I think that lawsuit was on the east coast, perhaps New York. I think it was local to that state, b/c both Michael's and Aaron Bros are still pulling that overpriced-but-perpetually on sale b.s. here in CA.
Aaron Bros is owned by Michael's but the quality is significantly better at Aaron Bros, even for seemingly identical frames. For example, they both sell a style of frame called "Studio." A cursory look indicates that they're identical -- both are mat black, 5/8"deep, 1 5/8" wide, with the same 1/8" recess detail on the inside. But if you look carefully there are significant differences. The fit and finish on the Michael's frame is sloppy compared to Aaron Bros' version. The rabbet is much shallower on the Michael's frame. Aaron Bros uses points while Michael's uses some slot-and-tab system that pretty much forces you to use their crappy particleboard backing. And most importantly, the Aaron Bros frame is true-to-size, but the Michael's is not. I found this out the hard way when I bought my first and only Michael's frame, opened it up, and found that my artwork didn't fit because the opening was a quarter-inch smaller than stated in both directions.
I don't know why they would sell frames of such differing quality in their two different stores, but they do. I shop pretty regularly at Aaron Bros. I avoid Michael's like it's the plague.