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Full Opinion
United States Court of Appeals
For the First Circuit
No. 15-2354
JUDITH SHAULIS,
Plaintiff, Appellant,
v.
NORDSTROM, INC., d/b/a/ NORDSTROM RACK,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. F. Dennis Saylor IV, U.S. District Judge]
Before
Torruella, Lynch, and Lipez, Circuit Judges.
S. James Boumil, with whom Boumil Law Offices, Konstantine W.
Kyros, and Law Offices of Konstantine W. Kyros, were on brief, for
appellant.
P. Craig Cardon, with whom Dylan J. Price, Sheppard Mullin
Richter & Hampton LLP, John P. Bueker, Rebecca C. Ellis, and Ropes
& Gray LLP, were on brief, for appellee.
July 26, 2017
LIPEZ, Circuit Judge. This case is about a sweater with
a controversial price tag. Appellant 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. 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. To vindicate this
position, Shaulis filed suit alleging that Nordstrom had, in
violation of Massachusetts statutory and common law, improperly
obtained money from her and other Massachusetts consumers and
requested that a court order Nordstrom to restore this money and
enjoin Nordstrom from continuing to violate Massachusetts law.
The district court, in a well-reasoned opinion, granted
Nordstrom's motion to dismiss all of Shaulis's claims. We affirm.
I. Background
The facts underlying this case are taken from the second
amended complaint and are presumed true for the purpose of this
appeal. They are fully set forth in the opinion of the district
court. See Shaulis v. Nordstrom Inc., 120 F. Supp. 3d 40, 43-44
(D. Mass. 2015).
- 2 -
Defendant Nordstrom, Inc. is a Seattle, Washington-based
corporation that operates department stores throughout the United
States and Canada, including five "Nordstrom Rack" outlet stores
in Massachusetts. Shaulis purchased a sweater at one of these
stores in Boston in 2014. The price tag attached to the sweater,
which included both the $49.97 purchase price and the "Compare At"
price of $218, identified the difference between the two numbers
as "77%" worth of savings.1
Shaulis claims that this price tag was deceptive.
According to Shaulis, although price tags on Nordstrom Rack
products contain both a sale price and a "Compare At" price that
purports to represent a bona fide price at which Nordstrom (or
some other retailer) formerly sold those products, Nordstrom, in
reality, sells goods manufactured by designers for exclusive sale
at its Nordstrom Rack stores, which means that such items were
never sold -- or intended to be sold -- at the "Compare At" prices
advertised on the price tags. Shaulis claims that she was
wrongfully "[e]nticed by the idea of paying significantly less
than the 'Compare At' price charged outside of Nordstrom Rack,"
and that, but for Nordstrom's deception, she never would have
purchased the sweater.
1 The complaint also listed a number of "typical examples" of
products representing "the pricing schemes and tactics utilized
by" Nordstrom. The complaint does not, however, allege that
Shaulis purchased any of these items.
- 3 -
On November 6, 2014, Shaulis initiated this action with
a complaint filed in the Massachusetts Superior Court. She filed
an amended complaint on December 8, 2014, and a second amended
complaint ("SAC") on December 24. The SAC alleged claims for
fraud, breach of contract, unjust enrichment, violations of the
Code of Massachusetts Regulations and the Federal Trade Commission
Act,2 and violations of Mass. Gen. Laws ch. 93A ("Chapter 93A").
The SAC was brought on behalf of herself and all those similarly
situated, and proposed a class consisting of "[a]ll individuals
residing in the Commonwealth of Massachusetts who, within the
applicable statute of limitations preceding the filing of this
action . . . , purchased Nordstrom Rack Products."
Nordstrom removed the case to federal court and
successfully moved to dismiss the action for failure to state a
claim. The district court held that Shaulis had failed to
adequately plead a legally cognizable injury under Chapter 93A,
and further denied her requests to certify several Chapter 93A
questions to the Massachusetts Supreme Judicial Court ("SJC") and
for leave to file a third amended complaint. The court also
dismissed all of Shaulis's common law claims, again citing the
failure to plead a legally cognizable injury.
2 The district court dismissed Shaulis's claim for violations
of the Code of Massachusetts Regulations and the Federal Trade
Commission Act on the ground that neither statute provides for a
private cause of action. Shaulis does not appeal this decision.
- 4 -
On appeal, Shaulis challenges dismissal of her Chapter
93A claim and her common law claims for fraud, breach of contract,
and unjust enrichment. Our review is de novo. Carter's of New
Bedford, Inc. v. Nike, Inc., 790 F.3d 289, 291 (1st Cir. 2015).
As a federal court sitting in diversity, we apply the substantive
law of Massachusetts, as articulated by the SJC. Sanders v.
Phoenix Ins. Co., 843 F.3d 37, 47 (1st Cir. 2016).
II. Chapter 93A
The bulk of Shaulis's appeal involves objections to the
district court's dismissal of her Chapter 93A claim for damages
and injunctive relief.3 Chapter 93A, commonly known as the
Massachusetts Consumer Protection Act, is a broad consumer
protection statute that provides a private cause of action for a
consumer who "has been injured," Mass. Gen. Laws ch. 93A § 9(1),
3Shaulis also asks us to certify several questions on Chapter
93A to the SJC, which we may do if the questions are determinative
of the pending cause of action and there is no controlling
precedent. See Mass. S.J.C. R. 1:03; Easthampton Sav. Bank v.
