Mulder v. Kohl's Department Stores, Inc.

Filing 41

Judge F. Dennis Saylor, IV: ORDER entered. MEMORANDUM AND ORDER ON MOTION TO DISMISS, MOTION TO AMEND, AND MOTION TO CERTIFY. (Pezzarossi, Lisa)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
______________________________________
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ELLEN MULDER,
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Plaintiff,
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v.
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KOHL’S DEPARTMENT STORES, INC., )
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Defendant.
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_____________________________________ )

Civil Action No.
15-11377-FDS

MEMORANDUM AND ORDER ON MOTION TO
DISMISS, MOTION TO AMEND, AND MOTION TO CERTIFY
SAYLOR, J.
This is a putative class action arising out of allegedly deceptive and misleading labeling
and marketing of merchandise by Kohl’s Department Stores, Inc. The amended complaint
alleges that Kohl’s has engaged in false advertising of its merchandise by listing fictional
“comparison prices” at which it had never previously sold that merchandise and that were
“intentionally selected so that Kohl’s could advertise phantom markdowns.” (Am. Compl. ¶ 5).
Plaintiff Ellen Mulder purchased two items that were listed with a comparison price at the Kohl’s
store in Hingham, Massachusetts. She has brought this action alleging fraud, breach of contract,
unjust enrichment, and violation of Mass. Gen. Laws ch. 93A, 940 Mass. Code Regs. § 6.01, and
the Federal Trade Commission Act.
Kohl’s has moved to dismiss the amended complaint pursuant to Fed. R. Civ. P. 12(b)(6)
for failure to state a claim upon which relief can be granted. After submitting three rounds of
written briefing in opposition and participating in oral argument, plaintiff has moved to amend

the complaint. Plaintiff has also filed a motion to certify a question of law to the Massachusetts
Supreme Judicial Court.
Because the complaint does not allege a legally cognizable injury, and for the other
reasons set forth below, defendant’s motion to dismiss will be granted, and plaintiff’s motions
for leave to amend and to certify questions to the Massachusetts Supreme Judicial Court will be
denied.
I.

Background
A.

Factual Background

Unless otherwise indicated, the facts below are presented as stated in the amended
complaint.
Kohl’s Department Stores, Inc. is a Wisconsin corporation with a principal place of
business in Menomonee, Wisconsin. (Am. Compl. ¶ 12). It operates a chain of department
stores, including more than twenty stores in Massachusetts. (Id. ¶ 13).
The amended complaint alleges that Kohl’s listed false “comparison prices” both on the
price tags of its products and on LED displays throughout the store. (Id. ¶¶ 3-4). Specifically, it
alleges that “Kohl’s misrepresented the existence, nature, and amount of price discounts on [its]
products” by falsely “purporting to offer specific dollar discounts from its own former retail
prices . . . or manufacturer’s suggested retail prices” when, in fact, the listed prices were
“fabricated [and] inflated, and d[id] not represent the true prices for which products were being
sold at Kohl’s.” (Id. ¶ 2). It specifically alleges that the comparison prices listed on the price
tags were “fictional amounts intentionally selected so that Kohl’s could advertise phantom
markdowns.” (Id. ¶ 5). It further alleges that “[t]he Kohl’s pricing scheme was prominently
displayed on all products available for sale at Kohl’s stores in Massachusetts.” (Id. ¶ 8).

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On November 3, 2014, Ellen Mulder went to the Kohl’s store located in Hingham,
Massachusetts. (Id. ¶ 23). The complaint alleges that she observed at least two price tags that
displayed comparison prices; one represented the manufacturer’s suggested retail price as having
been $55 and another displayed an undefined comparison price of $26. (Id.; Am. Compl. Exs. B,
C). The products were listed as being on sale for $29.99 and $17.99, respectively. (Am. Compl.
Ex. A). She paid a total of $40.78 to purchase both items as a result of an additional 15 per cent
discount. (Id.).
According to the complaint, Mulder “was induced to purchase” both items because she
was “[e]nticed by the idea of paying significantly less than the comparison pricing price.” (Am.
Compl. ¶ 23). The amended complaint alleges that Mulder “would not have made such
purchase, or would not have paid the amount she did, but for Kohl’s false representations of the
former price of the items she purchased.” (Id. ¶ 10). According to the amended complaint,
“Kohl’s never intended [to], nor did it ever, sell the items at the represented comparison price.”
(Id. ¶ 24).
B.

