FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS [Hon. F. Dennis Saylor IV, U.S. District Judge]
James Boumil, with whom Boumil Law Offices, Konstantine W.
Kyros, and Law Offices of Konstantine W. Kyros, were on
brief, for appellant.
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.
Torruella, Lynch, and Lipez, Circuit Judges.
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.
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).
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.
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.
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,
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."
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.
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).
bulk of Shaulis's appeal involves objections to the
district court's dismissal of her Chapter 93A claim for
damages and injunctive relief. 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), 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))).
reviewing the relevant Massachusetts regulations,
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
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.
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.
Injury under Chapter 93A
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.
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.
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 to claim
injury based on her overpayment theory, because she would
have possessed medication that was not what she bargained
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 "exceptions" to this general rule, embodied
in older SJC opinions that have not been expressly overruled,