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Court Rejects Challenge of Connecticut Consumer Law

February 19, 1991

WASHINGTON (AP) _ The Supreme Court today refused to limit a state’s authority to take action against allegedly misleading advertisements of manufacturer rebates.

The court, without comment, rejected an appeal by a department store chain that challenged such a Connecticut consumer protection regulation.

The regulation bars retailers from displaying an item’s net price - what a consumer would pay minus the rebate - unless stores give purchasers the rebate on the spot.

Caldor Inc., which has outlets in Connecticut and other states, said the regulation violates its free speech rights. The chain said the use of net prices to advertise manufacturer rebates is not misleading.

Such rebates generally require consumers to fill out a coupon and mail it along with a receipt from the retailer to get money back from a manufacturer.

The Connecticut Department of Consumer Protection said it is inherently misleading to advertise the net price as the true cost to the consumer when the purchaser must pay for mailing to get the rebate.

The Connecticut Supreme Court, in upholding the department regulation last July, agreed that such advertising could mislead the public.

The state court also noted that the consumer protection agency has received complaints since the early 1980s about manufacturer rebates.

The department is entitled to deal with the problem by requiring retailers to provide rebates at the time of purchase, the state court said.

Caldor, in the appeal acted on today, said the state court ruling ″raises non-disclosure of the cost of a postage stamp to a preposterous level″ of importance in deciding the case.

The case is Caldor Inc. vs. Commissioner of the Department of Consumer Protection, 90-989.

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