Judge dismisses suit claiming Walmart extorted shoplifters

A federal judge has dismissed a racketeering lawsuit that claimed Walmart Inc. and six other retailers committed extortion by coercing accused shoplifters to take pricey “restorative justice” classes.

The three plaintiffs claimed part of the fees paid for the classes was returned to the retailers.

The lawsuit claimed the defendants violated federal anti-racketeering law. However, Judge Lucy Koh with the U.S. District Court in the Northern District of California wrote in an order filed late Friday that she found no proof of a nationwide conspiracy among the defendants to extort unlawful payments from the plaintiffs through a pattern of racketeering activity.

Accused of shoplifting in 2017 from Walmart stores in Florida, Georgia and Texas, the plaintiffs identified only as Jane Doe, Mary Moe and John Roe said they were told they would be turned over for prosecution if they did not admit guilt and agree to take the online class from Corrective Education Co. of Utah. The class costs $400 upfront, or $500 if paid in installments.

Koh granted a motion to dismiss the plaintiffs’ claims against Bloomingdales Inc., Burlington, Kroger Co., 99 Cents Only Stores LLC, The Save Mart Companies Inc. and Sportsman’s Warehouse Inc. The claims were disThe

missed with prejudice, meaning they cannot be brought again.

The judge also granted the motion to dismiss for lack of jurisdiction the claims against Walmart as well as Corrective Education’s founders and some of its employees and directors. However, these claims were dismissed without prejudice, and Koh gave the plaintiffs 30 days to amend their complaint

to specify which statute of the anti-racketeering law Walmart and the individual defendants allegedly violated.

If they fail to file an amended complaint, or file one that fails to correct the deficiency, the case against Walmart and the individuals will be dismissed with prejudice.

Walmart had no comment Monday on the rulings in the suit and referred a reporter to the court documents.

Randy Hargrove, a Walmart spokesman, said the Bentonville retailer suspended its

restorative justice program in December 2017, after an evaluation begun earlier that year. The Wall Street Journal reported at the time that the program was available in about 2,000 Walmart stores.

Supporters of the programs see them as a way to reduce the number of calls to police and to keep first-time offenders from going through the legal system. But in 2015, a California Superior Court judge ruled in a suit against Corrective Education that the program violated the state’s

extortion laws. Corrective Education was not named as a defendant in the lawsuit dismissed Friday.

Walmart has since shifted its focus to prevention. Hargrove said the retailer uses a variety of methods, from door greeters to technology, to try to deter shoplifting.

And ultimately, “Our store associates certainly continue to have the discretion to call police for prosecution of shoplifters,” Hargrove said.

The case is Doe et al v. Walmart Inc. et al.