Legal

The Supreme Court of California recently ruled that collecting ZIP codes from customers who paid by credit card may subject merchants to class-action lawsuits. Dozens of such actions have already been filed, including against retailers "yet to be named." Reported settlements paid by some companies have exceeded $25 million. The lesson is clear: All retailers should review their customer information collection practices in light of California law (and other states) to avoid becoming the target of class-action lawyers.

Reebok agreed to refund $25 million to customers who bought its popular EasyTone and RunTone shoes as part of a settlement with the Federal Trade Commission, which says the company didn't have the science to back its “better way to a better butt” claims.

Groupon was hit with a second employee lawsuit alleging that the company failed to pay overtime. It's only the latest in a series of major setbacks for the social coupon site, casting its future into doubt.

On Sept. 19, the New York Attorney General announced a settlement with retail chain Michaels Stores over its allegedly deceptive advertising practices. Attorney General Eric Schneiderman claimed that the arts and crafts giant deceived consumers into thinking they were receiving enormous discounts on certain products when, in fact, they were really paying regular store prices.

A bankruptcy judge in New York approved Barnes & Noble’s $13.9 million purchase of Borders’ intellectual property, including its valuable customer list. The approval came after the parties offered a new proposal about how to protect the privacy interests of 48 million former Borders customers, and comes four days after the judge had temporarily halted the sale.

Chanel has filed a sweeping cyberpiracy and trademark infringement lawsuit in Nevada against 399 websites the company accuses of selling counterfeit items bearing the luxury retailer's name. The suit filed Sept. 20 in U.S. District Court in Las Vegas seeks unspecified damages from unnamed operators of websites that the fashion house alleges operate from China, the Bahamas and other overseas jurisdictions where trademark enforcement is lax.

Sears is in an active push to lease surplus space to other retailers. Its real estate division has listed on its website some 4,000 of its namesake and Kmart stores that have space for other merchants or retail operations to lease. According to a report, Sears has secured two lease deals, one with Western Athletic Clubs for 69,000 sq. ft. of a 273,000-sq.-ft. Sears store in Cupertino, Calif.

Arts and crafts chain Michaels has agreed to pay $1.8 million in penalties after the New York state Attorney General’s office accused the company of using deceptive advertising practices to disguise regular prices as sales discounts.

Two privately owned stores in Queens, N.Y., accused of peddling unauthorized Apple accessories have agreed to surrender any fake products in their inventories, according to a proposed settlement registered in federal court in Brooklyn.

Barnes & Noble has bought some of Borders’ intellectual property along with other bidders. According to Hilco Trading, the liquidation company handling the sale, multiple bidders, including Barnes & Noble, have agreed to buy $15.8 million of Borders' intellectual property, Craine’s said.