As supply chain woes continue, late last week several District Attorneys on behalf of the State of California filed a lawsuit against Kanye West’s apparel brand, Yeezy, alleging that the Yeezy companies violated state law because they failed to ship items within thirty days and failed to provide adequate delay notices, or provide an offer of a refund. According to the Complaint, the issues could go back at least four years, preceding the current COVID-related delays. The state seeks civil penalties, restitution, injunctive relief, and attorneys’ fees.
Similar to the FTC’s Mail Order Rule, Section 17538(a) of California’s Business Code requires that companies offering products online ship products within 30 days and, if they can’t meet that timing, they must provide a refund, send equivalent or superior replacement products, or provide the buyer with a written notice regarding the delay. The delay notices must include information like the expected duration of the delay and an offer of a refund, upon request.
The state also alleges that the defendants made untrue or misleading statements regarding the ability to ship products within a certain timeframe, particularly where customers paid an additional charge for expedited shipping, in violation of Business and Professions Code section 17500. In addition, the Complaint includes allegations that the companies failed to disclose logistical limitations to consumers, in violation of California Civil Code section 1770.
We have previously warned about FTC scrutiny regarding shipping delays, particularly regarding COVID-related products, and this case is a reminder that states are also watching. As the holiday season approaches, companies should review current shipping representations and related notices for compliance and consider modifications in anticipation of unexpected delays.
Update: On November 8, the Los Angeles County District Attorney’s Office announced that Yeezy had agreed to pay $950,000 to settle the lawsuit.