Procedural Background

Mulder initially filed a complaint in Plymouth County Superior Court on November 20,
2014. (St. Ct. Rec. at 2). She filed an amended complaint on February 19, 2015. (Id.). Kohl’s
removed the action to this Court on March 27, 2015.
Kohl’s has moved to dismiss the amended complaint for failure to state a claim upon
which relief can be granted. Mulder has filed a motion to amend the complaint, and a motion to
certify a question of law to the Massachusetts Supreme Judicial Court.
II.

Motion to Dismiss
On a motion to dismiss, the Court “must assume the truth of all well-plead[ed] facts and

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give . . . plaintiff the benefit of all reasonable inferences therefrom.” Ruiz v. Bally Total Fitness
Holding Corp., 496 F.3d 1, 5 (1st Cir. 2007) (citing Rogan v. Menino, 175 F.3d 75, 77 (1st Cir.
1999)). To survive a motion to dismiss, the complaint must state a claim that is plausible on its
face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). That is, “[f]actual allegations must
be enough to raise a right to relief above the speculative level, . . . on the assumption that all the
allegations in the complaint are true (even if doubtful in fact).” Id. at 555 (citations omitted).
“The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a
sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Twombly, 550 U.S. at 556). Dismissal is appropriate if the facts as alleged do
not “possess enough heft to show that plaintiff is entitled to relief.” Ruiz Rivera v. Pfizer
Pharm., LLC, 521 F.3d 76, 84 (1st Cir. 2008) (alterations omitted) (internal quotation marks
omitted).
Ordinarily, a complaint need only contain “a short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). For that reason, “great
specificity is ordinarily not required to survive a Rule 12(b)(6) motion.” Garita Hotel Ltd.
Partnership v. Ponce Federal Bank, F.S.B., 958 F.2d 15, 17 (1st Cir. 1992). However, under
Fed. R. Civ. P. 9(b), in cases “alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of
a person’s mind may be alleged generally.” The purposes of that requirement are (1) to give
defendants notice and enable them to prepare meaningful responses; (2) to preclude the use of a
groundless fraud claim as a pretext to using discovery as a fishing expedition; and (3) to
safeguard defendants from frivolous charges that might damage their reputations. See In re
Lupron Mktg. & Sales Practices Litig., 295 F. Supp. 2d 148, 170 (D. Mass. 2003) (quoting New

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England Data Services, Inc. v. Becher, 829 F.2d 286, 288 (1st Cir. 1987)); see also McGinty v.
Beranger Volkswagen, Inc., 633 F.2d 226, 228-29 (1st Cir. 1980). Under the Rule 9(b)
heightened pleading requirement, a complaint must state the time, place, and content of the
alleged false or fraudulent representations to state a claim for fraud. Epstein v. C.R. Bard, Inc.,
460 F.3d 183, 190-91 (1st Cir. 2006). The Rule 9(b) pleading requirement applies both to
general claims of fraud and also to “associated claims where the core allegations effectively
charge fraud.” North Am. Catholic Educ. Programming Found., Inc. v. Cardinale, 567 F.3d 8,
15 (1st Cir. 2009); Martin v. Mead Johnson Nutrition Co., 2010 WL 3928707, at *3 (D. Mass.
Sept. 30, 2010) (“A claim under Chapter 93A that involves fraud is subject to the heightened
pleading requirement.”).
A.

Count Four: Violation of CMR and FTCA

Count Four alleges a claim for violations of the Code of Massachusetts Regulations and
the Federal Trade Commission Act. Specifically, Count Four alleges that Kohl’s “violated and
continues to violate 940 [Mass. Code Regs.] 6[.]01” and “violated and continues to violate the
[Federal Trade Commission Act], 15 U.S.C. § 45(a)(1) and 15 U.S.C. § 52(a), as well as FTC
Guidelines published at 16 C.F.R. § 233.” Count Five alleges a violation of Mass. Gen. Laws.
ch. 93A that is predicated on violation of the underlying regulations. The Federal Trade
Commission Act does not provide for a private cause of action. See Marini v. Dragadosusa,
2012 WL 4023674, at *1 (D. Mass. Sept. 11, 2012) (“[T]he Federal Trade Commission
Act . . . does not provide a cause of action by private persons such as the plaintiff.” (citing
Holloway v. Bristol-Myers Corp., 485 F.2d 986, 1002 (D.C. Cir. 1973))). Likewise, there is no
private right of action under the Code of Massachusetts Regulations. As a result, Count Four
will be dismissed for failure to state a claim upon which relief can be granted.

