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 a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice. He focuses primarily on federal and state government regulatory and enforcement matters involving state attorneys general, the Consumer Financial Protection Bureau (CFPB), and the Federal Trade Commission (FTC). Drawing upon his experience as a deputy attorney general, Ashley has developed an extensive consumer practice with regard to the consumer financial services industry.
Clay Friedman – Co-leader
Clay is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice. Informed by nearly a decade in a state attorneys general office, and more than 25 years in private practice, Clay spends much of his time representing clients in singular or multistate regulatory actions. Clay has repeatedly led teams before all 50 state attorneys general and also handles matters with the Federal Trade Commission, the Consumer Financial Protection Bureau, and other local, state and federal agencies.
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.
Stephen Piepgrass
Stephen represents clients interacting with, and being investigated by, state attorneys general and other enforcement bodies, including the CFPB and FTC, as well as clients involved with litigation, particularly in heavily regulated industries.
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.
Michael Yaghi
Michael handles high-profile state attorneys general, FTC, and CFPB investigations by advising clients through these complex government inquiries. He assists clients through the entire life cycle of investigations, from regulatory enforcement through formal litigation.
Ketan Bhirud
As a former government official at the state and federal level, Ketan leverages extensive experience in the public and private sectors to skillfully represent client interests.
Tim Bado
Tim is an attorney in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, with a primary focus on financial services litigation.
Chris Carlson
Chris 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.
Natalia Jacobo
Natalia is an associate in the firm’s business litigation practice. She recently received her J.D from the University of California, Davis School of Law.
Namrata Kang
Namrata is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. Her work includes advising clients in regulatory investigations and compliance matters, in addition to representing clients in civil litigation matters.
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.
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. Susan also represents banks, fintechs, and financial services companies in connection with regulatory examinations and investigations brought by the CFPB, state attorneys general, and the California Department of Financial Protection and Innovation.
John Sample
John represents clients in a wide variety of general and complex litigation matters, shareholder disputes, products liability, and privacy claims.
Whitney Shephard
Whitney is an attorney 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.
Trey Smith
Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement practice. His experience includes serving as a summer associate at the firm in 2021.
Daniel Waltz
An experienced litigator, Daniel advises and represents regional, national and international companies, financial institutions and insurers in all facets of business, complex commercial and insurance coverage litigation. He is committed to working with his clients to find creative solutions to meet their needs.
Stephanie Kozol
Stephanie is Troutman Pepper’s senior government relations manager in the state attorneys general department.