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Phillips v. Hobby Lobby Stores Inc.

United States District Court, N.D. Alabama, Southern Division

September 27, 2018

DAVID PHILLIPS, ROBIN L. BROWNING as the EXECUTOR of the ESTATE OF DIANE BROWNING, MARY E. CARRARA, and WENDY CALMA, individually and on behalf of a class of persons, Plaintiffs,
v.
HOBBY LOBBY STORES, INC., Defendant.

          MEMORANDUM OPINION

          John E. Ott Chief United States Magistrate Judge.

         This is a putative class action brought by the Estate of Diane Browning[1] and Mary Carrara (collectively, “Plaintiffs”) against retailer Hobby Lobby Stores, Inc.[2]The case concerns the manner in which Hobby Lobby administers a weekly coupon offering “40% Off One Item at Regular Price.” Diane Browning, an Alabama resident, used a 40% off coupon when she purchased a small chest of drawers that was priced “Always 30% Off” the “marked price.” Mary Carrara, an Illinois resident, used a 40% off coupon on multiple occasions when she purchased fabric that was similarly priced “Always 30% Off” the “marked price.” On all purchases, Hobby Lobby applied the 40% off coupon to the marked price rather than the 30% off price. In their Fourth Amended Complaint, Plaintiffs allege that this practice constitutes breach of contract and violates the Alabama Deceptive Trade Practices Act (“ADTPA”), Ala. Code § 9-19-1 et seq., and the Illinois Consumer Fraud Act (“ICFA”), 815 Ill. Comp. Stat. 505/1 et seq., and Illinois Deceptive Trade Practices Act, 815 Ill. Comp. Stat. 510/1 et seq. (“IDTPA”). (Doc. 49).

         The case is now before the court on two motions for summary judgment filed by Hobby Lobby: (1) motion for summary judgment on Mary Carrara's claims for statutory and injunctive relief under the ICFA and IDTPA, (doc. 55), and (2) motion for summary judgment on both Plaintiffs' claims for breach of contract and the Estate's claims for statutory and injunctive relief under the ADTPA, (doc. 57). The motions have been fully briefed by the parties and are ripe for decision. For the reasons that follow, the first motion for summary judgment against Carrara's Illinois Consumer Fraud and Deceptive Trade Practices Acts claims is due to be granted. (Doc. 55). The second motion for summary judgment is due to be granted in part and denied in part. (Doc. 57). The motion is due to be granted as it relates to Plaintiffs' claims for breach of contract and the Estate's claim for injunctive relief under the ADTPA, but denied as it relates to the Estate's claims for statutory relief under the ADTPA.

         I. SUMMARY JUDGMENT STANDARD

         Rule 56 of the Federal Rules of Civil Procedure provides that a court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The party moving for summary judgment “always bears the initial responsibility of informing the district court of the basis for its motion, ” relying on submissions “which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); see also Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991); Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970). Once the moving party has met its burden, the nonmoving party must “go beyond the pleadings” and show that there is a genuine issue for trial. Celotex Corp., 477 U.S. at 324. At summary judgment, “the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).

         II. STATEMENT OF FACTS

         Hobby Lobby is a retailer that operates over 700 stores nationally. It sells arts, crafts, frames, small pieces of furniture, and other similar items. (Doc. 49 at ¶ 8; Doc. 50 at ¶ 8). Plaintiffs' claims arise out of their purchase of furniture (Diane Browning) and fabric (Mary Carrara).

         A. Furniture Pricing

         Hobby Lobby attaches two price tags to its furniture items. One is a green tag showing an item number and price. (See Doc. 58-19 at 2). The other is an orange tag stating that furniture is “Always 30% Off” the price displayed on the green tag. (Id.). The orange tag shows the item's 30% off price, which is identified as “Your Price” for the item. (Id.).

         Store signs explaining Hobby Lobby's furniture pricing are posted throughout the areas where furniture is sold. The signs explain that furniture is always 30% off the “marked price” and that “marked prices reflect comparable prices offered by other sellers for similar products.” (Doc. 58-9 at 2-3). The signs further explain that the “discounted price” of an item is “shown on [its] orange tag” and that the “discounts” are “provided every day.” (Id.).

         Hobby Lobby's advertisements convey the same pricing information. The advertisements state that furniture is “Always 30% Off the Marked Price.” (Doc. 58-10 at 2). The same definition of “marked price” is used: marked prices reflect “comparable prices offered by other sellers for similar products.” (Id.). The advertisements likewise indicate that the “Always 30% Off” price is a “discount” provided every day. (Id.).

         B. Fabric Pricing

         Certain fabrics sold by Hobby Lobby-home decor fabric, fleece, and calico prints and solids-are priced and advertised the same way as furniture. In the areas of the store where fabric is sold, signs state that home decor fabric, fleece, and calico prints and solids are “Always 30% Off the Marked Price” and that these “discounts” are “provided every day.” (Doc. 58-8 at 2). As with furniture, the signs explain that “marked prices reflect comparable prices offered by other sellers for similar products.” (Id.). Hobby Lobby's advertisements convey this same information. (Doc. 58-10 at 2).