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B.

Count Five: Violation of Chapter 93A

Chapter 93A of the Massachusetts General Laws prohibits “[u]nfair methods of
competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”
Mass. Gen. Laws ch. 93A, § 2(a). Conduct is “unfair or deceptive” if it falls “within any
recognized or established common law or statutory concept of unfairness.” VMark Software v.
EMC Corp., 37 Mass. App. Ct. 610, 620 (1994). Pursuant to 940 Mass. Code Regs. 3.16, “[a]n
act or practice is a violation of [Mass. Gen. Laws] Ch. 93A, s.2 if: . . . (3) [i]t fails to comply
with existing statutes, rules, regulations or laws, meant for the protection of the public’s health,
safety, or welfare promulgated by the Commonwealth . . . ; or (4) [i]t violates the Federal Trade
Commission Act, the Federal Consumer Credit Protection Act or other Federal consumer
protection statutes within the purview of [Mass. Gen. Laws ch.] 93A, s.2.” The Supreme
Judicial Court has interpreted the “regulation as being bound by the scope of [Mass. Gen. Laws
ch.] 93A, § 2(a). In other words, under 940 Mass. Code Regs. § 3.16(3) a violation of a law or
regulation . . . will be a violation of c[h]. 93A, § 2(a), only if the conduct leading to the violation
is both unfair or deceptive and occurs in trade or commerce.” Klairmont v. Gainsboro
Restaurant, 465 Mass. 165, 174 (2013). “[W]hether the particular violation or violations qualify
as unfair or deceptive conduct is best discerned from the circumstances of each case.” Id.
(quoting Kattar v. Demoulas, 433 Mass. 1, 14 (2000)) (internal quotation marks omitted).
1.

Code of Massachusetts Regulations

Title 940 of the Code of Massachusetts Regulations establishes rules governing, among
other things, retail advertising and price comparisons. Under Section 3.02(2), “[n]o statement or
illustration shall be used in any advertisement which creates a false impression of the grade,
quality, make, value, currency of model, size, color, usability, or origin of the product

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offered . . . .” 940 Mass. Code Regs. 3.02(2). Under Section 6.01, an advertisement is defined
as including a “representation . . . printed on or contained in any tag or label which is attached to
or accompanies any product offered for sale.”
Section 6.03(2) provides that “[s]ellers shall not use advertisements which are untrue,
misleading, deceptive, fraudulent, falsely disparaging of competitors, or insincere offers to sell.”
940 Mass. Code Regs. 6.03(2). The regulations define two specific types of “unfair or
deceptive” acts that are potentially relevant here. Under Section 6.05(2),
It is an unfair or deceptive act for a seller to state or imply that it is offering any
savings as to any product by making a direct or indirect price comparison, unless
the seller clearly and conspicuously describes the basis for the price comparison.
Notwithstanding the foregoing, a seller may claim a savings or compare a higher
and a lower price without disclosing the basis for the comparison if the seller is
comparing to its own former price.
940 Mass. Code Regs. 6.05(2). Under Section 6.05(3),
[i]t is an unfair or deceptive act for a seller to compare its current price with its
former price for any product, unless such former price is a bona fide, actual price
at which the seller offered the product to the public, openly and in good faith for a
reasonably substantial period of time in the recent past. The burden shall be on
the seller to show that its former price is not an inflated or exaggerated price, and
that the seller offered the product to the public at the former price openly and in
good faith.
940 Mass. Code Regs. 6.05(3). A price comparison is defined as “any advertisement . . . of a
seller’s current price for a product with any other price or representation of value, whether or not
such other price is actually stated in the advertisement.” 940 Mass. Code Regs. 6.01.
2.

