of an item. See

also Hinojos v. Kohl’s Corp., 718 F.3d 1098, 1105-06 (9th Cir. 2013)

(discussing that to some consumers “a product’s ‘regular’ or ‘original’ price

matters; it provides important information about the product’s worth and the

prestige that ownership of that product conveys”). Notably, this behavior

where a consumer equates a reference price with value is exactly “why

retailers . . . have an incentive to advertise false ‘sales.’” Id. at 1106.

22 If a plaintiff pleads that the retailer’s reference price represented to the

consumer was false or inflated, then the consumer has been deceived and has

shown ascertainable loss by the consumer’s objective reasonable belief that

they received an item of less value than what the retailer represented and

promised. Furst illustrates how this Court has prioritized deterring the

deceptive practice of fictitious pricing, see 182 N.J. at 20, and I would uphold

those long-standing principles by reinstating plaintiffs’ complaint.

Lastly, recent consumer behavior research analyzing fictitious pricing

and its impact on consumers provides additional support that plaintiffs

sufficiently pleaded an objective, reasonable, and measurable ascertainable

loss. Despite being acknowledged in plaintiffs’ complaint, the majority fails to

consider the body of research showing (1) how consumers equate a product’s

former price with its value and quality, and (2) that consumers place value on

the bargain itself. 5

In his article centered on fictitious pricing, Professor David Adam

Friedman discusses how “[a] higher fictitious ‘former price’ disingenuously

5 Plaintiffs cite ten articles in their complaint to support their allegations. I build upon the research plaintiffs provide to include more published articles in this dissent to illustrate how this body of academic research continues to grow nationally, adding further support to plaintiffs’ allegations that consumer behavior is greatly impacted by this deceptive practice. 23 causes the consumer to attach a higher level of value to an item than it would

have had the pricing been honest,” and describes how “[c]onsumers may also

use a former reference price as a signal of quality.” David Adam Friedman,

Reconsidering Fictitious Pricing, 100 Minn. L. Rev. 921, 934-35 (2016). More

specifically, Professor Friedman explains that

[i]f the price signal is genuine -- i.e., the good was once offered in a bona fide manner at a higher price, the advertised discount communicates the availability of a true bargain. . . . If the signal proves false, however, the consumer transacts on a false association of quality.

[Id. at 935 (emphasis added).]

Mark Armstrong and Yongmin Chen further discuss in their article on

discount pricing two reasons why a consumer is more willing to purchase an

item with a discounted price as compared to a low initial price: (1) “a high

initial price can indicate the seller has chosen to supply a high-quality product”

and (2) “when a seller with limited stock runs a clearance sale, later consumers

infer that unsold stock has higher expected quality when its initial price was

higher.” Mark Armstrong & Yongmin Chen, Discount Pricing, 58 Econ.

Inquiry 1614, 1614 (2020).

Moreover, researchers Richard Staelin, Joel E. Urbany, and Donald

Ngwe recently published a study on fictitious pricing and explained how there

is “robust and empirically documented observation[s] that when most

24 consumers buy a product, they consider not only the actual transaction price

. . . but also the expected savings relative to some normal (reference) price.”

Staelin, Urbany, & Ngwe, 87 J. of Mktg. at 830. The researchers explain that

an “attractive deal” has the ability “to disrupt search and encourage a

consumer to stop [searching for goods] even earlier, since the deal increases

the perceived utility of the offering and, thus, the offering is more likely to

meet or exceed the expected value of the consumer’s outside option.” Id. at

831 (citations omitted); see also Gorkan Ahmetoglu, Adrian Furnham, &

Patrick Fagan, Pricing Practices: A Critical Review of their Effects on

Consumer Perceptions and Behaviour, 21 J. of Retailing & Consumer Servs.

696, 699 (2014) (discussing how numerous studies taken together illustrate

that “the presence of a reference price increases consumers’ deal valuations

and purchase intentions and can lower their search intentions as compared to

the case where a reference price is absent”).

