GUESS?, INC., GUESS? RETAIL, INC.; and

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1 0 KOPELOWITZ OSTROW P.A. JEFFREY M. OSTROW, Florida Bar No. SCOTT A. EDELSBERG, Florida Bar No S.W. st Avenue, th Floor Fort Lauderdale, FL 0 Telephone: ( -00 Facsimile: ( -00 Attorneys for Plaintiff Adame *Additional Attorneys listed on next page SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES 0 SERENA ADAME and VERSIL MILTON, each individually and on behalf of all others similarly situated, vs. Plaintiffs, GUESS?, INC., GUESS? RETAIL, INC.; and DOES through 00, inclusive, Defendants. Case No. BC CONSOLIDATED AMENDED CLASS ACTION COMPLAINT Causes of Action on Behalf of California Subclass:. Deceit (Fraud, California Civil Code 0. Violation of the Unfair Prong of the UCL. Violation of the Fraudulent Prong of the UCL. Violation of the Unlawful Prong of the UCL. Violation of the California False Advertising Law, California Business & Professions Code Sections 00, et seq.. Violation of the Consumers Legal Remedies Act, California Civil Code Sections 0, et seq. Causes of Action on Behalf of Nationwide Class:. Unjust Enrichment. Violation of the UCL, California Business & Professions Code 00, et seq.. Violation of the California False Advertising Law, California Business & Professions Code 00, et seq. 0. Violation of the California Consumers Legal Remedies Act, California Civil Code 0, et seq.. Fraud, California Civil Code 0-00/SE0_ Error! Unknown document property name. Case No. BC

2 0 Additional Attorneys Representing Plaintiffs: TYCKO & ZAVAREEI LLP HASSAN A. ZAVAREEI (State Bar No. JEFFREY D. KALIEL (State Bar No. L Street, N.W., Suite 000 Washington, DC 00 Telephone: (0-000 Facsimile: (0-00 Attorneys for Plaintiff Adame LAW OFFICES OF WAYNE S. KREGER, PA WAYNE S. KREGER, California Bar No. wayne@kregerlaw.com 00 Wilshire Boulevard, Suite 0 Santa Monica, California 00 Telephone (0-0 Facsimile (0-00 Attorney for Plaintiff Adame AIMAN-SMITH & MARCY RANDALL B. AIMAN-SMITH, California Bar No. ras@asmlawyers.com REED W. L. MARCY, California Bar No. rwlm@asmlawyers.com HALLIE VON ROCK, California Bar No. hvr@asmlawyers.com CAREY A. JAMES, California Bar No. 0 Caj.asm@gmail.com Oakport Street, Suite 0 Oakland, California Telephone: (0-00 Facsimile: (0-0 Attorneys for Plaintiff Milton 0-00/SE0_ Error! Unknown document property name. Case No. BC

3 0 0 Plaintiff, SERENA ADAME ( Adame and Plaintiff, VERSIL MILTON ( Milton (collectively referred to as Plaintiffs, on behalf of themselves and all others similarly situated, alleges the following based upon personal knowledge as to allegations regarding Plaintiffs and on information and belief as to other allegations: INTRODUCTION. This is a civil class action seeking monetary damages, restitution, injunctive and declaratory relief from Defendants, Guess?, Inc., and Guess? Retail, Inc. ( Guess arising from its deceptive and misleading labeling and marketing of merchandise it sells at its company-owned Guess factory outlet stores ( Guess Outlet.. During the Class Period (defined below, Guess misrepresented the existence, nature and amount of price discounts on products manufactured exclusively for Guess Outlet ( Guess Outlet Products by purporting to offer steep discounts off of fabricated, arbitrary, and false prices.. Specifically, the clothing and other items sold at Guess Outlets are manufactured for, and sold exclusively by, those Outlets. These items are never offered to the public at the full prices from which Guess Outlets claim to offer discounts, nor at department stores or Guess Boutiques. Nevertheless, the price tag for each Guess Outlet item prominently and conspicuously displays two purported prices: a higher price and a seemingly discounted price. The higher price is labeled either as the Manufacturer s Suggested Retail ( MSR or Value Was price. The lower price is identified by Guess Outlets as Our Price. In fact, no Guess Outlet item is ever offered or sold at the higher MSR or Value Was price, but rather is always sold for the lower Our Price amount. Nor were the advertised MSR or Value Was prices prevailing market retail prices within three months immediately preceding the publication of the advertised former prices, as required by California law.. Having touted a false MSR or Value Was price, Guess then offered, on the same sales labels, to sell Guess Outlet Products for a price termed OUR PRICE, which supposedly represented a deep discount off of the false MSR or Value Was price. Page -00/SE0_ Case No. BC