City of Springfield, 736 F.3d 46, 50 (1st Cir. 2013). "We have
interpreted the SJC's requirement that there be 'no controlling
precedent' to prevent certification in cases when 'the course [the]
state court[ ] would take is reasonably clear.'" Id. at 51
(alteration in original) (quoting In re Engage, Inc., 544 F.3d 50,
53 (1st Cir. 2008)). The fact "[t]hat a legal issue is close or
difficult is not normally enough to warrant certification," since
otherwise cases involving state law "would regularly require
appellate proceedings in two courts." Bos. Gas Co. v. Century
Indem. Co., 529 F.3d 8, 15 (1st Cir. 2008). As explained below,
because the course the SJC would take on the issues before us is
reasonably clear, certification is not appropriate in this case.
- 5 -
by "unfair or deceptive acts or practices in the conduct of any
trade or commerce," id. § 2(a). See Rule v. Fort Dodge Animal
Health, Inc. (Rule II), 607 F.3d 250, 253 (1st Cir. 2010); see
also Casavant v. Norwegian Cruise Line Ltd., 952 N.E.2d 908, 912
(Mass. 2011) ("If any person invades a consumer's legally protected
interests, and if that invasion causes the consumer a loss --
whether that loss be economic or noneconomic -- the consumer is
entitled to redress under our consumer protection statute."
(quoting Hershenow v. Enterprise Rent-A-Car Co., 840 N.E.2d 526,
535 (Mass. 2006))).
After reviewing the relevant Massachusetts regulations,4
the district court determined that Nordstrom's alleged pricing
scheme "constitut[ed] an unfair or deceptive practice under
Chapter 93A." Shaulis, 120 F. Supp. 3d at 48-49. The court
further found that Shaulis had adequately alleged that Nordstrom's
deception "caused" an identifiable "harm" -- namely, that Shaulis
had sufficiently alleged that she was "directly induced" to make
a purchase she would not have made, absent the unfair or deceptive
practice. Id. at 50, 52. The court held, however, that Shaulis
4 The district court also discussed the applicable portions
of the Federal Trade Commission Act and related FTC Guidelines
dealing with false advertising and deceptive pricing. However,
because the court determined that the SAC adequately alleged a
violation of the Code of Massachusetts Regulations, it declined to
decide "whether the complaint also allege[d] a deceptive practice
under the Federal Trade Commission Act." Shaulis, 120 F. Supp. 3d
at 49 n.4.
- 6 -
had failed to allege a legally cognizable injury for purposes of
Chapter 93A because Shaulis's "subjective belief that she did not
receive a good value, without more, is not enough to establish the
existence of a Chapter 93A injury." Id. at 53.
On appeal, Shaulis contends that the district court
misread the SJC's Chapter 93A jurisprudence and erroneously
concluded that she had failed to adequately allege a legally
cognizable injury based on Nordstrom's deceptive pricing scheme.
Hence, we first review the relevant case law on Chapter 93A
injuries, and then review Shaulis's claim de novo.
A. Injury under Chapter 93A
Many courts -- both state and federal -- have struggled
to explain what constitutes an injury under Chapter 93A. See Tyler
v. Michaels Stores, Inc., 984 N.E.2d 737, 745 n.15 (Mass. 2013)
(discussing differing interpretations of earlier SJC opinions);
Rule v. Fort Dodge Animal Health, Inc. (Rule I), 604 F. Supp. 2d
288, 298 (D. Mass. 2009) (noting that case law "construing the
Chapter 93A . . . injury requirement has had a less than
intellectually coherent course of development"). We last explored
the parameters of Chapter 93A injuries in 2010 in Rule II. That
case involved a Chapter 93A claim by a plaintiff who purchased
heartworm medication for her dog, Luke. 607 F.3d at 251. After
administering the medication, the plaintiff learned that the FDA
had recalled the medication because of harmful side effects. Id.
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Plaintiff then brought a class action against the manufacturer of
the heartworm medication, alleging that, although Luke was none
the worse for wear, she had overpaid for the medication. Id.
at 251-52. Plaintiff's theory of the case was that "she purchased
[the medication] because of a deception (failure to disclose the
risk), the product was 'in reality' worth less than she paid for
it (because of that undisclosed risk)," and thus she had suffered
"injury," the measure of her damages being "the difference between
what she paid and what she would have paid if the risk had been
disclosed." Id. at 253.
A central issue in Rule II was whether a "per se" theory
of injury -- that is, a claim that the deception itself is the
requisite injury -- was sufficient to state a claim under Chapter
93A. Or, as we put the question in Rule II: whether "[C]hapter
93A injury requires that a plaintiff who seeks to recover show
'real' economic damages," or whether "injury as a violation of
some abstract 'right' like the right not to be subject to a
deceptive act that happened to cause no economic harm" was
sufficient. Id. We noted that the plaintiff had suffered no
"economic injury in the traditional sense" because she had "used
up" the medication for its advertised purpose without ill effect,
and she thus held nothing of reduced value nor faced any risk of
harm. Id. at 255. We acknowledged, however, that if Rule had
sued before Luke consumed the medication, she may have been able
- 8 -
to claim injury based on her overpayment theory, because she would
have possessed medication that was not what she bargained for.
Id.
