A federal judge in California on October 22, 2026 refused to send a strike-through pricing lawsuit against Brooks Brothers to arbitration, ruling that the "terms of use" links at the bottom of the retailer's web pages, and the "terms" links beside its email and text-message sign-up boxes at checkout, did not bind a shopper who bought a polo shirt without opening an account. In the same 21-page order, United States District Judge Stephen V. Wilson of the Central District of California also declined to dismiss the complaint or strike its class allegations, leaving a proposed California class that reaches back to March 19, 2022 intact for now.

In Short

A man bought a Brooks Brothers polo shirt online for $39.99, shown next to a crossed-out $89.50, and says the higher price was misleading because, he alleges, the shirt had not sold for $89.50 in the three months before, which California law requires for a "was" price. Brooks Brothers tried to move the case into private arbitration using small links to its terms on the website, and also asked the judge to throw the case out, but the judge refused both requests. The lawsuit now continues in court, although the judge has not decided whether the price was actually misleading, and has warned that turning it into a class action for all California shoppers may be hard.

The order and the parties

The ruling was entered as document 35 in Dominick Martin v. BB OpCo, LLC, case number 2:26-cv-07124-SVW-RAO. It takes the form of civil minutes headed "Order Denying Defendant's Motion to Compel Arbitration [17] and Defendant's Motion to Dismiss and Strike Allegations [19]." The court refers to the defendant, BB OpCo, LLC, as Brooks Brothers throughout.

Scott J. Ferrell and Victoria C. Knowles are listed as counsel for the plaintiff. K. Scott Bays, Kristine R. Argentine, Majesty Eve L. Jala and Matthew C. Catalano are listed for the defendant. The order does not name their firms.

Its opening line sets out the dispute. "This case involves allegedly misleading strike-through prices on the Brooks Brothers Website in violation of California's consumer protection and false advertising laws," according to the order. Brooks Brothers had filed three motions: to compel arbitration and, in the alternative, to dismiss for failure to state a claim and to strike the class allegations. "The Court DENIES Defendant's motions," the order states on its second page. The conclusion adds that the denials are "without prejudice," which leaves Brooks Brothers able to raise the arguments again later.

Nothing in the order is a finding that Brooks Brothers misled anyone. At the pleading stage a federal court accepts the complaint's factual allegations as true and asks only whether they state a plausible claim. Whether the $89.50 figure was ever the prevailing price is a question for evidence, not for this ruling.

One polo, two prices

The complaint rests on a single purchase. On January 10, 2025, Martin bought a polo from the Brooks Brothers website for $39.99, according to the order, which cites paragraph 11 of the first amended complaint. The strike-through reference price at the time was $89.50.

The court reproduced the product listing. It shows "The Vintage Polo Shirt In Cotton" under a small "Clearance" label, with $39.99 printed beside a struck-through $89.50. By PPC Land's calculation, that presents a saving of $49.51, or about 55 percent off the higher figure. The order describes the layout this way: "the strike-through reference price is immediately next to the current price. The strike-through price does not have an explanation for what it describes or when it might have been the prevailing price for the product."

Martin alleges that neither Brooks Brothers nor other online retailers had sold the polo for $89.50 for at least three months before the purchase date. He also points to other products on the site with what the court called "potentially misleading strike-through prices," citing paragraphs 24 to 27 of the complaint. To support the timing claim, the order says, he used "archived snapshots of the Brooks Brothers Website to show the store had not sold at the reference price within the past three months."

The proposed class, quoted from paragraph 54 of the first amended complaint, covers:

"All persons who purchased one or more of Defendant's products at a purported discount from a higher reference price from Defendant's Website while in California from March 19, 2022 through the date a class is certified for primarily personal, family or household purposes, and not for resale."

Martin seeks damages and equitable relief for himself and the class. The order does not state an amount.

Brooks Brothers argued that Martin agreed to an arbitration clause in the website's terms of use. He never signed anything. According to the order, the company's position was that he assented "when he saw 'terms' and 'terms of use' hyperlinks on the website and continued to browse and checkout."