4 0 0. But the MSR or Value Was prices used by Guess, which represented to consumers either a price at which Guess Outlet Products were generally sold or the purported former price, were a sham. In fact, Guess manufactures certain goods for exclusive sale at its Guess Outlets, which means that such items were never sold or even intended to be sold at the MSR or Value Was price listed on their labels. Guess Outlet Products were never offered for sale in Guess nonoutlet stores in California, or any other state, or in non-outlet retailers carrying Guess products.. Further, Guess intentionally uses MSR and Our on some of its price tags to mislead consumers into believing that Guess the manufacturer and the seller of the product are somehow different and distinct from one another. When Manufacturer is used directly next to the pronoun OUR, it leads consumers to believe that they are not the same party -- Manufacturer is a third party noun. Consumers understand OUR to be Guess. Therefore, in this context, they do not understand Manufacturer to also be Guess. Guess uses the carefully chosen third party Manufacturer and the pronoun Our so that the consumer will think that the party who manufactured the product and suggested its price are not the same, thereby duping customers into thinking they are getting a discount off the price a third party manufacturer determined it s worth or the price at which it should be sold.. Guess knows consumers are bargain-hunters, and knows consumers are excited by the prospect of a bargain. The juxtaposition of an artificial MSR or Value Was and an OUR PRICE on Guess Outlet Product price tags is intentionally designed to convey to consumers that the consumer is receiving a bargain or a deal on the product on sales terms more preferential or more optimal to the consumer than those offered outside the context of the outlet store. But there is no bargain to be had. The MSR or Value Was on Guess Outlet Products exists only to create the illusion of a bargain and the words Manufacturer and Our are used only to deceive consumers into making purchases they otherwise would not have made because they perceive that Guess is offering a product for sale at a lower price than what the products manufacturer suggested it should be sold. Page Case No. BC

5 0 0. Accordingly, the MSR or Value Was prices listed on Guess Outlet Products did not represent bona fide price information at all much less a former price in the preceding three months. They are fictional creations intentionally designed to enable Guess phantom markdowns.. The deceptive advertising by Guess for its Guess Outlet Products originated from its headquarters in Los Angeles, CA. For example, Guess Fiscal 0 Annual Report States: Since our inception, Paul Marciano has had principal responsibility for the GUESS brand image and creative vision. Under the direction of Mr. Marciano, our Los Angeles-based advertising department is responsible for overseeing all worldwide advertising. 0. The Federal Trade Commission ( FTC explicitly describes the fictitious pricing scheme employed at Guess Outlet stores as deceptive: C.F.R... (a Many members of the purchasing public believe that a manufacturer's list price, or suggested retail price, is the price at which an article is generally sold. Therefore, if a reduction from this price is advertised, many people will believe that they are being offered a genuine bargain. To the extent that list or suggested retail prices do not in fact correspond to prices at which a substantial number of sales of the article in question are made, the advertisement of a reduction may mislead the consumer. A former price is not necessarily fictitious merely because no sales at the advertised price were made. The advertiser should be especially careful, however, in such a case, that the price is one at which the product was openly and actively offered for sale, for a reasonably substantial period of time, in the recent, regular course of her business, honestly and in good faith and, of course, not for the purpose of establishing a fictitious higher price on which a deceptive comparison might be based. (i It bears repeating that the manufacturer, distributor or retailer must in every case act honestly and in good faith in advertising a list price, and not with the intention of establishing a basis, or creating an instrumentality, for a deceptive comparison in any local or other trade area. For instance, a manufacturer may not affix price tickets containing inflated prices as an accommodation to particular retailers who intend to use such prices as the basis for advertising fictitious price reductions.. Similarly, California statutory and regulatory law expressly prohibits false pricing schemes. Business & Professions Code 0, entitled Value determinations; Former price advertisements, states: Page Case No. BC

6 0 For the purpose of this article the worth or value of anything advertised is the prevailing market price, wholesale if the offer is at wholesale, retail if the offer at retail, at the time of publication of such advertisement in the locality wherein the advertisement is published. No price shall be advertised as a former price of any advertised thing, unless the alleged former price was the prevailing market price as above defined 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. (emphasis added.. The Guess Outlet pricing scheme was prominently displayed on all products available for sale at Guess Outlet stores in California. To illustrate, one of the merchandise price tags that advertised a sham MSR and a OUR PRICE that Plaintiffs relied on is pictured below: 0. The Guess Outlet also fraudulently advertised merchandise at higher Value Was prices, as illustrated by the price tag below: Page Case No. BC

7 0 0. Upon information and belief, thousands of consumers in California, and nationwide, were victims of Guess deceptive, misleading and unlawful false pricing scheme and thousands more, including Plaintiffs, will be deceived if the practices continue.. Guess fraudulently concealed from, and intentionally failed to disclose to, Plaintiffs and others similarly situated, the truth about its MSR and Value Was prices and advertised price discounts.. Guess false representations of MSR and Value Was prices and false representations of purported savings, discounts and bargains are material to a reasonable consumer.. Plaintiffs relied upon such false representations of MSR and Value Was prices and discounts when purchasing apparel from Guess Outlet stores in California. Plaintiffs would not have made such purchases, or would not have paid the amount they did, but for Guess false representations of the former price or MSR or Value Was price of the items they purchased, as compared with the supposedly discounted OUR PRICE at which Guess offered the items for sale.. Plaintiffs, in short, believed the truth of the price tags attached to the products they purchased at Guess Outlet, which expressly told them they were getting a terrific bargain on their purchases. In fact, they were not getting a bargain at all.. Reasonable consumers also understand Guess Outlet Products price tags to advertise bona fide price information for another reason: many items in Guess Outlet stores (and which are Case No. BC Page

