Class Action Accuses Home Depot of Going Too Far

What do you do when you’re facing legal action from a major company over shoplifting charges? For many people, the answer might be to bite the bullet and pay up, especially in the face of legal action. For one man, the answer was to fight back with a lawsuit of his own.

Many retailers have begun to use the civil shoplifting law as a profit center.

Earlier this month, California resident Jimin Chen filed a class action lawsuit accusing Home Depot of using trumped-up shoplifting allegations to seek unfair damages from customers and using threats of legal action to profit from questionable claims. The move follows two letters Chen received from a law firm working for Home Depot seeking payment of $360 to settle shoplifting claims. After Chen ignored requests to pay, the amount was increased to $625. Chen claims that the shoplifting charges are false, and that the letters’ threats of legal action amount to little more than bullying tactics designed the make the company money. The class action, filed on September 5, alleges that the false threats of criminal prosecution are used to seek unjust damages.

The dispute began on June 6 when, Chen says, he and a friend bought lumber from a Home Depot in San Leandro, California. Putting on work gloves from the store to handle the wood, Chen claims that he added the gloves to the pile of lumber while checking out, but they were not scanned. As he went to leave, having paid $1445 for the materials, Chen was stopped by a security guard and accused of stealing the gloves. Chen says he was then taking to a private ‘stew room’ where he was questioned, handcuffed, suffered an asthma attack, and agreed to sign a document stating he would not return to the store for 90 days. On June 10, the suit says, he received the first of the letters from a law firm seeking damages. Although all 50 states have laws allowing retailers and businesses to seek damages for theft, Chen accuses Home Depot of using California law to intimidate customers and to seek ‘money to which Home Depot is not entitled.’ California's Civil Shoplifting Law allows a maximum of $500 payment for shoplifting charges. The work gloves were priced at $3.99 each.

In the suit, Chen also accuses the law firm in question of sending more than one million ‘demand’ letters per year and of acting as a ‘letter mill’ for Home Depot and other retailers. The firm is not listed as a defendant, however.

"Many retailers have begun to use the civil shoplifting law as a profit center," says Chen in the complaint. "They contract with third-party 'recovery services' and law firms to send out standard form letters demanding shoplifting 'damages' that they unilaterally determine and that are entirely arbitrary."

As such, Chen hopes to see the practice declared unlawful, unfair, and fraudulent, the complaint says, while also seeking restitution for California consumers who faced similar situations.