The court applied the Ninth Circuit's two-part test for online agreements, drawn from Berman v. Freedom Financial Network (2022). Unless a company can show the consumer actually knew of the terms, an online contract binds the consumer "only if: (1) the website provides reasonably conspicuous notice of the terms to which the consumer will be bound; and (2) the consumer takes some action, such as clicking a button or checking a box, that unambiguously manifests his or her assent to those terms." Following Keebaugh v. Warner Bros. Entertainment (2024), the first part splits into two factors: "the context of the transaction" and "the visual aspects of the notice."

Both kinds of Brooks Brothers link failed both parts.

The first link sits at the bottom of every page. "In terms of visual characteristics, the hyperlink itself is a dark navy blue against an off-white background and is not underlined," the order says. It is grouped in a line with six other links to legal notices and a Brooks Brothers copyright notice, and it can be seen only after scrolling to the bottom of a page.

In the footer the court reproduced, the Terms of Use link sits in a row with Supply Chain Transparency, Notice at Collection, Do Not Contact Me, Privacy Policy and Sitemap. A "GET 10% OFF" promotional button covers the start of that same row in the image. The order does not comment on the button.

On context, the court found that buying a shirt is not the kind of transaction that signals a lasting contractual relationship. The Ninth Circuit and California courts look at whether there was "a full registration process," a "free trial," whether a user entered "credit card information," and "whether the user has downloaded an app on their phone." Here, the order says, "purchasing a shirt from Brooks Brothers does not start a continuing relationship. Consumers can buy individual items on the website, like a shirt, without creating an account."

On visual design, the court said the footer links "are buried on the website for at least five reasons":

  • they sit at the bottom of the page and require scrolling;
  • the font is smaller than other important objects, "like the dropdown menu titles, discount alerts, sign up button, section tags, product titles, and banners";
  • the color and formatting do not suggest a hyperlink;
  • the words "terms of use" alone would not tell a reasonable consumer that a contract exists, with the court quoting a California appellate decision that "the phrase 'terms of use' may have no meaning or a different meaning to a large segment of the Internet-using public";
  • the links are not close to the site's core interactive elements, such as products or the buttons that finalize a purchase.

On assent, the footer link failed twice over. It requires nothing from the user but browsing, which makes it a browsewrap agreement under California law, and "Browsewrap agreements have been consistently held unenforceable," according to the order. It also lacks what the Ninth Circuit calls explicit advisement. Quoting Godun v. JustAnswer (2025), the court wrote: "Explicit advisement generally looks like an explanatory clause, usually at the beginning of an advisal." Its finding on the footer was short: "In this case, the hyperlinks are not paired with explicit advisements."

Godun involved JustAnswer, the online expert-answer service that the Federal Trade Commission separately sued in January 2026 over its subscription practices.

The checkout boxes

The second argument concerned the checkout page. Below the billing details are two optional checkboxes, "Sign Up for Emails" and "Subscribe to Text Messages," each followed by explanatory text that ends in a "terms" link. The email text, as reproduced in the order, reads: "By signing up, you agree to receive emails about sales, promotions, events, new arrivals, and more. View Terms and Privacy Policy." The text-message notice runs several lines longer and includes the sentence "Consent is not a condition of any purchase."

These links are gray, underlined and set against a white background, in type comparable to the explanations but smaller than other text on the page. Brooks Brothers did not allege that Martin ticked either box, only that he scrolled past the links or was on the same page as them while buying the polo. In the checkout image the court reproduced, the email box appears ticked. The order does not say whether that box is pre-selected for every shopper, and its reasoning proceeds on the basis that Martin did not sign up.

The court again counted five reasons the links were buried. Two of them go beyond typography. The links sit at the end of several lines of text about emails and texts. And the wording points somewhere else entirely: "'you agree to receive emails' and 'you agree to receive recurring [...] text messages' before 'view terms' would lead a reasonable consumer to believe those terms pertain to the agreement to receive emails and texts," according to the order.

