Yeezy litigation illustrates shipping delays amid pandemic

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In the midst of the holiday cheer this year, you may have noticed longer delivery times and more out-of-stock items, even though you’ve ordered more online than in the past. Businesses and consumers have learned over the past 21 months that the COVID-19 pandemic has created supply chain bottlenecks and hindered delivery times. Companies often have no control over these delays, but a recent $ 950,000 settlement between the State of California and Yeezy Apparel LLC / Yeezy LC (Yeezy) – a clothing and footwear company owned by Ye (formerly Kanye West) – highlights the need for businesses to plan ahead and remain vigilant when promising fast product delivery. Most importantly, online retailers need to work with manufacturing and shipping partners and ensure that confirmation websites and emails accurately convey information. the Yeezy case provides an uplifting story for companies who can promise fast delivery of the products consumers buy online.

On October 21, 2021, prosecutors for Los Angeles, Alameda, Napa and Sonoma counties jointly filed a lawsuit in Los Angeles County Superior Court against Yeezy.[1] The complaint alleged that Yeezy violated California consumer protection laws[2] when he made allegedly misleading statements. Yeezy allegedly failed to ship the products within the time frame stated on the website, including when customers paid for expedited shipping, and at times failed to ship the products within 30 days of an order. California Business and Professions Code Section 17538 (a), in particular, requires businesses to ship Internet orders within 30 days of payment or take corrective action if they cannot meet the deadline.

the Yeezy Trial

Yeezy reached a settlement agreement in November with the counties. While Yeezy did not admit any wrongdoing, he paid $ 950,000 in civil penalties, attorney fees and a cy pres contribution to the California Consumer Protection Prosecution Trust Fund. the Yeezy the agreement also included an injunction measure. Yeezy and its current or future third-party logistics provider would be required to take various measures to ensure compliance with laws, such as developing a compliance policy, employing a compliance officer, establishing a system for tracking and responding to consumer complaints, and maintaining various methods for consumers to contact the business.

Although shipping delays reportedly started long before the pandemic, the complaint highlights steps businesses should take given persistent supply chain obstacles and the surge in internet sales over the past 21 years. last few months, especially during high volume sales periods like the holidays. As discussed below and alleged in the Yeezy claim, California requires companies to notify customers when they cannot fulfill an order within 30 days to offer a refund, provide similar replacement products, or proactively provide a refund.

Below we outline some preventative steps businesses may wish to take to avoid headaches, many of which are beyond their control.

Keep an eye out for overseas supplies

Companies should create systems to track and update national supplies of products and components. Before the pandemic, companies with finely tuned supply chains often reduced the need for home warehousing through “just-in-time” manufacturing. Companies have often tried to minimize the delay between manufacturer and consumer as much as possible. With container ships anchored outside Atlantic and Pacific ports, businesses face challenges in getting products quickly from shipping containers to warehouses to consumers, or even to their own facilities. assembly plants in the United States that create finished products from components from around the globe.

Coordinate messaging on website and in emails

Companies should also ensure that their manufacturing branches coordinate with website operations. If the business anticipates manufacturing or downstream transportation delays, the retail and internet marketing divisions should timely update website information and communicate accurate information to consumers where possible. . Sellers may also want to notify consumers in confirmation emails that the pandemic continues to cause unforeseen delays beyond the retailer’s control.

Communicate with shipping partners

Transportation providers have taken significant steps to meet the logistical demands of the proliferation of Internet orders since March 2020. Despite increasing capacity and stabilizing online sales in fall 2021, online retailers must prepare for future shipping disruptions. Unknown events such as high and continuous staff turnover rates and new coronavirus variants may impact shipping capacity in the future. Businesses should communicate regularly with their third-party shipping and fulfillment partners when issues arise, or in anticipation of delays, to take corrective action and address customer concerns. Companies that have exclusive contracts with a single shipper and may not be able to use an alternative supplier should be especially vigilant.

Prepare to take corrective action

the Yeezy The case illustrates that internet retailers have little or no control over some of the factors that can lead to pandemic-related delays and other unforeseen delays. refunds or offering written notice of delays with refund offers or equivalent or better substitute product proposals.[3]

The COVID-19 pandemic continues to affect many aspects of American life. Consumers and businesses have no way of anticipating all future events. Supply chain and shipping delays are expected to remain an issue for the foreseeable future. Businesses should take steps to reduce the risk of litigation or enforcement actions related to various consumer protection laws.

[1] People c. Yeezy Apparel LLC, et al., No. 21STCV38971 (Cal. Super. Ct. LA Cty. 22 October 2021).

[2] Cal. Bus. & Code Prof. §§ 17500, 17538; Cal. Civ. Code § 1770.

[3] Cal. Bus. & Code Prof. § 17538 (a) (1) – (4).


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