PHILADELPHIA - The owner of Justice Stores will pay $8 million to more than 600,000 people as a result of money being left in a class action settlement fund after a year.
On Feb. 12, the U.S. District Court for the Eastern District of Pennsylvania awarded the funds to Carol Rougvie and more than 600,000 other claimants in a class action suit against Ascena Retail Group, Inc., the owners of tween clothing outfit Justice Stores.
The class action suit, filed by eight customers of Justice Stores, alleged that, it deceptively labeled tween merchandise as 40% off when it was actually being sold at regular price. The eight consumers alleged various state law causes of action.
Judge Mark Kearney
According to the decision, 18.4 million consumers of Justice Stores were affected by the alleged deceptive marketing strategy.
The retailer originally offered up to $402 million in vouchers and to pay up to $27.8 million in cash to consumers who wanted it.
Attorneys also asked for $14.1 million but later decided to take their fees based on hours worked.
Judge Mark Kearney denied Justice Stores' motion that asked that the claims administrator distribute $9.1 million leftover to fund purchases made using the vouchers.
"As with the claims administrator, the parties reached this $8 million cap aware of the risk entailed in their good-faith estimate," Kearney ruled. "The settlement agreement unambiguously capped Justice Stores's reverter at $8 million.
"Their efforts, as we intended, resulted in more redemptions. We cannot both find the parties did less than everything possible to maximize the class benefit and then find the parties did not expect these results when they represented a potential voucher exposure of $402 Million.
"Justice Stores's counsel admitted his client knew of this exposure during the May 20, 2016 fairness hearing. Justice Stores and class counsel then agreed to raise the voucher value to $30 but the undeniable fact remains Justice Stores agreed to this $8 million cap knowing of a $402 million exposure."