Vibram USA, the company that makes FiveFingers running shoes, has agreed to settle a lawsuit that alleged the company made false and unsubstantiated claims about the health benefits of its glove-like footwear. According to the court filings, Vibram settled to put the matter to rest and avoid any additional legal expenses. “Vibram expressly denied and continues to deny any wrongdoing alleged in the Actions, and neither admits nor concedes any actual or potential fault, wrongdoing or liability,” read the court brief.
At a cost of $3.75 million, I can’t say that a result like this is surprising. Mass class actions like this are notorious moneymakers for the plaintiff’s bar (and from the sound of it, this one likely would have been before an MDL panel given the multiple suits involved). Even if Vibram thought they could win, taking a case like this through the class certification stage, discovery, motions and (heaven forbid) all the way to trial makes almost no sense financially. This just isn’t the sort of thing on which executives and savvy general counsel are going to bet the company.
In case you’re interested, the complaint itself can be found here (pdf). It alleged three causes of action: (1) untrue and misleading advertising under Massachusetts law, (2) violation of Florida’s Deceptive and Unfair Trade Practices Act, and (3) unjust enrichment.
An earlier Runners World article pointed out something interesting about the case. According to Harvard Law professor John C. P. Goldberg:
The plaintiff’s suit is careful to disavow any claim that she was physically injured as a result of using the FiveFingers shoes. Again, she is asking the court to take away from Vibram ill-gotten profits, and to distribute those gains to consumers who bought the shoes.
The reason the claim is framed this way is tied to the efforts of the plaintiffs’ lawyers to get the court to authorize this suit as a class action. The courts have made very clear that they are not going to authorize class actions in personal injury cases. Such cases, the courts say, pose too many “individualized” issues for a class action to provide an efficient and fair resolution. For example, if this were not a suit seeking disgorgement, but instead a suit seeking damages for injuries caused by FiveFingers shoes, the plaintiffs’ lawyers would for each claimant have to offer proof that that claimant actually suffered an injury, and that the injury was caused by the shoes rather than, say, a pre-existing condition in the plaintiff, or the plaintiff’s misuse of the shoes.
The plaintiff’s lawyers are hoping that, by focusing on Vibram’s alleged wrongful gains, rather than on whom Vibram may have injured, they will be able to convince the court to authorize a class action. This is a smart tactic, but it is by no means guaranteed to succeed.
Kudos to the plaintiff’s lawyers are in order, I suppose. As Prof. Goldberg pointed out, even that slick bit of lawyering wasn’t a slam dunk, but it was apparently just smart enough to squeeze out a settlement. It would be interesting to know just what portion of the settlement fund gets claimed, but I doubt we’ll see that number reported anywhere.