8 0 0 excluded from the definition of Guess Outlet Products do not advertise an MSR or Value Was price. 0. When, during a shopping experience, a consumer is confronted with some items that bear prominent MSR or Value Was price representations, and other items which simply state a price, it is reasonable for consumers to understand the reference price tags to indicate a true savings or bargain. The consumer reasonably understands that the plain-price tags do not offer a savings compared to a higher price.. In other words, if both types of products were only bargains due to their actual sales price, the MSR price representations would have no additional meaning.. Through its false and deceptive marketing, advertising and pricing scheme, Guess violated (and continues to violate California law prohibiting advertising goods for sale as discounted from former prices which are false, and prohibiting misleading statements about the existence and amount of price reductions. Specifically, Guess committed fraud and is liable for under California Code of Civil Procedure 0 and, and violated (and continues to violate California s Business & Professions Code 00, et seq. (the UCL, California s Business and Professions Code 00, et seq. (the FAL, the California Consumers Legal Remedies Act, Civil Code 0, et seq. (the CLRA, and the Federal Trade Commission Act ( FTCA, which prohibits unfair or deceptive acts or practices in or affecting commerce and specifically prohibits false advertisements. U.S.C. (a and U.S.C. (a(.. Plaintiffs, individually and on behalf of all others similarly situated, seek damages, restitution and other equitable remedies, including an injunction under the UCL, FAL and CLRA. PARTIES. Plaintiff, Serena Adame is an individual who is a citizen of the City of El Monte, County of Los Angeles, California. In reliance on Defendants false and deceptive advertising, marketing and pricing schemes, Ms. Adame purchased two items from the Guess Outlet located in Camarillo, California, and as detailed herein, was damaged as a result thereof. Page Case No. BC

9 0 0. Plaintiff Versil Milton is an individual who is a citizen of San Diego County, California. In reliance on Defendants false and deceptive advertising, marketing and pricing schemes, Mr. Milton purchased four items from the Guess Outlet located in San Ysidro, California, and as detailed herein, was damaged as a result thereof.. Defendant Guess?, Inc. is a corporation duly organized and existing under the laws of the State of Delaware, with its principal place at South Alameda Street, Los Angeles, California 00.. Defendant Guess? Retail, Inc. (together with Guess?, Inc., hereinafter referred to as Guess is a Delaware Corporation doing substantial business in the State of California, with its corporate headquarters located in Los Angeles, California. Guess operates approximately Guess Factory Stores in the United States, including approximately in California.. The true names and capacities, whether individual, corporate, associate, representative, alter ego or otherwise, of defendants and/or their alter egos named herein as DOES through 00 inclusive are presently unknown to Plaintiffs at this time, and are therefore sued by such fictitious names pursuant to California Code of Civil Procedure. Plaintiffs will amend this Complaint to allege the true names and capacities of DOES through 00 when the same have been ascertained. Plaintiffs are informed and believe and based thereon alleges that DOES through 00 were employed or affiliated by Defendants and are responsible for the alleged conduct. Plaintiffs are further informed and believe and based thereon alleges that DOES through 00 were and/or are, in some manner or way, responsible for and liable to Plaintiffs for the events, happenings, and damages hereinafter set forth below. Plaintiffs are informed and believe and based thereon alleges that at all times relevant herein each of the Defendants was the agent, servant, employee, subsidiary, affiliate, partner, assignee, successor-in-interest, alter ego or other representative of each of the remaining Defendants and was acting in such capacity in doing the things herein complained of and alleged. JURISDICTION AND VENUE. Jurisdiction is proper in this Court under California Code of Civil Procedure 0.0 and the California Constitution, Article VI 0. This Court, and not the United States District Page Case No. BC

10 Court, has jurisdiction of this class action, because Plaintiffs claims fall within the provisions of U.S.C. (d((a (a provision of the Class Action Fairness Act for the following reasons: (a State of California; (b more than two-thirds of the members of the Plaintiff Class are citizens of the Guess?, Inc. and Guess? Retail, Inc. are defendants: (i from whom significant relief is sought by members of the proposed class, (ii whose alleged conduct forms a significant basis for the claims asserted by the proposed class, and (iii who are citizens of the State of California; (c the principal injuries resulting from the alleged conduct or any related conduct 0 of each defendant were incurred in the State of California; and (d during the -year period preceding the filing of the original complaint in this 0 class action, no other class actions have been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other person. 0. Moreover, the California Superior Court has jurisdiction over Guess because it is a California citizen and it has sufficient minimum contacts and nerve center(s within California, and/or entities that have otherwise intentionally availed themselves of the California market so as to render the exercise of jurisdiction over it by the California court consistent with traditional notions of fair play and substantial justice. Furthermore, Defendants have purposefully availed themselves of the benefits and protections of the laws within the State of California and within Los Angeles County, having sufficient contacts such that the exercise of jurisdiction would be consistent with traditional notions of fair play and substantial justice. Plaintiff Adame is also located in Los Angeles County, State of California and all putative class members are located in the State of California.. Venue is appropriate in Los Angeles County as Guess has its primary business headquarters and its principal place of business located at South Alameda Street, Los Angeles, California 00; Plaintiff Adame is also a resident of Los Angeles County. /// /// Page Case No. BC

