In Basmadjian v. The RealReal, Inc., the plaintiff brought a putative class action alleging that the defendant misrepresented the weight of gemstones in the jewelry sold on its therealreal.com website, in violation of California law.
The website operates as an online consignment store where people can buy and sell jewelry and other items. The website says that its products are "100% the real thing" and that it has a "team of authentication experts, horologists and gemologists."
The defendant moved to dismiss on various grounds. One interesting argument that the defendant made was that the plaintiff's false advertising claim should be dismissed because she failed to claim that she had actually suffered a financial loss. The defendant argued that "plaintiff's allegations pertaining to the loss she suffered are speculative because she has not alleged that she paid more for the ring than it was actually worth."
The United States District Court for the Northern District of California didn't buy it, however, saying that the plaintiff had sufficiently alleged that she didn't get the weight of diamonds that she had bargained for. The court wrote, "Defendant's argument is based on the flawed premise that a consumer cannot suffer a loss unless they can prove that they paid more for a product than it's objective value. Under this false premise, sellers would be free to misrepresent their products and mislead consumers into buying them so long as the price they charge is lower than the product's objective worth."
This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.
