NY Federal Judge Approves Michael Kors Fake Sale Class Action Settlement

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A New York federal judge has granted preliminary approval to an almost $5 million class action settlement to resolve allegations that Michael Kors LLC advertised fake sale prices on items at its outlet stores.

U.S. District Judge William H. Pauley III said in his Monday order that the Michael Kors class action settlement reached with plaintiffs Tressa Gattinella and Kristin Lengyel is “fair, reasonable and adequate.” Michael Kors has agreed to pay $4,875.000 to settle the class action lawsuit.

“The court finds that the agreement was reached in the absence of collusion, and is the product of informed, good-faith, arm’s-length negotiations between the parties and their capable and experienced counsel,” Judge Pauley wrote.

The New York federal judge also appointed Gattinella and Lengyel to serve as class representatives. The Michael Kors fake sale class action lawsuit was originally filed by Gatinella in July 2014. The lawsuit was amended to include Lengyel as a plaintiff.

Gatinella claimed that she purchased a pair of jeans at Michael Kors outlet store in California, which she paid $79.99 for, believing she was receiving the jeans at a 33 percent discount, marked down from the $120 list price on the price tag. However, Gatinella claims that Michael Kors was never going to sell the jeans for $120.

Lengyel made a similar purchase at a Michael Kors outlet store, which she claims was also based on a fake price.

They claim in their fake sale class action lawsuit that the retailer deceived and misled its customers by giving them the impression that they were being sold products with deeply discounted prices, and that the products they were purchasing “were formerly sold or offered at a higher price at main line retail stores and are now significantly cheaper at the outlet stores,” they wrote in their request for approval.

Gatinella and Lengyel alleged that the prices placed on the price tags at the Michael Kors Outlet Stores “were artificial, arbitrary and did not represent a bona fide price at which Michael Kors formerly sold the Michael Kors Outlet Products.”

The Michael Kors class action settlement is for “all consumers who purchased Michael Kors Outlet Products from a Michael Kors Outlet Store during the Class Period,” which is from July 25, 2010 until July 25, 2014.

In addition to the monetary relief offered to Michael Kors outlet store consumers, the company “has agreed for all of its United States outlet stores to cease the very practice a the heart of” their allegations.

Toward that end, Michael Kors will “modify its price tags, as well as provide in-store displays with explanations of pricing terms, making it easier for customers to understand the value of what they are purchasing.”

In order to receive a benefit from this class action settlement, the parties have agreed to streamline the process, for the sake of the Class Members, as much as possible.

“To participate, claimants need only submit online or by mail a Claim Verification Form verifying that they purchased Michael Kors Outlet Products during the Class Period,” plaintiffs explained in their motion for approval of the outlet store fake sale class action settlement, which was submitted in June.

Class Members will not need to submit a proof of purchase in order to benefit from this Michael Kors class action settlement. However, Class Members who have receipts may “receive a higher distribution depending upon the amount of their purchases.”

The plaintiffs are represented by Jeffrey M. Ostrow, Jason H. Alperstein and Scott A. Adelsberg of Kopelowitz Ostrow PA, Wayne S. Kreger of the Law Offices of Wayne Kreger, and Hassan A. Zavareei and Jeffrey D. Kaliel of Tycko & Zavareei LLP.

Michael Kors is represented by Leslie Gordon Fagen, Darren Wright Johnson and Walter Rieman of Paul Weiss Rifkin Wharton & Garrison LLP.

The Michael Kors Outlet Store Fake Sale Class Action Lawsuit is Gattinella v. Michael Kors (USA) Inc. et al., Case No. 1:14-cv-05731, in the U.S. District Court for the Southern District of New York.

UPDATE: On June 6, 2016, Top Class Actions viewers who submitted timely and valid claims for the Michael Kors settlement began receiving checks worth as much as $170.04.