A California judge approved a $68.5 million settlement yesterday to resolve allegations that Office Depot violated the California False Claims Act (CFCA) by overcharging California public entities for office and classroom supplies. More than 1000 cities, counties, school districts and other government entities in California will share in the settlement. The settlement agreement provides the precise allocation among those entities based on the amount of supplies that they purchased from Office Depot. The City of Los Angeles will receive the largest share—$11.6 million.
Former Office Depot employee David Sherwin filed the lawsuit under seal on behalf of the State of California in 2009. Nearly 20 local government entities intervened in 2012. The complaints in intervention alleged that Office Depot overcharged the public entities using five different practices. For a detailed discussion of the complaints in intervention and those alleged practices, see our earlier post.
Sherwin died last year, but his estate will receive his share of the settlement proceeds. The CFCA provides that the relator may receive between 15 percent and 33 percent of the amount recovered when an entity intervenes in the case, and between 25 percent to 50 percent when an entity does not intervene. Each entity will pay Sherwin’s estate from its share of the recovery. Sherwin’s counsel will receive $9 million in attorney’s fees pursuant to the settlement agreement.
Notably, in May 2014, Office Depot settled similar claims brought by the New York AG for $475,000.