Federal Trade Commission Act

Pursuant to the Federal Trade Commission Act, “[u]nfair methods of competition in or
affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are
hereby declared unlawful.” 15 U.S.C. § 45(a). It is an “unfair or deceptive act or practice” to
disseminate “any false advertisement . . . (2) [b]y any means, for the purpose of inducing, or
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which is likely to induce, directly or indirectly, the purchase in or having an effect upon
commerce, of food, drugs, devices, services, or cosmetics.” 15 U.S.C. § 52(a), (b).
The Federal Trade Commission’s Guides Against Deceptive Pricing distinguishes
between “former price comparisons,” “retail price comparisons,” and “comparable value
comparisons.” See 16 C.F.R. §§ 233.1, 233.2; Rubenstein v. Neiman Marcus Group LLC, 2015
WL 1841254, at *5 (C.D. Cal. March 2, 2015). According to the section on “former price
comparisons,”
One of the most commonly used forms of bargain advertising is to offer a
reduction from the advertiser’s own former price for an article. If the former
price is the actual bona fide price at which the article was offered to the public on
a regular basis for a reasonably substantial period of time, it provides a legitimate
basis for the advertising of a price comparison. Where the former price is
genuine, the bargain being advertised is a true one. If, on the other hand, the
former price being advertised is not bona fide but fictitious—for example, where
an artificial, inflated price was established for the purpose of enabling the
subsequent offer of a large reduction—the “bargain” being advertised is a false
one; the purchaser is not receiving the unusual value he expects. In such a case,
the “reduced” price is, in reality, probably just the seller’s regular price.
16 C.F.R. § 233.1(a). The section on “retail price comparisons” identifies “[a]nother commonly
used form of bargain advertising” as one where the seller offers “goods at prices lower than those
being charged by others for the same merchandise in the advertiser’s trade area (the area in
which he does business).” 16 C.F.R. § 233.2(a). According to the guidelines,
This may be done either on a temporary or a permanent basis, but in either case
the advertised higher price must be based upon fact, and not be fictitious or
misleading. Whenever an advertiser represents that he is selling below the prices
being charged in his area for a particular article, he should be reasonably certain
that the higher price he advertises does not appreciably exceed the price at which
substantial sales of the article are being made in the area—that is, a sufficient
number of sales so that a consumer would consider a reduction from the price to
represent a genuine bargain or saving.
Id. “Comparable value comparisons” are described as “[a] closely related form of bargain
advertising” that offers “a reduction from the prices being charged either by the advertiser or by
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others in the advertiser’s trade area for other merchandise of like grade and quality—in other
words, comparable or competing merchandise—to that being advertised.” 16 C.F.R. § 233.2(c).
According to the guidelines,
Such advertising can serve a useful and legitimate purpose when it is made clear
to the consumer that a comparison is being made with other merchandise and the
other merchandise is, in fact, of essentially similar quality and obtainable in the
area. The advertiser should, however, be reasonably certain, just as in the case of
comparisons involving the same merchandise, that the price advertised as being
the price of comparable merchandise does not exceed the price at which such
merchandise is being offered by representative retail outlets in the area.
Id. Other courts have interpreted price tags with “Compared To” language as displaying
a “comparable value comparison” as opposed to a “former price comparison.” See, e.g.,
Rubenstein, 2015 WL 1841254, at *6; Branca v. Nordstrom, Inc., 2015 WL 1841231, at
*8 (S.D. Cal. March 19, 2015).
3.

Alleged Unfair or Deceptive Acts

As noted, Mulder purchased two items—one whose tag displayed a comparison price of
$26 and for which she paid $17.99, and a second whose tag displayed a manufacturer’s
suggested retail price of $55 and for which she paid $29.99. (Am. Compl. ¶ 3, Exs. A, B, C). 1
The price tags in the record do not provide any explanation of the basis for the price
comparisons, and the amended complaint alleges that “Kohl’s never intended [to], nor did it
ever, sell the items at the represented comparison price.” (Am. Compl. ¶ 24). The amended
complaint also alleges that the MSRP contained on the second item’s price tag was “fabricated.”
(Am. Compl. ¶ 2). It therefore appears that the amended complaint sufficiently states a claim for
violations of the Code of Massachusetts Regulations. See Shaulis v. Nordstrom, Inc., 2015 WL
4886080, at *6 (D. Mass. Aug. 14, 2015). Such violations would also constitute unfair or

1

Mulder ultimately paid a total of $40.78 as a result of an additional 15 per cent discount on her purchase.
(Am. Compl. Ex. A).

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deceptive conduct within the meaning of Chapter 93A. See id. at *6 (citing Klairmont, 465
Mass. at 174-75).
The amended complaint also purports to state a claim based on an alleged violation of the
Federal Trade Commission Act. Because the amended complaint adequately alleges an unfair or
deceptive act under Chapter 93A by sufficiently alleging a violation of the Code of
Massachusetts Regulations, the Court need not determine whether it has also adequately alleged
an unfair or deceptive act in violation of the Federal Trade Commission Act.
4.

