Wal-Mart Settles Consumer Class Action for $7 Million

Agrees to Improve Pricing of Individual Items

January 23, 2004
Like most of us, Colman Herman of Dorchester, Mass., gets annoyed when he can't find the price of an item on a store shelf. But unlike most of us, Herman has done something about it.

Herman has won multi-million dollar class action suits against Wal-Mart and Home Depot and has suits pending against other retail giants. He has not sought any money for himself and has not received any.

In the latest suit, Wal-Mart agreed to pay $7.35 million to settle Herman's suit charging the company with failing to comply with Massachusetts' tough item-pricing regulations.

Most of the money will be spent putting scanners in stores that will allow consumers to quickly learn the price of any item and print their own adhesive price tags. $1 million of the settlement will go to various charities and community services organizations in the Bay State.

Earlier, Home Depot agreed to pay $3.8 million in grants and to spend $20 million complying with the item-pricing regulations.

Herman's victories had humble beginnings. In 1999, he asked Home Depot's Quincy store to comply with the state regulation that requires retailers to mark the price on most items.

Home Depot ignored him. So Herman, a free lance writer with no legal background, asked Massachusetts Attorney General Thomas F. Reilly to assist him. Reilly did nothing. Herman then sued Home Depot in Small Claims Court and won $25.

Despite the Small Claims action, Home Depot still refused to bring its stores into compliance with the law. Herman then sued the chain in Quincy District Court. The case was eventually certified as a class action, affecting all stores in Massachusetts.

It was at this point that Attorney General Reilly finally swung into action. Stung by the cries of other retailers upset by the Home Depot verdict, Reilly softened the law to make life easier for the retailers.

Reilly's innovation? He amended the regulation to permit stores to install bar code scanners that let consumers print out their own adhesive price tags after scanning the item they are thinking of purchasing.

Herman had no comment on the most recent settlement. Neither he nor his attorney would identify the other chains still facing legal action.

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