Case 3:14-cv-01631-LAB-JLB Document 1 Filed 07/09/14 Page 1 of 22 HASSAN A. ZAVAREEI (CA 181547) 1 JEFFREY KALIEL (CA 238293) TYCKO & ZAVAREEI, LLP 2 2000 L Street, NW, Suite 808 3 Washington, DC 20036 (202) 973-0900 4 (202) 973-095 (FAX) [email protected] 5 [email protected] 6 STUART E. SCOTT (0064834) (PHV Forthcoming) DANIEL FRECH (0082737) (PHV Forthcoming) 7 SPANGENBERG SHIBLEY & LIBER LLP 1001 Lakeside Avenue East, Suite 1700 8 Cleveland, OH 44114 (216) 696-3232 9 (216) 696-3924 (FAX) [email protected] 10 [email protected] 11 ANDREW R. MAYLE (0075622) (PHV Forthcoming) JEREMIAH S. RAY (0074655) (PHV Forthcoming) 12 MAYLE, RAY & MAYLE 210 South Front Street 13 Fremont, OH 43420 (419) 334-8377 14 (419) 355-9698 (FAX) [email protected] 15 [email protected] 16 Counsel for Plaintiffs and the Proposed Class 17 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA 18 DAVID M. LUCAS ) CASE NO. '14CV1631LAB JLB 19 10528 Pinion Trail ) Escondido, CA 92026 ) JUDGE 20 ) and ) 21 ) ERIC L. SALERNO ) CLASS ACTION COMPLAINT 22 7467 Redhill Way ) Browns Valley, CA 95918 ) [Jury Demand Endorsed Hereon] 23 ) On Behalf of Themselves and Those ) 24 Similarly Situated ) ) 25 Plaintiffs ) ) 26 vs. ) ) 27 JOS. A. BANK CLOTHIERS, INC., a ) Delaware Corporation ) 28 1 Case 3:14-cv-01631-LAB-JLB Document 1 Filed 07/09/14 Page 2 of 22 c/o C T Corporation System ) 1 818 West Seventh Street ) Los Angeles, CA 90017 ) 2 ) Defendant ) 3 4 Plaintiffs, David M. Lucas and Eric L. Salerno, through undersigned counsel, on behalf of 5 themselves and all California residents similarly situated, allege the following based on personal 6 knowledge as to allegations regarding Plaintiffs and on information and belief as to other 7 allegations. 8 INTRODUCTION 9 1. This is a class action against Jos. A. Bank Clothiers, Inc. (“Jos. A. Bank” or 10 “Defendant”) for its deceptive and unlawful use of so-called “sales” based on inflated, arbitrary 11 and false “former” prices. In its direct marketing to consumers via in-store advertising displays, 12 print advertising and via its website (www.josbank.com), Jos. A. Bank advertises false former 13 prices, false price discounts and false free apparel promotions for its men’s suits, sportcoats, and 14 dress pants. 15 2. Jos. A. Bank’s “buy one get one [or more] free” suit offers and other similar 16 promotions require consumers to buy one “regular” price suit to get one or more free item of Jos. 17 A. Bank men’s apparel. But the “regular” prices are a sham. 18 3. During the “Class Period,” as defined below, Jos. A. Bank has misrepresented the 19 nature and amount of price discounts for its men’s suits, sportcoats, and dress pants by offering 20 specific dollar and percentage discounts from those same inaccurate and inflated “regular prices.” 21 These purported free apparel promotions and discount offers are false because the referenced 22 “regular price” is, in each instance, fabricated, inflated and not representative of Jos. A. Bank’s 23 true former price, within the preceding three months, for its men’s suits and other apparel. To the 24 contrary, Jos. A. Bank’s former prices are a price no consumer has actually ever paid for a Jos. A. 25 Bank suit not in connection with some sale or discount. 26 4. Jos. A. Bank did not sell any meaningful quantity of suits, and it had no intention 27 of selling any meaningful quantity of such products, at the “regular” retail prices employed in their 28 2 Case 3:14-cv-01631-LAB-JLB Document 1 Filed 07/09/14 Page 3 of 22 1 advertising and marketing materials. Instead, these purportedly former prices are constructed from 2 whole cloth by Jos. A. Bank to deceive consumers into believing they are getting a good deal. 3 5. Furthermore, the advertised “regular” prices for Jos. A. Bank’s men’s suits, 4 sportcoats, and dress pants, which purport to be a former price for those items, are not the 5 prevailing retail market prices within three months immediately preceding the publication and 6 dissemination of the advertised former prices, as required by California law. 7 6. The Federal Trade Commission (FTC) described false former pricing schemes, 8 similar to Jos. A. Bank’s scheme in all material respects, as deceptive: 9 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 10 actual, bona fide price at which the article was offered to the public on a regular basis for a reasonable substantial period of time, it provides a legitimate basis for 11 the advertising of a price comparison. Where the former price is genuine, the 12 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 price, 13 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 14 receiving the usual value he expects. 