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JCPenney to fork out $50 million to settle class action over alleged deceptive discount pricing

By Jessica Karmasek | Nov 30, 2015


LOS ANGELES (Legal Newsline) - J. C. Penney Company Inc. has reached an agreement -- albeit subject to court approval -- that settles a false advertising class action lawsuit brought against it by a group of California customers who allege the retailer engaged in deceptive discount pricing.

Under the terms of the proposed settlement, JCPenney will make available $50 million to settle class members’ claims.

Class members will have the option of selecting a cash payment or store credit.

The amount of the payment or credit will depend on the total amount purchased by each class member during the class period -- between November 2010 and January 2012.

Also as part of the settlement, JCPenney has agreed to implement and/or continue certain “improvements” to its price comparison advertising policies and practices, including “periodic monitoring and training programs” designed to ensure compliance with California’s advertising laws.

According to a company statement released earlier this month, JCPenney continues to deny the allegations and is entering into the settlement to “eliminate the uncertainties, burden and expense of further protracted litigation.”

“While we are confident of our position, resolving this litigation removes any uncertainty and risk, which we believe is in the best interest of our shareholders,” said Marvin Ellison, CEO for JCPenney.

The lawsuit, filed in the U.S. District Court for the Central District of California in 2012, alleges JCPenney falsely advertised its “original” prices, “sale” prices and corresponding discounts for its private and exclusive branded apparel and accessories.

The class alleges the retailer did so to deceive shoppers into believing they were getting bigger discounts.

The plaintiff, Cynthia E. Spann, and the class are represented by Matthew J. Zevin of the Stanley Law Group and Derek J. Emge of the Emge Firm LLP.

In a filing with the Central District of California last week, class counsel requested an award of fees equaling 27 percent of the $50 million class settlement amount -- $13.5 million -- plus litigation costs of $191,080.91 and an “enhancement payment” of $10,000.

“The proposed fee award recognizes Class Counsel’s hard work, tenacity, ingenuity, efficiency and success through nearly four years of litigation, resulting in an exceptional recovery of $50,000,000 for the Settlement Class,” they wrote.

“The Settlement provides real, immediate, and substantial cash relief (or Store Credit of equal value) for participating Settlement Class Members who, but for this Litigation, would have received nothing. The requested fees and costs are fair and reasonable based on the complexity, risk and result obtained.”

The $10,000 also is appropriate, they argue, pointing out that it represents a “mere 0.0002 percent” of the class settlement amount and is lower than awards that have been approved in similar cases in the Ninth Circuit.

From Legal Newsline: Reach Jessica Karmasek by email at

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Organizations in this Story

Stanley Law GroupEmge Firm LLP