Johnson et al v. Jos. A. Bank Clothiers, Inc.

Filing 30

OPINION AND ORDER granting 12 Motion to Dismiss for Failure to State a Claim; denying 28 Motion to Strike 27 Reply to Response to Motion. Signed by Magistrate Judge Norah McCann King on 1/8/2014. (pes1)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
MATTHEW B. JOHNSON, et al.,
Plaintiffs,
vs.

Civil Action 2:13-cv-756
Magistrate Judge King

JOS. A. BANK CLOTHIERS, INC.,
Defendant.
OPINION AND ORDER
Plaintiffs bring this action on behalf of themselves and a
putative plaintiff class of Ohio residents, alleging violations of the
Ohio Consumer Sales Practices Act (“OCSPA”), O.R.C. § 1345.01 et seq.,
and rules promulgated thereunder, in connection with defendant’s
marketing practices based on allegedly false advertised regular
prices.

This matter is now before the Court, with the consent of the

parties pursuant to 28 U.S.C. § 636(c), for consideration of Defendant
Jos A. Bank Clothier, Inc.’s Motion to Dismiss Plaintiffs’ Class
Action Complaint (“Defendant’s Motion”), Doc. No. 12, Plaintiffs’
Brief in Opposition to Defendant’s Motion to Dismiss (“Plaintiffs’
Response”), Doc. No. 23, and Defendant’s Reply, Doc. No. 27.
Also before the Court is plaintiffs’ motion to strike Defendant’s
Reply, Doc. No. 28.

Plaintiffs argue that Defendant’s Reply should be

stricken from the record pursuant to S.D. Ohio Civ. R. 7.2 because it
exceeds 20 pages.

Local Rule 7.2(a)(3) provides as follows:

Limitation Upon Length of Memoranda. Memoranda in support
of or in opposition to any motion or application to the
Court should not exceed twenty (20) pages. In all cases in
which memoranda exceed twenty (20) pages, counsel must
include a combined table of contents and a succinct, clear

and accurate summary, not to exceed five (5) pages,
indicating the main sections of the memorandum, the
principal arguments and citations to primary authority made
in each section, as well as the pages on which each section
and any sub-sections may be found.
S.D. Ohio Civ. R. 7.2(a)(3).

Although Rule 7.2(a)(3) expresses a

preference that memoranda not exceed twenty pages, the rule in fact
contemplates the filing of memoranda that exceed twenty pages and
provides a procedure for doing so.

See id. (“In all cases in which

memoranda exceed twenty (20) pages . . . .”).

Prior leave of Court is

not expressly required by either Rule 7.2 or the procedures of the
undersigned, so long as the requirements of the rule are satisfied.
See id.

Defendant’s Reply complies with these requirements.

Accordingly, plaintiffs’ motion to strike, Doc. No. 28, is DENIED.
For the following reasons, Defendant’s Motion, Doc. No. 12, is
GRANTED.
I.

Background
The Complaint, Doc. No. 1, includes the following allegations.

Defendant Jos A. Bank Clothiers, Inc., is a Delaware corporation with
its principal place of business in Maryland.

Id. at ¶ 11.

Defendant

operates a national chain of retail clothing stores and has
approximately twenty-five stores throughout Ohio, including four
stores in Franklin County, Ohio.

Id. at ¶ 12.

Defendant frequently

advertises sales via “television commercials, targeted mailings,
Facebook, email, targeted telephone campaigns and in-store
advertising” in which the purchaser of one suit at the “regular” price
receives a specified number of additional suits for free.
¶¶ 20-21, 40, 46.

2

See id. at

Plaintiffs Matthew Johnson and Charles Patterson are Ohio
residents. In 2013, each purchased a suit from defendant at “the
purported ‘regular price’ of $795” and, based on the advertised sale
at the time, received “three ‘free’ suits.”

Id. at ¶¶ 14-18.

Plaintiffs allege that the “regular price” of each purchased suit
“did not reflect the true price regularly paid by consumers for Jos.
A. Bank suits.”

Id. at ¶ 17.

Plaintiffs allege that the “regular

price” of the suits “was grossly inflated by Jos. A. Bank in order to
pass the costs of the ‘free suits’ on to the Plaintiffs.”
18.

Id. at ¶

According to plaintiffs, defendant’s suits are “almost never”

sold at the “regular price;” plaintiffs believe that less than one
percent of defendant’s suits sold in Ohio are sold at the “regular
price.”

