[co-author: Stephanie Kozol]*
On October 17, following Washington Attorney General (AG) Bob Ferguson’s unsuccessful consumer protection action against thrift store chain, Savers Value Village Inc. (Savers), the Washington Superior Court of King County granted Savers’ motion for attorney’s fees and costs in the amount of $4.3 million. This substantial award — which is allowable under the Washington Consumer Protection Act (WA CPA) — represents a substantial recoupment of Savers’ attorneys’ fees spent to defend the almost decade-long litigation.
The AG’s Protracted Investigation and Litigation
Savers is the largest for-profit thrift retailer in the world and generates more than $1 billion in annual revenue. It generates revenue by purchasing clothing, furniture, and other donations from charities, which it then resells to consumers.
The Washington AG began investigating Savers in 2014 and, after a failed negotiation, sued the retailer. In its complaint, the Washington AG alleged that Savers used its websites, advertisements, and other means to misrepresent itself as a charity and to mislead consumers into believing their purchases directly supported various charities. According to the Washington AG, these practices, among others, violated the WA CPA.
Initially, the trial court ruled that Savers misled the public. On appeal, the Washington Court of Appeals reversed, holding that the state’s claims failed to satisfy constitutionally required exacting proof standards. The state then appealed to the Washington Supreme Court, which in turn held that the Washington AG’s claims violated Savers’ First Amendment right to engage in constitutionally protected charitable solicitation for the charities the company worked with. The Supreme Court remanded the case to the trial to rule on Savers’ entitlement to attorneys’ fees and costs.
The Motion for Attorneys’ Fees
The WA CPA grants courts discretion to award attorney’s fees and costs to “the prevailing party.” As a result, Savers initially requested $5,878,758 in fees on remand. The trial court granted Savers’ motion, noting that the Washington AG drew out the matter and increased legal costs by ignoring Savers’ requests to better understand which aspects of its conduct violated the law.
After allowing additional briefing to assist the court with its lodestar analysis (i.e., the number of hours reasonably expended on litigation multiplied by a reasonable hourly rate) and to allow the state to challenge Savers’ attorneys’ fees, the court ultimately awarded Savers $4,271,689.98 on October 17. However, the court (i) declined to award appellate fees and costs, (ii) declined to award fees and costs related to Savers’ offensive 42 U.S.C. § 1983 litigation, and (iii) implemented a 5-15% fee reduction based on Savers’ attorneys’ block billing practices.
In response to the award, the Washington AG remarked that this case is its first consumer protection loss since 2012. It further assured the public that the award would be drawn from a reserve account maintained for adverse legal judgments — not from taxpayer funds. Savers promised to donate more than $1 million of the fee award to charities.
Why It Matters
In the past two decades, state AGs have increasingly leveraged consumer protection statutes to extract large settlements from businesses. The court’s award against the state is a rare check on an AG’s enforcement authority. The risk of future monetary awards may chill state AGs’ future pursuit of weaker claims and incentivize them to collaborate more closely with businesses during investigations. Alternatively, the award also affords defendants a credible threat in state AG litigation, where cases asserted by an AG’s office appear (i) meritless, (ii) in conflict with clearly established law, or (iii) in derogation of a defendant’s constitutional rights.
*Senior Government Relations Manager
