The mechanism behind both suits
Both lawsuits target the same core practice: showing a struck through reference price next to a sale price to imply a discount that does not reflect what the product actually sold for recently. In the Lululemon case, plaintiff Annette Cody says she bought Wunder Train high rise tights listed at $59 next to a crossed out $98, implying a $39 discount, but the complaint alleges the tights had not sold at $98 since October 2025. The Nike class action makes a parallel claim about black Air Max 2017 sneakers, which carried a $190 reference price from September 8, 2025 through March 14, 2026 while being continuously marked down the entire period.
Neither company has commented on the pending litigation. What makes both cases legally serious rather than just reputational noise is the statute they invoke. California's False Advertising Law requires that a former or reference price actually reflect the prevailing market price within the prior 90 days, unless the advertisement discloses when the item last sold at that price. That is a specific, auditable standard, and it turns pricing history data, exactly the kind most retailers already log in their commerce platforms, into the evidence plaintiffs need.
This is a doubling trend, not a one off
Advertising attorney Rob Freund told reporters that phantom discount lawsuit filings roughly doubled from 2024 to 2025, even though this category of litigation has existed since at least 2013. That is the detail enterprise retail leaders should sit with: this is an established cause of action, tested in courts for over a decade, now experiencing a sharp increase in filing volume against a specific set of pricing practices that got more aggressive during a period of high promotional intensity.
Georgetown marketing professor Anita Rao points to heightened consumer price sensitivity amid persistent inflation as a driver of the surge, both because retailers leaned harder into deep discount messaging to move inventory, and because consumers and their attorneys became more attentive to whether those discounts were real. Rao's own research found that even misleading "starting from" pricing language measurably boosts conversion, which is exactly why retailers keep using reference pricing tactics despite the legal risk: they work, right up until they generate a lawsuit.
The scope problem for enterprise retailers
The Nike class action is not scoped narrowly to one product. It seeks to represent all California consumers who purchased Nike products through the brand's direct to consumer channels at a discount since July 21, 2022, a four year lookback window. That scope turns a single SKU dispute into a potential enterprise wide liability spanning every markdown Nike ran on its own ecommerce and app channels in that period, assuming the reference pricing pattern held across the catalog rather than being isolated to the cited sneaker.
That is the structural risk other enterprise retailers should recognize in their own operations. Automated markdown and reference pricing engines typically apply the same logic across thousands of SKUs simultaneously. If the underlying reference price logic violates the 90 day rule for one product, it likely violates it for the entire catalog running through that same pricing engine, which is precisely how a single plaintiff's individual purchase becomes the seed for a class action covering years of transaction history.
Vego Garden and the pattern beyond big brands
The pattern extends well beyond marquee athletic apparel brands. Gardening products company Vego Garden has also faced deceptive advertising allegations tied to the same reference pricing pattern, suggesting plaintiffs' firms are working through ecommerce catalogs systematically rather than targeting only the highest profile brands. For any retailer running automated pricing software across a large SKU count, the relevant question is whether the same reference price logic exists somewhere in their own stack, regardless of brand recognition.
The tooling asymmetry matters here too. Rao notes that consumer facing price history tools, like the price tracking features built into some marketplaces, already exist, but most shoppers have little incentive to use them absent third party oversight from regulators or advocacy groups. That is changing quickly as plaintiffs' attorneys effectively serve as that oversight layer, mining pricing history data that retailers themselves generated and stored, then using it as the evidentiary basis for litigation.
What pricing and commerce teams should fix now
The immediate fix is procedural: any retailer using struck through or "was/now" pricing in California needs to verify that reference prices reflect actual sale prices within the trailing 90 days, or add explicit disclosure of when the item last sold at the higher price. That is a rules engine change, not a strategy change, and it is far cheaper to implement proactively than to defend in a class action discovery process that will pull years of pricing logs regardless.
The strategic fix is broader. Pricing and promotions teams need to treat reference price logic as a compliance-owned system, not just a merchandising lever, with the same rigor applied to markdown algorithms that gets applied to data privacy or accessibility compliance. Given that filings have doubled year over year and plaintiffs are already working down the list from Nike and Lululemon to smaller DTC brands like Vego Garden, the realistic assumption for any enterprise retailer running dynamic or automated reference pricing is that this scrutiny is coming, and the pricing engine audit should happen before a plaintiff's attorney runs it first.
