99 Cents Only Stores Obtains Dismissal in Deceptive Advertising Class Action

Munger, Tolles & Olson represented 99 Cents Only Stores Inc. in obtaining a dismissal of all claims for monetary relief in a class action lawsuit alleging the company engaged in unfair competition and deceptive advertising. The plaintiff claimed that, because the retailer is named 99 Cents Only Stores, it cannot sell items for more than $1, even if such prices are fully disclosed prior to purchase.

In a ruling issued Nov. 2, 2015, Los Angeles Superior Court Judge Kenneth R. Freeman sustained the company’s demurrer and granted its motion to strike, effectively dismissing all claims for monetary relief. Judge Freeman found that the plaintiff could not state the claims alleged because the company disclosed the prices for these few items at the point of selection, via shelf tags and individual labels, and at the point of purchase, via detailed register displays, and as such, the customers were on notice of the prices charged before purchase and received the full benefit of those items.

Lead counsel Malcolm A. Heinicke told Law360: “Plaintiff concedes that the practice she is challenging is one through which the company provides a customer convenience, i.e., selling milk at the lowest price allowed by state law. And, the court’s ruling confirms that because the company diligently disclosed the prices of the few items sold for over one dollar, no customer suffered any actual harm from this added convenience.”

The court agreed with Munger Tolles’ argument that customers who availed themselves of the convenience were clearly notified of the prices they were paying and received full value of the item purchased.

In addition to Mr. Heinicke, the team representing 99 Cents Only Stores included Martin D. Bern and Jessica Barclay-Strobel.