CALIF.COURT REINSTATES STAPLES LAWSUIT

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CALIF.COURT REINSTATES STAPLES LAWSUIT

 user 2006-01-23 at 9:46:00 am Views: 87
  • #13414

    California court reinstates Staples lawsuit
     Jan 2006 NEW YORK  – A California appeals court has reinstated a lawsuit claiming that Staples Inc.overcharged customers when shipping products, saying the company effectively sold insurance without a license.
    The state’s Second District Court of Appeals said on Wednesday that the trial court erred when it found that Staples, the largest U.S. office supply retailer, was exempt from insurance licensing rules.
    Staples, according to court papers, doubled the insurance costs on some items and pocketed the increase as a commission.
    While the charge was not unreasonable, it was “without question, insurance,” the court said. “The fact it is offered only as an incidental aspect of a transaction focused on shipping packages does not exempt Staples from insurance licensing requirements.”
    The plaintiff, Staples customer Alan Wayne, had sued on behalf of California residents and was seeking class-action status. He accused Staples of violating the state’s insurance rules and unfair business practices law.
    “We are seeking restitution of all the money that was unfairly collected by Staples from all the people who shipped packages in California,” Wayne’s lawyer, Henry Rossbacher, said.
    Staples covered shipping insurance for items up to $100, and charged customers 70 cents per additional $100 of declared value.
    Package delivery company United Parcel Service Inc. , however, charged Staples half of that amount for the excess coverage. Staples did not inform customers of the markup, the court said.
    Staples argued it had a right to make a profit, and that customers had the option not to buy the extra coverage.
    “Staples no longer charges these shipping damage fees and hasn’t done so since May 2002,” said Owen Davis, Staples’ spokesman. “The issue is solely about whether Staples must be registered to sell the shipping damage coverage as regulated by the state insurance code.