A federal judge in California has ruled that Abercrombie & Fitch Co. cannot send a class action deceptive pricing suit against its Hollister subsidiary to arbitration or have the claim dismissed.

The suit, which was filed last fall by plaintiff Rebeka Rodriguez in Superior Court of the State of California, County of San Diego, claimed that Hollister used fake reference prices to create the illusion of discounts on its website. Rodriguez filed the suit after purchasing a short-sleeve crew baby tee from the Hollister website for $6.99 in March 2025. Rodriguez said she believed at the time that she’d purchased the shirt for a significant discount based on a $14.95 strike-through reference price.

The class action lawsuit claimed that the reference price was not the prevailing market price in the 90 days prior to the purchase, and that Hollister’s pricing and advertising practices misled customers into thinking they were getting a deal.

Ruling last week in United States District Court for the Southern District of California, Judge James E. Simmons Jr., denied Abercrombie & Fitch Trading Co.’s motions to send the suit to arbitration, dismiss the class claims and to stay the action.

Abercrombie argued that Rodriguez’s claims were subject to arbitration because she essentially agreed to the company’s arbitration provision in its sales terms when she clicked the “submit order” button to purchase the shirt. But the court disagreed, saying that according to state-law principles of contract formation, Rodriguez couldn’t agree because “any such action must indicate the parties’ assent to the same thing, which occurs only when the website puts the consumer on constructive notice of the contractual terms.”

The court referenced a similar recent decision in a case against J.Jill parent Jill Acquisition LLC, in which it declined to enforce the retailer’s website terms of use and compel arbitration. In that case, though the retailer clearly linked to its service terms, the plaintiff made a one-off purchase without creating an account, which the court felt made the shopper less likely to notice the service terms link.

“Plaintiff argues that the terms were not sufficiently conspicuous to put her on notice that she was assenting to an arbitration clause in the context of the transaction,” Simmons said in the decision. “Under the law governing internet transactions in this Circuit, the weight of authority supports Plaintiff’s argument.”

A number of deceptive pricing class action suits have been brought against fashion brands in recent years. Last year, Premium Brands OpCo LLC, which operates Ann Taylor Factory and Loft Outlet stores, settled a suit that claimed it advertised false discounts in stores in eight states. Fashion Nova also was hit with a deceptive pricing class action lawsuit last year, with plaintiffs based in California, Oregon and Washington claiming that the fast fashion retailer “creates an illusion that customers are receiving a limited-time discount” by inflating regular prices.

In the class action suit, Rodriguez requested a jury trial, damages, restitution and injunctive relief to prevent Hollister from continuing to use its alleged deceptive pricing practices.