Columbia Settles Outlet Store Pricing Scam Class Action

Outdoor clothing company Columbia Sportswear agreed to change its price tags to settle a class action lawsuit alleging the company dupes consumers into thinking they are getting merchandise on sale at outlet locations.

Lead plaintiffs Jeanne and Nicholas Stathakos allege in their 2015 class action lawsuit that Columbia uses false reference prices on clothing tags in outlet stores to trick consumers into thinking the items are worth more.

In reality, much of the merchandise is not sold outside of the outlet store at retail locations and not for the high prices Columbia lists on their price tags, allege the plaintiffs.

After U.S. District Court Judge Yvonne Gonzalez Rogers refused to certify a damage Class and limited the relief to an injunction, the parties agreed to settle the class action lawsuit. Columbia agreed to change the price tags on its outlet clothing to make it clearer that the high reference price does not reflect the actual price that the item was offered at in a retail location.

“The injunction is designed to ensure that consumers understand Columbia’s reference prices by describing what Columbia means by those reference prices,” notes the proposed settlement agreement.

Columbia also agreed to add more signs in its outlet locations explaining what reference pricing means. The clothing company will also be limited to using six terms on its price tags or include additional signs in its stores explaining how the price tags work and what they mean.

Further, the company will provide more information at cash registers about the price of the items sold at its outlet locations stating “The higher price on our price tags refers to either the price the same Columbia product was offered at by Columbia in its own stores, its own online properties, or at third party retailers, or the price at which a similar but not identical product was offered in any of those channels.”

The injunctive Class includes “[a]ll consumers who have purchased an Outlet SMU Build at a Columbia Outlet store in the State of California since July 1, 2014 through the conclusion of this action,” according to court documents.

The proposed settlement agreement does not release Columbia from class action claims for monetary damages, states the plaintiffs’ proposed settlement agreement; however, the lead plaintiffs are releasing their individual claims.

The parties ran into trouble in calculating the attorneys’ costs and fees that Columbia has tentatively agreed to pay. The attorneys for Columbia say that the hours claimed by the plaintiffs’ attorneys is three times the hours they spent working on the case. The plaintiffs’ attorneys say that they spent $1.5 million on the class action lawsuit and have actually cut their fee for the settlement agreement.

In a hearing, Judge Rogers told the attorneys that they would need to provide an accounting of their hours if they continue the dispute; otherwise, says the judge, the settlement will be approved effective Jan. 16, 2018.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

The lead plaintiffs and Class of shoppers are represented by Hassan A. Zavareei and Annick M. Persinger of Tycko & Zavareei LLP.

The Columbia False Outlet Store Pricing Class Action Lawsuit is Stathakos v. Columbia Sportswear Co., et al., Case No. 4:15-­cv-­04543, in the U.S. District Court for the Northern District of California.