Taking into consideration (1) the CFA’s strong remedial purpose to

protect consumers, (2) the Legislature’s intent to cement the CFA as “one of

the strongest consumer protection laws in the nation” by creating a private

right of action to assist in reducing the Attorney General’s enforcement

burdens, Bosland, 197 N.J. at 555 (emphasis added), (3) our case precedents,

25 (4) consumer behavior research, and (5) the invaluable practical insight

provided by the Attorney General appearing as amicus, it is clear to me that

plaintiffs here have sufficiently pleaded that they suffered an ascertainable loss

under a benefit-of-the-bargain theory after being deceived by Aéropostale’s

fictitious pricing scheme.

Contrary to the majority’s view, plaintiffs’ ascertainable loss is objective

and reasonable. As alleged in the complaint, plaintiffs reasonably believed --

when viewing the discounts advertised and promised by Aéropostale -- that the

products were worth a higher value but were being sold at a discounted price,

yielding a certain amount of savings. Based on our reasoning in Furst and

consumer behavior research, it is apparent that these beliefs are common and

reasonable among consumers. In fact, that is exactly why retailers engage in

the deceptive practice of fictitious pricing. See Hinojos, 718 F.3d at 1106;

Furst, 182 N.J. at 17 (“Merchants draw consumers into their stores by holding

sales events . . . that promise the regular value of a product at a reduced

price.”).

Although plaintiffs do not allege that they received “defective” products

(i.e., non-wearable clothing), as was the case in Furst, a “defective” or

“flawed” product is not always required to show ascertainable loss under the

benefit-of-the-bargain theory. See Campbell Soup Co., 782 F. Supp. 2d at 99

26 (“[T]here is no requirement that the product actually received be defective or

deficient in any way other than that it is not what was promised.”). It is

enough at the motion-to-dismiss stage that plaintiffs alleged they “received

items worth far less than the value claimed by [d]efendant.” (emphasis added).

Moreover, what Aéropostale promised based on the information it provided

(i.e., reference prices), were products worth a higher value and a realization in

savings. Plaintiffs received neither and, therefore, contrary to the majority’s

conclusion, plaintiffs did not receive “exactly what they knowingly

purchased.” Ante at ___ (slip op. at 23).

And importantly, plaintiffs’ ascertainable loss is measurable and

quantifiable as the difference between the reference price on the products and

the amount they actually purchased the products for -- i.e., reference price

minus (-) purchase price equals (=) ascertainable loss. Applying that formula

to the facts alleged in the complaint concerning the “hoodie” Robey purchased,

Robey’s ascertainable loss can be quantified by looking at the difference

between $59.95 (the reference price) and what she paid for the “hoodie,”

$23.98 (the purchase price), which equals $35.97. That equation, one that the

Attorney General urges this Court to utilize, would be similarly applied to the

additional factual allegations made by plaintiffs.

27 Although the majority identifies that other jurisdictions have declined to

hold that consumers are injured by rampant fictitious pricing schemes, we

must not forget the legislative history and intent surrounding the enactment of

the CFA’s private cause of action: “to ‘give New Jersey one of the strongest

consumer protection laws in the nation.’” Bosland, 197 N.J. at 555 (emphasis

added).

Although the issue of whether plaintiffs have pleaded out-of-pocket loss

need not be reached given my conclusions that plaintiffs have sufficiently

pleaded ascertainable loss under the benefit-of-the-bargain theory, I cannot

ignore Judge Maritza Berdote Byrne’s thoughtful concurring opinion that

plaintiffs sufficiently pleaded an ascertainable loss under the out-of-pocket

loss theory. See Robey v. SPARC Grp. LLC, 474 N.J. Super. 593, 606 (App.

Div. 2023) (Berdote Byrne, J.S.C. (temporarily assigned), concurring).

Therefore, I will briefly discuss the applicability of out-of-pocket loss theory

to the present case.

“[O]ut-of-pocket loss . . . will suffice to meet the ascertainable loss

hurdle . . . .” Thiedemann, 183 N.J. at 248. A plaintiff can suffer an out-of-

pocket loss that is ascertainable and that is equated to the purchase price of the

product when the plaintiff purchases a completely worthless item. See Lee,

28 203 N.J. at 527-28 (concluding that when representations about a product are

“baseless” then the out-of-pocket loss is the purchase “of the worthless

product”). A plaintiff may also illustrate an out-of-pocket loss if they spent

money to repair a defective product. See Thiedemann, 183 N.J. at 251-52.