Id. at ¶¶ 22, 25, 27.

Plaintiffs allege that, because

defendant’s suits “are on ‘sale’ almost 100% of the time,” id. at ¶
23; see also id. at ¶ 40 (“[A]s soon as one sale ends, another
substantially similar sale begins.”), defendant’s advertised “regular
prices” “do not reflect the true price regularly paid by consumers for
their suits.”

Id. at ¶ 22.

That deception proximately injures and damages the consumer
who is not getting a ‘deal’ or a ‘sale’ price at all, but
rather, is paying an inflated ‘regular price’ for suits not
worth nearly that much.
Id. at ¶ 30.
The Complaint also alleges that defendant has misrepresented the
quality of its suits:
Jos. A. Bank represented to the Plaintiffs and those
similarly situated that they would be receiving a suit,
sportcoat or dress slacks of a certain quality – that is, a
suit, sportcoat or dress slacks of a quality commensurate
with its ‘regular’ price.
What the Plaintiffs and those

3

similarly situated actually received was a suit, sportcoat
or dress slacks that was greatly inferior in value to what
was represented by the regular price.
Id. at ¶ 31.

When plaintiff Johnson purchased “a suit he believed was

regularly sold for $795, he assumed that suit would be comparable in
quality to suits sold for $795 by other men’s specialty retailers.”
Id. at ¶ 32.

However, defendant “did not employ the quality of

materials, construction or standards of craftsmanship one would expect
of a suit with the retail price they advertised[.]”1
II.

Id. at ¶ 34.

Standard
A motion to dismiss under Rule 12(b)(6) attacks the legal

sufficiency of the complaint.

See Roth Steel Prods. v. Sharon Steel

Co., 705 F.2d 134, 155 (6th Cir. 1983).

In determining whether

dismissal on this basis is appropriate, a complaint must be construed
in the light most favorable to the plaintiff, and all well-pleaded
facts must be accepted as true.

See Bower v. Fed. Express Corp., 96

F.3d 200, 203 (6th Cir. 1996); Misch v. Cmty. Mut. Ins. Co., 896 F.
Supp. 734, 738 (S.D. Ohio 1994).

The United States Supreme Court has

explained that, “once a claim has been stated adequately, it may be
supported by showing any set of facts consistent with the allegations
in the complaint.”
(2007).

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 546

However, a plaintiff’s claim for relief “requires more than

labels and conclusions, and a formulaic recitation of the elements of
a cause of action will not do.”

Id. at 555.

“Factual allegations

must be enough to raise a right to relief above the speculative
1

Plaintiffs’ proposed class includes persons who purchased a suit from
defendant, as well as those who purchased “dress pants or sportcoats/suit
jackets.” Complaint, ¶ 81. The Court refers only to suits for simplicity’s
sake and because the named plaintiffs allegedly purchases suits.

4

level[.]”

Accordingly, a complaint must be dismissed if it does

Id.

not plead “enough facts to state a claim to relief that is plausible
on its face.”

Id. at 570.

III. Discussion
Plaintiffs’ first cause of action alleges that defendant violated
§ 1345.02(B)(2) of the OCSPA.

The OCSPA provides that “[n]o supplier

shall commit an unfair or deceptive act or practice in connection with
a consumer transaction.”

O.R.C. § 1345.02(A).

Under O.R.C. §

1345.02(B)(2), it is an unfair or deceptive act or practice for a
supplier to represent, inter alia, “[t]hat the subject of a consumer
transaction is of a particular standard, quality, grade, style,
prescription, or model, if it is not.”
Plaintiffs allege that defendant violated § 1345.02(B)(2)
by represent[ing] to the Plaintiffs and those similarly
situated that they would be receiving a suit, sportcoat or
dress slacks of a certain quality – that is, a suit,
sportcoat or dress slacks of a quality commensurate with
its ‘regular’ price.
What the Plaintiffs and those
similarly situated actually received was a suit, sportcoat
or dress slacks that was greatly inferior in value to what
was represented by the regular price.
Complaint, ¶ 31.

Plaintiffs argue that defendant’s “price signals to

consumers a particular level of quality” and that the price of an item
is an implicit representation by the supplier that the item is of a
particular standard, quality, or grade.

Plaintiffs’ Response, p. 10.

