JC Penney announced Tuesday it has reached a settlement, subject to court approval, in the class action case Cynthia E. Spann v. JC Penney Co. Inc., filed in the U.S. District Court for the Central District of California. The retailer said it is settling the suit not as an admission of wrongdoing, but to eliminate costs associated with litigation.
“While we are confident of our position, resolving this litigation removes any uncertainty and risk, which we believe is in the best interest of our shareholders,” CEO Marvin Ellison said in a news release.
The case was filed in 2012 on behalf of California shoppers who purchased private band and exclusive brand items between November 2010 and January 2012. The case alleged that the retailer advertised was falsely lowering prices from a inflated price that never took effect.
Lead plaintiff Spann claimed, she bought three blouses from Penney’s private brand East Fifth because the items were advertised at $17.99, a 40% discount from their original $30 price. Spann later found out that the blouses were not sold for the original price during the three months prior to her purchase.
“(The) plaintiff would not have purchased the blouses in absence of JC Penney’s misrepresentations,” the documents state. “As a result, the plaintiff has been personally victimized by and suffered economic injury as a direct result of the defendant’s unlawful, unfair and fraudulent conduct.”
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