The majority correctly asserts that the present case is distinguishable

from past decisions, ante at ___ (slip op. at 20-21), but it does not adequately

consider Dugan v. TGI Fridays, Inc., 231 N.J. 24 (2017). In Dugan, where the

plaintiffs brought a class action CFA claim against a restaurant that did not list

the price of beverages on its menus, we noted that “[i]ndividual plaintiffs may

be able to establish ascertainable loss and causation by showing that they

would not have purchased the beverages or would have spent less money on

them had they been informed of their cost.” Id. at 60. Here, plaintiffs allege --

and we must accept the allegations as true at this stage -- that “they would not

have purchased the [clothing] items at the prices they paid had they known the

items had not been regularly offered or sold at the higher list price,” or had

they been informed that the discounts were false. Therefore, plaintiffs here

suffered an out-of-pocket loss that is ascertainable, i.e., the purchase price of

the clothing items.

Other jurisdictions have adopted this approach or similar approaches to

out-of-pocket loss. In Munning v. Gap, Inc., a case with substantially similar

29 facts to the present appeal, the United States District Court for the Northern

District of California interpreted the New Jersey CFA and held that the

plaintiffs sufficiently pleaded an out-of-pocket loss because the plaintiffs

alleged that they would not have purchased the products if the plaintiffs knew

that the discounts were false, even though the items the plaintiffs purchased

were not worthless. 238 F. Supp. 3d 1195, 1201 (N.D. Cal. 2017).

Moreover, in Hinojos, the United States Court of Appeals for the Ninth

Circuit, interpreting California law, held “that when a consumer purchases

merchandise on the basis of false price information, and when the consumer

alleges that he would not have made the purchase but for the

misrepresentation, he has standing to sue . . . because he has suffered an

economic injury.” 718 F.3d at 1107. Although standing to sue under

California law is slightly different than the ascertainable loss requirement

under the CFA, the general principles regarding harm and loss to the consumer

apply.

And most recently in Clark v. Eddie Bauer LLC, another case with

similar facts to the present case, the Oregon Supreme Court held that, under

Oregon law, “when a person acts in response to [a store’s] deception by

spending money that the person would not otherwise have spent, the person

has been injured to the extent of the purchase price as a result of that

30 deception.” 532 P.3d 880, 893 (Or. 2023) (emphasis added). In other words,

if a “plaintiff paid money . . . for articles of clothing that she would not have

bought had she known their true price history,” then “[t]he money that [the]

plaintiff is out as a result is her ‘loss.’” Id. at 891 (emphasis added).

Thus, here, because plaintiffs alleged that they would not have

purchased the items had they known the discounts were false, they arguably

sufficiently pleaded an out-of-pocket loss that would equate to the purchase

price of the items.

The fact that plaintiffs did not allege that they attempted to return the

items is of no moment, especially at this stage in the litigation. Our decision

in Bosland is instructive of this point. We held in Bosland that “the CFA does

not require a consumer, who has been victimized by a practice which the

statute is designed to remedy, to seek a refund from the offending merchant as

a prerequisite to filing a complaint.” 197 N.J. at 547-48. Importantly, we

emphasized that interpreting the CFA to require a pre-suit demand “would

potentially permit practices, that the statute is designed to deter, . . . to

continue unabated and unpunished.” Id. at 561. We maintained that “[s]uch

an analysis of the CFA would limit relief by making it available only to those

consumers who are alert enough to ask for a refund, while allowing the

offending merchant to reap a windfall.” Ibid.

31 Thus, our precedent does not support the notion that for plaintiffs here to

successfully plead ascertainable loss under an out-of-pocket loss theory, they

must have attempted to return the items. Just because plaintiffs could have

returned the items and “theoretically, could have secured complete relief in no

way diminishes the fact that” plaintiffs “sustained an immediate quantifiable

loss” when they were tricked into purchasing items they otherwise would not

have paid for due to defendant’s misrepresentations. Id. at 559.

Echoing our sentiments from twenty years ago in Furst, the CFA “cannot

be construed to allow an offending merchant to benefit from his own

deception.” 182 N.J. at 14. I would have let this case proceed in the ordinary

course: discovery, motion practice if warranted, then trial. I therefore dissent.