Alleged Injury

The amended complaint alleges that “Kohl’s has been unjustly enriched by obtaining
revenues and profits that it would not otherwise have obtained absent its false, misleading and
deceptive conduct.” (Am. Compl. ¶ 65). It further alleges that “Kohl’s has improperly obtained
money from [p]laintiff” and “requests that this court cause Kohl’s to restore this money to
[p]laintiff . . ., and to enjoin Kohl’s from continuing to violate the [Code of Massachusetts
Regulations] as discussed herein and/or from violating the [Code of Massachusetts Regulations]
in the future.” (Id. ¶ 66).
There does not appear to be a causation issue: the second amended complaint alleges that
the unfair or deceptive act or practice (the allegedly manipulative price marking) caused an
identifiable harm (a purchase that otherwise would not have been made). The question instead is
whether that alleged harm is sufficient to sustain a claim under Chapter 93A.
“Chapter 93A provides a cause of action for a plaintiff who ‘has been injured.’ . . . by
‘unfair or deceptive acts or practices.’” Rule v. Fort Dodge Animal Health, Inc., 607 F.3d 250,
253 (1st Cir. 2010) (citing Mass Gen. Laws ch. 93A, §§ 9(1), 2(a)). The jurisprudence as to what
constitutes an “injury” under Chapter 93A is, to say the least, somewhat muddled. See Shaulis,

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2015 WL 4886080, at *7-8 (reviewing Massachusetts cases); Ferreira v. Sterling Jewelers, Inc.,
2015 WL 5437086, at *3 (D. Mass. Sept. 15, 2015) (“From the vantage of the federal courts, the
jurisprudence on cognizable injuries under chapter 93A leaves much to be desired by way of
clarity.”). The First Circuit observed in Rule that the decisions of the Supreme Judicial Court
had left it “uncertain whether and when something less than conventional economic injury will
suffice” under Chapter 93A. 607 F.3d at 253. Nonetheless, the court went on to note that “the
most recent SJC cases on point appear to have returned to the notion that injury under chapter
93A means economic injury in the traditional sense; and, if . . . [there are] exceptions, it is for the
SJC to identify and define them.” Id. at 255.
The alleged harm, if any, suffered by Mulder here is not a “non-economic” injury; she
does not claim, for example, that she suffered emotional distress as a result of the transaction. If
it is anything, therefore, it is some form of “economic” injury. However, the injury that Mulder
claims to have suffered is not an “injury” in any traditional sense of the word. She paid $40.78
for merchandise on the alleged belief “that she was getting a significant discount on her
purchase.” (Am. Compl. ¶ 10). But it appears that she paid $40.78 for items that were, in fact,
worth $40.78. The fact that plaintiff may have been manipulated into purchasing the items
because she believed she was getting a bargain does not necessarily mean she suffered economic
harm. See Shaulis, 2015 WL 4886080, at *9. 2
As in Shaulis, it is superficially appealing to conclude that plaintiff has suffered a
cognizable “injury” under the law. The requirements of misrepresentation and causation have
been met: plaintiff alleges that she was unfairly induced into a making a purchase that she would

2

See also Ferreira, 2015 WL 5437086, at *5 (“The critical inquiries here are whether Ms. Ferreira has
offered sufficient evidence that she was led to believe she was purchasing something other than what was sold to
her, and whether what she received was actually worth less—even if not quantifiably so—than what she thought she
was buying.”) (citation omitted).

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not have made, but for the misrepresentation. And the transaction was arguably to her detriment;
she would rather have her money—which she could use to purchase other things—than the
items.
The question, however, is whether that amounts to a legally cognizable “injury” within
the meaning of Chapter 93A. Based on the allegations in the complaint, it does not. See id. at
*10. The law requires more than misrepresentation, causation, and a potential remedy: it
requires a legally cognizable “injury.” There does not appear to be such an injury here. See
Ferreira, 2015 WL 5437086, at *7 (“The record supports nothing more than the conclusion that
Ms. Ferreira now thinks she was somehow getting less of a bargain than she did.”). Plaintiff has
not suffered an economic injury; among other things, she has suffered no loss, and there is no
sum of money that could be awarded to her that could “compensate” her without providing a
windfall. 3 It therefore appears that the complaint fails to plead a cause of action under Chapter
93A, based on the absence of a cognizable injury. Accordingly, the motion to dismiss Count
Five will be granted.
C.

Counts One, Two, and Three

Counts One, Two, and Three allege common-law claims for fraud, breach of contract,
and unjust enrichment. The complaint for all three counts appears to rely in substantial part on
violations of the Code of Massachusetts Regulations.
1.

