A federal judge on Monday tentatively approved a $40 million settlement between Skechers USA Inc. and consumers who bought the toning shoes after 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 comes three months after Manhattan Beach, Calif.-based Skechers reached a deal 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 covers more than 70 lawsuits from across the country. The suits were consolidated in federal court in Louisville, Ky. Skechers denied the allegations but said it settled to avoid long litigation.
Tim Blood, a San Diego-based attorney who represented the class, said the two settlements were reached in conjunction with each other.
“This is the other piece of the settlement process,” Blood told The Associated Press. “By combining the cases, we’re able to get much more value for class members.”
U.S. District Judge Thomas B. Russell 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 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 percent for posture-related muscles and 71 percent for one of the muscles in the buttocks.
The attorneys involved in the case will split $5 million from a separate fund designated specifically to pay the lawyers. Russell ordered that the money cannot come from the $40 million settlement fund set aside for consumers. It’s unknown how many people are in the settlement class because some people may have bought more than one pair of shoes, Blood said.
“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,” Russell wrote.
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.
By Brett Barrouquere
Britt Nolan Named CCO For McCann Worldgroup, North America
Britt Nolan has been hired as chief creative officer at McCann Worldgroup, North America. He will report to Javier Campopiano, global chief creative officer of McCann Worldgroup and McCann.
Nolan will work directly with the network’s creative leadership in the U.S. and Canada to lead the development of ideas that solve clients’ business challenges, guided by the creativity of the network’s founding philosophy of “Truth Well Told.” Key to this effort will be fostering collaboration across capabilities and agencies, leveraging the network’s talent and expertise in strategy, design, commerce, branding and production to bring its best-in-class offerings to bear for each client.
“Britt is without a doubt a leader and a point of reference for excellence in our industry,” said Campopiano. “He has led some of North America’s very best work in recent years with incredible range--creating eye-catching, smart, authentic, and funny ways of connecting brands with people. He has a rare track record of success across both creative and business, with a unique understanding of how they power each other. And most importantly, we share a common belief that brand-building is right now more important than it ever was, and the only way to do it is through radical creativity based on human truths. He embodies the very essence of our Truth Well Told philosophy.”
Most recently president and chief creative officer of Leo Burnett Chicago, Nolan comes to McCann Worldgroup with a track record of creative achievement and business impact, both for his clients and the agencies at which he’s worked. Over the years, his work has won Grand Prix or Best in Show at every major international award show, including over 50 Cannes Lions, as well as recognition... Read More