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Mulder v. Kohl's Department Stores, Inc.

United States Court of Appeals, First Circuit

July 26, 2017

ELLEN MULDER, Plaintiff, Appellant,
KOHL'S DEPARTMENT STORES, INC., Defendant, Appellee.


          S. James Boumil, with whom Boumil Law Offices, Konstantine W. Kyros, and Law Offices of Konstantine W. Kyros, were on brief, for appellant.

          Lauri A. Mazzuchetti, with whom Michael C. Lynch, James B. Saylor, Kelly Drye & Warren LLP, and William T. Harrington, were on brief, for appellee.

          Before Torruella, Lynch, and Lipez, Circuit Judges.

          LIPEZ, Circuit Judge.

         This appeal involves a putative class action lawsuit arising out of allegedly deceptive labeling and marketing of products by Kohl's Department Stores, Inc. Appellant Ellen Mulder purchased several items from a Kohl's store in Hingham, Massachusetts. The price tags on these items listed both purchase prices and significantly higher "comparison prices." Mulder alleges that these comparison prices are entirely fictional, and were selected by Kohl's to mislead unsuspecting consumers about the quality of its products. Feeling cheated by Kohl's allegedly deceitful pricing scheme, Mulder filed suit alleging that Kohl's had, in violation of Massachusetts statutory and common law, improperly obtained money from her and other Massachusetts consumers. She requested that a court order Kohl's to restore this money and enjoin Kohl's from continuing to violate Massachusetts law. The district court granted Kohl's motion to dismiss all of Mulder's claims. We affirm.

         We faced identical claims against a different retailer in a related case, Shaulis v. Nordstrom, No. 15-2354, slip op. at 5-32 (1st Cir. July 26, 2017), also decided today. The reasoning of that opinion applies fully here. We provide the following background and analysis only to address Mulder's contentions regarding the district court's denial of her motion for leave to amend and to address a new "travel expenses" theory of injury proposed in an accompanying proposed second amended complaint.

          I. Background

         The facts underlying this case are taken from the amended complaint and are presumed true for the purposes of this appeal. They are fully set forth in the opinion of the district court. See Mulder v. Kohl's Dept. Stores, Inc., 15-11377-FDS, 2016 WL 393215, at *1-3 (D. Mass. Feb. 1, 2016).

         Defendant Kohl's Department Stores, Inc. is a Wisconsin-based corporation that operates department stores throughout the United States, including more than twenty stores in Massachusetts. Mulder purchased two items at one of these stores in 2014. The first item listed a "manufacturer's suggested retail price" of $55; the second displayed a "comparison price" of $26. The items were listed as being on sale for $29.99 and $17.99, respectively.

         Mulder claims that these price tags were deceptive. According to Mulder, 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 reality, the listed sale prices were "fabricated [and] inflated." In short, Mulder claims that the comparison prices listed on the price tags were "fictional amounts intentionally selected so that Kohl's could advertise phantom markdowns" and persuade customers to make purchases they otherwise would not make.

          On November 20, 2014, Mulder filed suit in Massachusetts Superior Court. She filed an amended complaint on February 19, 2015. The amended complaint alleged claims for fraud, breach of contract, unjust enrichment, violations of the Code of Massachusetts Regulations and the Federal Trade Commission Act, [1]and violations of Mass. Gen. Laws ch. 93A ("Chapter 93A").

         After Kohl's removed the case to federal court, it successfully moved to dismiss the action for failure to state a claim. The district court held that Mulder had failed to adequately plead a legally cognizable injury under Chapter 93A, and further denied her requests to certify several Chapter 93A questions to the Massachusetts Supreme Judicial Court ("SJC") and for leave to file a second amended complaint. The court also dismissed all of Mulder's common law claims.

         On appeal, Mulder challenges dismissal of her Chapter 93A claim and her common law claims for fraud, breach of contract, and unjust enrichment. Our review is de novo. Carter's of New Bedford, Inc. v. Nike, Inc., 790 F.3d 289, 291 (1st Cir. 2015). As a federal court sitting in diversity, we apply the substantive law of ...

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