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Attorney: Retail pricing class actions on the rise

By Anna Aguillard | Dec 9, 2015

LOS ANGELES (Legal Newsline) - On Nov. 11, JCPenney agreed to dole out a $50 million settlement to more than 8 million class members who filed suit against the retailer for false advertising.

According to a class action expert, the settlement comes as part of a larger national trend of suits filed against retailers.

“Retail sale pricing litigation is on the rise,” said Deborah Renner, leader of BakerHostetler’s class action defense practice in New York.

The suit against JCPenney was originally filed in 2012 and accused the retailer of falsely increasing its original prices in order to make its sale prices more appealing, allegedly tricking its shoppers into thinking they were getting high discounts.

The original plaintiff was a California woman who bought three shirts at $17 each, which was advertised as a 40 percent discount from its original price. The woman filed suit after learning that the shirts hadn’t sold for that original price for at least three months.

Although JCPenney entered the settlement, it denies the allegations, and said it only entered the settlement to end the headache associated with class action litigation.

“It is easier to manage a class action settlement than class action litigation,” Renner said.

“While the settlement here involves 8-to-11 million people potentially, there is a procedure in place.”

The settlement class extends to all people who shopped at one of JCPenney’s California locations between Nov. 5, 2010 and Dec. 31, 2014, and who purchased one or more JCPenney branded items at a discount of at least 30 percent off the item’s original price.

Class members will receive either a cash payment or store credit after submitting a valid claim form. The amount will be determined by a point system.

At least 32 class actions have been filed in the state of California for similar allegations against various retailers, including Ascena Retail Group, Michael Kors and Kohls.

Renner said although the trend of class actions against retailers is new, it’s not unprecedented.

“Class actions over alleged misrepresentations in pricing are not new, and many industries have been affected over the years,” she said.

“In the 1990s, for example, we saw a spate of class actions against insurance companies for alleged misrepresentations in the pricing of their life insurance products, and later, for the pricing of their long-term care products.

“As for retail sale pricing litigation, there have been other suits recently, and we expect to see more.”

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