11 0 0 FACTUAL ALLEGATIONS. Traditionally, retail outlet stores were located in remote areas and typically maintained an inventory of defective and excess merchandise. Customers often flocked to these outlets in hopes of finding steep discounts and bargains. See (last visited July, 0.. However, in an effort to increase profits, major retailers such as Guess have, without notice to consumers, begun using company-owned outlet stores to sell made-for-outlet goods that are never intended to be sold at non-outlet stores.. In California, such outlet stores are located in purpose-built malls touted as outlets, or premium outlets. For example, Plaintiff Adame purchased her Guess Outlet Products at the Premium Outlets in Camarillo. The very term outlet conveys to reasonable consumers that at least some products are comprised of merchandise formerly offered for sale at full-price retail locations. The location of Guess Outlets in outlet malls deceives reasonable consumers into believing they are receiving true outlet merchandise, when they are not. In a further illustration, the outlet complex at which Named Plaintiff Versil Milton purchased his Guess items, Las Americas Premium Outlets, advertises Exceptional Brands, and extraordinary savings of % to %. For shopping that is always worth the trip. The Las Americas Premium Outlets complex also purports to offer impressive savings at Outlet Stores (including Guess.. Instead, retailers like Guess Outlet create the illusion of traditional outlet discounts and bargains by offering the made-for-outlet goods at prices reduced from fabricated, arbitrary, and false prices. In short, outlet stores such as Guess Outlet are using false and fraudulent price comparison tactics. See (last visited July, 0. See also, (last visited December 0, 0 (article details how a consumer expert purchased a pair of men s Guess shorts at the outlet costing $. and a pair that appeared the same Page Case No. BC

12 0 0 was $.0 at the Guess retail store. The consumer expert reported that the mainline retail product was manufactured with a pricier fabric than what was sold at the outlet store.. The intentional use of false and fraudulent price comparison tactics is increasingly deceiving consumers in the market. To illustrate, on January 0, 0, four Members of Congress demanded an FTC investigation of misleading marketing practices by outlet stores across the United States. The four Members of Congress described a pricing scheme similar to the one implemented at Guess Outlet stores and stated, [i]t is a common practice at outlet stores to advertise a retail price alongside the outlet store price even on made-for-outlet merchandise that does not sell at regular retail locations. Since the item was never sold in the regular retail store or at the retail price, the retail price is impossible to substantiate. We believe this practice may be a violation of the FTC s Guides Against Deceptive Pricing ( CFR. See (last visited December 0, 0.. This is precisely the practice used by Guess in its Guess Outlet Stores. Indeed, the fact that Guess offered some products with plain price tags and others with MSR or Value Was tags indicates that Guess intentionally sought to convey to consumers that they were receiving a true markdown off a former price. If Guess sought only to offer good prices on clothing items purportedly similar to other clothing items in the marketplace, it would have labelled all of its products with simple price tags. Plaintiffs Purchases. On April, 0, Plaintiff Adame entered the Guess Outlet located in Camarillo, California. She observed that merchandise was advertised with price tags that represented a MSR price next to a significantly reduced OUR PRICE. She also observed that other items in the store did not make these price-reduction representations on their price tags. Ms. Adame understood that the items with the MSR price tags represented a true bargain, while the items with plain pricing did not. Enticed by the idea of paying significantly less than the MSR price charged outside of Guess Outlets, and by receiving a true bargain, Plaintiff Adame was induced to purchase a RHEA SLG Page 0 Case No. BC

13 0 0 Slim Clutch bearing Style Number VY000 with a MSR price of $0.00 and an OUR PRICE of $.. She was also induced to purchase one Agata Crossbody bearing Style Number LE0 with a MSR price of $.00 and an MSR price of $... By purchasing a RHEA SLG Slim Clutch bearing Style Number VY000 for the OUR PRICE of $. instead of the MSR price of $0.00, Plaintiff Adame was led to believe that she saved on her purchase. In reality, Guess never intended, nor did they ever, sell the item at the represented MSR price. Thus, Plaintiff Adame was deceived by the false price comparison into making a full retail purchase with no discount. Likewise, by purchasing an Agata Crossbody bearing Style Number VY000 for the OUR PRICE of $.00, Plaintiff Adame was led to believe that she saved on her purchase. In reality, Guess never intended, nor did it ever, sell the item at the represented MSR price. Thus, Plaintiff Adame was deceived by the false price comparison into making a full retail purchase with no discount. 0. Additionally, Plaintiff Milton entered the Guess Outlet located in San Ysidro, California. He observed that merchandise was advertised with price tags that represented a MSR or Value Was price next to a significantly reduced OUR PRICE. He also observed that other items in the store did not make these price-reduction representations on their price tags. Mr. Milton understood that the items with the MSR or Value Was price tags represented a true bargain, while the items with plain pricing did not. Enticed by the idea of paying significantly less than the MSR or Value Was price charged outside of Guess Outlets, and by receiving a true bargain, Plaintiff Milton was induced to purchase a Hawthorne Full Zip jacket for $.00, a Speyer Destination shirt for $., a Varick print shirt for $.00 and a pair of Mayday sweatpants for $.. The price tag for each of these items had a MSR or Value Was listing that was higher than the OUR PRICE listed.. By purchasing the jacket, two shirts and pair of sweatpants at the reduced OUR PRICE instead of the higher MSR or Value Was price, Plaintiff Milton was led to believe that he saved on his purchase. In reality, Guess never intended, nor did it ever, sell the items at the Page Case No. BC

