The Washington Supreme Court's recent decision in Montes v. SPARC Group LLC, provides significant guidance regarding the scope of actionable injury under Washington's Consumer Protection Act (CPA). In answering a certified question from the Ninth Circuit, the Court held that a consumer who purchases a product at the advertised price after allegedly being misled by false discount advertising does not suffer an injury to "business or property" under the CPA where the consumer received the exact product sought at the agreed price and failed to allege any objective economic loss.
The decision places important limitations on private false discounting claims and clarifies that subjective disappointment or the loss of the perceived bargain is insufficient to establish injury under Washington's CPA.
Background of the Dispute
Plaintiff Shawnna Montes filed a putative class action against SPARC Group LLC, operator of Aeropostale, alleging the retailer engaged in a widespread deceptive pricing scheme. According to the Complaint, Aeropostale routinely advertised products at steep discounts from purported "regular" prices that products rarely sold for in practice.
Montes alleged that she purchased a pair of "Seriously Soft Heathered High Rise Leggings" for $6 after seeing this product advertised with a strike through the "regular price" of $12.50. She claimed that she reasonably believed the leggings ordinarily sold for $12.50 and that the listed sale price represented a genuine bargain. However, according to the Complaint, the leggings were offered at the supposed regular price for only a single day during the preceding six-month period.
The Complaint alleged that Aeropostale's pricing practices violated the CPA because the retailer falsely created the impression of substantial discounts to induce consumer purchases. Montes sought to represent a statewide class of Washington consumers who purchased products advertised with purported discounts or free offers.
Plaintiff's Theories of Injury
The CPA prohibits “unfair or deceptive acts or practices in the conduct of any trade or commerce.” RCW 19.86.020. To prevail in a private CPA claim, the plaintiff must prove five “distinct” elements:
- an unfair or deceptive act or practice
- occurring in trade or commerce,
- affecting the public interest,
- injury to a person’s business or property, and
- a causal link between the unfair or deceptive act and the injury. Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 719 P.2d 531 (1986).
By contrast, the attorney general “is not required to prove causation or injury” when it prosecutes a CPA case. State v. Mandatory Poster Agency, Inc., 199 Wn. App. 506, 518, 398 P.3d 1271 (2017); RCW 19.86.080.
Montes advanced three theories to establish the CPA's required injury to "business or property" under RCW:
- First, she argued that she suffered injury because she would not have purchased the leggings had she known the truth about their pricing history. The complaint alleged consumers were induced to spend money they otherwise would have retained.
- Second, Montes asserted a "benefit of the bargain" theory, contending that consumers did not receive the promised discount because the products were not actually worth the fictitious reference prices used in the advertising.
- Third, she alleged that the deceptive pricing practices artificially inflated consumer demand, which in turn allowed Aeropostale to charge inflated prices across its product line.
Notably absent from the Complaint, however, were allegations that the leggings were defective, materially different from what was advertised, or worth less than the $6 purchase price. Montes also did not allege that she attempted to return the leggings after learning of the alleged deception.
The Federal District Court dismissed the complaint for failure to adequately plead injury under the CPA. The Ninth Circuit Court of Appeals subsequently certified the question to Washington's Supreme Court asking whether a consumer suffers injury to "business or property" when purchasing a product at the advertised price due to false discount representations.
The CPA Requires Objective Economic Injury
Washington's Supreme Court began its analysis by examining the CPA's statutory language. Under RCW 19.86.090, only a person "injured in his or her business or property" may maintain a private CPA action. The Court reiterated that the phrase "business or property" refers to economic injuries, not noneconomic harms such as emotional distress, embarrassment, inconvenience, or subjective disappointment. It relied on Frias v. Asset Foreclosure Services Inc., 181 Wn.2d 412, 431, 334 P.3d 529(2014) (quoting Panag v. Farmers Ins. Co. of Wash., 166 Wn.2d 27, 57, 204 P.3d 885 (2009)), for the proposition that only economic losses qualify as actionable injuries under the statute.
Although the Court acknowledged that CPA injuries need not be substantial and may be temporary or difficult to quantify, the injury nevertheless must constitute an objectively measurable economic loss. The opinion emphasized that the CPA's liberal construction does not eliminate the legislature's express requirement that a private plaintiff suffer injury to business or property interests.
Why the Purchase Price Theory Failed
The Court first rejected Montes's argument that the purchase itself constituted economic injury because she would not have bought the leggings absent the deceptive pricing scheme.