Specifically, plaintiffs argue that the price advertised by a supplier
implicitly represents that the item being sold is of similar quality
to the items sold by the supplier’s competitors at the same price.
See id.; Complaint, ¶¶ 32 (“For, example, when Johnson bought a suit
he believed was regularly sold for $795, he assumed that suit would be

5

comparable in quality to suits sold for $795 by other men’s specialty
retailers . . . .”), 34 (“However, in producing Johnson’s suit and, in
fact, all of their suits, Jos. A. Bank did not employ the quality of
materials, construction or standards of craftsmanship one would expect
of a suit with the retail price they advertised . . . .”).
Plaintiffs’ argument is not well taken.
As noted supra, it is a deceptive act or practice for a supplier
to represent “[t]hat the subject of a consumer transaction is of a
particular standard, quality, grade, style, prescription, or model, if
it is not.”

O.R.C. § 1345.02(B)(2).

Plaintiffs’ reference to

implicit representations notwithstanding, a violation of §
1345.02(B)(2) requires a supplier to affirmatively represent that a
product is of a “particular standard, quality, grade, style,
prescription, or model.”

See R.C. § 1345.02(B)(2); Patterson v. Cent.

Mills, Inc., 112 F.Supp. 2d 681, 692 (N.D. Ohio Aug. 21, 2000)
(“Although plaintiffs contend that in designing and marketing the
shirt at issue [the defendant] represented that the shirt was
appropriate and safe to be worn by children, plaintiffs have presented
no evidence that [the defendant] made such an affirmative
representation.”) (citing Funk v. Montgomery AMC/Jeep/Renault, 586
N.E.2d 1113 (Ohio Ct. App. 1990) (requiring an affirmative
representation of inaccurate or false information to recover under
O.R.C. § 1345.02); Hubbard v. Bob McDorman Chevrolet, 662 N.E.2d 1102,
1107 (Ohio Ct. App. 1995) (finding no violation of R.C. § 1345.02(B)
where there was no evidence that “material misrepresentations were
affirmatively made by appellee”); Lintermoot v. Brown, No. 15-86-25,

6

1988 WL 80492, at *1 (Ohio Ct. App. Aug. 2, 1988) (“We first observe
that the evidence does not disclose that defendant made any
affirmative representations to plaintiff as to the type of engine in
the vehicle at the time of sale. . . .

Obviously, had the legislature

intended R.C. 1345.02 to include failure to disclose as well as
representations as deceptive or unfair practices, it could easily have
included such language.”).

The Complaint alleges that defendant’s

suits are “greatly inferior in value to what was represented by the
regular price” of the suits.

Complaint, ¶ 31.

The Complaint does

not, however, allege that defendant made any affirmative
representation that its suits were of a particular quality.
Plaintiffs may have expected that a suit purchased for $795 from
defendant “would be comparable in quality to suits sold for $795 by
other men’s specialty retailers;” see id. at ¶ 32; however, a
consumer’s subjective expectations of a product’s quality do not alone
support a cause of action under O.R.C. § 1345.02(B)(2).

Although the

price charged in a consumer transaction may be generally
representative of the quality of the items sold, the price charged
does not, by itself, constitute a representation that a product is of
a particular quality.

Accordingly, the Complaint fails to state a

colorable claim for relief under O.R.C. § 1345.02(B)(2).
Plaintiffs’ first cause of action also alleges a violation of
O.A.C. § 109:4-3-12(A).
8 n.29, 14.

See Complaint, ¶ 4; Plaintiffs’ Response, pp.

That regulation is titled “Declaration of policy” and

provides:
This rule is designed to define with reasonable specificity
certain circumstances in which a supplier's acts or

7

practices in advertising price comparisons are deceptive
and therefore illegal.
For purposes of this rule, price
comparisons involve a comparison of the present or future
price of the subject of a consumer transaction to a
reference price, usually as an incentive for consumers to
purchase.
This
rule
deals
only
with
out-of-store
advertisements as defined in paragraph (B)(3) of this rule.
The rule stems from the general principle, codified in
division (B) of section 1345.02 of the Revised Code, that
it is deceptive for any claimed savings, discount, bargain,
or sale not to be genuine, for the prices which are the
basis of such comparisons not to be bona fide, genuine
prices, and for out-of-store advertisements which indicate
price comparisons to create false expectations in the minds
of consumers.
O.A.C. § 109:4-3-12(A).

The parties have briefed their respective

positions regarding whether defendant’s promotions constitute a “price
comparison” under O.A.C. § 109:4-3-12(A).
p. 9; Defendant’s Motion, pp. 17-19.

