WWD Law Review: LuLaRoe, Kardashian and Bangladesh
LuLaRoe has been hit with a second class-action lawsuit in less than a month. This time, the suit, which claims the apparel company has violated California state law and the Racketeer Influenced and Corrupt Organizations Act, is seeking $1 billion in damages.
Meanwhile, Kim Kardashian has been handed a preliminary win in the “KKW Beauty” related trademark suit she has been facing since this summer. And two recent developments suggest that conditions for garment workers in Bangladesh, the world’s second largest exporter of apparel, may be improving.
The Saga of LuLaRoe
LuLaRoe, which was recently slapped with a class-action lawsuit alleging that it was operating a “pyramid scheme” of a business, has been hit with another one. This time, the plaintiffs — Aki Berry, Cheryl Hayton and Tiffany Scheffer, three former LuLaRoe sales representatives — are not only claiming that the California-based multilevel marketing retailer is operating based on a pyramid scheme model, but they are also seeking $1 billion in damages — one half of the company’s total annual sales.
According to their suit, Berry, Hayton and Scheffer claim that LuLaRoe encouraged its sales reps to constantly purchase thousands of dollars of new garments and yet the “plaintiffs and tens of thousands of other consultants never even made a profit.”
The suit — which claims violations of California state law and the federal Racketeer Influenced and Corrupt Organizations Act — asserts that as many as 80,000 people paid thousands up front for inventory and at least “some [were left] in financial ruin due to the pressure to max out credit cards and to take loans to purchase inventory.”
In addition to a trial and monetary damages, the named plaintiffs have asked the court to certify their class-action suit to enable “all persons who were and are LuLaRoe consultants from 2013 until present” to join the suit and share in the ultimate monetary settlement.
Berry, Hayton and Scheffer’s lawsuit comes just 10 days after Stella Lemberg, Jeni Laurence, Amandra Bluder and Carissa Stuckart, four former LuLaRoe consultants, filed suit against the company, alleging that it was running afoul of contract law by failing to honor its advertised “100 percent buyback program” for unsold garments when consultants were quitting the company.
LuLaRoe calls both lawsuits baseless and inaccurate.
Location, Location, Location
Kim Kardashian — or better yet, her corporation Kimsaprincess Inc. — has scored a preliminary win in the lawsuit she was hit with this summer over the branding of her KKW Beauty venture. New York-based makeup artist Kirsten Kjaer Weis filed a trademark infringement suit against Kimsaprincess Inc. in federal court in Illinois in July, alleging that Kardashian’s “KKW” branding was a bit too similar to her own “KW” beauty line, which has been around since September 2010.
While neither Weis nor Kardashian is based in Illinois, Weis opted to file suit there, in part because she alleges that Kardashian’s collection was marketed and sold in the state but also because she did not want to file in Kardashian’s state of residence/operation, California. Why? Well, according to Weis, Illinois “is a middle ground in the interest of justice.” To be specific, Weis claims that Kardashian might derive an unfair advantage if the case played out on her home turf.
Despite Weis’ allegation that Kardashian has “nearly infinite resources to defend against [her] claims in any district,” the court held this week that they are to face off in California, “the same place where the allegedly infringing products are produced.”
The court further held that “while California might be inconvenient in some way for [Weis], she has already chosen a forum to which she would have to travel for this suit. Changing [the] venue to California would increase her cost of travel (at least marginally) but it would not create a cost for [Weis] where none had previously existed.”
The next battle in front of Weis: Showing that consumers are likely to be confused between her “KW” branded cosmetics and those bearing Kardashian’s “KKW” logo.
Women’s Rights Here…and There
In light of fashion’s increased attention to the way it treats those within its ranks, it is difficult not to think about a certain group of individuals who are frequently subjected to abuse: Those who work within the supply chains for many mainstream retailers, particularly in far-flung locations, such as Bangladesh, Cambodia and Thailand, for instance.
Since the Rana Plaza tragedy, in which a building housing various garment factories collapsed in 2013, killing 1,135 people, local lawmakers and international NGOs have joined to improve the working conditions in the factories located in Bangladesh, the world’s second largest exporter of garments.
Late last month, an arbitral tribunal in The Hague bolstered the legally binding enforcement mechanisms of the Bangladesh Accord on Fire and Building Safety (“Accord”), one of the coalitions entered into by many Western brands on the heels of Rana Plaza to implement structural improvements and safety advancements in garment factories.
Earlier this year, complaints were filed by IndustriALL Global Union and UNI Global Union against two leading — but unnamed — fashion brands for failing to abide by the tenets of the Accord, including requiring that their supplier factories make necessary on-site improvements. Since then, The Hague’s Permanent Court of Arbitration has agreed to hear the cases, a move that is being touted as an early but major victory for the unions and for the future of manufacturing in Bangladesh, in general.
The decisions in those cases are expected in the spring.
Even more recently, the government in Bangladesh has agreed to ensure that the Accord, which was scheduled to conclude in May, will continue on until “a national regulatory body is ready to take over monitoring.”
Christy Hoffman, deputy general secretary of UNI Global Union, told Reuters that this is yet another win in the fight for the safety of garment workers. “The talks with the government show that it recognizes the importance of a safe ready-made garment industry, and we will continue to work with regulators to help enhance their capacity.”
Julie Zerbo is the founder of The Fashion Law.
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