Molayem v. Ralph Lauren Corporation

Background

Ralph Lauren outlet stores advertised products with substantial discounts and displayed supposed original prices. Ida Molayem, Michael Gathen, and Keith White alleged that the products had not actually been offered at those original prices and that the discounts induced them to buy items because they believed they were receiving significant bargains. The plaintiffs brought claims under California’s Unfair Competition Law and Consumers Legal Remedies Act, New York’s consumer-protection and false-advertising statutes, and Oregon’s Unlawful Trade Practices Act. They sought damages, injunctive relief, and other equitable relief.

Ralph Lauren moved to dismiss all claims. It argued, among other things, that the plaintiffs had not adequately investigated Ralph Lauren’s mainline stores and other sales channels, where some products might have been offered at full price. After filing the case, the plaintiffs investigated Ralph Lauren’s mainline stores and websites. They alleged that only one of the sixteen purchased items could be found on the mainline website and that many outlet products appeared to be exclusive to the outlet stores. They also offered a regression analysis comparing reference prices and sales prices.

New York Claims

The court dismissed the New York claims under New York General Business Law Sections 349 and 350. Those statutes require an actual injury caused by deceptive conduct. The plaintiffs relied on a price-premium theory, meaning they claimed that the alleged misrepresentation caused them to overpay.

The court held that New York law requires an objective basis for determining that the plaintiffs paid more than the products were worth. The plaintiffs’ allegations that they would not have purchased the products without believing they were bargains, standing alone, described subjective disappointment rather than a legally sufficient injury. The court also found that the regression analysis did not establish the products’ real market value or show what the products would have sold for without the allegedly false reference prices. Because the complaint did not allege that the same or substantially similar products were sold at a different price, the court dismissed the New York claims.

California and Oregon Claims

The court denied dismissal of the California claims under the Unfair Competition Law and Consumers Legal Remedies Act and the Oregon claims under the Unlawful Trade Practices Act. These claims were subject to Federal Rule of Civil Procedure 9(b), which requires fraud allegations to identify the circumstances of the alleged misconduct with particularity.

The court found that the plaintiffs identified the stores, approximate purchase dates, products, and prices, and explained why they believed the pricing was deceptive. Although the plaintiffs’ investigation of mainline stores and online stores occurred after the original complaint was filed, the court determined that the investigation supplied information supporting their allegations and gave Ralph Lauren notice of the alleged misconduct. The court therefore found that the plaintiffs had adequately pleaded the California and Oregon claims.

Equitable Relief

The court also allowed the plaintiffs to pursue injunctive relief and equitable restitution under California and Oregon law. The plaintiffs alleged that they wanted to shop at Ralph Lauren outlet stores again but were deterred by the alleged pricing practices. The court concluded that these allegations were sufficient at this stage to establish standing to seek an injunction, because the alleged future harm was the loss of the ability to shop at the outlets, not merely a past financial injury.

The court also found it premature to dismiss the equitable-restitution claims. The plaintiffs explained why they believed damages might not provide an adequate remedy, including uncertainty about the damages model and differences between the available statutory remedies. The court concluded that the equitable claims could remain while the legal claims proceeded.

Disposition

Judge Jessica G. L. Clarke’s conclusion states that Ralph Lauren’s motion to dismiss was GRANTED in part and DENIED in part. The New York claims were dismissed. The California and Oregon claims, including the requests for injunctive relief and equitable restitution addressed in the opinion, were not dismissed. The parties were directed to file a joint status update by October 14, 2025, proposing deadlines for briefing on class certification.