Browsewrap, sign-in wrap and the missing advisal

Brooks Brothers' checkout argument raised a classification question. California courts recognize "clickwraps, scrollwraps, and sign-in wraps" alongside browsewrap. A sign-in wrap, in which a user signs up for a service on a screen that says acceptance of separate terms is required, is not presumed unenforceable, but it requires "a textual notice indicating the user will be bound by the terms."

The court accepted that the checkout notices could work as sign-in wrap for the subscriptions they describe. "Before consumers can get emails or texts, they must check the box to sign up and there is a notice indicating the user will be bound by terms," the order says. But Martin was not challenging an email or text subscription. For the shirt purchase, the court held, "the hyperlinks at checkout function as browsewrap for the shirt transaction at issue," because nothing had to be signed up for to buy the shirt and Brooks Brothers' theory was that browsing the checkout page was itself assent. The explanations, the court added, "do not warn consumers that browsing or proceeding with checkout will qualify as agreeing to the hyperlinked terms."

The distinction matters for any retailer whose marketing consent forms double as the main place a terms link appears at checkout. A link attached to an email opt-in may bind a shopper to email terms; on this reasoning, it does not carry an arbitration clause into the purchase itself.

Why "Clearance" did not save the price

With arbitration refused, the court turned to whether the complaint states a claim. Martin brings three causes of action: California's False Advertising Law, the Consumers Legal Remedies Act and the Unfair Competition Law. "Plaintiff plausibly alleges all claims under all three causes of action," according to the order.

Section 17501's three-month rule

The core claim is under California Business and Professions Code section 17501, which the order quotes:

"No price shall be advertised as a former price of any advertised thing, unless the alleged former price was the prevailing market price [...] within three months next immediately preceding the publication of the advertisement or unless the date when the alleged former price did prevail is clearly, exactly and conspicuously stated in the advertisement."

To plead a violation, the court said, a plaintiff must plausibly allege that a reasonable consumer would read the advertised price as a former price, and that it was not the prevailing market price in the preceding three months. Because the claim sounds in fraud, it must also be pleaded with particularity under Federal Rule of Civil Procedure 9(b). Martin met that bar, the court found: "In describing the reference price, Plaintiff explains who saw the price, what the price was, when he saw the price, where he saw the price, and how he saw the price."

Brooks Brothers argued that the word "CLEARANCE" prevents any reasonable consumer from being misled, since a clearance label signals that the struck-through figure is not a recent price. It relied on Hirlinger v. WP Co. (2024), a Northern District of California case about The Washington Post. There, a $40 annual subscription was shown beside a struck-through $120, with the explanation "$40 for one year, then $120 every year thereafter." That court found the $120 "clearly and unambiguously refers to the future renewal price."

Judge Wilson found no parallel. "Here, the strike-through prices on clearance items are advertised as former prices for those items," the order says. Even accepting that a clearance label suggests a permanent markdown and an older former price, the label does not "clearly, exactly and conspicuously" state "the date when the alleged former price did prevail," as section 17501 requires.

That is the practical edge of the ruling for retailers. Under the statute's own wording, a strike-through price that is not the prevailing market price of the past three months needs a date, clearly stated. A category label such as "Clearance," on this reading, is not a date.

Is a price a statement?

The court also upheld the broader claim under section 17500, which covers any false or misleading statement. Brooks Brothers argued that a price is not a statement about a product, citing Boris v. Wal-Mart Stores, a case about two identical migraine medications sold at very different prices, in which the court reasoned that "the price is simply the amount at which the merchant offers to sell the product." (The order attributes Boris to a "Western District of California," a court that does not exist; its own citation places the case in the Central District.)

The court drew a line between current prices and former prices. "Advertised former prices communicate at least two things: (1) consumers were once willing to purchase the product at the former price and (2) the seller is providing a discount on the product," according to the order. It cited a California Court of Appeal decision involving J.C. Penney, which in turn quoted a 1957 opinion of the California Attorney General, to place former-price claims in "the so-called 'comparative advertising' field." The court summed it up: "while a current price just describes the merchant's offer, the former price makes a comparison between a current offer and the former prevailing market price."

