Judge Says New Balance Class Action Settlement Needs Clarity

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The proposed settlement in a class action lawsuit alleging New Balance falsely marketed its shoes as “Made in USA” will need to be clarified before it can be approved, ruled a California federal judge.

The plaintiffs asked for preliminary approval of the New Balance class action settlement – offering to end claims for the sum of $750,000.

However, U.S. District Court Judge M. James Lorenz pointed out that the settlement award available to Class Members will be used up by the time five percent make valid claims.

“The representation in the motion and the proposed class notice that class members will receive ‘up to $10’ in damages is problematic,” notes the judge in the order denying preliminary approval of the New Balance class action settlement.

“’Up to $10’ is the maximum class member payment provided under the settlement agreement. The actual amount depends on the number of claims. However, based on the representations in Plaintiff’s motion, the class members will not receive $10 unless the class participation rate is extremely low or the factual representations in support of the proposed settlement are inaccurate by a wide margin.”

Of the $750,000 settlement paid by New Balance, $535,000 would have remained for Class Members after administrative costs, attorney fees, and plaintiff awards are paid. The settlement proposal indicated that there are approximately 1 million Class Members.

“If only 10 percent of the putative class submit claims, their estimated recovery will be $5.35,” noted the order denying preliminary approval of the New Balance class action settlement. “To receive $10, the participation rate would have to be abysmally low — just over 5 percent.”

Further, there are issues with Notice in the proposed New Balance “Made in USA” class action settlement. Judge Lorenz found that the Notice procedures described in the New Balance settlement did not meet statutory requirements regarding Class Members who wish to object.

“The proposed class notice must be amended to make clear that making an objection does not preclude a class member from submitting a claim,” notes Judge Lorenz in his order denying preliminary approval of the New Balance class action settlement.

New Balance was hit with the class action lawsuit after allegedly falsely advertising that its shoes are entirely made in the U.S.A. The plaintiffs alleged that significant components of New Balance shoes are made abroad, but the company held out the shoes as an American product.

The plaintiffs claimed that New Balance’s false labeling was attempting to prey upon consumers’ attempts to buy locally – and charging a premium for their product.

Despite the issues Judge Lorenz identified in the motion for preliminary approval of the New Balance class action settlement, the plaintiffs will have the opportunity to amend the settlement and try again.

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 New Balance consumers are represented by Aubry Wand of the Wand Law Firm and Todd N. Schneider, Kyle G. Bates and Jason H. Kim of Schneider Wallace Cottrell Konecky & Wotkyns LLP.

The New Balance Made in USA Class Action Lawsuit is Sheila Dashnaw, et al. v. New Balance Athletics Inc., et al., Case No. 3:17-cv-00159, in the U.S. District Court for the Southern District of California.

UPDATE: On Jan. 24, 2019, a $750,000 settlement has been preliminarily approved to resolves claims that New Balance shoes are falsely advertised as “Made in the USA.”

UPDATE 2: On April 1, 2019, the California New Balance “Made in the USA” class action settlement is now open. Click here to file a claim.

UPDATE 3: On Sept. 21, 2019, Top Class Actions viewers started receiving checks from the California New Balance shoes class action settlement worth as much as $20. Congratulations to everyone who filed a valid claim and got PAID!