Nike and Lululemon have both recently been hit with lawsuits alleging deceptive pricing strategies in which discounted products are listed at fake, inflated original prices. Both lawsuits were filed by the same law firm, Pacific Trial Attorneys, and sought class-action status.
In a lawsuit filed in Los Angeles federal court on July 21, California resident Corinne Pearson accused Nike of using deceptive “phantom” discounts on its website and mobile app. The lawsuit claims Nike displays false, inflated “reference prices” alongside sale prices to trick customers into believing they are saving money when the items are sold at their regular price
In the Nike lawsuit, Pearson charges that a Nike Air Max 2017 with a list price of $190 was continuously marked down from early September 2025 through the middle of March 2026 and was eventually acquired by Pearson at a 39 percent discount. The proposed class covers every California buyer of discounted Nike DTC merchandise going back to July 2022.
The filing against Nike claims that the company’s sale alerts have violated California’s False Advertising Law. The law requires that retailers listing the former price must reflect the true market price of the product within the past 90 days, unless the retailer’s ad notes when the product was sold at the listed reference price.
“In reality, Nike’s reference prices are fictitious. Nike’s sales frequently last longer than 90 days. Because Nike products are ‘on sale’ for more than 90 days, the advertised reference prices are stale and do not reflect the prevailing market prices of those products,” the lawsuit stated.
In Los Angeles Superior Court, plaintiff Annette Cody claims in court papers filed on July 20 that Lululemon similarly listed products with “fictitious regular prices” with “corresponding phantom discounts.” She charges that the retailer of false original prices, only to strike them through and make the new “sale” prices look more enticing.
“This practice allows defendant to fabricate a fake ‘reference price’ and present the actual price as ‘discounted,’ when it is not,” Cody stated in her complaint.
Specifically, Cody said she purchased in April 2026 a pair of Wunder Train high-rise tights listed at $59, on sale from a list price of $98. Her claim is that the tights had not actually sold at $98 since October 2025.
“These pricing and advertising practices reflecting high-pressure fake sales are patently deceptive,” according to court papers. “They are intended to mislead customers into believing they are getting a bargain by buying products from defendant on sale and at a substantial and deep discount.”
In both cases, plaintiffs are seeking financial restitution, monetary damages, and a court to halt the use of misleading, inflated reference prices.
Nike and Lululemon have not responded to the lawsuits.
Image courtesy Nike