Count One: Fraud

Count One alleges common-law fraud. To establish fraud or fraudulent
misrepresentation, a plaintiff “must show that the defendant [1] ‘made a false representation of a

3

The Court could arguably order injunctive relief, requiring Kohl’s to accept an exchange in which
plaintiff returns the items and Kohl’s refunds the $40.78. It does not follow, however, that plaintiff has suffered an
economic injury; again, she has suffered no actual loss.

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material fact [2] with knowledge of its falsity [3] for the purpose of inducing the plaintiff to act
thereon, and [4] that the plaintiff reasonably relied upon the representation as true and acted upon
it [5] to [her] damage.’” Eureka Broadband Corp. v. Wentworth Leasing Corp., 400 F.3d 62, 68
(1st Cir. 2005) (quoting Russell v. Cooley Dickinson Hosp., Inc., 437 Mass. 443, 458 (2002)).
Here, the principal problem with the fraud claim is that the complaint fails to allege an
actionable injury caused by the alleged false statement. It is well-settled that a common-law
action for fraud requires a pecuniary loss. See, e.g., Restatement (Second) of Torts § 525.
Having not alleged a pecuniary loss, the fraud claim cannot survive. See Shaulis, 2015 WL
4886080, at *11. Because the complaint does not adequately allege common-law fraud, Count
One will be dismissed.
2.

Count Two: Breach of Contract

Count Two alleges a claim for breach of contract. To prove a breach of contract under
Massachusetts law, a plaintiff must show “that there was a valid contract, that the defendant
breached its duties under the contractual agreement, and that the breach caused the plaintiff
damage.” Guckenberger v. Boston Univ., 957 F. Supp. 306, 316 (D. Mass. 1997) (citations
omitted); accord Michelson v. Digital Fin. Servs., 167 F.3d 715, 720 (1st Cir. 1999).
Under Massachusetts law, a covenant of good faith and fair dealing is implied in every
contract. UNO Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 385 (2004).
The covenant provides that “neither party shall do anything that will have the effect of
destroying or injuring the rights of the other party to receive the fruits of the contract.”
Anthony’s Pier Four, Inc. v. HBC Associates, 411 Mass. 451, 471-72 (1991).
The implied covenant may not be invoked to create rights and duties not contemplated by
the provisions of the contract or the contractual relationship. UNO Restaurants, 441 Mass. at

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385-86; AccuSoft Corp. v. Palo, 237 F.3d 31, 45 (1st Cir. 2001). However, “[a] party may
breach the covenant of good faith and fair dealing . . . without breaching the express term of th[e]
contract. Otherwise, the implied covenant would be a mere redundancy.” Massachusetts v.
Schering-Plough Corp., 779 F. Supp. 2d 224, 240 (D. Mass. 2011) (quoting Speakman v.
Allmerica Fin. Life Ins., 367 F. Supp. 2d 122, 132 (D. Mass. 2005)). “The essential inquiry is
whether the challenged conduct conformed to the parties’ reasonable understanding of the
performance obligations, as reflected in the overall spirit of the bargain, not whether the
defendant abided by the letter of the contract in the course of performance.” Speakman, 367 F.
Supp. 2d at 132.
The amended complaint appears to allege that in executing a contract of sale with
Mulder, Kohl’s violated the implied covenant of good faith and fair dealing by including
“contract terms [that were] materially deceptive and misleading or outright lies.” (Am. Compl.
¶ 56).
However, the amended complaint does not allege that the terms of the contract itself were
breached. It does not allege that the merchandise purchased by Mulder was worth less than what
she paid for it, or that she did not receive the benefit of her bargain. “By charging this agreed
price in exchange for ownership of the clothing, [Kohl]’s gave the plaintiff[] the benefit of [her]
bargain.” See Kim v. Carter’s Inc., 598 F.3d 362, 364 (7th Cir. 2010) (finding that consumers
failed to allege breach of contract where retailer sold them clothing that was advertised as
discounted from suggested prices).
In sum, the amended complaint does not state an action for breach of contract, or breach
of the implied covenant of good faith and fair dealing. Accordingly, Count Two will be
dismissed.

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3.