CLRA, UCL and the injunction question

The remaining claims followed. The Consumers Legal Remedies Act lists, at Civil Code section 1770(a)(13), "making false or misleading statements of fact concerning reasons for, existence of, or amounts of, price reductions." The same misleading-to-a-reasonable-consumer standard applies as under the False Advertising Law, so that claim survived. The Unfair Competition Law claim followed automatically: "Any violation of the false advertising law [...] necessarily violates the unfair competition law," the order says, quoting a 1983 California decision.

Brooks Brothers also challenged Martin's standing to seek an injunction, arguing that any future harm was speculative now that he knows about the pricing. The court disagreed, relying on Davidson v. Kimberly-Clark (Ninth Circuit, 2018), which held that a previously deceived consumer may seek an injunction against false advertising if they want to buy the product again but cannot rely on the representation. Martin alleges he would consider buying more Brooks Brothers products if the company fixed its advertising.

One sentence in this section describes the information problem at the heart of reference pricing. "If Brooks Brothers does not change its advertising, there is no way to know, without looking at historical pricing, whether the advertised reference prices accurately reflect prevailing market prices," according to the order. It cited Paya v. Macy's (Central District of California, 2025) for the point that a desire to shop combined with an inability to trust prices can support prospective standing.

The class: overbroad, unascertainable or neither

The motion to strike attacked the class definition. Brooks Brothers argued it was too broad because it included people who saw higher reference prices outside its website and people who bought products with no discount advertised. The court was blunt: "These statements are factually untrue." The definition covers only purchases from Brooks Brothers' own website "at a purported discount," and the order says "the plain meaning of 'at a purported discount' is that there was a discount at the time of purchase."

The company also argued that the class could not be ascertained, because excluding resellers depends on whether a purchase was made "for primarily personal, family or household purposes," a subjective question. The court noted a circuit split on whether ascertainability is a separate requirement for class certification and said the Ninth Circuit, in Briseno v. ConAgra Foods (2017), rejected it as an independent prerequisite. Even if it were one, the order says, "With the aid of discovery, Plaintiff may be able to fashion an objective test for ferreting out resellers using information like purchase histories and commercial addresses or other methods."

Still, the court did not leave the class question settled. "As noted at the last status conference on August 31, 2026, the Court expects certification of a class in this case might be particularly challenging. However, striking the allegations at this stage in the litigation would be premature," the order states.

What the order does not decide

The ruling leaves several questions open. It does not decide whether $89.50 was or was not the prevailing market price for the polo in the three months before January 10, 2025. It does not certify a class, and the judge has signaled doubts on that front. It sets no schedule in its text, and it states no damages figure. Because the denials are without prejudice, Brooks Brothers may return to its arguments, including on arbitration, as the record develops.

The order also does not address whether a differently designed terms notice, such as an explicit statement beside the button that completes a purchase, saying that buying means accepting the terms, would have changed the outcome. Its reasoning, though, tracks the elements the Ninth Circuit has asked for: a notice the shopper is likely to see, tied to an action the shopper must take, with an explanation that the action means agreement.

Why this matters for retailers and advertisers

Strike-through prices are among the most common devices in e-commerce advertising. They appear on product pages, in shopping ads and in promotional emails. Former-price rules differ across jurisdictions: California's statute uses a three-month look-back for the prevailing market price, while the EU's prior-price rule, applicable since May 28, 2022, measures a discount against the lowest price of at least the previous 30 days.

California has produced a steady run of these claims. PPC Land reported in December 2024 that Pillow Cube faced a class action in the Southern District of California under section 17501 and related statutes over a pillow shown at $134.99 against a purported original price of $179.99. A month later, a lawsuit alleged that Patagonia misled shoppers with reference prices on products that, the complaint said, had run continuous sale prices for 98 days without being offered at the stated reference prices.

