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GOAA member's firm target of lawsuit

  Legal Business  -   POSTED: 2008/07/09 15:46

A class-action lawsuit filed June 26 in U.S. District Court in Miami accuses an Orlando law firm founded by a member of the Greater Orlando Aviation Authority of racketeering by sending threatening letters that demand money from alleged shoplifters.

According to the complaint, letters from Palmer Reifler & Associates PA say the recipients must pay large fines under state laws or face possible legal action or a "visit from a sheriff."

James Palmer, the senior partner and founder of the firm, was named to the airport board May 23 to a four-year term succeeding Robert Theisen.

The complaint alleges the law firm:

- Sent millions of threatening form letters intended to "harass, intimidate and coerce" people into paying large fines. The suit charges the firm with abusing laws passed in all 50 states as a way for retailers to recover massive losses from retail theft. Under the laws, retailers can seek civil damages and penalties from thieves.
However, a nationally published report contends retailers are supplying the names of those only suspected of shoplifting, even when there is no conviction or solid evidence to indicate guilt.

- Received tens of millions of dollars during the past 20 years at consumers' expense, plus a percentage from the retailers, ranging from 18 percent to 30 percent of the income generated from the letters.
The plaintiffs want to recover their money and stop the alleged harassment by mail and phone, via a jury trial expected later this summer.

It's not the first time Palmer Reifler & Associates have been sued over these types of letters, says Alison Harke, with Harke & Clasby LLP of Miami, one of two firms representing the plaintiffs. However, in previous attempts, the suit either was settled or dismissed. The current approach is to file the lawsuit in federal court under anti-racketeering laws.

Harke says the retailers -- 50 large clients that include Wal-Mart Stores Inc. and J.C. Penney -- may be sued later. Wal-Mart referred requests for comment to its legal department, but no response was received by press time. A spokeswoman at J.C. Penney says her company doesn't comment on pending litigation.

"This is a frivolous lawsuit," says Natt Reifler, a partner and attorney who oversees the recovery law activities of the Palmer firm. It seems to challenge the statutes themselves and the right to send "demand" letters, he says, adding that the process a way to resolve differences without resorting to the courts.

The recovery effort is a legitimate procedure under the law, which doesn't allow for the collection of debt, but for damages and civil penalties, says the lawyer.

Thanks to his firm's actions, retailers have recovered a substantial amount of money over the years, Reifler says. He declines to say how much, but adds that the actions "helps keep prices down," which is a boon for consumers.

"This is an economically viable way for retailers to recover their losses," agrees Daniel C. Johnson, a lawyer specializing in commercial law with the Carlton Fields law firm Orlando office, who is not involved in the case.

"I have not heard of anything I would call an abuse" of the particular laws, adds John Rogers, senior vice president and general counsel for the Florida Retail Federation. He notes that he lobbied on behalf of passage of the recovery laws in Florida.

The law benefits retailers not only by recouping money, but also by reducing the time employees must devote to pursuing cases against shoplifters and in monitoring stores, says Rogers.


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