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Deceptive Ads Can Lead to Legal Trouble for California Retailers, Court Rules

California retailers may be liable for large money awards if they falsely advertise that their products are on sale.

Deceptive Ads Can Lead to Legal Trouble for California Retailers, Court Rules

A federal appeals court Tuesday revived a potential class-action lawsuit alleging that Kohl's Department Stores Inc. misstated in advertising that items had been marked down.

The U.S. 9th Circuit Court of Appeals said California consumer laws permit such lawsuits if the customer would not have made the purchase but for the perceived bargain.

"Price advertisements matter," Judge Stephen Reinhardt wrote for a three-judge panel. "When a consumer purchases merchandise on the basis of false price information and when the consumer alleges that he would not have made the purchase but for the misrepresentation, he has standing to sue."

Kohl's has denied the underlying allegations that its ads were false or misleading.

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