Mill Valley Law Firm Files Lawsuit Accusing Home Depot of Shoplifter Shakedown

A Mill Valley law firm is accusing big box retailer Home Depot of shaking down customers accused of shoplifting at its stores, threatening to sue them if they don’t pay damages despite having no intention of suing and getting thousands of would-be shoplifters to collectively pay the company millions of dollars.

The lawsuit centers on California's Civil Shopping Law, which allows retailers to recover the cost of stolen items by bringing civil actions against shoplifters. But instead of doing that, the law firm Palmer, Reifler and Associates, representing Home Depot, avoided the trouble and expense of filing lawsuits by scaring people, regardless if they were guilty or innocent, into settling their claims.

“The idea is that what may be lawful in isolated and individual instances graduates to an unlawful scheme of sending out threats of lawsuits that you have no intention of filing,” Christian Schreiber, an attorney with downtown Mill Valley law firm Chavez & Gertler, told Patch.

In a class-action lawsuit filed Sept. 5 in Alameda County Superior Court, Chavez & Gertler alleges that its client, Castro Valley resident Jimin Chen, went to the Home Depot in San Leandro with a friend on June 6, buying $1,446 worth of lumber. In doing so, they each put on a pair of $3.99 work gloves to protect their hands, and placed the gloves atop the merchandise in their cart once they'd loaded the lumber on the cart. 

But the checkout clerk didn’t scan the gloves, according to the complaint, and Chen was stopped by a Home Depot security guard and detained. Chen and his friend were told they could only leave if they submitted personal identifying information and signed a document agreeing to stay out of the store for 90 days, according to the complaint. They complied, and police were not called to the alleged shoplifting incident.

According to the complaint, as the men left, they were given a one-page document titled "Notice of Intent to Exercise the Rights and Potential Remedies of Home Depot,” which warned them that "You may face both criminal charges and a civil claim related to this incident” and that "You will soon receive further information from the Home Depot's attorneys, regarding demand for the civil penalty."

Chen received a letter a few days later demanding that he pay $350 within the next 20 days or else risk being sued by Home Depot for theft of merchandise, the complaint alleges. The lawsuit claims that this "first demand letter" “has been and continues to be sent to hundreds, if not thousands, of individuals accused by Home Depot of shoplifting from its stores in California."

Chen did not respond, and received a second letter less than a month later saying he now had to pay $625 and if he chose to pay by credit card, a $14.50 "convenience fee" would apply.

Schreiber said the demand letters are specious, as neither Home Depot or Palmer, Reifler has brought a single lawsuit against an accused shoplifter in the past four years under California's anti-shoplifting law.

The lawsuit claims the practice of demanding damages nets the law firm, which Schreiber said provides the same service for other retail clients, millions of dollars. The firm remits about 75 percent of what it collects to clients, such as Home Depot, and keeps the rest, according to ABC News.

When Natt Reifler, one of Palmer, Reifler's principals, was deposed in 2007 for an unrelated lawsuit, he said the firm had collected “under $10 million a year” on behalf of its clients, ABC News reported. 

For more on the Home Depot lawsuit, read the complaint.