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

Filing 40

ORDER: Defendants Motion 33 is GRANTED in part and DENIED in part. The class claims and the breach of contract claim asserted in the Amended Complaint are DISMISSED. The Court declines, at thisjuncture, to dismiss the claims of the individual plaintiffs forstatutory damages under O.R.C. § 1345.09(B). Signed by Magistrate Judge Norah McCann King on 08/19/2014. (sr1)

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 instituted this action on behalf of themselves and a
putative class of Ohio residents, alleging multiple 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.

Complaint, Doc. No. 1.

On January 8, 2014, the Court granted

defendant’s motion to dismiss the class allegations, reasoning that
plaintiffs had failed to allege actual damages, a prerequisite to a
class action under the OCSPA.

Opinion and Order, ECF 30.1

filed the Amended Complaint, ECF 32, on January 31, 2014.

Plaintiffs
This matter

is now before the Court with the consent of the parties, see
U.S.C. § 636(c), on

28

Defendant Jos A. Bank Clothier, Inc.’s Motion to

Dismiss Plaintiffs’ First Amended Class Action Complaint (“Defendant’s
Motion”), Doc. No. 33. Plaintiffs’ motion for leave to file
Plaintiffs’ Amended Brief in Opposition to Defendant’s Motion to
1

The Court also concluded that, although the individual plaintiffs may be able
to state a colorable claim for relief under Ohio Admin. Code § 109:4-3-04,
these individual claims were deficient because the Complaint failed to allege
that the transactions occurred in Ohio. Opinion and Order, ECF 30, PageID #
462.

Dismiss (“Plaintiffs’ Response”), Doc. No. 35, is GRANTED. In
resolving Defendant’s Motion, the Court has considered Plaintiffs’
Response, which is attached to ECF 35.

Defendant has filed a reply in

support of Defendant’s Motion. Defendant’s Reply, ECF 36. Because the
Court concludes that oral argument is unnecessary, plaintiffs’ request
for oral argument in connection with the resolution of Defendant’s
Motion is DENIED.
I.
Defendant Jos A. Bank Clothiers, Inc., is a Delaware corporation
with its principal place of business in Maryland.
¶ 10.

Amended Complaint,

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 ¶ 11.

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.

See id. at

¶¶ 20-21, 41, 46.
The named plaintiffs, Matthew Johnson and Charles Patterson, are
Ohio residents. Id. at ¶8.

In 2013, each purchased a suit from

defendant at a store operated by defendant in Ohio.

Id. at ¶¶ 13-14.

Plaintiffs purchased their suits at “the purported ‘regular price’ of
$795” and, based on the advertised sale at the time, each was promised
“three ‘free’ suits.”

Id. at ¶¶ 13-15.

Plaintiffs do not allege that

they did not receive four suits in exchange for their payment of $795,
nor do they allege that the four suits actually received by them were

2

worth, collectively, less than $795 or that they could have obtained
four suits of similar quality elsewhere for less than $795. Plaintiffs
do allege, however, that the “regular price” of each purchased suit
was “vastly inflated above the true regular market price regularly
paid by consumers for Jos. A. Bank suits.”

Id. at ¶ 16.

Plaintiffs

further 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 ¶ 17.

According to plaintiffs, defendant’s suits are “almost never”
sold at the “regular price;” plaintiffs believe that fewer than one
percent of defendant’s suits sold in Ohio are sold at the “regular
price.”

Id. at ¶¶ 23-25, 27.

Because defendant’s suits “are on

‘sale’ almost 100% of the time,” defendant’s advertised “regular
prices” “do not reflect the true price regularly paid by consumers for
their suits.”

Id. at ¶ 22-23; see also id. at ¶ 38 (“[A]s soon as one

sale ends, another substantially similar sale begins.”)

In addition,

plaintiffs allege that, because Jos. A. Bank suits are almost never
sold at the regular price, “the purported ‘regular price’ is by
definition not ‘regular,’ and is, instead, illusory.”

Id. at ¶ 25;

see also id. at ¶ 36 (“the ‘sales price’ of Jos. A. Bank’s suits. . .
has become the true ‘regular price’ due to the fact that the sales are
never ending.”)

Moreover, plaintiffs allege,

[t]hat deception proximately injures and damages the
consumer who is not getting the “deal” or “bargain”
promised, but rather, is paying an inflated “regular price”
for suits, sportcoats and dress slacks that have a fraction
of the market value or “regular price” claimed by Jos. A.
Bank.
Id. at ¶ 31.

