The Children’s Place Fake Sale Settlement Gets OK

A federal judge has granted preliminary approval of a $6.8 million settlement that ends customer claims that The Children’s Place uses fake sales to drum up business.

The approval was granted by U.S. District Judge Gonzalo P. Curiel who determined that the settlement was “fair, adequate, and reasonable,” and provided sufficient benefits to Class Members. 

The judge went on to explain that, though the claims brought forward by customers were strong and did have a chance at succeeding in court, the trial could drag on for years.

The judge noted that settling, as opposed to litigating the claims, is favored when cases are “complex and likely to be expensive and lengthy to try.” He stated that because this is the case in The Children’s Place class action lawsuit, the settlement was a good option.

According to the judge, the settlement has a good chance of providing benefits to Class Members, whereas if the claims continued in court, Class Members could receive nothing. The judge said that though the customers made strong claims, they might not have demonstrated “a viable measure of restitution” so they could receive no benefits, even if they won.

The settlement in total is $6.8 million, notes Judge Curiel. Class Members will receive their benefits in the form of vouchers worth $6 each. The judge determined that these vouchers were a concrete benefit because they are vouchers, and not coupons, which only provide benefits when the customers spend money to use them.

The judge stated that The Children’s Place class action settlement vouchers are a value to customers because they “provide Class Members with adequate purchasing power,” given low prices common to The Children’s Place.

Reportedly, the total value of the vouchers amounts to around $5.4 million. The judge noted that if The Children’s Place sale class action lawsuit were successful in court, The Children’s Place could be required to create a fund of $40 million to give a $6 voucher to every Class Members.

The judge goes on to explain that the $5.4 million allotted for vouchers in the settlement represents around 13 percent of the possible award that could be gained at trial. According to the judge, this amount is consistent with other similar class action settlements.

The settlement was reached after two full days of mediation sessions, explains the judge. The Children’s Place does not admit guilt in the fake sale class action lawsuit, but agreed to settle the claims to avoid the continued costs and potential risks associated with litigation. 

The Children’s Place sale class action lawsuit was filed by Monica Rael and Alyssa Hedrick who said that The Children’s Place advertised higher original prices to make the lower “sale” prices look more impressive. Allegedly, this was done to trick customers into thinking they were getting a good deal on clothing.

Have you ever been subjected to a fake sale? Share your story in the comment section below.

The lead plaintiffs and Class are represented by Todd Carpenter of Carlson Lynch Sweet Kilpela & Carpenter LLP.

The Children’s Place Fake Pricing Class Action Lawsuit is Monica Rael, et al. v. The Children’s Place Inc., et al., Case No. 3:16-cv-­00370, in the U.S. District Court for the Southern District of California.

UPDATE: March 2020, The Children’s Place fake sale class action settlement is now open. Click here to file a claim.

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