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Sweater controversy: price tag lawsuits dismissed

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The U.S. 1st Circuit Court of Appeals on Wednesday upheld the dismissals of two lawsuits that accused two national retailers — Seattle-based Nordstrom Inc. and Menomonee Falls, Wisconsin-based Kohl's Department Stores Inc. — of using deceptive price tags to trick consumers into believing that they were getting a discount on high-end merchandise they bought.

Per court documents, “this case is about a sweater with a controversial price tag. … Judith Shaulis purchased a cardigan sweater for $49.97 at a Nordstrom Rack outlet store in Boston, Massachusetts. The price tag attached to that sweater listed both the purchase price of $49.97 and a higher "Compare At" price of $218. (Ms.) Shaulis claims that the listed ‘Compare At’ price was deceptive. The sweater was, she alleges, never sold by Nordstrom Rack, or any other retailer, for $218. Instead, Shaulis claims that the ‘Compare At’ price tags are used by Nordstrom to mislead consumers about the quality of items.” 

The lawsuit was originally dismissed because Ms. Shaulis “had failed to adequately plead a legally cognizable injury,” among other reasons. Kohl’s faced a similar lawsuit over several items purchased by Ellen Mulder. The court on Wednesday affirmed the original dismissal for the same reason.