See Plaintiffs’ Response,

However, the Court finds it

necessary to first consider whether § 109:4-3-12(A) even creates a
private cause of action because the regulation does not expressly
provide for such a right.

The parties have not addressed this issue.

“When determining whether, in the absence of explicit language, a
statute grants a private right of action, Ohio courts have used the
test set forth in” Cort v. Ash, 422 U.S. 66 (1975); Grey v. Walgreen
Co., 967 N.E.2d 1249, 1252 (Ohio Ct. App. 2011) (citing Strack v.
Westfield Cos., 515 N.E.2d 1005 (Ohio Ct. App. 1986)):
First, is the plaintiff “one of the class for whose
especial benefit the statute was enacted,” — that is, does
the statute create a federal right in favor of the
plaintiff? Second, is there any indication of legislative
intent, explicit or implicit, either to create such a
remedy or to deny one?
Third, is it consistent with the
underlying purposes of the legislative scheme to imply such
a remedy for the plaintiff?
Cort, 422 U.S. at 78 (citations omitted).

However, courts have tended

to focus most closely on the second Cort factor, i.e., that of

8

legislative intent to create a personal right and a private remedy.
See, e.g., Grey, 967 N.E.2d at 1252-53 (“The United States Supreme
Court has gradually focused on the single factor of whether there was
a legislative intent to grant a private right of action”) (citing
Alexander v. Sandoval, 532 U.S. 275 (2001)). See also Fawcett v. G.C.
Murphy & Co., 46 Ohio St.2d 245, 249 (Ohio 1976) (refusing to “read []
a remedy into” O.R.C. § 4101.17 where there was no “clear implication”
that the legislature “intended to create a civil action for damages
for the breach of [§] 4101.17”).
As noted supra, plaintiffs allege that defendant violated O.A.C.
§ 109:4-3-12(A).
n.29, 14.

See Complaint, ¶ 4; Plaintiffs’ Response, pp. 8

Pursuant to O.R.C. § 1345.05(B)(2), the Ohio Attorney

General is authorized to adopt substantive rules defining acts or
practices that are deceptive and violative of the OCSPA.
1345.05(B)(2).

O.R.C. §

Section 109:4-3-12(A) was adopted by the Ohio Attorney

General pursuant to this provision; however, nothing in the regulation
suggests an intention to create a personal right or a private remedy.
Plaintiff has not referred to, and the Court has not found, any Ohio
authority even suggesting that O.A.C. § 109:4-3-12(A) creates a
private cause of action.

Section 109:4-3-12(A) is titled “Declaration

of policy,” and it merely sets forth the policy upon which the
remainder of the regulation is premised.

Unlike sections (C)-(I) of

the regulation,2 § 109:4-3-12(A) does not list or describe any conduct
that is considered “deceptive,” and thus actionable, under the OCSPA.
Furthermore, the basis of plaintiffs’ allegations, i.e., defendant’s
2

Section (B) provides a list of definitions.

9

See O.A.C. § 109:4-3-12(B).

alleged improper comparison of sales prices to its own regular prices,
see Plaintiffs’ Response, p. 9 (“Every time a consumer purchases any
sale item at Jos. A. Bank, which includes most items in the store, he
is deceived by the ‘comparison’ to that inflated regular price.”), is
expressly addressed in section (E) of the regulation, which provides
for a private cause of action.

See O.A.C. § 109:4-3-12(E) (titled

“Comparison with supplier’s own price” and setting forth actionable
“deceptive” acts).

Under the circumstances, the Court cannot permit

plaintiffs’ claims premised on a violation of O.A.C. § 109:4-3-12(A)
to proceed; to hold otherwise would circumvent the express language
and intent of the regulation.

See e.g., Howard v. Pierce, 738 F.2d

722, 727 n.9 (6th Cir. 1984) (finding that 42 U.S.C. § 1437, titled
“Declaration of policy and public housing agency organization,”
“expresses the congressional goal of remedying the ‘acute shortage of
decent, safe, and sanitary dwellings for families of low income’” and
does not create a private cause of action).
To the extent that plaintiffs have asserted claims under O.A.C. §
109:4-3-12(E), the Complaint fails to state a cause of action.
Plaintiffs’ allegations relate to advertisements and sales in which
one item is purchased at a “regular price” and additional items are
“free.”

See e.g., Complaint, ¶¶ 1-2, 5, 16, 20-21, 81 (defining the

potential class as “[a]ll persons who purchased a suit, dress pants or
sportcoats/suit jackets at a Jos. A. Bank retail store in Ohio, . . .
where the purchase was for one item based on a ‘regular price’ in
connection with an offer of at least one other ‘free’ item.”).