In reaching this decision, we observed that "the most
recent SJC cases" had "moved away" from the "per se" theory of
injury supported by earlier cases -- that is, a claim that an
unfair or deceptive act alone constitutes injury -- and had
"returned to the notion that injury under [C]hapter 93A means
economic injury in the traditional sense." Id. at 254-55; see
also Rule I, 604 F. Supp. 2d at 298-306 (surveying the development
of the SJC's Chapter 93A jurisprudence). Specifically, we
contrasted the SJC's earlier opinions in Leardi v. Brown, 474
N.E.2d 1094 (Mass. 1985), and Aspinall v. Philip Morris Cos., 813
N.E.2d 476 (Mass. 2004), with more recent opinions in Hershenow,
840 N.E.2d at 526, and Iannacchino v. Ford Motor Co., 888 N.E.2d
879 (Mass. 2008), which had rejected the "per se" theory of injury.
See Hershenow 840 N.E.2d at 535 ("A consumer is not . . . entitled
to redress under [Chapter 93A], where no loss has occurred.");
Iannacchino, 888 N.E.2d at 886-87 (explaining that, if properly
alleged, a claim that plaintiffs own vehicles with defective door
handles, in violation of federal safety regulations, would support
a cause of action under Chapter 93A because plaintiffs would have
paid for fully compliant vehicles, which they did not receive).
We acknowledged, however, that there may remain certain
- 9 -
"exceptions" to this general rule, embodied in older SJC opinions
that have not been expressly overruled, but we left to the SJC the
task of defining them. Rule II, 607 F.3d at 255 (citing Leardi,
474 N.E.2d at 1101); see also Hershenow, 840 N.E.2d at 538, (Cowin,
J., concurring) (noting that Hershenow had "overruled . . . sub
silentio" earlier opinions supporting a "per se" theory of injury).
1. Tyler
Helpfully, since our opinion in Rule II, the SJC has
clarified what constitutes a legally cognizable injury under
Chapter 93A, most notably in Tyler v. Michaels Stores, Inc. In
Tyler, the plaintiff accused the defendant of violating a statute,
Mass. Gen. Laws ch. 93, § 105, that prohibits companies from
writing customers' "personal identification information" on credit
card transaction forms when the credit card issuer does not require
the company to provide such information. 984 N.E.2d at 738 & n.1.
The SJC explained that, if the company, as a result of a violation
of § 105, "use[d] the [personal identification] information for
its own business purposes," such as "by sending the customer
unwanted marketing materials or by selling the information for a
profit," the company would "ha[ve] caused the consumer a[] [non-
economic] injury that [wa]s distinct from the statutory violation
itself and [thus] cognizable under [Chapter 93A]." Id. at 746.
But the SJC went on to explain that if, by contrast, the company
had merely placed the personal information in a file "and never
- 10 -
used the information for any purpose thereafter, a consumer would
not have a cause of action for damages" under Chapter 93A, even
though the company may have violated § 105 and thereby committed
"an unfair or deceptive act." Id. at 746 n.17.
In explaining its decision in Tyler, the SJC stated that
a violation of an independent statute -- such as the Code of
Massachusetts Regulations here -- does not itself "satisf[y] the
injury requirement of c. 93A, § 9," and hence, does not
"automatically entitle[ ] the plaintiff to at least nominal damages
(and attorney's fees)" under Chapter 93A. Id. at 744â45. Instead,
"the violation of the legal right that has created the unfair or
deceptive act or practice must cause the consumer some kind of
separate, identifiable harm arising from the violation itself."
Id. at 745 (emphasis added). The SJC thus held that "a plaintiff
bringing an action . . . under [Chapter 93A] must allege and
ultimately prove that she has, as a result [of the statutory
violation], suffered a distinct injury or harm that arises from
the claimed unfair or deceptive act." Id. at 745-46 (emphasis
added); see also Walsh v. TelTech Sys., Inc., 821 F.3d 155, 161-
62 (1st Cir. 2016) (discussing Tyler); Bezdek v. Vibram USA Inc.,
No. 12-cv-10513-DPW, 2013 WL 639145, at *5 (D. Mass. Feb. 20, 2013)
(observing that the SJC has "disavowed the notion that deceptive
advertising constitutes per se injury on consumers who purchase
the product").
- 11 -
2. Bellermann
The SJC recently reaffirmed Tyler's holding in
Bellermann v. Fitchburg Gas & Elec. Light Co., 54 N.E.3d 1106
(Mass. 2016), which postdates the district court's opinion in this
case. See 54 N.E.3d 1106. In Bellermann, a state agency
determined that a utility company had failed to comply with certain
storm preparedness regulations. Id. at 1107. Plaintiffs,
customers of the company, filed a class action under Chapter 93A,
alleging that they had suffered economic injury by "overpaying for
a level of emergency storm preparedness" that the company could
not have provided, if a storm had occurred. Id. at 1108. As the
plaintiffs saw it, they had adequately alleged injury because "they
ha[d] paid for more in terms of quality and reliability of service
than they received." Id. at 1109-10.
The SJC rejected the Bellermann plaintiffs' theory of
injury. Id. at 1114. Citing Tyler and earlier cases, the SJC
distinguished cases where a Chapter 93A plaintiff "suffered an
economic injury because . . . the defendants' products did not
deliver the full anticipated and advertised benefits, and
therefore were worth less, as used or owned, than what the
plaintiffs had paid," from those cases where the alleged injury
was merely hypothetical or speculative. Id. at 1112. Reaffirming
Tyler's holding that "to meet the injury requirement under [Chapter
93A], a plaintiff must have suffered a 'separate, identifiable
- 12 -
harm arising from the [regulatory] violation' that is distinct
'from the claimed unfair or deceptive conduct itself,'" the SJC
concluded that permitting plaintiffs' overpayment theory of injury
"would permit class certification . . . whenever a product (or
service) fails to conform to a regulatory requirement and the
consumer alleges an economic injury based on overpayment for the
product." Id. at 1111 (quoting Tyler, 984 N.E.2d at 745).
