Case Law Summaries

Solo v. Bed Bath & Beyond, Inc.

• Opinion Date: April 26, 2007
• Business Law
• E-Mail

CONSUMER FRAUD; DAMAGES —To receive an award under the Consumer Fraud Act, a consumer must suffer an ascertainable loss which includes both a monetary loss as well as where a consumer has received less than what was promised; however, a consumer must make such allegations with sufficient detail and specificity for its lawsuit to go forward.

A consumer acted as the representative in a class action suit against a retailer for violating a consumer fraud statute. The consumer alleged that the retailer misrepresented the thread count in some multi-ply bed sheets it was selling.

The retailer moved to dismiss the complaint, claiming that the consumer had failed to state a claim of action. The Court, pursuant to the Federal Rules of Civil Procedure, accepted all allegations in the complaint as being true and then analyzed them to ascertain if the consumer had failed to state a claim that would entitle the consumer to relief. The Court also noted that all reasonable inferences had to be drawn in favor of the consumer.

The Court looked to the text of the statute under which the consumer brought suit – the New Jersey Consumer Fraud Act. That Act requires a consumer to allege unlawful conduct by a seller, that the consumer suffered an ascertainable loss, and that there was a causal relationship between the seller’s unlawful conduct and the consumer’s ascertainable loss. The Court noted that since the seller was alleging an affirmative action by the retailer, intent was not a necessary element under the Act; nor was reliance required under the Act. The Court acknowledged that the first element of the Act’s requirement was met. However, it did not find that the consumer had met the second and third elements of the Act.

The Court noted that ascertainable losses include both a monetary loss as well as a consumer receiving less than what was promised. Here, it found that the consumer failed to make such allegations with sufficient detail and specificity. The consumer’s statements were found to be both broad and conclusory. The Court also held that the consumer failed to plead the necessary specific facts that would set forth and define the ascertainable loss or to state what the specific loss was caused by the misrepresentation.

Even if it assumed that the consumer had been able to plead an ascertainable loss, the Court further found that the consumer failed to demonstrate the causal relationship between the alleged misrepresentation and the ascertainable loss. The Act requires some amount of causation between the two and that this nexus be proven by the consumer.

Consequently, the Court dismissed the consumer’s lawsuit.

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