Facts

Tressa Gattinella brought a class action against Michael Kors (USA) Inc., Michael Kors, LLC, Michael Kors Retail Inc. and Michael Kors Stores LLC relating to information contained on price tags for merchandise sold at Kors Outlet stores.

PLAINTIFF'S CONTENTIONS:
Gattinella contended that the price tags of items at Kors Outlet stores listed the Manufacturer's Suggested Retail Prices (MSRPs) even though such items were never sold nor intended to be sold at the MSRP price listed on the label. The labels also allegedly included a price term "OUR PRICE" which was lower than the MSRP. Since these items were manufactured to be sold exclusively at Kors Outlet stores, these MSRP prices were fictional creations designed to allow defendants to create "phantom markdowns." She claimed that consumers such as herself relied on this deceptive and misleading labeling and marketing of merchandise to purchase items, believing they were getting a bargain.

Plaintiff brought claims for violations of the California's Business & Professions Code Sections 17200, et seq., violations of the Unfair Competition Law, the California False Advertising Law, and the Consumers Legal Remedies Act.

DEFENDANTS' CONTENTIONS:
Defendants denied wrongdoing and asserted various affirmative defenses.

Result

The parties reached a settlement in which Michael Kors agreed to pay $4.875 million and change the manner in which it displays its price tags by either omitting reference pricing or changing "MSRP" to "Value."

Other Information

FILING DATE: July 25, 2014.