In other words, the SJC treated the plaintiffs' theory
as akin to a per se theory of injury. Because the plaintiffs had
alleged only a possibility of adverse consequences -- which did
not occur -- they were, in effect, seeking damages based solely on
the utility company's violation of the regulations. The court
held that such a claim, alleging an "overpayment" for a flawed
"product" that never actually underperformed, did not state a
cognizable injury under Chapter 93A.
The SJC reached this conclusion in Bellermann by
comparing and contrasting its reasoning in three earlier Chapter
93A cases: Iannacchino, Aspinall, and Hershenow. Two of the cases,
Iannacchino and Aspinall, involved regulatory noncompliance in
which the court had found identifiable economic injury. In the
third, Hershenow, the SJC concluded that the defendant's
regulatory violation had caused no economic loss. Id. at 1111-
13.
- 13 -
Specifically, in Iannacchino, the plaintiffs claimed
that their vehicles' door handles did not comply with applicable
safety regulations. 888 N.E.2d 882. Although the SJC dismissed
the plaintiffs' claims on other grounds, the court observed that
safety regulations play "a highly significant role" in a consumer's
decision to purchase a vehicle, id. at 886, and thus
the purchase price paid by the plaintiffs for their
vehicles would entitle them to receive vehicles that
complied with . . . safety standards or that would be
recalled if they did not comply. If [the defendant]
knowingly sold noncompliant (and therefore potentially
unsafe) vehicles or if [the defendant], after learning
of noncompliance, failed to initiate a recall and to pay
for the condition to be remedied, the plaintiffs would
have paid for more (viz., safety regulation-compliant
vehicles) than they received. Such an overpayment would
represent an economic loss -- measurable by the cost to
bring the vehicles into compliance -- for which the
plaintiffs could seek redress under G.L. c. 93A.
888 N.E.2d 886-87.
Bellermann similarly construed the circumstances in
Aspinall. There, the SJC had held that purchasers of cigarettes
could bring a class action against a manufacturer for falsely
claiming that its cigarettes delivered health benefits they did
not, in fact, provide. 813 N.E.2d 479-80. The manufacturer
labeled the cigarettes as "light," in purported compliance with
regulations under which "light" cigarettes were those that
delivered lower levels of toxins compared to regular cigarettes.
Id. The SJC concluded that the putative class members "were
injured when they purchased a product that, when used as directed,
- 14 -
exposed them to substantial and inherent health risks that were
not . . . minimized by their choice of the defendant's 'light'
cigarettes." Id. at 488. As the Bellermann court interpreted the
holding in Aspinall, the consumers had alleged a legally cognizable
injury because each consumer "had purchased and smoked cigarettes
that did not deliver the advertised health benefits" and they did
not receive the benefit (lower toxins) "for which each had paid."
Bellermann, 54 N.E.3d at 1112.
The SJC contrasted these cases with Hershenow, in which
putative class members who had rented automobiles from the
defendant rental company sought class certification based on the
defendant's violation of a regulation governing the terms of damage
waiver clauses. Although the rental agreement did not comply with
applicable regulations, none of the putative class members had
been in an accident that triggered the damage waiver clause.
Because the invalid provision was never enforced, the SJC concluded
that no plaintiff had suffered the necessary, distinct injury that
"is an essential predicate for recovery under" Chapter 93A.
Hershenow, 840 N.E.2d at 528 (emphasizing that each putative class
member was no "worse off during the rental period than he or she
would have been had the [damage waiver provision] complied in
full"). Hence, "unlike the injuries recognized in Iannacchino and
Aspinall," where plaintiffs did not "receive[] the full benefit of
the purchase," the plaintiffs in Hershenow received everything
- 15 -
they bargained for and faced no future risk of harm. Bellermann,
54 N.E.3d at 1113 (quoting Shaulis, 120 F. Supp. 3d at 52).
We can derive from the analyses in Tyler and Bellermann
a clear understanding of the SJC's current view of a legally
cognizable economic injury under Chapter 93A. To state a viable
claim, the plaintiff must allege that she has suffered an
"identifiable harm" caused by the unfair or deceptive act that is
separate from the violation itself. Tyler, 984 N.E.2d at 745.
Put another way, a plaintiff must "show 'real' economic damages,"
as opposed to some speculative harm. Rule II, 607 F.3d at 253.
Accordingly, a claim that alleges only a "per se" injury -- that
is, a claim resting only on a deceptive practice, regulatory
noncompliance, or the "impairment of an abstract right without
economic loss" -- is insufficient to state a Chapter 93A claim.
