BOSTON (AP) — The Home Depot hardware store chain has agreed to pay an estimated $3.8 million to settle a class-action lawsuit that claimed its failure to stamp prices on individual store items hurt consumers.
The lead plaintiff in the suit, Colman Herman of Boston, began his efforts after the state attorney general’s office declined to enforce the state’s item pricing regulation, which requires retailers to stamp prices on every item, with some exceptions.
Neither Herman, 59, nor any individual consumer will receive any money under the settlement because the damages per person are so small and the cost of tracking down each person so great, The Boston Globe reported.
Up to half the money will go to cover expenses of attorneys involved in the suit, including the state attorney general’s office. The other half will go to various consumer groups and charities, including Habitat for Humanity, which will receive $1 million.
Home Depot spokesman John Simley said the settlement was “the best possible outcome under the circumstances.”
He declined to comment on Massachusetts’ item pricing law.
“The bottom line is it’s the law and whether it’s good or bad it is the law and we are bound to comply with it,” he said.
Herman declined comment, citing provisions in the settlement agreement that bar him from discussing it. The agreement received preliminary approval Monday in Suffolk Superior Court.
In July, Atlanta-based Home Depot was fined $500,000 for failure to comply with a similar law in Michigan.
Home Depot said it would have to spend $20 million over the next three years to comply with the Massachusetts law at its 31 state locations and two Expo Design Center, according to the agreement.
Jon Hurst, president of the Retail Association of Massachusetts, said the settlement could set a dangerous and costly precedent. He said several other retailers have already been targeted in class action suits and warned that millions of dollars in settlements and in stamping prices on items would eventually be passed down to consumers.
“This could have an impact right on down to the corner hardware store,” he said.
Attorney General Tom Reilly’s office declined comment, though a spokeswoman commended the plaintiffs for their efforts.
Herman, a freelance writer with a pharmacy degree, had asked the attorney general’s office to force a Quincy Home Depot to comply with the item pricing law in 1999. When the state took no action, he won a $25 judgment in small claims court against the store, but continued his legal fight after the store continued to refuse to stamp most items.
A district court judge ordered the Quincy store to comply with the regulation and levied a $13,625 fine last year. Reilly eventually re-examined the law after retailers complained Herman was acting as a “private attorney general.” He concluded the law was worth retaining, but did not begin any enforcement efforts and retailers continued to ignore it.
Last May, attorneys Robert Bonsignore and Robin Brewer filed the class-action suit against Home Depot, seeking $25 for each consumer affected by Home Depot’s refusal to stamp individual items.
AP-ES-11-19-02 0917EST