City wins $8.7 million from Office Depot in whistleblower suit

The City of Los Angeles will receive $8.7 million in a settlement against Office Depot resulting from a whistleblower lawsuit filed by a business manager  receiving money as a result of a legal action, the City Council on Friday accepted $8.7 million in a settlement against Office Depot triggered by a whistleblower,a business manager at Office Depot, saying that the company was overcharging the city and other governmental jurisdictions.

“At a time when the city is having financial troubles, it’s nice to bring in $8.7 million to the city,” City Attorney Mike Feuer said. “I hope we can use this as a way for the city to welcome more actions of this type.The case has been pending since he took office in July 2013. The money received by the city is part of an overall settlement of $80 million with the state of California.

The original contract between the various governmental jurisdictions guaranteed “most favored public entity” pricing on goods. Office Depot later negotiated separate contracts with other government organizations at lower prices, according to an analysis from the law firm of Akin Gump.

Office Depot also switched products to higher-priced items, failed to include manufacturer rebates and increased its list prices more than twice a year, the case asserted.

Cities may pass laws allowing individuals to file cases on their behalf based on verified allegations of fraud. New York City has just such a law, modeled after the federal False Claims Act (FCA) in which the whistleblowers can receive between 15-30% of what the city (or government) recovers.

Jeffrey Newman represents whistleblowers