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Deceptive discounts are not a cognizable CPA injury

4/27/26

By: Charles Lally

The Washington Supreme Court, in an en banc answer to a certified question from the Ninth Circuit Court of Appeals, held that misrepresenting a product’s discounted price, comparative price, or price history does not create an economic “injury” to purchasers within the meaning of the Washington Consumer Protection Act, RCW 19.86. Five of Washington’s nine Supreme Court Justices concurred with Justice Sheryl Gordon McCloud, writing for the majority in Shawna Montes v. Sparc Group LLC. No. 104162-4 (Wash. Apr. 2, 2026) (en banc) (available here).

The putative class action against Aéropostale

Plaintiff Montes purchased a pair of “Seriously Soft Heathered High-Rise Leggings” from Aéropostale’s online shop in January 2021. The leggings were advertised as being on sale for $6.00, discounted from the regular price of $12.50. Montes later determined that, between July of 2020 and January of 2021, the leggings had been offered at their “regular” price for only one day.

Montes filed a putative class action in the United States District Court for the Eastern District of Washington, on behalf of consumers who had purchased products from Aéropostale advertised as discounted or as part of a free offer. Aéropostale moved to dismiss for failure to state a claim, and the district court dismissed Montes’ complaint.

On appeal, the Ninth Circuit determined that Washington law was unclear regarding whether Montes had properly alleged an injury to her “business or property.” The Ninth Circuit certified a question to the Washington Supreme Court:

When a seller advertises a product’s price, coupled with a misrepresentation about the product’s discounted price, comparative price, or price history, does a consumer who purchases the product because of the misrepresentation suffer an ‘injur[y] in his or her business or property’ under [the Consumer Protection Act] if the consumer pays the advertised price?

The Washington Supreme Court, by a six-three majority, answered in the negative.

Plaintiff Montes failed to allege an economic loss

Montes advanced three theories of injury: (1) that she was wrongfully induced to purchase the leggings and would not have purchased them absent the inducement; (2) that she was wrongfully induced to purchase the leggings and was deprived of the satisfaction of getting a bargain by the inducement; and (3) that the price she paid was inflated by the wrongful inducement.

Crucially, Montes conceded that the leggings’ fair worth was $5.00 – $6.00 and conformed in every way (except for price history) to her expectations. The court noted that, for Montes to succeed on her first theory (that she was wrongfully induced to purchase the leggings and would not have purchased them absent the inducement), she would need to have alleged the leggings were “objectively different from or less valuable than the product she thought she was buying.” As to whether the misrepresented price history creates such a difference, the court noted “a seller’s abstract claim about value does not create an objective difference between two otherwise identical fungible items.” As to the second theory (that she was wrongfully induced to purchase the leggings and was deprived of the satisfaction of getting a bargain by the inducement), the court found that “disappointment is not a cognizable CPA injury.”

Regarding the third theory of injury (that the price she paid was inflated by the wrongful inducement), Montes’ factual concession that the leggings were worth “between $5.00 and $6.00” proved fatal. Aéropostale almost exclusively offered the leggings for sale at that price. Montes paid what she herself asserted to be a fair price. In light of that fact, the majority did not reach the price premium theory of injury.

What if Plaintiff Montes had not conceded the fair value of the leggings?

Dissenting, Chief Justice Debra L. Stephens noted that a reduction in a plaintiff’s purchasing power as a result of an unfair or deceptive act can constitute a cognizable injury under the CPA. The dissent found Aéropostale’s near-perpetual “discount” was a deceptive market signal, and that market signal caused an increase in demand for the leggings. Therefore, the dissent’s analysis found Plaintiff Montes had properly pleaded an injury under the CPA.

Takeaways

For Washington businesses, Montes v. Sparc Group means a narrowing of the category of injuries recognized as cognizable under the Consumer Protection Act to only those that are “economic in nature.” After Montes, disappointed bargain-seekers will need to allege a material difference between the value of products as advertised and received to pursue a claim under the CPA.

Previous decisions had excluded claims for personal injuries, mental distress, embarrassment, and inconvenience; Montes removes the CPA as an avenue for redressing noneconomic damage to businesses and property. For example, the dissent identifies restrictions on the use and enjoyment of property as a now-unavailable injury. However, the majority reiterate that damages which are difficult to quantify, but properly plead as economic in nature, remain a valid basis for a CPA claim.

Notably, although finding for Aéropostale in the context of individual consumer claims, the court highlighted that the Attorney General could pursue a CPA claim against Aéropostale on the facts of the case. The court went so far as to include a reference to the portion of the statute authorizing such a claim, presumably as a signal of its stern disapproval of the conduct described in the complaint.

For more information on this topic, please contact Charles Lally at charles.lally@fmglaw.com or your local FMG attorney.

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