Count Three: Unjust Enrichment

Count Three alleges a claim for unjust enrichment. Unjust enrichment is defined as the
“retention of money or property of another against the fundamental principles of justice or equity
and good conscience.” Santagate v. Tower, 64 Mass. App. Ct. 324, 329 (2005). To succeed on a
claim for unjust enrichment, a plaintiff must show (1) a benefit conferred upon defendant by
plaintiff, (2) an appreciation or knowledge by defendant of the benefit, and (3) that acceptance or
retention of the benefit under the circumstances would be inequitable without payment for its
value. Massachusetts Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 552 F.3d 47, 57 (1st
Cir. 2009).
The amended complaint alleges that “Kohl’s has been unjustly enriched by obtaining
revenues and profits that it would not otherwise have obtained absent its false, misleading and
deceptive conduct.” (Am. Compl. ¶ 60). However, that conclusory allegation is not sufficient to
state a claim for unjust enrichment. There is no allegation that Mulder did not receive the
merchandise she attempted to purchase or that she paid more than its true value—in other words,
there is no allegation that Kohl’s retained a benefit that would be inequitable without payment
for its value. Accordingly, Count Three will be dismissed.
III.

Motion to Amend Complaint
Rule 15 of the Federal Rules of Civil Procedure addresses amendments to pleadings.

Under Rule 15(a), a party may amend a “pleading” without leave of court in certain relatively
narrow circumstances. 4 “In all other cases, a party may amend its pleadings only with the
opposing party's written consent or the court's leave. The court should freely give leave when

4

A party may amend a pleading once as a matter of course within “21 days after serving it,” or “if the
pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days
after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.” Fed. R. Civ. P. 15(a)(1).

15

justice so requires.” Fed. R. Civ. P. 15(a)(2). Nonetheless, amendments may be denied on the
basis of “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to
cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by
virtue of allowance of the amendment, [and] futility of amendment.” Foman v. Davis, 371 U.S.
178, 182 (1962). In determining whether to grant a motion to amend, the Court must examine
the totality of the circumstances and “exercise its informed discretion in constructing a balance
of pertinent considerations.” Palmer v. Champion Mortg., 465 F.3d 24, 30-31 (1st Cir. 2006).
In substance, Mulder seeks to add new allegations that she was induced to travel to
Kohl’s by false advertising, and that she suffered an economic injury because of the consumption
of gasoline and depreciation of her automobile arising out of that travel. Considering the totality
of the circumstances, Mulder’s motion to amend her complaint will be denied both because of
undue delay and because her proposed amendments to the complaint would be futile.
A.

Undue Delay

In the First Circuit, it is well-established that “undue delay in moving to amend, even
standing alone, may be . . . an adequate reason [to deny a motion for leave to amend].” In re
Lombardo, 755 F.3d 1, 3 (1st Cir. 2014) (citing Foman, 371 U.S. at 182; Acosta–Mestre v.
Hilton Int'l of P.R., Inc., 156 F.3d 49, 51-52 (1st Cir. 1998)); accord Perez v. Hospital Damas,
Inc., 769 F.3d 800, 802 (1st Cir. 2014); Calderón–Serra v. Wilmington Trust Co., 715 F.3d 14,
20 (1st Cir. 2013) (“Appreciable delay alone, in the absence of good reason for it, is enough to
justify denying a motion for leave to amend.”). The First Circuit has “also held that in assessing
whether delay is undue, a court will take account of what the movant ‘knew or should have
known and what he did or should have done.’” In re Lombardo, 755 F.3d at 3-4 (quoting Invest
Almaz v. Temple–Inland Forest Prods. Corp., 243 F.3d 57, 72 (1st Cir. 2001)). Delays for

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periods as short as four months and less than three months have been found to constitute undue
delay. See Villanueva v. United States, 662 F.3d 124, 127 (1st Cir. 2011) (four-month delay);
Kay v. N.H. Dem. Party, 821 F.2d 31, 34 (1st Cir. 1987) (less than three-month delay).
After Kohl’s filed its motion to dismiss, Mulder did not seek to amend her complaint.
Instead, she filed an opposition to the motion, sought (and was granted) leave to file a sur-reply,
opposed the motion again at oral argument, and then submitted a third written memorandum in
opposition after argument was heard. Mulder freely admits that she filed her motion to amend to
rectify deficiencies identified in this Court’s unfavorable ruling in Shaulis v. Nordstrom, a case
in which the plaintiff—who is also represented by Mulder’s counsel—filed substantially
identical allegations of false advertising against a different retailer. (Pl. Mem. ¶¶ 5, 13).
Nonetheless, Mulder was “put on notice of the deficiencies in the complaint by the
motion to dismiss. If [she] had something relevant to add, [she] should have moved to add it
then.” Fire & Police Pension Ass'n of Colo. v. Abiomed, Inc., 778 F.3d 228, 247 (1st Cir. 2015).
She presumably had the additional information at her disposal, or could have obtained it with
reasonable diligence, at all relevant times. Under the circumstances, Mulder has not provided a
valid reason for her neglect and delay, and her motion will therefore be denied.
B.

