Nordstrom, AGAG Jeans to Pay $4M to Settle ‘Made in USA’ Class Action

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Nordstorm Inc. and designer jeans company AG Adriano Goldschmied have agreed to pay more than $4 million to resolve an ongoing class action lawsuit that accused the companies of falsely marketing jeans as “Made in USA.”

David Paz, lead plaintiff in the class action lawsuit, has requested preliminary approval from the court for a settlement that would provide Class Members who bought the jeans that allegedly contained foreign parts with a $20 voucher or a pair of AGAG pants (with certain stipulations).

The proposed class action settlement amount was based on calculations of the quantity of foreign-made components that made up the jeans products. The settlement amount also took into consideration factoring in the risks of the class members receiving no money if the case went to trial.

The class action lawsuit originally filed in June 2014 alleged that Nordstrom and AGAG participated in unfair business practices in violation various consumer laws by falsely labeling their jeans as “Made in USA.” Paz alleged that the jeans were made from multiple foreign component parts which was in violation of California law and/or federal law. Paz alleged that the trim, denim fabric and zippers were all foreign made, and the Made in USA labeling constituted false advertising.

While the defendants have continued to deny the plaintiffs’ allegations, they have agreed to refrain from using the “Made in USA” labels on products that contain foreign parts.

In October 2014, U.S. District Judge Dana M. Sabraw denied Nordstom & AGAG’s motion to dismiss the class action lawsuit, saying that though federal and state laws differed, there was no reason that the companies could not comply with the laws at both levels. If this current preliminary order is approved, the settlement distribution process will begin with the assistance of a claims administrator.

The proposed Class will include California residents who purchased AGAG garments that contained any foreign components bearing the “Made in USA” label from June 4, 2010 until Dec. 31, 2015 for personal, non-commercial use. It is estimated approximately 1 million eligible class products were sold during the class period, with the average price of $200 per garment.

The $20 voucher is a promotional code that can be used toward the purchase of any AGAG product available at the time of purchase. For members choosing a free pair of AGAG pants, there will be 25,000 that will be set aside for class members to claim which will be available on a first-come/first-served basis. In the event that more than 25,000 pairs of pants are selected by eligible claimants, AGAG may choose to fulfill all pants claims in excess of 25,000 or may distribute $20 vouchers for any pants claims received after the 25,000 pairs set aside for the claim have been requested.

Once a settlement claims administrator has been chosen, the public will be notified by information posted on AGAG’s website, some by mail and other forms of notification. After notification, eligible consumers will be able to file a claim based on the guidelines established by the settlement administrator.

“All in all, this Settlement is a fair result for the class,” the motion for preliminary approval of the Nordstrom class action lawsuit says. “Defendants are no longer engaging in the conduct that gave rise to this action because AGAG will be forever enjoined from using an unqualified “Made in USA” label on its Jeans. … Future customers will also enjoy the benefits of AGAG’s newly revised country of origin labeling practices.”

Paz is represented by John H. Donboli and J.L. Sean Slattery of Del Mar Law Group LLP.

The Nordstrom Made in USA Class Action Lawsuit is Paz v. AG Adriano Goldschmied Inc., et al, Case No. 3:14-cv-01372, in the U.S. District Court for the Southern District of California.