14 0 0 represented MSR or Value Was prices. Thus, Plaintiff Milton was deceived by the false price comparison into making a full retail purchase with no discount.. Plaintiffs did not understand the MSR or Value Was prices to indicate a comparison to a non-identical product, because the price tag did not specify that the savings was in relation to a different product, nor did it specify what that different product might have been.. Plaintiffs specifically selected certain products over other products because the price tags represented price savings.. Plaintiffs would not have purchased the products, or would not have paid the price they did, if they had known they were not truly receiving a discount off a true former price, as specified.. Plaintiffs and class members reliance on Defendants false price comparison advertising was reasonable. In fact, empirical marketing studies provide an incentive for retailers to engage in this false and fraudulent behavior: [c]omparative price advertising offers consumers a basis for comparing the relative value of the product offering by suggesting a monetary worth of the product and any potential savings [A] comparative price advertisement can be construed as deceptive if it makes any representation, or involves any practice that may materially mislead a reasonable consumer. Comparative Price Advertising: Informative or Deceptive?, Dhruv Grewal and Larry D. Compeau, Journal of Public Policy & Marketing, Vol., No., at (Spring. In short: Id. at,. [b]y creating an impression of savings, the presence of a higher reference price enhances subjects perceived value and willingness to buy the product Thus, if the reference price is not truthful, a consumer may be encouraged to purchase as a result of a false sense of value.. Despite the MSR/OUR PRICE Scheme used at Guess Outlets, Plaintiffs would purchase Guess Outlet Products in the future from Guess Outlet stores and/or other retail establishments, if product labels accurately reflect former prices and discounts. If the Court were to issue an injunction ordering Guess to comply with California s comparative price advertising Page Case No. BC

15 0 0 laws, and prohibiting Guess use of the deceptive practices discussed herein, Plaintiffs would likely shop for Guess Outlet Products again in the near future at Guess Outlets. CLASS ALLEGATIONS. Plaintiffs incorporate and reallege by reference each and every allegation contained in the preceding paragraphs as if set forth herein in full. Class :. The Class that Plaintiffs seek to represent defined as follows (the Nationwide All individuals residing in the United States and its territories who, within the applicable statute of limitations preceding the filing of this action, purchased Guess Outlet Products from a Guess Outlet store.. Plaintiffs also bring this individually and as a Class action on behalf of the following subclass of persons located within the state of California (the California Class : All individuals in the State of California who, within the applicable statute of limitations preceding the filing of this action, purchased Guess Outlet Products from a Guess Outlet store in California.. Plaintiffs reserve the right to redefine the Classes prior to certification.. Excluded from the Class are Guess, its parents, subsidiaries, affiliates, officers and directors, any entity in which Guess has a controlling interest, all customers who make a timely election to be excluded, governmental entities, and all judges assigned to hear any aspect of this litigation, as well as their immediate family members. 0. The members of the Class are so numerous that joinder is impractical. The Class consists of thousands of members, the precise number which is within the knowledge of and can be ascertained only by resort to Guess records.. There are numerous questions of law and fact common to the Class which predominate over any questions affecting only individual members of the Class. Among the questions of law and fact common to the Class are: (a Whether, during the Class Period, Guess used false price representations and falsely advertised price discounts on its merchandise sold at Guess Outlet stores; Case No. BC Page

16 0 0 (b Whether, during the Class Period, the price tags affixed to all items sold at Guess Outlets contain misrepresentations and omissions; (c Whether, during the Class Period, such misrepresentations and omissions are material; (d Whether, during the Class Period, Guess made such misrepresentation and omissions with the intent to induce the reliance of Plaintiff Class, and whether the Guess conduct as alleged herein was knowing and intentional; (e Whether such misrepresentation and omissions were disseminated to Plaintiff Class in uniform, written form; (f Whether, during the Class Period, the MSR or Value Was prices advertised by Guess were the prevailing market prices for the respective merchandise sold at Guess Outlet stores during the three month periods preceding the dissemination and/or publication of the advertised former prices; (g Whether Guess use of false or deceptive price advertising constituted false advertising under California Law; (h Whether Guess engaged in unfair, unlawful and/or fraudulent business practices under California law; (i Whether Guess misrepresented and/or failed to disclose material facts about its product pricing and discounts. (j Whether Guess has made false or misleading statements of fact concerning the reasons for, existence of, or amounts of price reductions; (k Whether Guess conduct, as alleged herein, was intentional and knowing; (l Whether Class members are entitled to damages and/or restitution, and in what amount; (m Whether Guess is likely to continue using false, misleading or illegal price comparisons such that an injunction is necessary; and Page Case No. BC