According to the Court, every retail transaction involves an exchange of money for something of value. While the consumer parts with money, the consumer simultaneously receives a product in return. Without allegations that the product received was objectively deficient or worth less than the amount paid, the mere fact that a consumer was induced to make a purchase does not establish economic loss.
The Court distinguished cases where plaintiffs received products materially different from what was represented. In Williams v. Lifestyle Lift Holding, Inc., 175 Wn. App. 62, 302 P.3d 523 (2013) for example, injury existed because the cosmetic surgery procedure performed materially differed from what was advertised and caused the side effects the seller claimed would not occur. Here, by contrast, Montes received the leggings she intended to purchase, and the leggings possessed the value promised. The alleged deception related only to the product's pricing history, not to any objective characteristic of the product itself.
The Court Rejects the "Benefit of the Bargain" Theory
The court likewise rejected Montes's "benefit of the bargain" theory. Montes argued that because the promised discount was illusory, she failed to receive the benefit she expected from the transaction. The Court characterized this alleged harm as disappointment rather than economic injury. It explained that a seller's representation regarding a product's comparative value or pricing history does not alter the objective nature or value of an otherwise identical fungible good.
The opinion stressed that subjective consumer expectations do not constitute protected business or property interests under the CPA. The court noted that "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."
The Court found especially persuasive the analogous New Jersey Supreme Court's decision in Robey v. SPARC Group LLC, 256 N.J. 541, 311 A.3d 463 (2024), which involved nearly identical allegations against Aeropostale. Like the Washington Supreme Court, the New Jersey Supreme Court concluded that consumers who received the products they intended to purchase failed to establish an ascertainable economic loss merely because the advertised discounts were allegedly deceptive.
The Price Premium Theory Also Failed
Montes' final theory alleged that Aeropostale's deceptive pricing scheme artificially inflated demand and allowed the retailer to charge inflated prices. Washington's Supreme Court rejected that theory as inconsistent with Montes' own allegations. In opposing dismissal, Montes acknowledged the leggings possessed a value between $5 and $6, which was the range at which Aeropostale regularly sold the product.
Since Montes effectively conceded that the leggings were worth approximately what she paid, the court concluded the Complaint failed to plausibly allege deceptive pricing practices that caused consumers to pay an inflated premium above the product's actual value.
Relationship to Prior Washington Authority
The Court also relied on its earlier decision in Young v. Toyota Motor Sales U.S.A., 196 Wn.2d 310, 320, 472 P.3d 990 (2020). In Young, a consumer alleged that Toyota deceptively advertised a rearview mirror feature that did not actually exist on the purchased vehicle. Although the Court acknowledged the alleged misrepresentation, it concluded the plaintiff failed to establish a cognizable injury because the deception did not alter the truck's economic value in any measurable way.
In the case at hand, the principle extended into the false discounting context by reaffirming that deceptive conduct alone is insufficient to sustain a private CPA claim absent demonstrable economic loss.
Implications for Consumer Protection Litigation
The decision represents a significant development for retailers and businesses defending consumer class actions based on pricing practices. False discounting lawsuits have proliferated nationwide, particularly against apparel and online retailers accused of advertising perpetual sales or inflated comparison prices.
The Court's ruling in Montes narrows the scope of viable private CPA claims in Washington by making clear that inducement to purchase alone is not enough. Consumers must allege an objectively measurable economic injury, such as receiving a product worth less than the purchase price or materially different from what was promised.
At the same time, the Court carefully avoided granting blanket immunity for deceptive pricing conduct. The opinion repeatedly acknowledged that Aeropostale's alleged conduct may still violate consumer protection laws and could potentially support regulatory enforcement actions by the attorney general, who need not establish injury or causation.
The ruling draws an important distinction between deceptive conduct and actionable private damages claims. While deceptive advertising may still expose retailers to governmental enforcement or claims involving objectively diminished products, consumers seeking private CPA remedies must plead and prove actual economic harm.
Conclusion
In Montes v. SPARC Group LLC, Washington's Supreme Court reaffirmed that the CPA's injury requirement demands more than disappointment. Because Montes received the exact leggings she sought at the precise price she agreed to pay, and because she failed to allege any objective diminution in value, the Court concluded she suffered no cognizable injury to "business or property" under the CPA.
The opinion provides an important limitation on private false discounting litigation and reinforces a central principle of Washington consumer protection law that deceptive conduct alone does not automatically entitle a plaintiff to damages absent demonstrable economic loss.