The

Complaint does not allege that defendant advertised its items using

10

such terms as “̔regularly .........., now ..........,’ ‘.......... per
cent off,’ ‘reduced from .......... to ..........,’ ‘save
$..........,’” see O.A.C. § 109:4-3-12(E)(1), that defendant’s
advertising uses “language indicating a range of savings or
reduction,” see O.A.C. § 109:4-3-12(E)(2), or that defendant sells by
means of “individually negotiated transactions.”
3-12(E)(3).

See O.A.C. § 109:4-

Furthermore, defendant’s alleged advertisements, which

offer free items when one item is purchased at the regular price, see
id., are not considered a “price comparison” for purposes of O.A.C. §
109:4-3-12, because they do not represent “that a savings, reduction
or discount exists or will exist,” and they do “not reasonably imply a
comparison to identifiable prices or items.”
12(B)(4) (defining “price comparison”).

See O.A.C. § 109:4-3-

Accordingly, the Complaint

fails to state a claim under O.A.C. § 109:4-3-12(E).
Plaintiffs also allege a violation of O.A.C. § 109:4-3-04, which
regulates the use of the word “free” in advertisements by suppliers.
Section 109:4-3-04 of the Ohio Administrative Code provides as
follows:
It shall be a deceptive act or practice in connection with
a consumer transaction for a supplier to use the word
“free” or other words of similar import or meaning, except
in conformity with this rule. It is the express intent of
this rule to prohibit the practice of advertising or
offering goods or services as “free” when in fact the cost
of the “free” offer is passed on to the consumer by raising
the regular (base) price of the goods or services that must
be purchased in connection with the “free” offer.
In the
absence of such a base price a “free” offer is in reality a
single price for the combination of goods or services
offered, and the fiction that any portion of the offer is
“free” is inherently deceptive.
O.A.C. § 109:4-3-04(A).

Where, as alleged here, there is

11

a consumer transaction in which goods or services are
offered as ‘free’ upon the purchase of other goods or
services the supplier must insure:
(1) That the unit regular price charged for the other goods
or services is not increased, or if there is no unit
regular price, the unit price charged for the other goods
or services is continued for a reasonable period of time[.]
O.A.C. § 109:4-3-04(D)(1).

Furthermore,

[o]nly the supplier's regular price for the goods or
services to be purchased may be used as the basis for a
“free” offer.
It is, therefore, a deceptive act or
practice for a supplier to offer “free” goods or services
based on a price which exceeds the supplier's regular price
for other goods or services required to be purchased.
O.A.C. § 109:4-3-04(E).

“Regular price” is defined as

the price at which the goods or services are openly and
actively sold by a supplier to the public on a continuing
basis for a substantial period of time. A price is not a
regular price if:
(a) It is not the supplier’s actual selling price;
(b) It is a price which has not been used in the recent
past; or
(c) It is a price which has been used only for a short
period of time.
O.A.C. § 109:4-3-04(F)(1).
In the case presently before the Court, plaintiffs allege that
the “regular price” of the suits purchased by them “did not reflect
the true price regularly paid by consumers for Jos. A. Bank suits.”
Complaint, at ¶ 17.

Plaintiffs allege that the “regular price” of the

suits “was grossly inflated by Jos. A. Bank in order to pass the costs
of the ‘free suits’ on to the Plaintiffs.”

Id. at ¶ 18.

According to

plaintiffs, defendant’s suits, as well as their formal wear, dress

12

pants, and sportcoats, are “almost never” sold at the “regular price;”
plaintiffs believe that less than one percent of defendant’s suits
sold in Ohio are sold at the “regular price.”

Id. at ¶¶ 22, 25, 27.

Plaintiffs allege that, because defendant’s “suits, sportcoats and
dress pants are on ‘sale’ almost 100% of the time,” id. at ¶ 23; see
also id. at ¶ 40 (“[A]s soon as one sale ends, another substantially
similar sale begins.”), defendant’s advertised “regular prices” “do
not reflect the true price regularly paid by consumers for their
suits.”

Id. at ¶ 22.

Accordingly, plaintiffs allege that defendant

uses an “inflated” regular price, and not its true “regular price,” in
advertisements offering “free” items with the purchase of an item at
the “regular price.”

See e.g., id. at ¶¶ 16-17, 22, 25, 30.

