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.
Troutman Pepper State Attorneys General Team
Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation. |
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Clay Friedman – Co-leader Clayton is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice, multidisciplinary teams with decades of experience crafting effective strategies to help deter or mitigate the risk of enforcement actions and litigation. |
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Judy Jagdmann Judy is a partner in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice, based in the Richmond office. She brings experience serving as chair and commissioner of the Virginia State Corporate Commission (VSCC) from 2006 through 2022, which includes regulating the utilities, insurance, banking, and securities industries. She also served as Virginia’s attorney general from 2005-2006. |
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Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He focuses his practice on enforcement actions, investigations, and litigation. Stephen primarily represents clients engaging with, or being investigated by, state attorneys general and other state or local governmental enforcement bodies, including the CFPB and FTC, as well as clients involved with litigation, with a particular focus on heavily regulated industries. |
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Avi Schick A former deputy attorney general of New York, Avi applies his experience in bet-the-company matters, representing clients in criminal and civil investigations and enforcement actions before state and federal regulators, prosecutors and enforcement agencies. |
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Michael Yaghi Michael is a partner in the firm’s State Attorneys General and Regulatory Investigations, Strategy + Enforcement (RISE) Practice Groups, nationwide teams that advise clients on consumer protection enforcement matters and other regulatory issues. |
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Tim Bado Tim is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, where he represents corporations and individuals facing potential civil and criminal exposure. Tim’s experience in government investigations, enforcement actions, and white-collar litigation spans a number of industries, including financial services, pharmaceutical, health care, and government contracting, among others. |
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Chris Carlson Chris Carlson represents clients in regulatory, civil and criminal investigations and litigation. In his practice, Chris regularly employs his prior regulatory experience to benefit clients who are interacting with and being investigated by state attorneys general. |
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Natalia Jacobo Natalia is an associate in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice. She focuses her practice on two primary areas: government contracting and state attorney general work. |
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Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising. |
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Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general. |
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Susan Nikdel Susan is an associate in the firm’s Consumer Financial Services Practice Group, and focuses her practice on consumer financial services matters. She has defended several of the nation’s largest and most influential financial institutions in individual and class action litigation involving the Telephone Consumer Protection Act (TCPA), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), and other consumer privacy statutes. |
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John Sample John is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He focuses his practice on a wide range of general and complex litigation matters, including shareholder disputes, fraud, products liability, breach of contract, and Biometric Information Privacy Act claims. |
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Whitney Shephard Whitney is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. She represents clients facing state and federal regulatory investigations and enforcement actions, as well as related civil litigation. |
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Trey Smith Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice. He focuses his practice on helping financial institutions and consumer facing companies navigate regulatory investigations and resulting litigation. |
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Daniel Waltz Daniel is a member of the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and State Attorneys General team. He counsels clients in connection with navigating complex government investigations, regulatory compliance, and transactions, involving state and federal government contracting obligations. Drawing on his broad experience as a former assistant attorney general for the state of Illinois, Daniel is a problem solver both inside and outside the courtroom. |
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Stephanie Kozol Stephanie is Troutman Pepper’s senior government relations manager in the state attorneys general department. |