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Office Depot to Pay $23M Settlement to Whistle-Blower's Estate.
Office Depot to pay $68.5 million settlement to whistle-blower's estate and California cities
By Shaun Bevan.A California judge has approved an Office Depot settlement that will pay $68.5 million to 1,000 California public agencies and the estate of whistle-blower David Sherwin.
Sherwin, a former Office Depot account manager who died of cancer in March, filed a lawsuit on behalf of more than 1,000 California state agencies in 2009, alleging that the office supplies retailer violated the California False Claims Act by overcharging public agencies for office and classroom supplies.
Sherwin claimed that the company systematically violated the terms of contracts by not offering the "best price" for pens, ink, furniture and other goods between 2001 and 2011.
Sherwin's estate received $23 million, and the city of Los Angeles was the largest recipient of the settlement at $11.7 million, according to a news release.
"I want to thank this excellent team whose collaboration resulted in this successful resolution," said Altomease R. Kennedy, an attorney at Washington, D.C.-based Sanford Heisler Kimpel LLP. "I always found David Sherwin's assertions compelling, and was confident this matter would ultimately come to a fair and just conclusion, as it now has. His suit called attention to and halted egregious corporate behaviors costing taxpayers millions of dollars. I am sorry David isn't here to witness this very positive outcome."
Boca Raton-based Office Depot (NYSE: ODP) told investors last year that the settlement would be around $80 million. The company has said that the settlement is not an admission of wrongdoing.
In 2010, Office Depot reached a $4.5 million settlement with Florida on overcharging allegations. The Sunshine State and California were not the only states that complained about overcharging. Office Depot has been cooperating with investigations by attorneys general in Texas, Arizona, Missouri and New York, as well.
Office Depot merged with rival OfficeMax in late 2013 and has plans to close hundreds of stores as a cost-saving measure.
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