Neiman Marcus Will Pay $3M to Settle Price Tag Class Action Lawsuit

Neiman Marcus has agreed to pay $2.9 million to end a class action lawsuit alleging the retailer uses false “compare to” prices at its stores.

Lead plaintiff, Linda Rubenstein, alleged in her class action lawsuit that she and other consumers were tricked into thinking they got a good deal at Neiman Marcus by price tags that included “compare to” prices that did not reflect prices that the items were actually offered for sale at.

The Neiman Marcus class action lawsuit alleged that the “compared to” price included on retail items in Neiman Marcus’ Last Call stores constituted false advertising. The plaintiff alleged that the items were never sold at the “compared to” prices at flagship Neiman Marcus stores; however, the scheme duped consumers into thinking so.

The retailer successfully argued that a reasonable consumer would think that the “compare to” prices reflected similar products and not the actual price that the item was sold at earlier; however, the Ninth Circuit disagreed on appeal and found that the plaintiff had established that a consumer would be confused by the price tag.

Under the terms of the settlement agreement, Neiman Marcus will provide Class Members with monetary relief as well as disclose more information about the “compare to” prices both in-store and online.

“This settlement agreement, like all settlements, strikes a balance between the maximum possible recovery the proposed settlement class might obtain by pursuing litigation to the very end, and the risk of failing to obtain any recovery should Neiman prevail,” said the plaintiff’s motion urging court approval of the settlement agreement.

Neiman Marcus does not admit liability to any of the class action lawsuit allegations and the plaintiff says that damages to Class Members likely total in the hundreds of millions.

“The Parties resolved this lawsuit after significant discovery, many months of arm’s length negotiation, exchanges of relevant information, and the mediation expertise of the Mediator,” states the motion for approval of the preliminary Neiman Marcus settlement agreement.

Class Members will include all persons who purchased products from Neiman Marcus Last Call stores in California labeled with a “compared to” price. Each Class Member will be provided points based on their purchases that will determine the payment they receive from the Neiman Marcus class action settlement.

Known Class Members will be provided notice of the settlement agreement via email or regular mail. Additionally, the retailer will run notices in one or more print publications.

According to the motion for approval, “the proposed settlement immediately provides the certainty of valuable benefit to proposed Settlement Class Members. The proposed settlement offers all proposed Settlement Class Members a portion of the price of items they purchased advertised as having a ‘Compared to’ price, i.e. a portion of the financial cost they incurred as a result of the challenged practice.”

Neiman Marcus has also agreed to pay the class action lawsuit attorney’s fees and award to the lead plaintiff.

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 Neiman Marcus shoppers are represented by Joshua A. Fields, Michael Louis Kelly and Behram V. Parekh of Kirtland & Packard LLP.

The Neiman Marcus False Price Tags Class Action Lawsuit is Linda Rubenstein v. The Neiman Marcus Group LLC, et al., Case No. 2:14­-cv-­07155, in the U.S. District Court for the Central District of California.

UPDATE: The Neiman Marcus False Price Tags settlement website is now available.  Check out the settlement details and get the link to file a claim here.

UPDATE 2: On Dec. 3, 2018, Top Class Actions viewers started to receive checks from the Neiman Marcus Last Call fake sale class action settlement worth as much as $373.90.