         A difference with a furniture purchase and fabric purchase was the fabric ticket. When a customer purchases fabric from Hobby Lobby, the customer receives a fabric ticket that also contains pricing information. (Carrara Dep. at 45-46, 132-33;[3] Doc. 58-11). Because fabric is usually priced by the yard, the customer tells the Hobby Lobby employee working in the fabric department how many yards, or fractions of yards, she wishes to purchase; the employee records the number of yards purchased and the applicable price per yard on the fabric ticket, and then multiplies those two numbers to arrive at the total purchase price of the fabric. (Carrara Dep. at 129-59). The portion of the fabric ticket completed by the employee depends upon the price of the fabric being purchased. If the price is not a sale, clearance, or always discounted price, the employee typically completes only the top (white) portion of the ticket. (Id. at 135; Doc. 58-11 at 2). When a sale, clearance, or always discounted fabric is purchased, the employee completes the bottom (pink) portion of the fabric ticket by (1) filling in the number of yards purchased, (ii) writing in the “regular price” of the fabric, (iii) computing the sale or discount percentage to arrive at the “reduced price per yard, ” and (iv) multiplying the number of yards by the reduced price per yard to arrive at the total purchase price. (Id. at 141-43, 158-59; Doc. 58-11 at 2). At the bottom of the pink part of the ticket, customers are informed that “no additional discounts or coupons are allowed on sale and clearance fabric.” (Doc. 58-11 at 2).

         C . 40% Off Coupon

         Hobby Lobby provides a weekly coupon for its customers' use. Customers can clip the coupon out of a newspaper advertisement, download the coupon onto their mobile cellular device, or print the coupon from Hobby Lobby's website. (Freebern Dep. at 81-83).[4] The coupon is good for “40% Off One Item at Regular Price.” (Doc. 58-5 at 2-3). The term “regular price” is not defined in the coupon. (Id.). Certain stated restrictions apply to the coupon's use: customers are limited to one coupon per day; the coupon must be presented at the time of purchase; the coupon cannot be used on certain items; and the coupon offer is “not valid with any other coupon, discount, or previous purchase.” (Id.).

         D . Diane Browning's Furniture Purchase

         Diane Browning purchased a small chest of drawers at the Hobby Lobby store in Jasper, Alabama, on April 2, 2016. (Doc. 58-21). The green tag attached to the chest of drawers indicated a marked price of $289.99; the orange tag reflected an “Always 30% Off” price of $202.99. (Doc. 58-19).

         Mrs. Browning was given a sales receipt at the time of her purchase. (Doc. 58-21; Robin Browning Dep. at 107).[5] The receipt shows Mrs. Browning used a coupon to obtain a 40% discount on furniture marked at $289.99, that using the coupon saved her $116.00, and that the discounted price she paid after using the coupon was $173.99. (Doc. 58-21 at 2). The receipt also explains Hobby Lobby's return policy: if the original sales receipt is presented by the customer within 90 days of purchase, Hobby Lobby will exchange the merchandise, provide store credit, or issue a refund. (Id. at 3). Without an original receipt, the customer may either exchange the merchandise or receive a merchandise credit. (Id.).

         When Mrs. Browning returned home, she showed her sales receipt to her husband, who immediately noticed the 40% coupon had not been applied to the chest of drawers' “always” price of $202.99. (Robin Browning Dep. at 64-65, 97- 101, 105-06). Instead, the receipt showed the 40% coupon had been applied to the “marked price” of $289.99. (Docs. 58-19 & 58-21; Robin Browning Dep. at 100-01, 103-06). This was evident to Mr. Browning from his examination of the receipt and the furniture tags Mrs. Browning also brought home with her. (Id. at 97-101).

         Mr. Browning testified that he does not know whether his wife noticed or read the Hobby Lobby store signs identifying furniture as “Always 30% Off the Marked Price” and notifying customers that their “discounted price” is shown on the orange tag and that the “discounts” are “provided every day.” (Robin Browning Dep. at 144-49). He also does not know whether his wife read the sales receipt at the time the time she purchased the chest of drawers, although he has no evidence that she was prevented from doing so. (Id. at 41, 106-08.) As far as he knows, his wife never spoke with anyone at Hobby Lobby about the price she paid for the chest of drawers. (Id. at 69-70).

         Mrs. Browning never returned the chest of drawers to Hobby Lobby for a refund. (Id. at 72, 113). She continued to use the furniture after purchasing it. (Id. at 113).

         E . Mary Carrara's Fabric Purchases

         Mary Carrara was a frequent shopper at Hobby Lobby, visiting the store in Peoria, Illinois, at least every other week. (Carrara Dep. at 25). She purchased many fabric items from Hobby Lobby, including fleece, calico, and home decor fabrics. She noticed and read the store signs identifying fleece, calico, and home decor fabrics as “Always 30% Off the Marked Price.”[6] (Id. at 76-77, 105, 107). She understood Hobby Lobby was representing that it was selling those fabric items at ¶ 30% reduction from the comparable prices other sellers charged for similar items. (Id. at 115-16). She also understood that the “marked price” was not a former price previously charged by Hobby Lobby and that the 30% reduced price referenced on the signs was a discount that Hobby Lobby provided every day. (Id. at 110, 115, 117-18).

         Mrs. Carrara frequently used a 40% off coupon when she purchased items from the Hobby Lobby store in Peoria. She usually cut the coupon out of Hobby Lobby's newspaper advertisements. (Id. at 70, 78). On those occasions when Mrs. Carrara used a 40% off coupon in connection with her purchase of a fabric item that was always priced at 30% off, the cashier would not apply the coupon to the “reduced price” identified on Mrs. Carrara's fabric ticket, but instead would apply the coupon to the “regular price” shown on the ticket. (Id. at 145-48). Mrs. Carrara acknowledged how the process worked at her deposition:

Q. … Say you bought a yard of a piece of fabric that had a marked price of $10. So on [the fabric ticket] in that pink section down there, they would fill out one yard in the furtherest left-hand column, right?
A. Yes.
Q. Then they would put out $10 under that column “regular price, ” right?
Q. Yes.
Q. And then the next column, the “reduced” column, they would put $7, and then they would have one times 7, that would be $7 for that piece, is what that would cost, right?
A. Yes.
Q. So now you go up with a coupon, and … they won't give you 40 percent off, in my example, of the $7, they would only give ...

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