The

Court concludes that these allegations are sufficient to state a
colorable cause of action for an individual under O.A.C. § 109:4-3-04
at this juncture.

Nevertheless, plaintiffs’ claims must be dismissed

because the Complaint fails to allege that the alleged OCSPA
violations occurred within Ohio and the Complaint fails to adequately
allege damages for a class action under the OCSPA.
The OCSPA provides, in part: “No supplier shall commit an unfair
or deceptive act or practice in connection with a consumer
transaction.

Such an unfair or deceptive act or practice by a

supplier violates this section whether it occurs before, during, or
after the transaction.”

O.R.C. § 1345.02(A).

A consumer has a cause

of action and is entitled to relief for any violation of the OCSPA.
See O.R.C. § 1345.09.

A consumer may, in an individual action,

rescind the transaction or recover actual and statutory damages for a

13

violation of the OCSPA.

O.R.C. § 1345.09(A).

Alternatively, the

consumer may “recover damages or other appropriate relief in a class
action under Civil Rule 23.”

O.R.C. § 1345.09(B).

In order to

maintain a class action, however, a plaintiff must allege actual
“damages [that] were a proximate result of the defendant’s deceptive
act.”

Butler v. Sterline, Inc., 210 F.3d 371, at *4 (6th Cir. Mar.

31, 2010).

See also Washington v. Spitzer Mgmt., Inc., No. 81612,

2003 WL 1759617, at *5 (Ohio Ct. App. Apr. 3, 2003) (“CSPA limits the
damages available in class actions to actual damages . . . .”);
Konarzewski v. Ganley, Inc., No. 92623, 2009 WL 3649787, at *8 (Ohio
Ct. App. Nov. 5, 2009) (“[C]lass action plaintiffs must prove actual
damages under the CSPA.”).
Defendant argues that plaintiffs’ class claims fail because the
Complaint does not contain factual allegations of actual damages.
Defendant’s Motion, pp. 7-15; Defendant’s Reply, pp. 6-25.

This Court

agrees.
The Complaint alleges that “damages are readily and easily
calculable and will be a matter of arithmetic once the actual ‘regular
price’ of Jos. A. suits in Ohio is determined.”

Complaint, ¶ 57.

Complaint uses plaintiff Patterson’s transaction as an example:
Because the true regular or average price of a Jos. A. Bank
“Executive Suit” is, at most, $200-$250, Jos. A. Bank
deceived Patterson into paying an additional $545-$595 for
his “regular price” suit to cover the cost of the “free”
items associated with the “sale”, as well as a substantial
profit for Jos. A. Bank.
Thus, Patterson’s compensatory
damages are the additional amount he paid, beyond the
suit’s true regular price.
Put another way, while Patterson received a number of
items, none of them were for “free” because he spent at
least $545 to cover the cost of the “free” offer, which is

14

The

exactly what 109:4-3-04 and 109:4-3-12 are meant to protect
against.
That $545 (or the “regular price” paid less the
true regular price is found to be) should be returned to
Patterson and those similarly situated.
Id. at ¶¶ 61-62 (emphasis in original).

The Complaint alleges that

“[s]imilar examples could be put forth for Patterson and each member
of the putative Class by simply substituting the true ‘regular price’
of the suit or sportcoat into each transaction.”

Id. at ¶ 63.

“Damages are easily calculated,” the Complaint alleges, “by simply
replacing the fake ‘regular price’ with the real regular price in the
context of each class member’s purchase.”

Id. at ¶ 64 (emphasis

omitted).
Plaintiffs now argue that they “did not get the benefit of their
bargain because they received neither free merchandise nor suits that
regularly sold for the advertised ‘regular’ price.”
Response, p. 12.

Plaintiffs’

According to plaintiffs, defendant’s “advertising

promised Johnson a suit that Jos. A. Bank regularly sold in the market
place for $795, plus additional merchandise for free.

What Johnson

(and class members) actually got was nothing for free and a suit that
Jos. A. Bank regularly sold for a fraction of $795.”

Id. at p. 14.

Plaintiffs rely on Ohio’s benefit of the bargain rule and argue that
they “did not get the benefit of their bargain because they received
neither free merchandise nor suits that regularly sold for the
advertised ‘regular’ price.”

Id. at p. 12.

The “benefit of the bargain” rule provides a method for
calculating damages in an action for fraud; under the rule, the
“proper measure of damages is the difference between the value of the
property as it was represented to be and its actual value at the time

15

of purchase or exchange.”

