Prosecutors in Napa and Sonoma counties on Wednesday reached a settlement with global fast-fashion retailer Shein, just days after accusing the company of violating California law by failing to deliver online orders on time and keeping customers in the dark about delays.

The lawsuit, filed Monday in Napa County Superior Court, claims Shein repeatedly violated a state rule requiring online retailers to ship purchases within 30 days of payment. If they can’t meet that deadline, the law says companies must issue a refund, send a replacement item or notify the buyer in writing about the delay.

Shein did none of those things, the lawsuit alleges, even as it continued collecting payments and promising fast shipping. The complaint was filed by the district attorneys of Napa, Sonoma, San Francisco and Los Angeles counties on behalf of the People of the State of California.

The case targets three Delaware-based companies tied to Shein’s U.S. operations, accusing them of false advertising and unfair competition. The suit seeks $600,000 in civil penalties, to be split evenly among the four counties, and $100,000 in investigative cost reimbursement for the Napa County district attorney’s office, which led much of the casework. On Wednesday, a Napa Superior Court judge ordered Shein to pay those penalties as well as a permanent injunction barring Shein from making “untrue or misleading” claims about delivery timelines.

“California consumers deserve to have the products they pay for delivered in a timely manner and Shein repeatedly violated that trust by failing to offer refunds when they couldn’t deliver on time,” Napa County District Attorney Allison Haley said in a statement.

California law treats online transactions much like in-person retail sales, with built-in protections to prevent buyers from being strung along indefinitely. Prosecutors argue Shein’s failure to follow those rules not only harms customers but gives it an unfair advantage over businesses that do. Though this case focuses on a specific state regulation, it adds to a growing list of legal and regulatory challenges facing Shein — a Chinese-founded and Chinese-owned e-commerce company that has drawn scrutiny for its rapid rise and opaque operations.

U.S. lawmakers have previously raised concerns over the company’s labor conditions, environmental impact and alleged intellectual property theft. A group of indie artists sued Shein in U.S. federal court in 2023, alleging that the company violated the Racketeer Influenced and Corrupt Organizations Act, or RICO, by repeatedly selling exact copies of its designs.

A judge recently denied Shein’s motion to dismiss the RICO claims. In 2021, a U.S. House committee flagged Shein for potentially using forced labor, particularly sourcing cotton from China’s Xinjiang region. Shein’s shipments have also been accused of exploiting a tariff loophole, allowing duty-free imports under $800.

Shein, which sells ultra-cheap, trend-driven clothing almost exclusively online, operates no physical stores and markets aggressively to younger shoppers through platforms like TikTok and Instagram. Its business model emphasizes speed and volume, with thousands of new listings added daily.