Walmart hasn’t fully closed out a class action accusing the retail giant of having cash register prices that don’t match store shelves, but a federal judge has ruled the original plaintiff can’t lead the litigation, because he could have simply checked his receipt and challenged the overcharges in the store.
Yoram Kahn, who claimed he paid more than he expected based on in-store signs, sued Walmart in federal court in Chicago, alleging violations of the Illinois Consumer Fraud and Deceptive Business Practices and Uniform Deceptive Trade Practices acts, along with other state consumer protection laws and a claim for unjust enrichment.
In an order filed March 21, U.S. District Judge Sara Ellis granted Walmart’s motion to dismiss Kahn’s claim. But the judge didn’t fully rule out future litigation over the kinds of claims raised by Kahn.
According to Ellis, “various agencies have imposed fines on Walmart” for differences between in-store advertising and point-of-sale charges. She cited a $2 million fine California levied in 2012 for violating a 2008 order to resolve checkout pricing errors. In 2021, the North Carolina Department of Agriculture and Consumer Services fined two Wilmington Walmarts “after an investigation found repeated and excessive scanning errors that caused customer overcharges on between 3 and 7 percent of purchases each month,” Ellis wrote. “An additional five Walmart stores, including one of the previously fined stores, had to pay over $15,000 in fines for overcharging consumers due to price scanning errors in February 2022.”
Although Kahn lives in Ohio, his lawsuit stems from August 2022 purchases made at a Walmart in suburban Niles. He said the store charged $1.88 for strawberry Kit-Kat candies marked at $1.64; $2.28 for Reese’s Minis and Chi-Chi’s salsa, each listed at $2; $2.87 for Hershey strawberry syrup instead of $2.48; $3.94 for Entenmann’s Lite Bite banana muffins he expected to cost $3.60; and $3.48 for Hostess cupcakes that should’ve been $3.12.
Kahn further said his legal team looked into pricing disparities at Walmart stores in “Florida, Indiana, Maryland, New Jersey and New York, finding examples of overcharges at various stores,” Ellis wrote, while also finding two of the North Carolina stores that continued to overcharge customers in August 2022 despite being fined six months earlier.
In arguing for dismissal, Walmart said Kahn’s claim failed to plead facts necessary to sustain his allegations of deception, chalking up the discrepancies to corporate error which Kahn could’ve addressed in-store based on his receipt. Walmart pointed to a 1997 Illinois Third District Appellate Court opinion, Tudor v. Jewel Food Stores, and Ellis said although Kahn’s allegations don’t carry the same amount of details, the issuance of printed receipts similarly dooms Kahn's claims.
“In light of the fact that Walmart provided Kahn with a receipt against which he could, and indeed did, compare the shelf price to the scanned price to determine if they differed, the court cannot find that Walmart intended for Kahn to rely on the incorrectly scanned price,” Ellis wrote.
Kahn’s remaining claims failed on the same reasoning. A complaint under the Uniform Deceptive Trade Practices Act “requires an allegation of a false, misleading or deceptive representation, made with the intention that the consumer rely on the misrepresentation,” Ellis wrote, adding that a plausible deception allegation is needed for the unjust enrichment claim, and furthermore such a claim can’t stand on its own with the Consumer Fraud and Deceptive Business Practices Act claim already dismissed.
Ellis dismissed Kahn’s claims with prejudice, saying there is no way for him to correct the defects she identified with this individual claims. However, she dismissed the putative class claims without prejudice, creating the possibility a different defendant could sue Walmart on similar grounds.
Kahn has been represented in the action by attorneys Scott Gingold, of Evanston; and Stanley D. Bernstein, Sandy A. Liebhard and Stephanie M. Beige, of Bernstein Liebhard, of New York.
Walmart is represented by attorneys Daniel M. Blouin, Frank A. Battaglia and Olga Pototskaya, of Winston & Strawn, of Chicago.