I was looking through my emails and stumbled across this news in my spam folder. So here’s the deal, the budget retail store giant Harbor Freight has a lawsuit on their hands.
What it’s all about
Basically the plaintiff is alleging that that Harbor Freight violated the law by advertising merchandise as “on sale” or “comp at” that had not been sold at the stated regular or “comp at” price for 28 of the preceding 90 days. Harbor Freight disputes Plaintiff’s allegations and believes that it complied with all applicable laws at all times.
As you may know, legal disputes and battles can drag on forever and have lots of expenses for both parties, so rather than battle it out in court, both parties have agreed to settle.
There is a proposed settlement that will refund a percentage of certain purchases to eligible Class Members, if the Court approves the settlement, but only if a Claim Form is timely filed.
The Court has certified a class for settlement purposes. Members of the class are as follows:
All Harbor Freight customers in the United States who since April 8, 2011 and up to December 15, 2016 (the “Class Period”) purchased any product from Defendant which was advertised with a higher reference price (e.g., “reg. $XXX,” “only $XXX,” or “comp. at $XXX”) adjacent to a lower current offering price, but which was not sold by Defendant at the higher reference price for at least 28 of the last 90 days prior to purchase, excluding Defendant’s employees, representatives, court officials in this case, and any customer already party to a suit against Defendant challenging advertised pricing.
If you have recently shopped at HF you may have already received one of these notices in your email inboxes which means you might be entitled to a portion of the settlement.
I don’t know if HF violated any laws. What do you guys think?
Here’s my guess about how this sort of class action goes. I suspect a lot of stores whose business is built on aggressive discounts exaggerate the “regular” price of their goods and don’t actually sell anything at the “Compare At:” price, which is often made up.
If you’re a class action lawyer, you get a big percentage of the total lawsuit settlement value. The ideal lawsuit to file, then, is one where the evidence is pretty easy to collect and the charges are thus easy to prove.
And that’s exactly what’s going on here. All you have to do to pursue a case like this is to send a couple of college students into several Harbor Freight locations every day to look at the price for the same items and to take pictures of the price tags or write them down. So you just check the price for a screwdriver set and discover that it’s advertised at “Compare at: $39.95” but Harbor Freight only ever sold it at somewhere between $9.95 and $12.95. Boom! You’ve got them dead to rights, especially if you track prices for a couple dozen different items across multiple stores, ideally in different areas of the country. Your cost in hiring college students to do this is not terribly significant at $10.00 per hour.
Then you threaten to sue and if they don’t settle quickly, you have a good chance of winning at trial because you’re dealing with abundant “hard” evidence. And then you get 30% to 40% of the lawsuit value which could be $10 or $20 million if the case is strong. Not a bad return on an investment of $40,000 or $50,000 in college student labor to gather the evidence.
Easier said than done