3

Plaintiffs purport to bring the action on behalf of a plaintiff
class defined as
[a]ll persons who purchased a suit, dress pants or
sportcoats/suit jackets at a Jos. A. Bank retail store in
Ohio, within two years of filing of this Complaint, where
the purchase was for one item based on a “regular price” in
connection with an offer of at least one other “free” item.
Id. at ¶ 91.2
The Amended Complaint alleges that defendant’s pricing practice,
which allegedly qualifies as a deceptive act or practice under Ohio
Admin. Code § 109:4-3-04, violates the OCSPA. Plaintiffs also assert a
claim of breach of contract:
The advertisements were clear, definite and left nothing
open for negotiation. . . . The Company’s advertisements
constituted offers, the acceptance of which completed a
binding contract. . . . Plaintiffs and the putative class
accepted Defendant’s offers upon tendering payment. Upon
payment, Defendant was required to perform its promises
made in its advertisement, including, for example,
delivering . . . four suits with certain “regular” market
prices – i.e., each suit was promised to be worth the
advertised price – in exchange for a single payment for one
of the suits.
Id. at ¶¶ 68 – 71. When defendant delivered “suits that were worth far
less than promised,” plaintiffs allege, defendant acted in breach of
its contract with its customers.

Id. at ¶ 72.

The Amended Complaint seeks declaratory, injunctive and monetary
relief. Id. at PageID # 481.
Defendant asks that the Amended Complaint be dismissed in its
entirety. Defendant’s Motion.

2

For simplicity’s sake and because the named plaintiffs allegedly purchased
suits, this Opinion and Order will refer to only suits.

4

II.
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
level[.]”

Id.

Accordingly, a complaint must be dismissed if it does

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

Id. at 570.
III.

1. The Claim under the OCSPA
The OCSPA prohibits a supplier from committing an unfair or
deceptive act or practice in connection with a consumer transaction.
O.R.C. § 1345.02(A). The OCSPA also authorizes the Ohio Attorney
General to promulgate “substantive rules defining . . . acts or
practices that violate” the OCSPA.

O.R.C. § 1345.05(B)(2). Where a

5

consumer establishes a deceptive act by a supplier in violation of
such a rule,
the consumer may rescind the transaction or recover, but not
in a class action, three times the amount of the consumer’s
actual economic damages or two hundred dollars, whichever is
greater, plus an amount not exceeding five thousand dollars in
noneconomic damages or recover damages or other appropriate
relief in a class action under Civil Rule 23, as amended.
O.R.C. 1345.09(B).
The Amended Complaint asserts a claim under a rule promulgated
pursuant to the OCSPA, Ohio Admin. Code § 109:4-3-04, which regulates
suppliers’ use of the word “free” in advertisements. That rule
provides, in pertinent part, 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 is alleged here, there is

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).

In addition,

6

[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).

Moreover,

[c]ontinuous or repeated "free" offers are deceptive acts
or practices since the supplier's regular price for goods
to be purchased by consumers in order to avail themselves
of the "free" goods will, by lapse of time, become the
regular price for the "free" goods or services together
with the other goods or services required to be purchased.
Under such circumstances, therefore, an offer of "free"
goods or services is merely illusory and deceptive.
O.A.C. § 109:4-3-04(H).
The Amended Complaint specifically alleges that defendant
advertises sales of suits in which the purchaser of one suit at the
“regular” price of $795 receives three additional suits for free.
id. at ¶¶ 20-21, 41, 46.

See

Plaintiffs also allege, however, that

defendant’s suits are “almost never” sold at the “regular price.” Id.
at ¶¶ 23-25, 27.

Thus, plaintiffs contend, defendant’s advertised

“regular prices” “do not reflect the true price regularly paid by
consumers for their suits.”

Id. at ¶ 22.

Because suits are almost

never sold at the “purported ‘regular price,’” that price is illusory

7

and it is the “sale price” that is the true regular price. Id. at ¶¶
25, 36.
This Court previously concluded, Opinion and Order, ECF 30, that
these allegations sufficiently plead a violation of Ohio Admin. Code §
109:4-3-04.3

The Court now reaffirms that conclusion.