17 0 0 (n Whether Plaintiffs and Class members are entitled to an award of reasonable attorneys fees, pre-judgment interest and costs of suit.. Plaintiffs claims are typical of the claims of the members of the Class and, like all members of the Class, purchased goods from a Guess Outlet that falsely conveyed a MSR price and a fictitious discount. Accordingly, Plaintiffs have no interests antagonistic to the interests of any other member of the Class.. Plaintiffs are representatives who will fully and adequately assert and protect the interests of the Class, and has retained counsel who is experienced in prosecuting class actions. Accordingly, Plaintiffs are an adequate representative and will fairly and adequately protect the interests of the Class.. A class action is superior to all other available methods for the fair and efficient adjudication of this lawsuit, because individual litigation of the claims of all members of the Class is economically unfeasible and procedurally impracticable. While the aggregate damages sustained by the Class are in the millions of dollars, the individual damages incurred by each member of the Class resulting from Guess wrongful conduct are too small to warrant the expense of individual lawsuits. The likelihood of individual Class members prosecuting their own separate claims is remote, and, even if every member of the Class could afford individual litigation, the court system would be unduly burdened by individual litigation of such cases.. The prosecution of separate actions by members of the Class would create a risk of establishing inconsistent rulings and/or incompatible standards of conduct for Guess. For example, one court might enjoin Guess from performing the challenged acts, whereas another might not. Additionally, individual actions may be dispositive of the interests of the Class, although certain class members are not parties to such actions.. The conduct of Guess is generally applicable to the Class as a whole and Plaintiffs seek, inter alia, equitable remedies with respect to the Class as a whole. As such, the systematic policies and practices of Guess make declaratory relief with respect to the Guess California Subclass as a whole appropriate. Page Case No. BC

18 0 0 Page CAUSES OF ACTION FIRST CAUSE OF ACTION Deceit (Fraud, on behalf of California Subclass. Plaintiffs incorporate by reference paragraphs - as though fully set forth herein.. As alleged herein, Guess made material misrepresentations to, and concealed and suppressed facts from, the Plaintiffs and the other members of the Plaintiff Class.. As alleged herein, Guess knew these misrepresentations were false, and Guess knew that the facts it concealed and suppressed were necessary to make material statements made by Guess not misleading. 0. As alleged herein, Guess made these misrepresentations, and concealed and suppressed these facts, with the intent to induce the reliance of and to defraud the Plaintiffs and the other the members of the Plaintiff Class.. Guess misrepresentations and omissions were conveyed through uniform writings given to the Plaintiffs and each member of the Plaintiff Class.. The Plaintiffs and the other members of the Plaintiff Class believed that Guess misrepresentations and statements rendered misleading by concealment and suppression of facts were true or were ignorant of their falsity or misleading nature.. In reliance on Guess misrepresentations and omissions, the Plaintiffs and the other members of the Plaintiff Class, were induced to, and did in fact, purchase clothing and other items they would not have otherwise purchased, and/or pay more for such clothing and items than they otherwise would have. Had the Plaintiffs and the other members of the Plaintiff Class known the truth, they would not have taken such actions.. The reliance of the Plaintiffs, and of the other members of the Plaintiff Class, was reasonable and justified.. As a proximate result of Guess fraudulent conduct as alleged herein, the Plaintiffs and the other members of the Plaintiff Class have been injured.. Pursuant to California Code of Civil Procedure 0, Guess is liable for the damages suffered by the Plaintiffs and the other members of the Plaintiff Class. Case No. BC

19 0 0 The actions of Guess as alleged herein constitute oppression, fraud, or malice, as those terms are defined in California Civil Code, thus entitling the Plaintiffs and the other members of the Plaintiff Class, and each of them, to an award of punitive damages. SECOND CAUSE OF ACTION (Violation of the Unfair Prong of the UCL, on behalf of California Subclass. Plaintiffs incorporate by reference paragraphs - as though fully set forth herein.. The UCL defines unfair business competition to include any unlawful, unfair or fraudulent act or practice, as well as any unfair, deceptive, untrue or misleading advertising. Business & Professions Code 00.. A business act or practice is unfair under the UCL if the reasons, justifications and motives of the alleged wrongdoer are outweighed by the gravity of the harm to the alleged victims. 0. Guess has violated the unfair prong of the UCL by representing a false MSR price and corresponding OUR PRICE for goods exclusively manufactured for sale at Guess Outlet stores. As a result, the inflated MSR or Value Was price and corresponding OUR PRICE was nothing more than a false, misleading and deceptive illusion of a discount.. These acts and practices are unfair because they caused Plaintiffs, and are likely to cause consumers, to falsely believe that Guess Outlet is offering value, discounts or bargains from the prevailing market worth of the products sold that did not, in fact, exist. As a result, purchasers, including Plaintiffs, reasonably perceived that they were receiving products that regularly sold in the non-outlet retail marketplace at substantially higher prices (and were, therefore, worth more than what they paid. This perception has induced reasonable purchasers, including Plaintiffs, to buy such products, which they otherwise would not have purchased.. The gravity of the harm to members of the Class resulting from these unfair acts and practices outweighed any conceivable reasons, justifications and/or motives of Guess for engaging in such deceptive acts and practices. By committing the acts and practices alleged above, Guess engages in unfair business practices within the meaning of California Business & Professions Code 00, et seq.. Through its unfair acts and practices, Guess has improperly obtained money from Page Case No. BC