15 16 C.F.R. 233.1(a) 16 7. California statutory and regulatory law also expressly prohibits false former pricing 17 schemes. Cal. Bus. & Prof. Code § 17501, entitled “Value determinations; Former price 18 advertisement,” states: 19 For the purpose of this article the worth or value of anything advertised is the 20 prevailing market price, wholesale if the offer is at wholesale, retail if the offer is at retail, at the time of publication of such advertisement in the locality wherein the 21 advertisement is published. 22 No price shall be advertised as a former price of any advertised thing, unless the alleged former price was the prevailing market price as above defined within three 23 months next immediately preceding the publication of the advertisement or unless 24 the date when the alleged former price did prevail is clearly, exactly, and conspicuously stated in the advertisement (emphasis added). 25 26 8. Hundreds of thousands of California consumers have been victims of Jos. A. 27 Bank’s deceptive, misleading, and unlawful pricing scheme, which has been disseminated to 28 California consumers via in-store display advertising, internet advertising, and print advertising. 3 Case 3:14-cv-01631-LAB-JLB Document 1 Filed 07/09/14 Page 4 of 22 1 Jos. A. Bank’s false advertising focuses reasonable purchasers’ attention on fictitious bargains and 2 price discounts. As a result, purchasers, including Plaintiffs, have reasonably perceived that they 3 are receiving valuable price reductions or bargains regarding their purchase of men’s suits, 4 sportcoats, or dress pants. This perception has induced reasonable purchasers, including Plaintiffs, 5 to buy such products from Jos. A. Bank and to refrain from shopping for the same or similar 6 products from competitors of Jos. A. Bank. 7 9. Jos. A. Bank knows or reasonably should know that its comparative price 8 advertising is false, deceptive, misleading, and unlawful under federal and California state law. 9 10. The facts that Jos. A. Bank misrepresented or failed to disclose are facts that a 10 reasonable person would have considered material, i.e., facts that would contribute to a reasonable 11 person’s decision to purchase men’s suits, sportcoats, and/or dress pants. Jos. A. Bank’s false 12 representations regarding “regular” prices and false representations of purported savings, 13 discounts, and bargains are objectively material to the reasonable consumer and therefore reliance 14 upon such representations may be presumed as a matter of law. Price, including purported former 15 prices, matter significantly to consumers. 16 11. At all relevant times, Jos. A. Bank has been under a duty to Plaintiffs and others 17 similarly situated to disclose the truth about its former and “regular” prices. 18 12. Plaintiffs relied upon false representations of former price, purported savings, and 19 discounts in connection with Jos. A. Bank’s “regular” prices when purchasing men’s suits, 20 sportcoats, and dress pants from Jos. A. Bank in California. 21 13. Plaintiffs reasonably and justifiably acted and relied to their detriment on Jos. A. 22 Bank’s failure to disclose and concealment of, the truth about Jos. A. Bank’s false former price 23 advertising scheme in purchasing Jos. A. Bank men’s suits, sportcoats, and dress pants in 24 California. 25 14. Jos. A. Bank intentionally concealed and failed to disclose the truth about its 26 misrepresentations and false former price advertising scheme for the purpose of inducing Plaintiffs 27 and others similarly situated to purchase Jos. A. Bank men’s suits, sportcoats, and dress pants. 28 4 Case 3:14-cv-01631-LAB-JLB Document 1 Filed 07/09/14 Page 5 of 22 1 15. The claims and issues asserted herein are governed by federal and California state 2 law. The state of California has the greatest interest in policing corporate conduct occurring within 3 the state that affects the rights and interests of its citizens. 4 16. Plaintiffs, individually, and on behalf of all others similarly situated, seek 5 restitution and injunctive relief. 6 17. For reasons made clear below, a class action lawsuit is the most efficient way to 7 remedy the harm done by Jos. A. Bank’s deceptive sales practices and to make whole the California 8 consumers Jos. A. Bank has systematically deceived and misled. 9 THE PARTIES 10 18. Plaintiff, David M. Lucas, is a resident of Escondido, California, who, in reliance 11 on Defendant’s false and deceptive advertising, marketing and pricing schemes, purchased suits at 12 the purported “regular price” of $895 and received 2 supposedly “free” suits from a Jos.