STAPLES SETTLES PRICING LAWSUIT

[Anonymous]

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

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January 24, 2006 at 9:58 AM