Platforms have moved toward stricter validation at the same time. From April 23, 2026, Amazon required a seller's List Price to be backed by recent sales, either at another retailer or as the Featured Offer on Amazon, and from May 18 it tied its Typical Price to a 90-day median of non-promotional prices. A List Price that fails validation produces no strike-through at all. In May, Amazon began rolling out a full year of Rufus price history to shoppers in the US, UK and India. Judge Wilson's remark that there is "no way to know, without looking at historical pricing" whether a reference price is accurate describes the gap that such tools are built to close.

Outside the US, regulators have reached the same displays through enforcement rather than private suits. In Australia, the Federal Court in April ordered Emma Sleep to pay $15 million over fake countdown timers and phantom discounts; a timer that resets to zero is a device commonly classed as a dark pattern. In June, HSK United paid $79,200 over strikethrough prices on products that had not sold at the higher price since at least January 1, 2025. And in September, the ACCC fined digiDirect $99,000 after the Australian retailer admitted that its strikethrough discount claims were misleading. All three Australian amounts are in Australian dollars.

The arbitration half of the ruling may travel further than the pricing half. Arbitration clauses with class action waivers are a standard defense against consumer class actions, and they work only if the terms form a contract. In August, Amazon reinstated binding individual arbitration and a class action waiver for shoppers, five years after dropping it. A day earlier, a federal judge in San Jose found Grok's sign-up and chat notices too faint to bind users to xAI's forum selection clauses, under the same Ninth Circuit framework. In September, a federal judge in New York refused Thryv's attempt to move a libel case to Texas because it offered no detail on how its Terms of Use link was placed, sized or colored.

The outcome is not uniform. In a scraping dispute, a federal judge rejected Anthropic's argument that Reddit's user agreement was an unenforceable browsewrap, inferring knowledge of the terms from Anthropic's own conduct in accessing the site. That reasoning turned on a company's repeated automated access, not a single consumer's purchase.

For e-commerce teams, the Brooks Brothers order turns ordinary interface decisions into evidence. Font size relative to "discount alerts" and "banners," link color, underlining, distance from the checkout button, and the words placed before a terms link were all part of the court's analysis. So was the business model: a guest checkout with no account and no app, which the court read as a one-off sale rather than a continuing relationship. The marketing consent boxes that sit on many checkout pages also came under scrutiny, because their "terms" links were read as covering the marketing messages rather than the purchase.

For advertisers whose shopping ads and product feeds carry sale prices pulled from the same site data, the price question runs in parallel. A strike-through figure on a product page often appears in other channels too. The order addresses only the Brooks Brothers website and only California law, but its reading of section 17501, that a clearance label does not substitute for a stated date, applies on its terms to any former price advertised to California consumers.

Timeline

Summary

Who: Dominick Martin, a California shopper represented by Scott J. Ferrell and Victoria C. Knowles, against BB OpCo, LLC, which operates the Brooks Brothers website. United States District Judge Stephen V. Wilson of the Central District of California issued the order.

What: The court denied Brooks Brothers' motions to compel arbitration, to dismiss the complaint and to strike class allegations, all without prejudice. It held that the "terms of use" link in the site footer and the "terms" links beside email and text-message sign-up boxes at checkout did not create a binding arbitration agreement for a guest purchase. It also held that Martin plausibly pleaded claims under California's False Advertising Law, Consumers Legal Remedies Act and Unfair Competition Law over a polo sold at $39.99 beside a struck-through $89.50 that, he alleges, had not been the prevailing price in the prior three months.

When: The order was filed on October 22, 2026. The purchase took place on January 10, 2025, and the proposed class covers California purchases from March 19, 2022 until a class is certified.

Where: The United States District Court for the Central District of California, case number 2:26-cv-07124-SVW-RAO, concerning purchases made from California on the Brooks Brothers website.

Why: The ruling keeps a California strike-through pricing claim in court and finds that a "Clearance" label does not meet section 17501's requirement to state when a former price prevailed. It also shows how courts read the placement, size, color and wording of terms links when retailers try to move consumer claims into individual arbitration. The judge has said class certification may be "particularly challenging," so the scale of the case remains unresolved.