Id.; see also Tyler, 984 N.E.2d at 745-46. It is thus not enough
to claim that the defendant's improper conduct created a risk of
"real economic damages." Rule II, 607 F.3d at 253 (internal
quotation marks omitted). Speculation concerning still inchoate
harm does not establish the distinct injury that "is an essential
predicate for recovery under" Chapter 93A. Bellermann, 54 N.E.3d
at 1113 (quoting Hershenow, 840 N.E.2d at 528); see also Rule II,
607 F.3d at 253. Instead, legally cognizable injuries under
Chapter 93A must involve objective, "identifiable" harm that goes
- 16 -
beyond the deception itself. Tyler, 984 N.E.2d at 745; Iannacchino
888 N.E.2d at 888.
B. Application
Shaulis claims that she has suffered a legally
cognizable injury because she was "induced" to make a purchase she
would not have made, but for the false sense of value created by
Nordstrom's pricing scheme. She primarily asserts that her injury
is the loss of $49.97 because, in the district court's words, "she
would rather have her money -- which she could use to purchase
other things -- than the sweater." Shaulis, 120 F. Supp. 3d at
52. Although the SJC has not addressed an "induced purchase"
theory of injury exactly like Shaulis's, we think it is clear,
given the discernible principles in the SJC's case law, that
Shaulis's claim falls short of alleging the "identifiable" injury,
distinct from the claimed deceptive conduct itself, that the SJC
requires for individual relief under Chapter 93A. Tyler, 984
N.E.2d at 745; see also Bellermann, 54 N.E.3d at 1111.
The flaw in Shaulis's theory of injury -- that the mere
purchase of an item may constitute cognizable injury, regardless
of the item's specific qualities -- is that it merges the alleged
deception with the injury. To illustrate that point, we offer two
scenarios. First, if Shaulis had not purchased a sweater after
viewing the offending "Compare At" price tag, and later learned
that Nordstrom's pricing scheme violated the Massachusetts Code of
- 17 -
Regulations, she obviously would not have suffered a legally
cognizable Chapter 93A injury. To claim injury based on the
deceptive tag would be to rely on the "per se" theory of injury
the SJC has rejected.
In the second scenario, taking the facts as Shaulis
alleges them, she purchased the sweater, but claims she did so
only because the tag suggested that the sweater was worth more
than the price Nordstrom actually charged. This contention is
simply another way of saying that Shaulis was wrongfully deceived
by Nordstrom. She identifies no objective injury traceable to the
purchased item itself -- for example, that the sweater was poorly
made or that its materials were misrepresented. Such a purchase-
as-injury claim collapses the SJC's required distinction between
deception and injury by attempting to plead an assertion about a
consumer's disappointed expectations of value in place of an
allegation of real economic loss.
Shaulis contends that this construction reads the SJC's
definition of injury too narrowly. In her view, her injury is
clear: she no longer has her money, and the sweater she does have
is "worth nothing at all to [her] since she never would have bought
it" absent Nordstrom's deception. Thus, Shaulis argues, her injury
is concrete -- more like the injuries alleged by owners of
noncompliant cars in Iannacchino than like the speculative or
never-realized harms alleged in Rule II or Hershenow -- and,
- 18 -
therefore, she has alleged more than the mere regulatory violation
the SJC has rejected as a viable form of Chapter 93A injury.
However, Shaulis's attempt to distinguish her injury
from those of the unsuccessful plaintiffs in cases like Rule II,
Hershenow, and Bellermann overlooks a primary rationale for those
decisions, namely, that the plaintiffs had received everything
they had bargained for. Thus, in Rule II, the plaintiff received
effective medication without side effects. In Hershenow, the
plaintiffs received adequate rental cars, and the illegal damage
waivers in their rental contracts were never enforced. And, in
Bellermann, the plaintiffs received all of the electrical service
to which they were entitled.
By contrast, in cases where plaintiffs' Chapter 93A
claims were successful, there was a clear connection between the
defendant's regulatory violation and an objective injury. In
Iannacchino, for example, the SJC noted that plaintiffs could
adequately plead injury where the cars they purchased purported
to, but did not, meet federal safety regulations, the defendant
refused to recall and fix the vehicles, and the plaintiffs' damages
could be easily identified by measuring the cost to bring the
vehicles into compliance with the regulations. Iannacchino, 888
N.E.2d at 886-87; see also Bezdek, 2013 WL 639145, at *6
(recognizing "price premium" theory of injury adequately alleged
- 19 -
where plaintiffs claimed they paid more for shoes that promised
to, but did not, provide specific health benefits).
Unlike the plaintiffs in Iannacchino, however, Shaulis's
complaint fails to identify any bargained-for characteristic of
the sweater that she has not received. As the district court
explained, Shaulis "arguably got exactly what she paid for, no
more and no less," emphasizing her failure to allege that the
sweater was "worth less than the selling price, that it was
manufactured with shoddy materials or inferior workmanship, that
it is of an inferior design, or that it is otherwise defective."
Shaulis, 120 F. Supp. 3d at 51-52. At bottom then, Shaulis's
alleged "injury" is only that Nordstrom tricked her into believing
that she was getting a bargain, and not, as was the case in
Iannacchino, that the product itself was deficient in some
objectively identifiable way. That perceived adverse impact -- as
the district court put it, "the subjective belief as to the nature
of the value [Shaulis] received" -- does not state a legally
cognizable economic injury under Chapter 93A because it fails to
identify anything objective that Shaulis bargained for that she
did not, in fact, receive.
Perhaps realizing this flaw in her claims, Shaulis
attempts to reframe her injury as a loss of the benefit of the
bargain, contending that the "Compare At" price tag was a false
representation that the sweater was of "high quality." But this
- 20 -
reformulation is fundamentally no different than her "induced
purchase" theory of injury because Shaulis does not explain how
the sweater was not of "high quality" in any objective way. As
the SJC explained in Iannacchino, a plaintiff's "bare assertion"
that a product is deficient in some way is "conclusory and can be
subjective" and thus "does not suffice to state a viable claim."
888 N.E.2d at 888. Instead, claims of injury premised on
"overpayment" for a product, or a loss of the benefit of the
bargain, require an objective measure against which the
plaintiff's allegations may be evaluated. See id. ("[T]he
complaint must identify a legally required standard that the
[product] w[as] at least implicitly represented as meeting, but
allegedly did not.").
