State v. American TV & Appliance of Madison, Inc.

430 N.W.2d 709, 146 Wis. 2d 292 (1988)

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State v. American TV & Appliance of Madison, Inc.

Wisconsin Supreme Court
430 N.W.2d 709, 146 Wis. 2d 292 (1988)

Facts

American TV & Appliance of Madison, Inc. (American) (defendant) ran a series of radio advertisements promoting a washer-and-dryer set on sale for $499. To prepare for the sale, American purchased 20 washer-and-dryer sets from the manufacturer for $520 each. American also purchased 133 more expensive washer-and-dryer sets. During the advertised sale, American sold four of the $499 washer-and-dryer sets and many of the more expensive sets. Wisconsin (the state) (plaintiff) sued American in state court, alleging that American violated Wisconsin consumer-protection laws by engaging bait-and-switch advertising—advertising the $499 washer-and-dryer sets with the intention of inducing customers to buy the more expensive sets. To support its claims, the state presented evidence showing that American displayed its discounted washer-and-dryer sets next to the more expensive sets and used a commission structure to make sales. The state reasoned that American’s display setup and commission structure discouraged customers from buying the $499 sets, resulting in a low number of sales of the discounted sets compared with sales of the more expensive sets. American filed a motion to dismiss the state’s complaint for failure to state a claim. The circuit court granted the motion. The court of appeals reversed the circuit court, holding that the state properly asserted a bait-and-switch advertising claim against American. American appealed.

Rule of Law

Issue

Holding and Reasoning (Callow, J.)

Dissent (Steinmetz, J.)

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