This Court also previously held, however, that the class claims
could not proceed because the OCSPA limits relief in connection with
such claims to actual damages, which the original Complaint had not
adequately alleged. Opinion and Order, ECF 30, PageID # 458-59.
(“Plaintiffs argue that damages are equal to the amount actually paid
for a single suit less the true regular price of that suit. . . . This
calculation, however, does not account for the fact that plaintiff[s]
actually received four suits. . . .”).
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).
Id. at PageID #459(citing Searles v. Germain Ford of Columbus, L.L.C.,
No. 08AP-28, 2009 WL 756645, at *5 (Ohio Ct. App. Mar. 24, 2009)).
In order to maintain a class action in connection with a
violation of a rule promulgated under the OCSPA, a plaintiff must
allege actual “damages [that] were a proximate result of the
defendant’s deceptive act.”

Butler v. Sterling, Inc., 210 F.3d 371,

at *4 (6th Cir. Mar. 31, 2010).

See also Konarzewski v. Ganley, Inc.,

3

As noted supra, however, the Court also held that the claim, as alleged,
failed because there was no allegation that the transactions at issue had
occurred in the State of Ohio. Opinion and Order, PageID #455.

8

No. 92623, 2009 WL 3649787, at *8 (Ohio Ct. App. Nov. 5, 2009)
(“[C]lass action plaintiffs must prove actual damages under the
CSPA.”); 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 . . . .”). Defendant
argues that plaintiffs’ class claims must fail because, like the
original Complaint, the Amended Complaint does not contain factual
allegations of actual damages.

Defendant’s Motion, PageID #680-87;

Defendant’s Reply, PageID #846-861.
The Amended Complaint claims damages based on a theory of loss of
the benefit of the advertised bargain. Id. at ¶¶ 61-65. Such damages
are compensatory in nature, measured by calculating “the difference
between the value of property as it was represented to be and its
actual value at the time of its purchase.”

Brewer v. Bros., 82 Ohio

App. 3d 148, 154 (1992); State v. Rose Chevrolet, Inc., CA91-12-214,
1993 WL 229392 at *2 (Ohio Ct. App. June 28, 1993) (citing Molnar v.
Beriswell, 122 Ohio St. 348, 252 (1930)).
Plaintiffs’ precise calculation of damages is not entirely clear.
On the one hand, plaintiffs base their theory of damages on the
expectation of receipt “of 4 suits each with a market value of $795 –
a total value of $3,180 – which was the deal he was promised.”
Amended Complaint, ¶ 62 (emphasis in the original).

On the other

hand, plaintiffs calculate their damages as
the difference between what he was told he would pay for 4
suits (that is, the true regular price of one suit – where
regular price has a required statutory definition) and what
he was actually required to pay to receive the 4 suits
(here $795, an inflated number unrelated to the true
regular price of the suits).

9

Id. at ¶ 63 (emphasis in the original). The Amended Complaint does not
specify the “true regular price” but defines that term only as “a
fraction of $795.”

Id. at ¶ 60. Significantly, and as noted supra,

the Amended Complaint does not allege that plaintiffs (or members of
the putative class) did not receive four suits in exchange for payment
of $795, nor does it allege that the four suits actually received were
worth, collectively, less than $795 or were available elsewhere for
less than that amount.
In contending that the Amended Complaint has alleged actual
damages sufficient to sustain a class action under the OCSPA,
plaintiffs rely primarily on two cases: Rose Chevrolet, Inc., 1993 WL
229392, and Hinojos v. Kohl’s Corp., 718 F.3d 1098 (9th Cir. 2013).

In

Rose Chevrolet, a car dealership falsely advertised that used rental
cars were “factory official vehicles”4 and sold those cars to consumers
at higher prices.

Rose Chevrolet, 1993 WL 229392, *2.

The court,

first noting that benefit of the bargain damages are generally awarded
in cases involving breach of contract or common law fraud and not in
cases alleging violations of the OCSPA, nevertheless awarded each
class member $500, that amount representing the difference in value
between the used rental cars purchased by most class members and a
factory official car. Id.
Rose Chevrolet is inapposite. In characterizing the cars at issue
in that case as “factory official vehicles,” the defendant in Rose
Chevrolet made an affirmative misrepresentation about the nature and
4

A “factory official vehicle” is expressly defined in Ohio Admin. Code §
109:4-3-16 as a current or previous model year car operated by a
representative of the vehicle’s manufacturer or distributor.