Shaulis, however, makes no objective claims, instead
relying only on inferences she drew about the quality of the
sweater based on the "Compare At" price tag. Indeed, Shaulis's
assertion that the sweater is "worth nothing to [her]" proves too
much, as it demonstrates that the only injury she has alleged is
based solely on her subjective belief that she got a bad deal.
Shorn of its conclusory allegations, the complaint adequately
alleges only that Nordstrom violated the Massachusetts Code of
Regulations and that Shaulis purchased a sweater for $49.97 that
she no longer wants.
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Shaulis's attempt to analogize this case to fake-Rolex
hawking in Hong Kong is also unpersuasive. She claims that the
district court "apparently would find no actionable grievance in
the fact that the purchase was not a real Rolex but a replica made
of inferior materials, selling at a 99% discount." There is an
obvious distinction there: falsely advertising a watch as a "Rolex"
is a material misstatement about the watch's quality. Shaulis
alludes to what she purchased as a "phony designer sweater" but
has made no allegations that Nordstrom ever represented it as such.
It may be the case that Shaulis, in fact, made an
inference from price to value (the claimed "high quality" of the
sweater) based on Nordstrom's "Compare At" price tag, or even that
Nordstrom hopes some customers will make this inference. See Dhruv
Grewal & Larry D. Compeau, Comparative Price Advertising:
Informative or Deceptive?, 11 J. Pub. Pol'y & Mktg. 52, 55 (1992)
("By creating an impression of savings, the presence of a higher
reference price enhances subjects' perceived value . . . [of a]
product."). Indeed, it is presumably just this kind of erroneous
inference that Massachusetts seeks to prevent by regulation. Yet,
not only have Massachusetts courts declined to find injury under
Chapter 93A where the plaintiff relies entirely on her subjective
belief as to the value received, but federal courts also have
routinely rejected claims of injury under Chapter 93A that were
not grounded in any objective measure. See, e.g., In re Celexa &
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Lexapro Mktg. and Sales Practices Litig., No. 14-cv-13848-NMG,
2015 WL 3751422, at *8 (D. Mass. June 15, 2015) (rejecting
"informed choice" theory of injury where plaintiffs alleged they
would not have purchased drug had they known certain information);
Sergeants Benv. Ass'n Health & Welfare Fund v. Sanofi-Aventis U.S.
LLP, 20 F. Supp. 3d 305, 336 (E.D.N.Y. 2014), aff'd, 806 F.3d 71
(2d Cir. 2015) (rejecting induced purchase theory of injury under
Chapter 93A).
Appellate courts reviewing the consumer protection
statutes of other states also have consistently rejected similar
purchase-as-injury claims. See, e.g., Kim v. Carter's Inc., 598
F.3d 362, 366 (7th Cir. 2010) (rejecting induced purchase theory
of injury where plaintiff alleged she was deceived by fictitious
price tags on clothing); Small v. Lorillard Tobacco Co., 720 N.E.2d
892, 898 (N.Y. 1999) (rejecting induced purchase theory of injury
under New York law because it "sets forth deception as both act
and injury"). Absent allegations of real loss grounded in some
objective measure, Shaulis's "induced purchase" theory of injury
is simply the "per se" theory of injury in new clothing, and hence,
it is insufficient to adequately allege injury under the SJC's
current Chapter 93A jurisprudence.
In a final attempt to salvage her claim for damages,
Shaulis changes tack, arguing that even if she has not suffered an
economic injury by being induced to purchase the sweater, she has
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suffered a separate injury in the form of expenses incurred
traveling to the Nordstrom Rack.5 Shaulis's "travel expenses"
theory of damages, however, was not pleaded in the SAC, and she
did not raise it in the district court. Hence, we need not address
it here. In any event, this argument would also fail because
Shaulis does not explain how a deceptive price tag could have
caused her to travel to the Nordstrom Rack in the first place.6
See Walsh, 821 F.3d at 160 ("A plaintiff's failure to establish
5 Shaulis also claims that she is entitled to damages under
Chapter 93A's statutory damages provision and the SJC's
acknowledgment in Tyler that "injury or harm worth more than a
penny" entitles a plaintiff to statutory damages. See 984 N.E.2d
at 746 n.20. Shaulis misapprehends the relevant law. Chapter
93A, § 9 provides that "if the court finds for the petitioner,
recovery shall be in the amount of actual damages or twenty-five
dollars, whichever is greater." This statutory damage provision
does not, however, supplant the requirement that a plaintiff prove
injury under § 9. Instead, "[i]t merely eliminates the need to
quantify an amount of actual damages if the plaintiff can establish
a cognizable loss caused by a deceptive act." Hershenow, 840 N.E.2d
at 526 n.18 (emphasis added). Tyler, however, involved noneconomic
injury (an invasion of the consumer's privacy), and its discussion
of "injury or harm worth more than a penny" dealt with the measure
of damages, not the establishment of injury in the first instance.
Here, Shaulis has simply not pleaded a legally cognizable injury,
an inquiry that is antecedent to the measurement of damages.
6 Shaulis attempts to circumvent this causation problem by
claiming that she was lured to the Nordstrom Rack by unspecified
advertising that promised bargains. These claims are too vague to
meet the heightened pleading requirements of Federal Rule of Civil
Procedure 9(b) for claims sounding in fraud. Martin v. Mead
Johnson Nutrition Co., No. 09-cv-11609, 2010 WL 3928707, at *3 (D.
