Max Gerboc v Context Logic, Inc., 2017 WL 3497405 (6th Cir. Aug. 16, 2017) is run by the defendant ContextLogic, Inc. (“ContextLogic”).  The website works like a bazaar, where consumers can buy thousands of types of products, ranging from home goods to apparel. Plaintiff Max Gerboc (“Plaintiff”), one of those consumers, bought a pair of portable speakers for $27 from  Later, Plaintiff brought a putative class action before the Ohio state court alleging he had been tricked into buying $27 speakers because had advertised them as marked down from $300.  He alleged he was given the impression the speakers were regularly priced at $300 and ContextLogic falsely represented a savings of approximately 90 percent off the regular price, in an effort to induce customers to purchase products from its website.

ContextLogic removed the case to the United States District Court, Northern District of Ohio (“District Court”), then it moved to dismiss, alleging, inter alia, that Plaintiff’s failure to allege actual damages defeated his class action claim.  The District Court agreed with ContextLogic, and it dismissed the class action claim.

On an interlocutory appeal, the United States Court of Appeals for the Sixth Circuit (“Sixth Circuit”) upheld the District Court’s decision. The Sixth Circuit found jurisdiction under the Class Action Fairness Act (“CAFA”) as the parties were minimally diverse, the putative class had over a hundred members, and the amount in controversy exceeded five million dollars.  The Sixth Circuit then held Plaintiff’s claims failed as a matter of common sense.  The Sixth Circuit noted Plaintiff was not injured because he got what he paid for: a $27 item that was offered as a $27 item and that works like a $27 item.  The Sixth Circuit said: “A 90% discount from $27 was not part of the deal; no line struck through the speakers’ purchase price, and none of the various website images that Gerboc has attached to his filings mention such a discount.”

The Sixth Circuit thus concluded that, while Plaintiff enriched ContextLogic for facilitating his purchase, he was not unjustly enriched because he got what he paid for.  Moreover, Plaintiff did not suffer any actual damages to entitle him to any relief.

Yaron Shaham