I Won't Play 'Ping-Pong' For Gift Cards

Article by CAFA Law Blog

Previously published by CAFA Law Blog on 29 March 2012.

Boundas v. Abercrombie & Fitch Stores, Inc., No. 10 C 4866, 2011 WL 5903495 (N.D. Ill. Nov. 21, 2011).

Clothier who paid The Situation not to wear its clothes gets to stay in federal court for voiding its own gift cards.

In this case, although the amount in controversy fell below CAFA's jurisdictional minimum after a District Court in California dismissed the complaint in part, it still retained the jurisdiction holding that a federal district court may not dispose of some claims on the merits, then dismiss the suit for lack of jurisdiction as the remaining claims fall short of the minimum amount in controversy.

The plaintiffs, Tiffany Boundas and Dorothy Stojka, brought this putative class action in the Illinois state court, against the defendant, Abercrombie & Fitch Stores, Inc., alleging breach of contract and violation of the Ohio Consumer Sales Practices Act ("OCSPA").

Abercrombie is a clothing retailer with stores across the United States and who is known for using scantily clad young models in its advertisements. In a December 2009 promotion, Abercrombie promised a $25 gift card to customers who bought at least $100 of merchandise in a single transaction. Stojka purchased approximately $300 of merchandise at an Abercrombie store in Oak Brook, Illinois, and received gift cards with a cumulative value of $75.

Stojka gave her cards to Boundas as a gift. When Boundas attempted to redeem the cards at the Oak Brook store in April 2010, the store declined, explaining that Abercrombie had voided the cards on or around January 30, 2010, eliminating all remaining value on them.

Abercrombie removed the case to the federal court pursuant to CAFA. Later, on Abercrombie's motion, the District Court dismissed the OCSPA claims because the transactions at issue involved non-Ohio consumers and otherwise lacked a substantial connection to Ohio.

The plaintiffs then moved to remand the case to state court, arguing that dismissal of the OCSPA claim reduced the matter in controversy below CAFA's jurisdictional minimum of $5 million. The Court, however, denied the motion.

Abercrombie contended that the value of the cards at issue was $5,674,453.44; whereas, the plaintiffs responded that the value of the cards was $4,228,537.35. The Court observed that even if the plaintiffs were right, punitive damages at a 1:5 ratio would to push the amount in controversy over $5 million...