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A U.S. District Court judge has certified a 30,000-member class in a sweatshop case against some of the nation’s largest clothing retailers. The ruling by Judge Alex Munson, of the U.S. District Court for the Northern Mariana Islands, also approved an $8.75 million preliminary settlement reached two years ago by about one-third of the defendants. Plaintiffs’ attorneys and human rights advocates hailed the decision as a significant victory for foreign sweatshop workers. The decision sends “a strong signal to factories and retailers alike that they better start complying with their legal obligations in dealing with wages and workplace conditions,” said Michael Rubin of San Francisco’s Altshuler, Berzon, Nussbaum, Rubin & Demain, who represented the plaintiffs. Filed under the Racketeer Influenced and Corrupt Organizations Act and the Alien Tort Claims Act, the suit alleges that 55 retailers and factories are active and knowing participants in a scheme to exploit thousands of foreign workers. “There’s a long way to go before they come close to proving what they have alleged,” said Keker & Van Nest’s John Keker, who is representing defendant The Gap Inc. “We firmly believe that as we get into it those allegations will not be provable and the case will go away.” A separate ruling in the case by Munson on Friday sustained most of the plaintiffs’ claims under the RICO Act, but dismissed the ATC Act claims with leave to amend. The news comes two weeks after the California Supreme Court ruled that Nike Inc. could be sued for false advertising in public relations statements it made denying that some of its overseas factories are sweatshops. Saipan, an island near Guam, is a U.S. commonwealth. Because the island is exempt from U.S. minimum wage and immigration laws, it has become a magnet for garment factories. According to Doe v. The Gap, CV-01-0031, numerous Saipan factories have hired foreign workers bound by so-called shadow contracts, which prohibit them from doing things like joining unions, criticizing their employers, getting pregnant and dating. “These violations of human rights have been occurring in the U.S.,” said Milberg Weiss Bershad Hynes & Lerach’s Albert Meyerhoff Jr. “That’s why we’re able to seek redress.” Milberg Weiss and Altshuler Berzon jointly sued 55 companies including The Gap, J.C. Penney Co. Inc. and Calvin Klein in 1999. Nineteen of the defendant retailers agreed to a settlement in which they would pay $8.75 million in damages as well as abide by a code of conduct and allow monitoring of their working conditions. But the remaining defendants maintained that the court could not approve a settlement in a class action until the judge had conducted a full class certification hearing. The new ruling means that the 30,000 Saipan workers will soon receive a notice informing them of their participation in the suit and of the preliminary settlement. According to Altshuler Berzon’s Rubin, about $2 million to $2.5 million of the settlement will go toward attorney fees. Keker said the defense was still reviewing its options, including asking the 9th U.S. Circuit Court of Appeals to review the class certification.

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