Precedent Setting Victory in Below-Cost Pricing Case

Perry Narancic scored a big win in the US District Court for Northern California, in a case of first impression, where the court agreed that a competitor that distributes its products for “free” (but charges inflated shipping and handling fees), is subject to the California below-cost pricing laws under Cal. Bus. & Prof. Code Section 17043. This was a case of first impression where the Court considered for the first time whether the cost of shipping a product should include the cost of shipping the product. The court found that an advertising that claimed to sell products for “free” was, on its faces, a sale below-cost – and that the cost of shipping should not be included in calculating “cost”. Bebe au Lait, LLC v. Mothers Lounge, LLC, Case No. 13-3035 (N.D. Cal. Filed July 2, 2013).