STAPLES SETTLES PRICING LAWSUIT

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STAPLES SETTLES PRICING LAWSUIT

 user 2006-01-24 at 9:58:00 am Views: 45
  • #13971

    Staples settles pricing lawsuit
    In novel pact, stores in Mass. will hand out $7.50 vouchers
    Staples
    Inc. yesterday signed a class-action settlement agreeing to resolve
    charges that it violated the state’s item-pricing regulation by giving
    a $7.50 voucher to as many as 76,800 Massachusetts shoppers.
    Under
    terms of the proposed settlement, the vouchers will be handed out to
    the first 1,200 shoppers who visit any of the chain’s 64 Massachusetts
    stores this year on a yet-to-be-selected Monday, identified in court
    papers as ”Consumer Day.”
    ”It’s a novel way to do it,” said Jim
    Copland, director of the Center for Legal Policy at the conservative
    Manhattan Institute in New York, which successfully pushed for federal
    restrictions on class-action lawsuits last year. ”It’s not a bad way
    to structure these things.”
    The proposed Staples settlement marks
    the first time consumers in Massachusetts have received direct
    compensation from an item-pricing class-action settlement. In previous
    cases involving such retailers as Home Depot, Wal-Mart, and Target,
    settlement money went to various groups or causes, some with tenuous
    consumer connections.
    Some Beacon Hill lawmakers have criticized the
    past settlements as frivolous and of no benefit to consumers. A bill
    surfaced last year as the Legislature was going out of session that
    would have prohibited item-pricing class-action claims, even those
    already in progress.
    Colman Herman, a Dorchester resident who is the
    lead plaintiff in the Staples case and worked on some of the other
    cases, said the voucher approach should address many of the lawmakers’
    concerns.
    ”This is the first item-pricing case where the money
    actually gets into the pockets of consumers,” said Herman, who plans to
    pick up a voucher but will receive no other compensation as part of the
    settlement.
    If all 1,200 vouchers are distributed at each store, the
    settlement would cost Staples $576,000, plus another $210,000 in fees
    paid to the attorneys who prosecuted the case.
    In the settlement
    agreement, Staples repeatedly denies any wrongdoing and says it has
    spent a total of $3.9 million since February 2000 complying with the
    state’s item-pricing regulations, which initially required retailers to
    put pricing stickers on all items in their stores but was modified in
    December 2003 to allow the use of aisle scanners.
    ”Staples asserts
    that few, if any, of the settlement class members were injured in fact
    by any alleged failure of Staples to comply with the item-pricing
    regulation,” the proposed settlement says. The retailer said it agreed
    to settle ”to avoid the further expense, inconvenience, and
    distraction of this litigation.”
    The date of Consumer Day won’t be
    selected until a judge gives final approval to the proposed settlement.
    The Staples vouchers must be redeemed at the store on the day they are
    handed out, but otherwise there are relatively few restrictions on
    their use.
    The vouchers will be handed out one for every customer 15
    or older. The vouchers can be used to buy anything except gift cards,
    postage stamps, or store services, and cannot be used for website
    purchases. There is no minimum purchase required, and the vouchers can
    be combined with coupon deals. No change will be returned for items
    purchased costing less than $7.50.
    Herman sued Home Depot in a
    small-claims court session in 1999 after failing to persuade Attorney
    General Thomas F. Reilly to enforce item pricing. His skirmishes with
    Home Depot mushroomed into a $3.8 million class-action settlement and
    spawned a series of lawsuits against several other retailers
    Herman
    now acknowledges the initial settlement approach, giving money to
    various nonprofit groups, was wrong, and says the Staples case could be
    a new template. Copland of the Manhattan Institute applauded the
    Staples approach for moving away from meaningless discount coupons, but
    said he thought it was ridiculous that an individual could sue a
    retailer for failing to comply with an obscure state law.
    ”To me, this is sort of a shakedown,” he said.
    How
    much Staples will eventually pay out depends on how many consumers show
    up on Consumer Day. Staples is required to pay a minimum of $252,000,
    according to the settlement. If redeemed vouchers total less than
    $252,000, the leftover balance will be paid to the National Consumer
    Law Center in Boston.
    Staples is required to publicize Consumer Day
    only with signage at its stores and notices placed in customer bags.
    Sam Perkins, an attorney at the Boston law firm of Brody, Hardoon,
    Perkins & Kesten, which handled the case, said the settlement
    prohibits the plaintiffs from running ads promoting Consumer Day, but
    he said he plans to notify groups that could benefit from it.
    For example, Perkins said, he could envision schools coordinating their students and parents to buy badly needed school supplies