![]() The lawsuit alleges that Shein stole the intellectual property of the designers and that the company uses a “byzantine shell game of a corporate structure” to avoid lawsuits. In a separate civil filing, three fashion designers claim that the Chinese retailer violated the Racketeer Influenced and Corrupt Organizations Act, better known as RICO. ![]() Is Temu legit? Cybersecurity expert warns it's not the bargain you want, coupon codes aside Why is Shein being sued by fashion designers? “Shein has attempted to maintain its monopoly by means of its anticompetitive scheme, desperate to avoid the robust competition Temu brought to the market.”Ī Shein spokesperson told Reuters that the lawsuit was, “without merit and we will vigorously defend ourselves.”Ī company spokesperson reiterated the statement when contacted by USA Today. between early 2020 and Temu’s entry in late 2022, Shein was and is a monopolist,” the lawsuit says. “Having controlled nearly the entire market in ultra-fast fashion in the U.S. The Temu lawsuit alleges that Shein used monopolistic powers to keep the rival out of the ultra-fast fashion marketplace, violating the Sherman Anti-Trust Act as well as other torts. Here's everything we know about the two cases. In regard to both lawsuits, Shein has claimed they are without merit and it is ready to defend itself. District Court of Massachusetts.Įarlier in July, three fashion designers filed a lawsuit in the District Court for the Central District of California alleging the online retailer engaged in copyright infringement and racketeering. The most recent comes as rival down-market retailer Temu filed an antitrust action in the U.S. Moreover, that experience can be a huge factor when the other side is assessing the value of the case for settlement.Fast fashion behemoth Shein is facing two federal civil lawsuits – both arriving within a week of each other. ![]() When selecting an attorney, RICO jury trial experience is critical because the strategy of litigating these cases is different from traditional business disputes. Criminal RICO carries a maximum penalty of 20 years and a fine that is the greater of $25,000 or three times the amount of pecuniary gain. The statute is also often used to prosecute commercial gambling cases, pain management (opioid) clinics (or pill mills), and public officials. The crimes that qualify as acts of racketeering activity are listed in OCGA 16-14-3.Īlthough RICO started as a tool to combat organized crime, today's prosecutors use RICO to prosecute employee embezzlement cases, Ponzi schemes, credit schemes, complex investment schemes, or a series of thefts that aggregate to over $100,000. To be prosecuted under Georgia RICO the underlying crimes must be acts of racketeering activity. Typically, the types of crimes that are prosecuted under the Georgia RICO Act are complex criminal schemes that involve thousands of transactions or multiple victims. Defending these matters can be difficult and the stakes are high because essentially the defendant is being accused of criminal conduct. Unfortunately, the RICO Act has been overused in litigation and often brought in simple breach of contract matters. They are able to recover treble (triple the plaintiff's damages) and often attorneys' fees. When bringing a RICO claim, the parties become private attorneys general. In civil litigation, RICO is a tool that businesses and individuals who have been victimized can use recover the damages. ![]() In contrast, the Georgia RICO Act can be used to prosecute individuals and schemes that have been active for only a short time. The two most important differences are that the federal RICO statute requires proof of continuity and an enterprise. ![]() The Georgia RICO Act (OCGA 16-14-4), however, has several differences and is much broader than its federal counterpart. When crafting the Georgia (RICO) Racketeer Influenced and Corrupt Organization Act, the legislature used the federal RICO statute as a model. Also, a RICO judgment is not dischargeable in most types of bankruptcy and can sometimes be collected against successor corporations. In civil litigation, the statute allows for the collection of treble (triple) damages and attorneys' fees. The Georgia Racketeer Influenced and Corrupt Organizations (RICO) Act, which was created to combat traditional organized crime, has been expanded to include multiple types of fraud, theft, and computer crimes that can be committed by individuals and corporations. ![]()
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