SEVERAL GROUPS TO RECEIVE GRANTS
The Boston Globe
Dorchester resident Colman Herman has reached a multimillion-dollar legal settlement in a class-action suit with Wal-Mart Corp. over the chain’s alleged failure to comply with the state’s item-pricing regulation.
The settlement agreement says Wal-Mart will spend $5.6 million over the next three years to bring its Massachusetts stores into compliance with the regulation, which was dramatically revised last year.
The Arkansas-based discount chain also agreed to pay $750,000 to attorneys who pursued the case on behalf of Herman and other Massachusetts consumers and $1 million in grants to several consumer and charitable groups and the office of Attorney General Thomas F. Reilly. Herman received no money, nor did any other individual consumer.
The agreement, recently approved by a Middlesex Superior Court judge, is the second item-pricing settlement Herman has reached with a major retailer. Home Depot settled similar allegations in late 2002 by agreeing to pay $3.8 million in grants and attorneys’ fees and to spend $20 million on item-pricing compliance.
Herman declined to comment yesterday, but the lead attorney on the case, Robert J. Bonsignore, praised Wal-Mart for signing the settlement and bringing its stores into compliance. He said similar lawsuits in Massachusetts are pending against other retailers, which he declined to identify. “What we are trying to do is get the companies to follow the law,” he said.
Wal-Mart admitted no wrongdoing and suggested that few consumers had actually been harmed by the lack of price stickers on products.
“The lawsuit brought attention to a law that needed to be changed,” said company spokeswoman Christi Gallagher. “We are happy that the lawsuit has been resolved.”
The settlements with Wal-Mart and Home Depot had humble beginnings. Herman, a freelance writer with a pharmacy degree and no legal background, asked Home Depot’s Quincy store in 1999 to comply with the regulation, which requires retailers to mark prices on most individual items.
When Home Depot ignored him, Herman asked Reilly to enforce the regulation. When Reilly did nothing, Herman took Home Depot to small claims session and won $25. When Home Depot still refused to adopt item-pricing, Herman sued the company successfully in Quincy District Court and eventually launched a class-action lawsuit against the Atlanta firm, involving all of its stores in
Massachusetts.
The legal victory in the Home Depot case and the ensuing outcry from retailers about the high costs associated with item-pricing prompted Reilly to intervene. Last summer, he revised the regulation, to allow retailers to stop marking prices on individual items if they install bar code scanners capable of printing out self-adhesive price stickers. In effect, the new regulation lets
consumers who want prices stamped on the products do the price stamping themselves.
The Wal-Mart settlement allows the retailer to reduce its $1 million in grant payments by $165,000 if it installs one more scanner in each store than is required under the new regulation.
The Wal-Mart grants include $225,000 for Reilly’s local consumer aid fund, $100,000 for the Give Kids the World charity, $100,000 for Bay Cove Human Services, $100,000 for Globe Santa, $100,000 for the Make A Wish Foundation, $75,000 for Consumer Credit Counseling Services of Southern New England, $100,000 for the Health Institute of New England Medical Center, $50,000 for the National Alliance for the Mentally Ill of Massachusetts, $100,000 for the Foundation for Taxpayer and Consumer Rights, $25,000 for the Civil Justice Foundation, and $25,000 for Consumer World, a website operated by Edgar Dworsky of Somerville.
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Bruce Mohl can be reached at [email protected]
