A federal judge has tentatively approved a $40 million settlement between Skechers USA Inc. and consumers who bought the toning shoes after company ads made unfounded claims that the footwear would help people lose weight and strengthen muscles. An undetermined number of people will be able to get a maximum repayment for their purchases:
• up to $80 per pair of Shape-Ups;
• $84 per pair of Resistance Runner shoes;
• up to $54 per pair of Podded Sole Shoes; and
• $40 per pair for Tone-Ups.
The agreement came three months after Manhattan Beach, Calif.-based Skechers reached a settlement agreement with the Federal Trade Commission over the advertisements for the shoes. That settlement was related to a broader agreement that resolves a multi-state investigation led by the Attorneys General from Tennessee and Ohio and involving more than 40 states. Skechers will provide an additional $5 million to the states. The settlement involves more than 70 lawsuits from across the country that were consolidated in federal court in Louisville, Ky.
U.S. District Judge Thomas B. Russell has set a fairness hearing to finalize the settlement for March 19. That hearing will be held after the settlement is advertised and consumers who qualify for compensation have an opportunity to object to the terms and opt out of participating, if they so choose. The settlement grew out of a series of ads Skechers aired featuring celebrity endorsers such as Kim Kardashian and Brooke Burke, with claims that the shoes could help people lose weight and strengthen their butt, leg and stomach muscles.
Skechers billed its Shape-ups as a fitness tool designed to promote weight loss and tone muscles with the shoe’s curved “rocker” or rolling bottom — saying it provides natural instability and causes the consumer to “use more energy with every step.” Shape-ups cost about $100 and are sold at retailers nationwide. Ads for the Resistance Runner shoes claimed people who wear them could increase “muscle activation” by up to 85% for posture-related muscles and 71% for one of the muscles in the buttocks.
Judge Russell ordered that attorneys’ fees can’t be paid from the $40 million settlement fund set aside for consumers. Instead $5 million will be paid by Skechers and put in a separate funds to be used as attorneys’ fees. It’s unknown how many people are in the settlement class because some people may have bought more than one pair of shoes. Judge Russell wrote, concerning the settlement, in his order:
Not only is this agreement in the range of possible solutions, it is likely the best resolution that class members could receive absent receipt of the product actually marketed to them.
A settlement with the FTC bars Skechers from running the ads in the future. The Federal Trade Commission settled similar charges with Reebok last year over its EasyTone walking shoes and RunTone running shoes. That $25 million agreement also provided customer refunds. Tim Blood, a San Diego-based lawyer with Blood, Hurst & O’Reardon, represented the class in the Skechers’ case.
Source: ABC News
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