Office Depot Settles Government Suit

A week after announcing that it would merge and cease mailing its domestic Viking Office Products catalog, Delray Beach, FL-based office products cataloger/retailer Office Depot said on Sept. 19 that it paid a $4.75 million to settle civil claims by the U.S. government.

The claims alleged that the company sold products to government agencies in violation of the federal False Claims Act. This act allows private parties to file actions on behalf of the government under certain circumstances and to share in the proceeds of any settlements.

Competitor Safina Office Products in January 2003 had filed a complaint that Office Depot was selling products under its GSA contract that were made in certain countries designated as non-Trade Agreement Act (TAA) countries, including China, Taiwan, and Thailand.

Office Depot did not admit any wrongdoing as part of the settlement and fully cooperated with the Justice Department’s investigation. According to a statement, the company decided to settle to avoid the cost and disruption to its business associated with what possibly could have been protracted litigation. The settlement agreement also resolves any claims that Safina might have against Office Depot.

Office Depot currently supplies office products to a number of federal agencies under a government-wide contract awarded by the U.S. General Services Administration (GSA). In May 2005, the Dept. of Justice reached a $9.8 million settlement with Office Max for similar allegations.

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