Consumer Law

Disparate impact isn’t “unfair” for consumer protection purposes, court indicates

Disparate impact isn’t “unfair” for consumer protection purposes, court indicates

Schulte
v. Conopco, Inc., No. 20-2696 (8h Cir. May 18, 2021)

This
would make a great student note topic: Is disparate impact “unfair” under state
consumer protection laws? The court here implicitly says no, without ever
confronting the question directly. Seems wrong to me.

Schulte
sued numerous companies for violating the Missouri Merchandising Practices Act
(MMPA) through their marketing of men’s and women’s antiperspirants—the men’s
is cheaper. The court of appeals affirmed the dismissal of the complaint.

The
MMPA bans “the act, use or employment by any person of any deception, fraud,
false pretense, false promise, misrepresentation, unfair practice or the
concealment, suppression, or omission of any material fact in connection with
the sale or advertisement of any merchandise in trade or commerce.”

A
Missouri regulation interprets “unfair practice” as any practice that either
“[o]ffends any public policy as it has been established by the Constitution,
statutes or common law of this state, or by the Federal Trade Commission, or
its interpretive decisions” or “[i]s unethical, oppressive or unscrupulous.”

But,
the court reasoned, “Schulte mistakes gender-based marketing for gender
discrimination. She ignores that the different scents, packaging, and labels
make the products potentially attractive to different customers with different
preferences.” In order to prevail, she’d have to plausibly allege that the only
difference between the products is the gender of the purchaser,” but targeted
marketing was not the same thing as “enforced point-of-sale pricing by gender.”
(By that logic, advertising only to hire men would not be a problem if they’d
hire women who showed up regardless.)

Because
men and women can purchase any of the products, they both have equal
opportunity to buy. “Ironically, her claim assumes all men and all women must
purchase products marketed to their gender.” She’s free to purchase the men’s
products if all she cares about is price. “Her choice not to illustrates a
difference in demand based on product preferences, not the purchaser’s gender.”
She doesn’t want the men’s products “because she does not want to ‘smell like a
man.’ She just does not want to pay extra for her preference.” But “preference-based
pricing is not necessarily an unfair practice.”

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