Brewer v. Bros., 611 N.E.2d 492, 496 (Ohio

Ct. App. 1992) (citing Molnar v. Beriswell, 122 Ohio St. 348 (Ohio
1930)).

See also State v. Rose Chevrolet, Inc., No. CA91-12-214, 1993

WL 229392, at *2 (Ohio Ct. App. Jun. 28, 1993) (applying the benefit
of the bargain rule in an action under the OCSPA).

The parties

dispute the applicability of the benefit of the bargain rule at this
stage of the litigation.

See Defendant’s Reply, pp. 7-8.

Nevertheless, the Court need not reach the merits of the parties’
arguments in this regard because plaintiffs’ alleged damages misstate
the facts and fail to allege a cognizable injury.
First, it is important to note that the Complaint does not
actually allege that plaintiffs did not receive the “free” items that
defendant advertised.

Rather, the Complaint alleges, and plaintiffs

argue, that the purportedly “free” suits received by plaintiffs were
not actually free because defendant’s advertised “regular price” was
inflated to account for the cost of the “free” items.
Complaint, ¶ 18.

See e.g.,

Plaintiffs actually received four suits for the

“regular price” of $795 for one suit.

Plaintiffs’ calculation of

damages does not, however, take into account the fact that plaintiffs
received more than one suit.
Plaintiffs argue that damages are equal to the amount actually
paid for a single suit less the true regular price of that suit.
Complaint, ¶¶ 57, 61-64.

See

For example, plaintiff Patterson alleges

that he was damaged in the amount of $545 to $595 because he paid $795
for one suit with an alleged true regular price of $200 to $250.
id. at ¶¶ 60-62.

See

This calculation, however, does not account for the

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fact that plaintiff Patterson actually received four suits, each
allegedly valued at $200 to $250, and not just one.

Based on

plaintiffs’ own allegations, plaintiffs actually received $800.00 to
$1000.00 worth of suits for $795.

See id.

Accordingly, plaintiffs

have not alleged that they suffered a cognizable injury.
Plaintiffs cite to Kinojos v. Kohl’s Corp., 718 F.3d 1098 (9th
Cir. 2013), and argue that defendant’s alleged misrepresentation about
price establishes the existence of actual damages.
Response, pp. 14-15.

Plaintiffs’

According to plaintiffs, “price advertisements

matter” and “misinformation about a product’s ‘normal’ price”
establishes an “̔obvious economic injury’ because ‘the bargain
hunter’s expectations about the product he just purchased is precisely
that it has a higher perceived value and therefore has a higher resale
value.’”

Id. at p. 14 (quoting Hinojos, 718 F.3d at 1106) (internal

quotations omitted)).

Similarly, plaintiffs argue that the Complaint

sufficiently alleges damages because it alleges that defendant “did
not honor the sales promotion’s terms because Jos. A. Bank did not
sell the merchandise at its true ‘regular price[.]’”
Response, p. 12.

Plaintiffs’

Plaintiffs’ arguments are not well taken.

Although plaintiffs’ allegations of misrepresentation of the
“regular price” in an advertisement also offering free items may be
sufficient to establish an OCSPA violation, those facts do not
sufficiently allege actual injury resulting from the violation.

Under

Ohio law, actual injury is independent of an OCSPA violation and both
must be adequately alleged in a class action under O.R.C. §
1345.09(B).

See O.R.C. § 1345.09(B); Searles v. Germain Ford of

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Columbus, L.L.C., No. 08AP-28, 2009 WL 756645, at *5 (Ohio Ct. App.
Mar. 24, 2009) (declining to certify a class under the OCSPA because
the plaintiff did not present any evidence of actual injury incurred
as a result of the alleged OCSPA violation).
reliance on Hinojos is misplaced.

Furthermore, plaintiffs’

In Hinojos, the United States Court

of Appeals for the Ninth Circuit applied California law to hold “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
under [California’s Uniform Competition Law and Fair Advertising Law]
because he has suffered an economic injury.”
1107.

Hinojos, 718 F.3d at

Even if the California law applied in Hinojos were comparable

to Ohio law, which it is not, the reasoning of that case would not
establish actual injury for purposes of the class allegations in this
case.

The court in Hinojos held that a consumer suffers an injury and

has standing to sue when he made a purchase of merchandise that he
would not otherwise have made but for false price information.

Id.