Mass. Sept. 30, 2010) ("A claim under Chapter 93A that involves
fraud is subject to the heightened pleading requirement.").
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both factual causation and proximate causation is fatal to her
Chapter 93A claim.").
C. Injunctive Relief under Chapter 93A
Shaulis separately assigns error to the district court's
failure to grant her request for injunctive relief under Chapter
93A. In particular, Shaulis contends that she is entitled to
injunctive relief under Chapter 93A regardless of whether her claim
for damages is dismissed.
Shaulis's only support for this claim is Diviacchi v.
Speedway LLC, in which the district court held that "a [Chapter
93A] plaintiff may pursue a claim for purely injunctive
relief . . . absent any injury." 109 F. Supp. 3d 379, 386 (D.
Mass. 2015). In making this determination, the Diviacchi court
focused on language in Tyler that it said suggested that the
requirement of proving injury applied only to a claim for damages.
Id. at 385â86. Specifically, the Diviacchi court acknowledged
that Tyler demonstrated "a broad shift away from the notion that
the invasion of a legal right, standing alone, is sufficient to
support a claim under Chapter 93A," but the court noted that the
SJC's silence on the availability of equitable relief counseled in
favor of finding that such relief was available. Id.; see Shaulis,
120 F. Supp. 3d at 50 n.5 (discussing Diviacchi).
We find this reasoning unpersuasive, as did the district
court. Neither the text of Chapter 93A nor the relevant case law
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supports this argument. The plain language of Chapter 93A limits
the class of consumers who may bring an action to those who "ha[ve]
been injured," and offers as remedy both "damages and
. . . equitable relief, including an injunction." Mass. Gen. Laws
ch. 93A, § 9(1) (emphasis added). We find nothing in the text of
Chapter 93A that obviates the need to prove injury in private suits
for injunctive relief, or even suggests that private suits for
equitable relief should somehow be treated differently than claims
for damages.
Further, the SJC has never explicitly distinguished
between the form of injury required for damages and that required
for injunctive relief. See Hershenow, 840 N.E.2d at 535 (holding
that Chapter 93A plaintiff must prove (1) an "invasion" of a
"legally protected interest" and (2) that the "invasion causes the
consumer a loss," either "economic or non-economic"); cf. Young v.
Wells Fargo Bank, N.A., 717 F.3d 224, 242 (1st Cir. 2013) (vacating
dismissal of claims for both damages and injunctive relief under
Chapter 93A, and noting that claim for injunctive relief was
"derivative of" plaintiff's claim for damages). Moreover, the
SJC's most recent opinion on point, Bellermann, lacks any language
distinguishing claims for damages from claims for injunctive
relief. See 54 N.E.3d at 1110 ("To succeed in [a] motion for class
certification under [Chapter 93A] . . . plaintiffs . . . must show
that the assertedly unfair or deceptive act or practice
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. . . caused their injuries."). Hence, consistent with the plain
language of the statute, we hold that a private cause of action
under Chapter 93A -- either for damages or injunctive relief --
requires a plaintiff to allege injury, as that term is defined by
the SJC. See Tyler, 984 N.E.2d at 745 ("The invasion of a
consumer's legal right . . . may be a violation of G.L. c. 93A,
§ 2 . . . but the fact that there is such a violation does not
necessarily mean the consumer has suffered an injury.").
Shaulis gravely warns, however, that failure to provide
for a private cause of action for injunctive relief will leave
Massachusetts consumers unprotected from retailers' dishonest
pricing schemes. We disagree. As we noted in Rule II, the
Massachusetts Attorney General "has authority [under Chapter 93A]
to seek heavy sanctions on those who engage in deceptive
advertising even without injury." 607 F.3d at 255 (emphasis added)
(citing Mass. Gen. Laws ch. 93A, § 4); see also Rule I, 604 F.
Supp. 2d at 304 ("Chapter 93A was not 'mean[t] to authorize purely
vicarious suits by self-constituted private attorneys-general.'"
(alteration in original) (quoting Leardi, 474 N.E.2d at 1102)).
It may be the case that Nordstrom's allegedly unlawful conduct
needs to be deterred, "but not necessarily by those who . . . were
not injured." Rule II, 607 F.3d at 255. Hence, because Shaulis
has not adequately alleged that she suffered a legally cognizable
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injury, her Chapter 93A claims for damages and injunctive relief
were both properly dismissed.
III. Common Law Claims
Shaulis's remaining common law claims -- for fraud,
unjust enrichment, and breach of contract -- fare no better than
her Chapter 93A claim. We address each in turn.
First, Shaulis's claim for fraudulent misrepresentation
fails for the same reason as her Chapter 93A claim: she has not
alleged an actionable injury caused by Nordstrom's allegedly false
statement. Specifically, under Massachusetts law, a claim for
fraudulent misrepresentation requires a pecuniary loss. See Twin
Fires Inv., LLC v. Morgan Stanley Dean Witter & Co., 837 N.E.2d
1121, 1135-36 (Mass. 2005). Although Shaulis alleges that she
would not have purchased the sweater but for Nordstrom's deception
-- and, hence, that we should infer that her "loss" is the total
purchase price -- she does not allege that the sweater she actually
received was worth less than she paid, or that the sweater was
defective in some way. Absent such allegations, her claim for
fraudulent misrepresentation fails to allege any pecuniary loss.