10

quality of the product sold.

Here, on the other hand, defendant’s

allegedly false statements relate to its use of the word “free” and to
its pricing practices. Those statements simply do not address the
nature of the suits sold.
Plaintiff’s theory of damages improperly conflates pricing
strategy and the intrinsic nature or value of the goods sold.
Plaintiffs justify their calculation by pointing to defendant’s own
sales materials, in which defendant offers additional suits “of ‘equal
or lesser value’ than the suit that is purchased.” Amended Complaint,
¶ 26 (emphasis in original). However, the OCSPA violation alleged by
plaintiffs and the rule upon which plaintiffs rely, Ohio Admin. Code §
109:4-3-04(H), relate not to a misrepresentation of the nature or
value of the goods sold5 but to a claimed misuse of the term “free.” In
any event, defendant’s use of the word “value” in this context clearly
relates to price, and not to the intrinsic value of the suits
purchased.
In Hinojos, upon which plaintiffs also rely, the United States
Court of Appeals for the Ninth Circuit applied California law to hold
that a consumer suffers economic injury when he “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
. . . .”

Id., 718 F.3d at 1107.

5

Indeed, in dismissing the original Complaint, this Court held, “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).” Opinion and Order, ECF 30, PageID# 447 (emphasis in
the original).

11

[T]o . . . 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. . . . Misinformation about a product’s
“normal” price is, therefore, significant to many consumers
in the same way as a false product label would be. . . . In
fact, the deceived bargain hunter suffers a more 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 1106-07 (internal citations omitted). The Ninth Circuit did not
calculate the precise economic injury suffered by the bargain hunting
consumer; that court merely held that such a consumer has standing to
sue under California law.6
Defendant contends that neither the individual plaintiffs nor
members of the putative class suffered actual damages for any alleged
violation of Ohio Admin. Code § 109:4-3-04 because they did not incur
pecuniary or out-of-pocket loss. Defendant urges this Court to reject
the reasoning of Hinojos as improperly conflating the concepts of
causation and damages.

Defendant’s Reply, PageID# 858. Noting the

definition of “regular price” established in O.A.C. § 109:4-3-04(H),7
defendant argues that – even assuming a violation of Ohio Admin. Code
109:4-3-04 - the regular price for four suits must be calculated as

6

In considering defendant’s earlier motion to dismiss, this Court found the
original Complaint to be insufficient even under Hinojos because, inter alia,
the Complaint did not allege reliance by the members of the putative class on
the alleged misrepresentation of the “regular price” of the suit. Opinion
and Order, ECF 30, PageID# 460-61. The Amended Complaint alleges that
plaintiffs and the members of the proposed class relied on defendant’s
misrepresentations. Id. at ¶ 37. See also id. at ¶¶ 19, 87. However, the
class definition proposed by plaintiffs, id. at ¶ 91, does not include a
reliance component.
7
“[T]he supplier's regular price for goods to be purchased by consumers in
order to avail themselves of the ‘free’ goods will, by lapse of time, become
the regular price for the ‘free’ goods or services together with the other
goods or services required to be purchased” (emphasis added).

12

$795, which is the precise amount allegedly paid for the four suits
received by the purchaser. Defendant’s Motion, PageID# 687.
Each Plaintiff selected the four suits he wanted, took them
to the register, and knowingly and voluntarily chose to
exchange payment for delivery of the suits. Each Plaintiff
received exactly what he believed he was purchasing at the
price he expected to pay. Plaintiffs suffered no actual
damages or injury, and thus, any award would be an improper
windfall.
Id. at PageID# 682-83.
This Court agrees with this analysis and declines to import the
Ninth Circuit’s theory of loss of subjective expectancy into the
OCSPA. It must be remembered that the Amended Complaint does not
allege that the suits purchased by plaintiffs were not worth,
collectively, the amount that plaintiffs paid or that similar suits
could have been purchased elsewhere for less. Under these
circumstances, and even assuming that plaintiffs are able without
unreasonable speculation to assign a dollar amount to their claimed
actual damages, recognition of plaintiffs’ claim would leave each
plaintiff with four suits that are worth, collectively, no less than
the amount paid for them, plus some additional amount in claimed
damages. It is clear to this Court that the Amended Complaint fails to
allege actual injury or damage as a result of the alleged OCSPA
violation.
The United States Court of Appeals for the Seventh Circuit,
applying Illinois law to defendant’s alleged pricing strategy and
sales practices, has reached a similar conclusion.

