Judge Tentatively OKs $40M Skechers Settlement

A federal judge tentatively approved a $40 million settlement between Skechers USA Inc. and consumers who bought the toning shoes after ads made unfounded claims that the footwear would help people lose weight and strengthen muscles.

An undetermined number of people will be able to get a maximum repayment for their purchases _ up to $80 per pair of Shape-Ups; $84 per pair of Resistance Runner shoes; up to $54 per pair of Podded Sole Shoes; and $40 per pair for Tone-Ups.

The agreement comes three months after Manhattan Beach, Calif.-based Skechers reached a deal with the Federal Trade Commission over the advertisements for the shoes. That settlement was related to a broader agreement that resolves a multi-state investigation led by the attorneys general from Tennessee and Ohio and involving more than 40 states. Skechers will provide an additional $5 million to the states.

The settlement covers more than 70 lawsuits from across the country. The suits were consolidated in federal court in Louisville, Ky. Skechers denied the allegations but said it settled to avoid long litigation.

Tim Blood, a San Diego-based attorney who represented the class, said the two settlements were reached in conjunction with each other.

“This is the other piece of the settlement process,” Blood told The Associated Press. “By combining the cases, we’re able to get much more value for class members.”

U.S. District Judge Thomas B. Russell set a fairness hearing to finalize the settlement for March 19. That hearing will be held after the settlement is advertised and consumers who qualify for compensation have an opportunity to object to the terms and opt out of participating, if they choose.

The settlement grew out of a series of ads Skechers aired featuring celebrity endorsers such as Kim Kardashian and Brooke Burke, with claims that the shoes could help people lose weight and strengthen their butt, leg and stomach muscles.

Skechers billed its Shape-ups as a fitness tool designed to promote weight loss and tone muscles with the shoe’s curved “rocker” or rolling bottom – saying it provides natural instability and causes the consumer to “use more energy with every step.” Shape-ups cost about $100 and are sold at retailers nationwide.

Ads for the Resistance Runner shoes claimed people who wear them could increase “muscle activation” by up to 85 percent for posture-related muscles and 71 percent for one of the muscles in the buttocks.

The attorneys involved in the case will split $5 million from a separate fund designated specifically to pay the lawyers. Russell ordered that the money cannot come from the $40 million settlement fund set aside for consumers. It’s unknown how many people are in the settlement class because some people may have bought more than one pair of shoes, Blood said.

“Not only is this agreement in the range of possible solutions, it is likely the best resolution that class members could receive absent receipt of the product actually marketed to them,” Russell wrote.

A settlement with the FTC bars Skechers from running the ads in the future.

The Federal Trade Commission settled similar charges with Reebok last year over its EasyTone walking shoes and RunTone running shoes. That $25 million agreement also provided customer refunds.