NORTHERN CALIFORNIA – Napa County District Attorney Allison Haley announced Wednesday that the First District Court of Appeal, Division Four, affirmed a $6.8 million judgment against Internet retailer Overstock.com for engaging in false advertising and unlawful business practices.

The trial that was the subject of the appeal was held before the Honorable Wynne S. Carvill in the Alameda County Superior Court in 2013.

The prosecution of the case was jointly handled by the Alameda, Marin, Monterey, Napa, Santa Clara, Santa Cruz, Shasta and Sonoma County District Attorney’s offices.

The major issue at trial was Overstock’s use of “advertised reference prices,” which it labeled “list price,” “compare at,” or “compare.”

Overstock frequently displayed such reference prices in close proximity to its sales price, often with a purported discount. An example of such an advertisement is the following:

“List Price: $999.00
Today’s Price: $449.99
You save: $549.01 (55%).”

The trial court found that Overstock had consistently used advertised reference prices created by various methods that were “designed to overstate the amount of savings to be enjoyed by shopping on the Overstock site.”

The trial court ordered Overstock to show accurate and transparent pricing, and pay a $6,828,000 penalty. Overstock appealed the decision.

The Court of Appeal issued a detailed opinion authored by the Honorable Justice Maria P. Rivera, unanimously affirming the trial court’s decision in its entirety.

The justices concluded that, among other things, there was sufficient evidence to support the trial court’s findings that Overstock engaged in false advertising, and that the trial court did not abuse its discretion in ordering $6,828,000 in civil penalties and an injunction to prevent future violations.

“The Court of Appeal’s thorough and well-reasoned decision is a victory for consumer protection. Businesses that advertise savings must do so truthfully and without misleading consumers,” said Napa County Deputy District Attorney Patrick Collins, who handles consumer protection cases.

The Court of Appeal’s decision will become final in 30 days.

Overstock has not indicated whether it will seek to file a petition with the California Supreme Court to review the decision.

A copy of the full opinion can be seen below.

060217 Overstock.com appellate decision by LakeCoNews on Scribd