Camasta v. Jos. A.

Bank Clothiers, Inc., -- F.3d --, 2014 WL 3765935 (7th Cir. Aug. 1,
2014).

The Seventh Circuit summarized plaintiff’s claim of actual

13

damages under the Illinois Consumer Fraud and Deceptive Business
Practices Act, which requires a showing of “actual damage” to a
private plaintiff:
Camasta did not claim that he was denied the terms or
pricing he saw advertised or that he did not receive the
shirts he selected. He does not claim that there was
anything about the shirts themselves that made them
defective or caused him to change his opinion about their
value. Camasta simply argues that his expectations for the
discount he received were unrealized when he learned that
the sale was not a temporary price reduction, but rather
the normal retail price of JAB’s merchandise.
Id. at *1. Commenting that the plaintiff in that case had “failed to
provide any evidence that he paid more than the actual value of the
merchandise he received,” id. at *6, the Seventh Circuit affirmed the
dismissal of the action for failure to state a claim upon which relief
can be granted.
Plaintiffs argue that to construe a damages theory of subjective
expectancy as insufficient under the OCSPA is to “make[] a nullity of
OAC §109:4-3-04.”

Plaintiff’s Response, PageID# 815.

To the

contrary, individual consumers able to establish a violation of the
rule may recover statutory damages even in the absence of actual
damages.

O.R.C. § 1345.09(B). Moreover, plaintiffs who are able to

allege and show actual damages in the form of, for example, payment
for goods falsely advertised as “free” but available elsewhere for a
lower price would be able to pursue even claims on behalf of a class.
The Court also rejects plaintiffs’ contention that this
conclusion is inconsistent with this Court’s language in Delahunt v.
Cytodyne Technologies, 241 F. Supp. 2d 827 (S.D. Ohio 2003). In

14

rejecting the notion that the plaintiff in that case had failed to
allege a cognizable injury, the Court stated:
Unlike a fraud claim, where a plaintiff must allege harm
above and beyond the misrepresentation and reliance
thereon, a cause of action accrues under the Consumer Sales
Practices Act as soon as the allegedly unfair or deceptive
transaction occurs.
Id. at 835. However, the plaintiff in Delahunt asserted, not misuse of
the word “free” in violation of Ohio Admin. Code § 109:4-3-04, but
claims based upon the alleged misrepresentation of the nature and
quality of the product purchased. In particular, plaintiff sought a
refund on behalf of herself and a class of plaintiffs, alleging “that
the Defendants engaged in unfair or deceptive acts or practices by
representing that the product was of a particular grade, standard, or
quality when it was not . . . .”

Id. at 836-37. As a result,

plaintiff argued, “every class member suffered harm because they paid
for a product that differed from what it was represented to be, and
thereby incurred a financial injury equal to the amount they paid for
the product.”

Id. at 833. The facts alleged by plaintiffs in Delahunt

are more closely aligned with those presented in Rose Chevrolet, in
which the supplier made an affirmative misrepresentation about the
nature and quality of the product sold.

For the reasons stated supra,

defendant’s alleged pricing strategy and sales practices cannot be so
construed and the Court concludes that Delahunt does not require a
different conclusion.
For all these reasons, the Court concludes that the Amended
Complaint fails to sufficiently allege actual damages as required for
a class action under O.R.C. § 1345.09(B).

15

2. The Breach of Contract Claim
Under Ohio law, a pleading asserting a breach of contract claim
must plead: 1) the existence of a valid contract; 2) performance by
the plaintiff; 3) breach by the defendant; and 4) resulting damages.
Pavlovich v. National City Bank, 435 F.3d 560, 565 (6th Cir. 2006)
(citing Wauseon Plaza Ltd. Partnership v. Wauseon Hardware Co., 156
Ohio App.3d 575, 807 N.E.2d 953, 957 (Ohio Ct. App.2004)).

The

Amended Complaint fails to adequately plead these elements.
The Amended Complaint fails to plead the existence of a contract
containing the advertised terms.

Plaintiffs allege that defendant’s

advertisements “constituted offers, the acceptance of which completed
a binding contract.”

Amended Complaint, at ¶ 69.