20 0 0 Plaintiffs and the Class. As such, Plaintiffs request that this court cause Guess to restore this money to Plaintiffs and all Class members, and to enjoin Guess from continuing to violate the UCL as discussed herein and/or from violating the UCL in the future. Otherwise, Plaintiffs and the Class may be irreparably harmed and/or denied an effective and complete remedy if such an order is not granted. THIRD CAUSE OF ACTION (Violation of the Fraudulent Prong of the UCL, on behalf of California Subclass. Plaintiffs incorporate by reference paragraphs - as though fully set forth herein.. The UCL defines unfair business competition to include any unlawful, unfair or fraudulent act or practice, as well as any unfair, deceptive, untrue or misleading advertising. Cal. Bus. & Pro. Code 00.. A business act or practice is fraudulent under the UCL if it is likely to deceive members of the consuming public.. Guess labels and advertising materials concerning false former prices were fraudulent within the meaning of the UCL because they deceived Plaintiffs, and were likely to deceive members of the class, into believing that Guess was offering value, discounts or bargains at Guess Outlet stores from the prevailing market value or worth of the products sold that did not, in fact, exist.. Guess deceived consumers into believing that it was offering value, discounts or bargains at Guess Outlet stores from the prevailing market value or worth of the products sold that did not, in fact, exist.. As a result, purchasers, including Plaintiffs, reasonably perceived that they were receiving products that regularly sold in the non-outlet retail marketplace at substantially higher prices (and were, therefore, worth more than what they paid. This perception induced reasonable purchasers, including Plaintiffs, to buy such products from Guess Outlet stores, which they otherwise would not have purchased. 0. Guess acts and practices as described herein have deceived Plaintiffs and were highly likely to deceive members of the consuming public. Specifically, in deciding to purchase Page Case No. BC

21 0 0 merchandise from a Guess Outlet store, Plaintiffs relied on Guess misleading and deceptive representations regarding its MSR or Value Was price and OUR PRICE. Each of these factors played a substantial role in Plaintiffs decision to purchase those products, and Plaintiffs would not have purchased those items in the absence of Guess misrepresentations. Accordingly, Plaintiffs suffered monetary loss as a direct result of Guess pricing practices described herein.. As a result of the conduct described above, Guess has been unjustly enriched at the expense of Plaintiffs and members of the proposed Class. Specifically, Guess has been unjustly enriched by obtaining revenues and profits that it would not otherwise have obtained absent its false, misleading and deceptive conduct.. Through its unfair acts and practices, Guess has improperly obtained money from Plaintiffs and the Class. As such, Plaintiffs request that this court cause Guess to restore this money to Plaintiffs and all Class members, and to enjoin Guess from continuing to violate the UCL as discussed herein and/or from violating the UCL in the future. Otherwise, Plaintiffs and the Class may be irreparably harmed and/or denied an effective and complete remedy if such an order is not granted. FOURTH CAUSE OF ACTION (Violation of the Unlawful Prong of the UCL, on behalf of California Subclass. Plaintiffs incorporate by reference paragraphs - as though fully set forth herein.. The UCL defines unfair business competition to include any unlawful, unfair or fraudulent act or practice, as well as any unfair, deceptive, untrue or misleading advertising. Business & Professions Code 00. regulation.. A business act or practice is unlawful under the UCL if it violates any other law or. California statutory and regulatory law also expressly prohibits false former pricing schemes. Business & Professions Code 0, entitled Value determinations; Former price advertisements, states: For the purpose of this article the worth or value of anything advertised is the prevailing market price, wholesale if the offer is at wholesale, retail if the offer at Page Case No. BC

22 0 0 retail, at the time of publication of such advertisement in the locality wherein the advertisement is published. No price shall be advertised as a former price of any advertised thing, unless the alleged former price was the prevailing market price as above defined 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. [Emphasis added.]. Civil Code 0, subsection (a(, prohibits a business from [a]dveritsing goods or services with intent not to sell them as advertised, and subsection (a( prohibits a business from [m]aking false or misleading statements of fact concerning reasons for, existence of, or amounts of price reductions.. Guess also violated and continues to violate Business & Professions Code 0, and Civil Code 0, sections (a( and (a( by advertising false discounts from purported former prices that were, in fact, not the prevailing market prices within three months next preceding the publication and dissemination of advertisements containing the false former prices.. The FTCA prohibits unfair or deceptive acts or practices in or affecting commerce and specifically prohibits false advertisements. ( U.S.C. (a( and U.S.C. (a. The FTC has established Guidelines which prohibit false pricing schemes, similar to Guess MSR/VALUE WAS/OUR PRICE Scheme in material respects, as deceptive practices that would violate the FTCA: (a Many members of the purchasing public believe that a manufacturer's list price, or suggested retail price, is the price at which an article is generally sold. Therefore, if a reduction from this price is advertised, many people will believe that they are being offered a genuine bargain. To the extent that list or suggested retail prices do not in fact correspond to prices at which a substantial number of sales of the article in question are made, the advertisement of a reduction may mislead the consumer. A former price is not necessarily fictitious merely because no sales at the advertised price were made. The advertiser should be especially careful, however, in such a case, that the price is one at which the product was openly and actively offered for sale, for a reasonably substantial period of time, in the recent, regular course of her business, honestly and in good faith and, of course, not for the purpose of establishing a fictitious higher price on which a deceptive comparison might be based. (i It bears repeating that the manufacturer, distributor or retailer must in every case act honestly and in good faith in advertising a list price, and not with the Page 0 Case No. BC

