Washington may have to pay up to $5.7M in legal costs to Value Village

The state of Washington may have to pay $5.7 million to thrift store chain Value Village.

Earlier this year, a King County judge ruled that the state Attorney General’s Office violated the company’s First Amendment rights when Attorney General Bob Ferguson alleged it was deceiving consumers by presenting itself as a charitable nonprofit organization when, in reality, it is a for-profit corporation.

Value Village allegedly spent $5.7 million on attorney’s fees and, in a 27-page ruling recently released, state Superior Court judge David Whedbee said the stores will be able to recover those costs, as noted by the McClatchy Media Network.

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In the ruling, Whedbee also outlined that during the litigation the attorney general’s office continued to send out press releases claiming Value Village was deceiving its customers.

According to court documents, the office would not meet with Value Village during the trial despite the store’s efforts to do so.

“The state continually requested reconsideration of rulings, despite unanimous opinions rejecting the state’s arguments and holding that the state’s actions violated established First Amendment principles,” the ruling, via McClatchy, explained.

In 2019, the attorney general’s office rejected an offer to settle the case for $475,000. That led to four more years of legal wrangling.

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“State’s claims under the Consumer Protection Act violated (Value Village’s) First Amendment right to engage in constitutionally protected charitable solicitation,” the ruling explained.

The attorney general “failed to show that any shopper had in fact been deceived or otherwise injured by its advertising and marketing,” the ruling said, according to McClatchy.

Whedbee agreed with Value Village, which said the lawsuit was “needless.”

“The court has ruled it will consider a fee award. It has not yet determined an amount. The amount is in dispute. Our response is due at the end of August,”, Brionna Aho, communications director for the attorney general’s office, said to McClatchy. “A decision is expected no earlier than the end of September, based on the briefing schedule.”

Earlier this year, the Washington Supreme Court handed the thrift store chain a unanimous win in the long-running legal fight with Ferguson, finding that its marketing practices constitute protected free speech.

The attorney general’s office began investigating the company eight years ago and, after the chain declined to pay millions of dollars to settle the investigation, Ferguson sued.

The state alleged the chain — which is based in Bellevue and operates 316 stores in the U.S., Canada and Australia — had created an impression that it was a nonprofit or charitable organization and that purchases at its stores directly benefited charities.

In reality, it’s a for-profit company that pays charitable organizations for donations, but it does not provide the charities a direct cut of retail sales. The justices ruled 9-0 in February the company’s marketing practices were protected by the U.S. Constitution.

In 2021, a state appeals court overturned a 2019 ruling that found the company had misled customers.

Contributing: The Associated Press