A federal judge cleared the way Monday for Vibram USA to begin settling a class action lawsuit alleging it used unsubstantiated claims about the health benefits of running in its FiveFingers shoes to increase their sale.
In an order filed Monday, federal Judge Douglas Woodlock of the U.S. District Court for the District of Massachusetts certified that a proposed $3.75 million settlement would apply to the entire class of persons who purchased FiveFinger shoes in the United States during the period covered by the settlement. The ruling clears the way for a claims administrator to publish a notice of the settlement.
Consumers will have 125 days from the publication of the notice to submit a claim for a refund of up to $94 per pair for up to two pairs of FiveFingers. Based on similar settlements, it is likely class members will receive between $20 and $50 per pair. Class members who fail to either file a claim or opt out of the class within the 95 days of the publication of settlement notice are bound by the settlement, which means they give up the right to ever sue Vibram over any of the claims addressed by the settlement.
Vibram USA how 10 days to deposit the $3.75 million in an escrow account that will be used to reimburse members of the class, pay a third-party claims administrator and plaintiffs’ attorneys up to $937,000 in fees and $70,000 in expenses. Vibram USA also is obligated to launch a website where consumers can submit their claims and the company is obliged to advertise the settlement agreement and the website online via banner ads until it makes 300 million impressions.
The class-action suit was brought against Vibram in March 2012 when Valerie Bezdek filed a suit in Massachusetts claiming that Vibram deceived customers by advertising that their shoes could reduce foot injuries and strengthen foot muscles. Subsequent claims in California and Illinois were consolidated before the Massachusetts court.
As part of the settlement, Vibram USA agrees to cease making those claims until such time as can provide competent and reliable scientific evidence. But it also continues to deny any wrongdoing.
“Even though Vibram expressly denies any wrongdoing, Vibram considers it desirable for these cases to be settled and dismissed, because this Settlement will finally put Plaintiffs’ claims and the underlying matters to rest and will avoid the substantial expense, burdens, and uncertainties associated with the continued litigation of these claims and cases,” reads a copy of the settlement filed with the U.S. District Court in Massachusetts.
The judge scheduled a fairness hearing for Oct. 29, 2014, when the court will review objections and determine whether to grant final approval of the settlement, including payment of legal fees and expenses to plaintiff’s counsel. The settlement marks a fraction of Vibram FiveFinger retail sales, which approached $160 million in 2011 alone.