NEW YORK (Reuters) – A federal judge said Walmart Inc, Target Corp. and Bed Bath & Beyond Inc should face a lawsuit claiming to sell bedding that was mistakenly labeled "100% Egyptian Cotton" or " 100% Elastic Egyptian Cotton "Despite being suspicious of their origin.
FILE PHOTO: A Bed, Bath & Beyond Store is pictured in San Marcos, California on September 24, 2014. REUTERS / Mike Blake / File Photo
Monday's decision by US District Judge Vincent Briccetti in White Plains, New York , claims that consumers nationwide overpaid for sticker cotton manufactured by an Indian textile company, Welspun India Ltd.
Egyptian cotton often has a premium price because of its prestige and because its long fibers provide a finer, lighter, softer and more durable fabric.
In a 39-page decision, Briccetti said consumers could pursue a breach of warranty and negligent misleading claims against retailers and a US unit of Welspun and fraud claims against the Welspun unit.
He rejected fraudulent claims against the retailers because there was no "strong initiation of fraudulent intent." New York and California consumers were allowed to sue the retailers under their respective state's consumer protection laws.
A lawyer for Welspun and Bed Bath & Beyond refused to comment. Walmart, Target and their respective lawyers did not respond promptly to requests for comments. Consumer lawyers did not respond promptly to similar requests.
According to the complaint, retailers sold Welspun's "Egyptian" cotton use to 2016, although Target and Bed Bath & Beyond had known for months, and Walmart had known as early as 2008 that the cotton was mislabeled.
The cotton was sold under Fieldcrest, Royal Velvet, Better Homes and Gardens, Canopy, Crowning Touch and Perfect Touch brands, legal documents.
Target separated his ties to Welspun in August 2016, and Walmart and Bed Bath & Beyond stopped selling that bedding later that year.
Disputes combined several lawsuits. It was handed over to Briccetti after the original judge, Richard Sullivan, was promoted to the Federal Court of Appeal in Manhattan.
The case is Welspun Litigation, U.S. Pat. District Court, Southern District of New York, No. 16-06792.
Reporting Jonathan Stempel in New York; Editing Bill Berkrot