Futility

Allowing Mulder to amend her complaint would also be futile. As noted, the proposed
second amended complaint seeks to add additional allegations to attempt to cure the deficiencies
in the first amended complaint identified by the Court in Shaulis v. Nordstrom, 2015 WL
4886080 (D. Mass. Aug. 14, 2015). In substance, Mulder’s new allegations are that she suffered
an “economic injury” because she spent time and money travelling to Kohl’s. (See Prop. Sec.
Am. Compl. ¶ 22).

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The primary shortcoming of Mulder’s new factual allegations is a lack of causation
between the alleged injury and the misrepresentations upon which she relies. Mulder did not,
and indeed could not have, seen the alleged misrepresentations until she was already present in
the store. The price tags, therefore, logically could not have caused her to travel to Kohl’s.
Instead, Mulder attempts to address her causation problem by alleging that she was “deceived by
Kohl’s advertising in general, including newspaper ads,” and that “but for the reputation that
Kohl’s developed as a result of its false advertising of ‘amazing prices,’” she would not have
undergone the expense of travelling to Kohl’s. (Id. at ¶¶ 22, 31).
However, under Fed. R. Civ. P. 9(b), in cases “alleging fraud or mistake, a party must
state with particularity the circumstances constituting fraud or mistake.” Under the 9(b)
heightened pleading requirement, a complaint must state the time, place, and content of the
alleged false or fraudulent representations to state a claim for fraud. Epstein v. C.R. Bard, Inc.,
460 F.3d 183, 190-91 (1st Cir. 2006). The Rule 9(b) pleading requirement applies both to
general claims of fraud and also to “associated claims where the core allegations effectively
charge fraud.” North Am. Catholic Educ. Programming Found., Inc. v. Cardinale, 567 F.3d 8,
15 (1st Cir. 2009); Martin v. Mead Johnson Nutrition Co., 2010 WL 3928707, at *3 (D. Mass.
Sept. 30, 2010) (“A claim under Chapter 93A that involves fraud is subject to the heightened
pleading requirement.”).
Again, the issue is not whether Kohl’s allegedly made misrepresentations in its in-store
displays and tags; the complaint adequately alleges such a violation. Instead, it is whether the
complaint sufficiently alleges that Kohl’s deceived her into going to the store at all. As set forth
in the amended complaint, Mulder’s allegations that she was induced to travel to Kohl’s by its
“advertising in general” and claims of “amazing prices” fall well short of meeting Rule 9’s

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requirements for alleging fraudulent representations. 5 Those alleged facts, therefore, are legally
insufficient to establish causation for the new injury she now alleges, and to allow her to amend
the complaint to include them would be futile.
IV.

Motion to Certify
Mulder has also asked the Court to certify the question of whether she suffered an

“economic injury” to the Massachusetts Supreme Judicial Court. Federal courts can certify
questions to the SJC in cases where there is no controlling precedent and where the questions
may be determinative of the pending cause of action. In re Engage, Inc., 544 F.3d 50, 52 (1st
Cir. 2008). The fact that a legal issue is close or difficult, however, is not normally enough to
warrant certification. Id. at 57. Under the circumstances, Mulder’s motion to certify will be
denied.
V.

Conclusion
For the foregoing reasons,
1) the motion to dismiss by defendant Kohl’s is GRANTED as to all counts;
2) Mulder’s motion to amend the complaint is DENIED; and
3) Mulder’s motion to certify questions to the Massachusetts Supreme Judicial Court is
DENIED.

So Ordered.

/s/ F. Dennis Saylor
F. Dennis Saylor IV
United States District Judge

Dated: February 1, 2016

5

Furthermore, as Kohl’s notes, a claim of “amazing prices” in most circumstances is likely non-actionable
puffery because, standing alone, such an advertisement does not make an explicit promise or guarantee. See Millen
Indus., Inc. v. Flexo-Accessories Co., Inc., 5 F. Supp. 2d 72, 74 (1998) (quoting Shaw v. Digital Equip. Corp., 82
F.3d 1194, 1218 (1st Cir. 1996)).

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