Now that Nasty Gal's Chapter 11 bankruptcy is well underway in court in the Central District of California, it seems an apt time to reflect on the fast fashion retailer’s legal history, as it would be naive to assume its legal woes did not, in some way, impact its downfall. Since getting its start as a vintage shop on eBay, Nasty Gal and its founder, Sophia Amoruso, have become the talk of the modern day e-commerce world, including a spot on Forbes’ “Richest Self-Made Women” List. But despite such consistently glowing press, getting to a place where Nasty Gal brings in over $300 million in revenue has not been without nasty litigation (and many threats to initiate litigation). Here is a summary …
HELLS ANGELS MOTORCYCLE CORPORATION v. NASTY GAL INC ET AL (September 2011): Notoriously protective of its intellectual property, the Hells Angels named Nasty Gal in a trademark infringement suit, alleging that the retailer “offered and sold products [bearing Hells Angels trademarks] to the public, identifying them as ‘Hells Angel Tee’ shirts” in an attempt to profit on the notoriety and appeal of the well-known motorcycle group.
Status: The parties settled the matter out of court in February 2012. The terms of the settlement are confidential, but likely included a financial component and an agreement that Nasty Gal will immediately and permanently cease selling any items that infringe the Hells Angels’ intellectual property rights.
JAMIE SPINELLO v. 80'S PURPLE INC ET AL (June 2014): Indie jewelry designer Jamie Spinello filed a $150,000+ copyright infringement suit against Nasty Gal for copying her designs. After Nasty Gal failed to cease stocking the jewelry designs in question, even after Spinello’s lawyer contacted Nasty Gal, Spinello slapped the retailer with a lawsuit in the U.S. District Court for the Central District of California alleging copyright infringement and vicarious and/or contributory copyright infringement.
Status: It seems the parties settled this one out of court before trial, as in July 2016, Spinello filed to voluntarily dismiss her suit against the company. The terms of the settlement are confidential, but likely included a financial component and an agreement that Nasty Gal will immediately and permanently cease selling any items that infringe Spinello’s intellectual property rights.
AIMEE CONCEPCION v. NASTY GAL (March 2015): In the first of a string of lawsuits, Nasty Gal was sued for allegedly “firing four pregnant women, as well as one man about to take paternity leave.” According to the lawsuit, which was filed in Los Angeles Superior Court by ex-employee Aimee Concepcion, Nasty Gal terminated her and three other pregnant employees in violation of California state law. In her suit, Concepcion alleges that Nasty Gal systematically and illegally terminates pregnant employees, thereby failing to “provide [4 months of state mandated] pregnancy leave and reinstatement [of employment after such leave].”
Status: It seems the parties settled this one out of court following arbitration (as arbitration was likely required by the Nasty Gal employees’ contracts), in March 2016. Concepcion filed to dismiss her suit against the company ahead of trial. The terms of the dismissal are confidential.
ETALIA GOLD v. NASTY GAL (March 2015): On the same day as Concepcion filed suit, Etalia Gold also filed a wrongful termination suit against Nasty Gal. Gold claims she was fired by Nasty Gal during a “surprise meeting” on her final day of work before starting maternity leave, despite her plan to return to work after giving birth to her child. According to Gold’s complaint, “Nasty Gal discriminates against and terminates pregnant employees so that it does not have to deal with what it perceives to be as the inconveniences of dealing with pregnant employees (including providing them with maternity leave).”
Status: The case was settled in accordance with a binding (and confidential) arbitration agreement in March 2016.
ANNE ME COELEN V. NASTY GAL (March 2015): Finally, on the same day as Concepcion and Gold initiated legal action against Nasty Gal, Coelen also filed suit, alleging that she was just a few days away from returning to work at Nasty Gal following maternity leave when the company fired her, despite her “stellar employment record and years of experience.” Coelen claimed in her complaint that “her employment with Nasty Gal was doomed from the minute she found out she was pregnant.” She further held: “Unfortunately for Plaintiff and a number of her co-workers, Nasty Gal has shown itself to be a horrible place to work where discrimination runs rampant against professional women who become pregnant.”
Status: It seems the parties settled this one out of court and also following arbitration, as in February 2016, Coelen filed to dismiss her suit against the company ahead of trial. The terms of the dismissal are confidential. (Note: Coelen is listed as one of Nasty Gal's creditors, confirming that she was, in fact, paid a monetary sum in connection with the parties' settlement).
FARAH SABERI V. NASTY GAL (April 2015): Former Nasty Gal employee Farah Saberi similarly filed suit against the brand for wrongful discharge. According to Saberi’s complaint, after receiving heart transplant surgery and returning to work (where she allegedly maintained a 40-hour per week schedule), she was demoted, had her salary cut, and eventually was fired as a result of the “elimination of [her] role.”
Moreover, Saberi, who worked as an accountant for Nasty Gal, alleged that despite being promised insurance for a period of time upon her termination, the company failed to keep her on its plan, resulting in Saberi’s inability to fill her medications for various ailments and her suffering of a seizure and “severe emotional distress.” She further claimed that due to the company’s failure to maintain her insurance, she had been “placed on hold for her position on a [kidney and pancreas] transplant list, where she remains while verifying her new insurance.”
Status: Again, the parties settled this one out of court and also following arbitration, in June 2016, as Saberi filed to dismiss her suit against the company. (Note: Saberi is listed as one of Nasty Gal's creditors, confirming that she was, in fact, paid a monetary sum in connection with the parties' settlement).
LOVE ET AL V. NASTY GAL (July 2016): Jewelry designer Pamela Love filed suit against Nasty Gal for copyright infringement. In Love’s lawsuit, which was filed in the Southern District of New York, a federal court in Manhattan, Love alleges that Nasty Gal copied and sold three of her copyright protected jewelry designs, including her Five Spike earring, Dagger Rosary, and Talon Cuff. All of the designs have recently disappeared from the Nasty Gal website, despite Nasty Gal agreeing to remove at least one of the items from its site in response to a cease and desist letter from Love’s counsel and then continuing to sell the lookalike jewelry for over a year and a half.
Status: This case is still pending in the Southern District of New York. (It is interesting to note that Pamela Love and Pamela Love Jewelry LLC are among Nasty Gal's list of creditors. Since Pamela Love is not a Nasty Gal supplier, the existence of these names on the list of individuals/companies owned money by Nasty Gal could suggest that the parties may have resolved this matter out of court, with Nasty Gal paying Pamela Love a monetary sum for copying her designs. However, counsel for Love stated that a settlement has not been reached).