The Complaint in the case presently before the Court is arguably
sufficient to establish that plaintiff Johnson would not have
purchased suits but for defendant’s alleged misrepresentations, see
Complaint, ¶ 33 (“Johnson was induced by Jos. A. Bank’s advertising
and marketing into believing that he was receiving an excellent value
by purchasing a suit of such qualify at such a low price – in fact,
that was the reason he entered into the transaction with Jos. A.
Bank.”), but there is no similar allegation that the members of the
putative class would not have purchased suits from defendant but for

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defendant’s alleged misrepresentations.

Accordingly, plaintiffs’

class claims would fail even under the reasoning of Hinojos.
In short, the Complaint does not allege that plaintiffs suffered
a legally cognizable injury.

Plaintiffs have therefore failed to

sufficiently allege actual damages as required for a class action
under O.R.C. § 1345.09(B).
Plaintiffs suggest that this conclusion will permit suppliers to
make misrepresentations with impunity “so long as the price charged on
the receipt was what [the supplier and its expert] claimed the
merchandise was worth.”

See Plaintiffs’ Response, pp. 18-19.

Plaintiffs miss the mark in this regard.

As recognized by the courts

in Rose Chevrolet, Inc., 1993 WL 229392, and Lewis v. Ganley Akron,
Inc., No. CV 2001 05 2544, 2004 WL 5518155 (Ohio Com. Pl. Feb. 10,
2004) (attached to Plaintiffs’ Response as Doc. No. 23-1), a consumer
is entitled to recover under Ohio law if a supplier misrepresents the
quality, style, or model of the subject of a consumer transaction.
See O.R.C. § 1345.02(B)(2); Rose Chevrolet, Inc., 1993 WL 229392
(awarding damages in an OCSPA class action where an auto dealer
misrepresented cars to be “factory official,” when they were not);
Lewis, 2004 WL 5518155 (awarding damages under the OCSPA where an auto
dealer refused to honor an agreement and testified that it never
intended to honor the agreement).

However, as discussed supra, the

Complaint does not state a claim under O.R.C. § 1345.02(B)(2).
Moreover, even a consumer who cannot establish actual damages in
connection with a misrepresentation about a product’s price is
nevertheless entitled to relief under the OCSPA; such a consumer may,

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in an individual action, rescind the transaction or recover statutory
damages.

See O.R.C. § 1345.09(A).

In class actions, however, actual

injury is required “to protect defendants from huge damage awards.”
Washington, 2003 WL 1759617 at *5 (emphasis omitted).

Where, as here,

the Complaint fails to allege actual injury or damage as a result of
the alleged OCSPA violation, the class claims cannot proceed.
Defendant also argues that plaintiffs’ individual claims must be
dismissed because the Complaint fails to allege facts showing that
plaintiffs purchased suits from defendant in Ohio.
Motion, p. 19; Defendant’s Reply, p. 30.

Defendant’s

This Court agrees.

The Ohio Consumer Sales Practices Act “‘is only applicable if the
offending conduct took place within the territorial borders of the
state of Ohio.’”

Delahunt v. Cytodyne Techs., 241 F.Supp. 2d 827, 839

(S.D. Ohio Jan. 24, 2003) (quoting Shorter v. Champion Home Builders
Co., 776 F.Supp. 333, 338–39 (N.D. Ohio 1991)).

See O.R.C. § 1345.04.

In the case presently before the Court, the Complaint alleges that
plaintiffs are Ohio residents, that defendant operates stores
throughout Ohio, and that the transactions referenced in the Complaint
are consumer transactions as defined by O.R.C. § 1345.01(A).
Complaint, ¶¶ 9-13.

See

Significantly, the Complaint does not allege that

the consumer transactions about which plaintiffs complain occurred in
Ohio.3 Accordingly, the Complaint is deficient because it does not
allege that defendant’s misconduct took place within the State of
Ohio.

3

O.R.C. § 1345.01(A), to which the Complaint refers, does not limit actionable
“consumer transactions” to those that occur within the State of Ohio.

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WHEREUPON, based on the foregoing, Defendant’s Motion, Doc. No.
12, is GRANTED.
Because it is unclear, at this juncture, whether plaintiffs can
and intend to amend the Complaint to address the deficiencies
identified herein, the Court will not dismiss the entire action.

The

Court will discuss this and other appropriate issues with counsel for
the parties at the continued preliminary pretrial conference currently
scheduled for January 9, 2014, at 2:00 p.m.

January 8, 2014

s/Norah McCann King_______
Norah McCann King
United States Magistrate Judge

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