On July 29, 2026, in Heilman v. Abercrombie & Fitch Co., Judge Edward M. Chen of the Northern District of California granted Abercrombie & Fitch Co.’s motion to dismiss a putative consumer class action challenging the retailer’s $7 shipping and handling fee under California’s Honest Pricing Law.
The court held that the fee was not “mandatory” under California Civil Code Section 1770(a)(29)(A) because consumers could avoid it by selecting free in-store pickup instead of home delivery.
Background
Plaintiff Naomi Heilman, a California resident, purchased a dress from Abercrombie & Fitch’s website. She was charged a bundled $7 shipping and handling fee because her purchase fell below the retailer’s $99 free-shipping threshold.
Heilman alleged that the advertised prices omitted the $7 fee, which was disclosed only at checkout, in violation of California Civil Code Sections 1770(a)(29)(A) and 1770(a)(9). She sought injunctive relief and attorneys’ fees.
The court also granted Abercrombie & Fitch’s request for judicial notice of screenshots of the checkout pages, applying the incorporation-by-reference doctrine. The court held that the webpages were central to the plaintiff’s claims and referenced throughout the complaint.
Shipping Fee Was Not “Mandatory”
Section 1770(a)(29)(A) prohibits advertising, displaying, or offering a price that excludes “all mandatory fees or charges.” The statute includes exceptions for government-imposed taxes and for postage or carriage charges “reasonably and actually incurred” to ship goods.
The court looked to dictionary definitions and legislative history of the term “mandatory” and the Assembly Judiciary Committee’s analysis of SB 478, concluding that the California Legislature consistently equated “mandatory” with fees that are “required,” “unavoidable,” or that consumers “cannot reasonably avoid,” while noting that optional fees need not be included in advertised prices.
Applying that standard, the court held that Abercrombie & Fitch’s shipping and handling fee was not mandatory because it applied only when a customer chose home delivery for an order under $99. Customers retained the option of free in-store pickup.
The court analogized the fee to an optional convenience charge, similar to gift wrapping, because it was not required to acquire the item itself. The plaintiff therefore failed to allege facts showing the fee was mandatory to her, and the court dismissed the claim without prejudice.
Court Rejects Plaintiff’s Counterarguments
The court rejected each of plaintiff’s counterarguments.
First, Heilman argued that the carriage-charge exception implies that shipping fees are inherently mandatory. The court disagreed, finding that the legislative history showed the opposite. The California Legislature recognized that shipping charges vary in avoidability depending on a retailer’s format. Shipping fees charged by online-only retailers may be mandatory, while fees charged by other retailers may not be.
Second, Heilman argued that in-store pickup is not always practically viable. The court left open whether “mandatory” could extend to fees that are not reasonably avoidable as a practical matter. But it found that Heilman had not pleaded facts showing that the fee was unavoidable to her specifically, such as that the nearest store was too far away.
Third, Heilman argued that the avoidability rule would produce absurd results because any fee could be avoided by shopping elsewhere. The court rejected the argument, clarifying that a fee’s mandatory character is not negated merely because a consumer could patronize a different retailer.
Bait-and-Switch Claim Also Dismissed
Section 1770(a)(9) prohibits “advertising goods or services with intent not to sell them as advertised,” sometimes referred to as bait-and-switch pricing.
The court noted that the plaintiff did not assert an independent bait-and-switch theory. Instead, she relied entirely on the same pricing conduct underlying the Section 1770(a)(29)(A) claim. Because that claim failed, the court held that the plaintiff had not established an independent basis for a Section 1770(a)(9) violation. It dismissed that claim without prejudice as well.
Key Takeaways
Retailers that offer a free and reasonably accessible alternative to a fee-triggering option, such as in-store pickup instead of paid home delivery, have a strong argument that the fee is not “mandatory” under California’s Honest Pricing Law.
However, the court suggested that a different outcome may be possible when a consumer lacks a reasonable alternative, such as when the nearest store is too far away to make in-store pickup a viable option.
If you have any questions, or would like additional information, please contact one of the attorneys on our State & Local Tax team or one of the attorneys on our Class Action & Multidistrict Litigation team.
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