23 0 0 C.F.R... intention of establishing a basis, or creating an instrumentality, for a deceptive comparison in any local or other trade area. For instance, a manufacturer may not affix price tickets containing inflated prices as an accommodation to particular retailers who intend to use such prices as the basis for advertising fictitious price reductions. 0. Guess use of and reference to a materially false MSR or Value Was price in connection with its marketing and advertisements concerning the merchandise sold at Guess Outlet stores violated and continues to violate the FTCA, U.S.C. (a( and U.S.C. (a, as well as FTC Guidelines published at C.F.R... As a result of the conduct described above, Guess has been unjustly enriched at the expense of Plaintiffs and members of the proposed Class. Specifically, Guess has been unjustly enriched by obtaining revenues and profits that it would not otherwise have obtained absent its false, misleading and deceptive conduct.. Through its unlawful acts and practices, Guess has improperly obtained money from Plaintiffs and the Class. As such, Plaintiffs request that this court cause Guess to restore this money to Plaintiffs and all Class members, and to enjoin Guess from continuing to violate the UCL as discussed herein and/or from violating the UCL in the future. Otherwise, Plaintiffs and the Class may be irreparably harmed and/or denied an effective and complete remedy if such an order is not granted. FIFTH CAUSE OF ACTION (Violation of the California False Advertising Law, California Business & Professions Code Sections 00, et seq. on behalf of California Subclass. Plaintiffs incorporate by reference paragraphs - as though fully set forth herein.. California s Business and Professions Code 00, et seq. prohibits unfair, deceptive, untrue, or misleading advertising, including, but not limited to, false statements as to worth, value and former price.. Guess practice of advertising MSR or Value Was prices on exclusive, made for Guess Outlet merchandise, which were materially greater than the actual prices of those products was an unfair, deceptive and misleading advertising practice because it gave the false impression Page Case No. BC

24 0 that the products sold at Guess Outlet stores were regularly sold in the non-outlet retail marketplace at substantially higher prices (and were, therefore, worth more than they actually were. In fact, the exclusive, made for Guess Outlet merchandise did not have a prevailing market price anywhere close to the MSR or Value Was price advertised because the merchandise was always sold under the OUR PRICE or discounted further from the OUR PRICE when placed on sale at the Guess Outlets.. Through its unfair acts and practices, Guess has improperly obtained money from Plaintiffs and the Class. As such, Plaintiffs request that this court cause Guess to restore this money to Plaintiffs and all Class members, and to enjoin Guess from continuing to violate the FAL as discussed herein and/or from violating the FAL in the future. Otherwise, Plaintiffs and the Class may be irreparably harmed and/or denied an effective and complete remedy if such an order is not granted. SIXTH CAUSE OF ACTION (Violation of the Consumers Legal Remedies Act, California Civil Code Sections 0, et seq., on behalf of California Subclass 0. Plaintiffs incorporate by reference paragraphs - as though fully set forth herein.. This cause of action is brought pursuant to the CLRA.. Plaintiffs and each member of the proposed classes are consumers within the meaning of California Civil Code (d. 00. Guess selling of goods manufactured exclusively for sale at Guess Outlets to Plaintiffs and the Class were transactions within the meaning of California Civil Code (e. The products purchased by Plaintiffs and the Class are goods within the meaning of California Civil Code (a. 0. As described herein, Guess violated the CLRA by falsely representing the nature, existence and amount of price discounts by fabricating inflated labeled MSR prices. Such a pricing scheme is in violation of Cal. Civ. Code 0, subsection (a( ( [a]dvertising goods or services with intent not to sell them as advertised and subsection (a( ( [m]aking false or misleading statements of fact concerning reasons for, existence of, or amounts of price reductions. Page Case No. BC

25 Plaintiffs relied on Guess false representations in deciding to purchase goods at Guess Outlet stores. Plaintiffs would not have purchased such items absent Guess unlawful conduct. 0. On April 0, 0, counsel for Plaintiff Adame provided proper notice of Plaintiffs intent to pursue claims under the CLRA and an opportunity to cure to Defendants via certified mail to the store where the purchase occurred at Guess Camarillo Premium Outlet, 0 Camarillo Center Drive, Space, Camarillo, California 00-. The domestic return receipt indicates the letter was delivered and signed-for on April, 0; no response to the CLRA letter has been received by Plaintiffs as of the date of this filing. 0. Plaintiffs request this Court enjoin Defendants from continuing to violate the CLRA as discussed herein and/or from violating the UCL in the future and to order restitution to Plaintiffs and each member of the proposed class. Otherwise, Plaintiffs, the Class and members of the general public may be irreparably harmed and/or denied effective and complete remedy if such an order is not granted. Page SEVENTH CAUSE OF ACTION Unjust Enrichment (on Behalf of the Classes, or in the Alternative, on behalf of the California Class 0. Plaintiffs incorporate by reference paragraphs - as though fully set forth herein. 0. Plaintiffs bring this claim individually, as well as on behalf of members of the Classes, under California law. Although there are numerous permutations of the elements of the unjust enrichment cause of action in the various states, there are few real differences. In all states, the focus of an unjust enrichment claim is whether the defendant was unjustly enriched. At the core of each state s law are two fundamental elements the defendant received a benefit from the plaintiff and it would be inequitable for the defendant to retain that benefit without compensating the plaintiff. The focus of the inquiry is the same in each state. Since there is no material conflict relating to the elements of unjust enrichment between the different jurisdictions from which Class members will be drawn, California law applies to the claims of the Classes. 0. In the alternative, Plaintiffs bring this claim individually as well as on behalf of the California Class. 0. At all times relevant hereto, Defendants deceptively priced, marketed, advertised, and Case No. BC