Shaulis contends, however, that she is at least entitled
to consequential damages on her fraud claim -- in the form of
travel expenses to the Nordstrom Rack, shipping expenses to return
the sweater, or the cost of telephone calls to Nordstrom to
complain. This argument also fails. Although consequential
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damages are generally available for fraudulent misrepresentation,
see Rivera Castillo v. Autokirey, Inc., 379 F.3d 4, 12 (1st Cir.
2004), Shaulis does not allege any consequential damages in the
SAC. As explained above, the "travel expenses" theory of damages
is alleged for the first time on appeal, and, even if this theory
had been properly alleged in the SAC, it fails for the simple
reason that plaintiff could not have seen the deceptive price tag
until she had already reached the store. See Kiluk v. Select
Portfolio Servicing, Inc., No. 11-civ-10731-FDS, 2011 WL 8844639,
at *5 (D. Mass. Dec. 19, 2011) ("[T]he complaint must allege that
plaintiffs suffered a pecuniary loss as a consequence of their
reliance on defendant's alleged misrepresentation.").
As for Shaulis's breach of contract claim, we find no
allegations in the SAC that the sales contract itself was actually
breached. See Kim, 598 F.3d at 364 (finding no breach of contract
where item was advertised for "30% off an inflated, fictitious"
price, because "[b]y charging this agreed price in exchange for
ownership of the clothing, [defendant] gave the plaintiffs the
benefit of their bargain"). The agreement between Shaulis and
Nordstrom was nothing more than a straightforward, everyday sales
contract for the purchase of a sweater. By charging the agreed
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price in exchange for ownership of the sweater, Nordstrom fulfilled
its contractual obligations.7
Shaulis's common law claim for unjust enrichment also
fails because a party with an adequate remedy at law cannot claim
unjust enrichment. ARE-Tech Square, LLC v. Galenea Corp., 91 Mass.
App. Ct. 1106 (Mass. App. Ct. 2017); see also Mass. Eye & Ear
Infirmary v. QLT Phototherapeutics, Inc., 412 F.3d 215, 234 (1st
Cir. 2005) (noting that unjust enrichment serves only as an
"equitable stopgap for occasional inadequacies in contractual
remedies at law"). Moreover, Massachusetts law does not permit
litigants "to override an express contract by arguing unjust
enrichment." Platten v. HG Bermuda Exempted Ltd., 437 F.3d 118,
130 (1st Cir. 2006). Although Shaulis argues that, if her other
claims are dismissed, she effectively has no adequate remedy, this
argument misapprehends the relevant law. It is the availability
of a remedy at law, not the viability of that remedy, that
prohibits a claim for unjust enrichment. See Reed v. Zipcar, Inc.,
7 Shaulis also makes an undeveloped claim that Nordstrom
violated the implied covenant of good faith and fair dealing.
Under Massachusetts law, a covenant of good faith and fair dealing
is implied in every contract. UNO Restaurants, Inc. v. Boston
Kenmore Realty Corp., 805 N.E.2d 957, 964 (Mass. 2004). However,
"[t]he duty of good faith and fair dealing concerns the manner of
performance" of the contract, as opposed to the negotiation of its
terms. Id. Moreover, the implied covenant may not be invoked to
create rights and duties not contemplated by the provisions of the
contract or the contractual relationship. Id. Here, because there
are no allegations in the SAC regarding Nordstrom's performance of
its contract with Shaulis, this claim also fails.
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883 F. Supp. 2d 329, 334 (D. Mass. 2012) (noting that the viability
of the remedy at law "is beside the point" and the "mere
availability" of a remedy at law bars a claim for unjust
enrichment), aff'd, 527 F. App'x 20 (1st Cir. 2013); Fernandes v.
Havkin, 731 F. Supp. 2d 103, 114 (D. Mass. 2010) ("Plaintiff's
negligence and [C]hapter 93A claims . . . preclude a claim for
unjust enrichment. The disposition of those claims is
irrelevant.").
IV. Motion for Reconsideration and Leave to Amend
Finally, we find that the district court did not err in
denying Shaulis's motion for reconsideration and for leave to
amend.
The district court held "that [Shaulis had] not made the
necessary showing of newly discovered evidence or a manifest error
of law to warrant reconsideration," and thus declined to vacate
the judgment of dismissal under Fed. R. Civ. P. 59 or 60 to allow
leave to amend. See AcevedoâVillalobos v. HernĂĄndez, 22 F.3d 384,
389 (1st Cir. 1994) ("Unless postjudgment relief is granted, the
district court lacks power to grant a motion to amend the complaint
under Rule 15(a)."). As explained above, the district court
committed no legal error in dismissing Shaulis's Chapter 93A and
common law claims. Hence, Shaulis's only remaining argument for
post-judgment relief is based on purported newly discovered
evidence -- a Nordstrom "Compliance Manual" that Shaulis alleges
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demonstrates "that Nordstrom has intentionally and deliberately
implemented" a deceptive pricing scheme. The district court,
however, found that Shaulis had adequately pleaded that
Nordstrom's alleged pricing scheme "constitut[ed] an unfair or
deceptive practice under Chapter 93A." Shaulis, 120 F. Supp. 3d
at 49. Nordstrom has not even appealed this determination, and,
hence, cumulative allegations of Nordstrom's allegedly deceptive
conduct cannot help Shaulis avoid dismissal of her claims. Here,
the primary deficiency in the SAC was that Shaulis failed to
adequately plead that she suffered a legally cognizable injury;
further allegations of deception do nothing to remedy that flaw.
Affirmed.
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