As a general rule,

however, proposals to the public in advertisements and circulars are
not offers that can be unilaterally accepted and made binding.

See 1

E. Farnsworth, Contracts, § 310, p. 260-61, and n.30 (3d ed.
2004)(citing Zaugg v. Toledo Fiberglass Credit Union, 1988 WL 114376
at * 1-2 (Ohio Ct. App. Oct. 28, 1988)(brochure advertising loan
insurance was not an offer); Ehrlich v. Willis Music Co., 93 Ohio App.
246, 247 (Ohio Ct. App. 1952)(newspaper advertisement for a sale price
on televisions was not an offer but an invitation to patronize the
store); Craft v. Elder & Johnston

Co., 38 N.E. 2d 416, 417-18 (Ohio

Ct. App. 1941) (newspaper advertisement of a sale price for sewing
machines did not create contractual obligations). The purpose of this
rule is to protect merchants – whose supplies are limited – from
excessive demands or “acceptances.”

16

1 Farnsworth, §3.10 at 260.

It is true that the general rule does not apply when an
advertisement “‘is clear, definite, and explicit, and leaves nothing
open for negotiation . . . .’” Stern v. Cleveland Browns Football
Club, 1996 WL 761163, *4 (Ohio Ct. App. Dec. 20, 1996)(Football season
ticket renewal solicitation constituted contractual offer because it
was “specific in its terms including price, quantity of tickets, and
the time [the purchaser] had to submit his payment. . . . Furthermore,
the renewal package mailed to [the purchaser] was not a general
advertisement to the public . . . .”). Other examples are those
advertisements that contain qualifiers that limit the sale or identify
targeted consumers, e.g., “while supplies last” or “the first customer
of the day.”

1 Farnsworth, §3.10 at 261.

See also Zaugg, 1988 WL

114376, *2 (“An advertisement can rise to the level of an offer if
special circumstances exist, such as, where it ‘. . . involves a
published offer of a reward for the furnishing of certain information,
the return of particular property, or the doing of a certain act . .
.’ or where the ‘. . . parties have progressed to a consummated
deal.’”)(quoting Craft, 38 N.E. at 418). Plaintiffs do not, however,
allege that defendants used such language in their advertisements nor
do the advertisements proffered by plaintiffs, Exhibit 1 attached to
the Amended Complaint, include such qualifying language.8 Moreover, the

8

Six advertisements attached to the Amended Complaint indicate that advertised
sales were not available to the general public, but were instead intended for
persons possessing an “invitation” or who had joined a discount club.
Exhibit 1 attached to Amended Complaint, PAGEID # 490, 492, 493, 507, 530.
Significantly, these advertisements do not refer to the sales about which the
named plaintiffs complain (i.e., “buy one suit at regular price, and receive
[x] suits for free”). Moreover, The Amended Complaint contains no allegations
about the distribution of these advertisements or why and how they create an
exception to the general rule that advertisements are not offers.

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pricing practice complained of by plaintiffs referred only to the
“regular” price of the product purchased, without specifying that
price, and to additional products of “equal or lesser value,” without
specifying those “free” products.
Under these circumstances, the Court concludes that the alleged
advertisements about which plaintiffs complain did not constitute
contractual offers that ripened into contracts upon plaintiffs’ tender
of money.

Rather, it was each plaintiff’s offer to pay for one suit

at the price specified by defendant at the time of purchase, with the
expectation that he would receive additional suits, that became the
basis of the parties’ contract when defendant accepted that offer.
Plaintiffs allege that they paid $795 in exchange for one suit
and the promise of three additional suits.
13-15.

Amended Complaint, at ¶¶

The Amended Complaint therefore sufficiently alleges the

existence of a contract for the sale of goods.

However, plaintiffs do

not allege that they did not receive four suits for the agreed upon
price of $795.

Accordingly, the Amended Complaint fails to adequately

plead a claim for breach of contract.

In sum, Defendant’s Motion, ECF 33, is GRANTED in part and DENIED
in part.

The class claims and the breach of contract claim asserted

in the Amended Complaint are DISMISSED. The Court declines, at this
juncture, to dismiss the claims of the individual plaintiffs for
statutory damages under O.R.C. § 1345.09(B).

Because the Court

entertains reservations as to its jurisdiction over the remaining

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claims, however, the Court will expect the parties to address this
issue at a conference to be scheduled forthwith.

August 19, 2014
Date

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

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