Vibram obtains First Circuit affirmation of class action settlement agreement related to its advertising
Client(s) Vibram USA, Inc. and Vibram SpA
On December 31, 2015, the United States Court of Appeals for the First Circuit affirmed a $3.75 million class action settlement involving Jones Day clients, Vibram USA, Inc. and Vibram FiveFingers LLC, makers of the popular FiveFingers shoes. The settlement disposed of three class action lawsuits brought in Massachusetts, Illinois, and California, in which putative class members alleged that Vibram deceptively advertised and marketed the health benefits of certain "barefoot" running shoes. This settlement comes on the heels of two FTC lawsuits against other shoe companies resulting in settlements of $25 and $40 million.
After obtaining preliminary approval of the class action settlement agreement in April 2014, three individuals objected, arguing that the parties misrepresented the amount to be refunded to purchasers of FiveFingers. In particular, the objectors claimed that the estimated refund of $8.44 per pair of shoes was unfair in light of the estimated potential recovery of $20 to $50 per pair. The District Court approved the settlement agreement over those objections.
On appeal, the First Circuit confirmed that "there was no misrepresentation in the notices sent to class members." The appellate panel explained that the settlement was fair "given the uncertainty of success that the plaintiffs faced at trial," and the considerable expenses to be incurred in trying the matter.
The First Circuit ruling effectively resolves all pending actions against Vibram alleging false advertising.
Bezdek v. Vibram USA, Inc., Nos. 15-1207, 15-1208 (1st Cir.); DeFalco v. Vibram USA, Inc., No. 15-1209 (1st Cir.)