Walgreens to Pay $1.6 Million in Massachusetts Class Action

June 28, 2004
In a settlement with the Massachusetts Attorney General, Walgreens has agreed to pay nearly $1.6 million to settle charges it violated the state's item-pricing regulation. Walgreens also has agreed to comply with the regulation in the future and appoint item-pricing coordinators at each of its Massachusetts stores, the Boston Globe reported.

Like two other recent consumer protection cases, the Walgreens case was "farmed out" to private sector attorneys who bore the risk and expense of prosecuting the drug store chain.

Massachusetts Attorney General Thomas F. Reilly also farmed out item-pricing cases aginst Home Depot and Wal-Mart to private law firms. The attorneys and their firms have received about $2.6 million in fees and expenses so far.

About $425,000 has gone to Reilly's office, meaning that the state -- rather than just saving money -- may actually turn a profit from the novel arrangement.

Since it would be impossible to identify the millions of consumers who were affected by the stores' failure to post individual prices, the retailers have agreed to give about $3.9 million to a group of charities, consumer organizations and other nonprofit groups, rather than making refunds to individual consumers.

The class action suits grew out of the efforts of Colman Herman of Dorchester, an individual consumer crusader who began suing retailers in Small Claims Court in 1999. The suits eventually grew into major class actions.

The growing wave of litigation created howls from retailers who clamored for Reilly to weaken the item-pricing regulation. Reilly finally made one concession -- he modified the regulation, allowing retailers to install scanners that consumers can use to generate pricing for individual items. In exchange for installing the scanners, the stores were excused from pasting a price tag on every single item.

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