Washington Attorney General Bob Ferguson’s long-running legal fight against the thrift store chain Savers Value Village has resulted in the state being compelled to pay the company over $4.3 million in legal expenses.
On Tuesday, King County Superior Court Judge David Whedbee announced the award, eight months after the state Supreme Court unanimously rejected the attorney general’s arguments that the thrift shop chain’s marketing methods were fraudulent. The judge dismissed the state’s complaint as “needless.”
“Defending and fully prevailing in this lawsuit was burdensome and costly,” said Richard Medway, general attorney for Savers Value Village, in an emailed statement. “But the result underscored the many positive aspects of our unique business model, which benefits the environment, consumers, and our many nonprofit partners.”
Savers Value Village, situated in Bellevue, Washington, and operating over 300 stores in the United States, Canada, and Australia, said that it will contribute more than $1 million of the prize to charity.
The attorney general’s office started an investigation into the firm in late 2014, and when Savers Value Village refused to pay millions of dollars to resolve the inquiry, Ferguson, a Democrat running for governor, filed a lawsuit.
According to the state, the thrift business gave the impression that it was a nonprofit or charity organization and that sales at its stores directly benefitted charities.
In truth, it is a for-profit corporation that compensates charity groups for donated products but does not give the charities a direct portion of retail sales. According to the organization, Savers Value Village paid $580 million to nonprofit partners worldwide in the five years ending in 2022 and saved 3.2 billion pounds of products out of landfills.
Northwest Center, which serves persons with disabilities, and Big Brothers Big Sisters of Puget Sound, two of the biggest organizations it works within Washington, had requested the attorney general’s office to dismiss the lawsuit.
While commercial speech is afforded less protection than other statements under the First Amendment, the Supreme Court concluded in February that Savers Value Village’s marketing was so focused on promoting the charities it supported that its tactics were entitled to full constitutional protection.
Ferguson’s office requested that no legal costs be awarded, stating that doing so would discourage the agency from filing complex consumer protection cases.
Whedbee said the attorney general’s office behaved in good faith, but the manner in which it handled the case — including disregarding pleas from the firm’s counsel to figure out what it was allegedly doing wrong — had prolonged the process and cost the company money in legal fees.
Brionna Aho, an attorney general’s office spokeswoman, said in an emailed statement that the case helped educate the public about the company’s for-profit status and pushed Savers Value Village to make certain adjustments.
The corporation agreed to register as a commercial fundraiser despite earlier being assured that it did not need to by the secretary of state’s office. By 2015, it had also put signage in its stores stating that it was a for-profit commercial fundraising, and staff had made occasional in-store remarks to that effect.
Aho stated that the case was the first loss by the attorney general’s consumer protection division since at least 2012 and that no government funds will be utilized to cover the legal bills. Instead, the funds will come from a reserve account established in the event of a negative court verdict and supported by rewards from successful cases brought by the attorney general.
According to her, the state’s public interest litigation collected more than $1.3 billion last year alone.