Kmart Corp. agreed Monday to pay $13 million to settle a class-action lawsuit accusing the retailer of ignoring federal regulations that govern access for disabled customers.
The settlement, if it wins a judge's approval, would be the largest ever under terms of the Americans With Disabilities Act.
The agreement, which plaintiffs' lawyers said could affect hundreds of thousands of Kmart customers, would allot $12.1 million in damages to class members in California. The remainder would go to plaintiffs in six other states.
Kmart also agreed to spend as much as $70 million in the next eight years to bring stores around the country into compliance with federal standards for merchandise placement, counters, restrooms, fitting rooms and parking lots.
Amy Robertson, the lead plaintiffs' attorney, said her firm filed the suit after receiving complaints from around the country. She credited Kmart's new management for working quickly to come up with an agreement.
"Their attitude was very can-do," said Robertson, a partner at a small Denver-based firm that specializes in disability litigation. "We are very happy with the result."
Troy, Mich.-based Kmart, since last year a subsidiary of Sears Holdings Corp., admitted no wrongdoing. The retailer operates 1,400 stores nationwide, including 108 in California.
The company said it would pay $8 million in cash and $5 million in store gift cards. It promised to assist customers who use wheelchairs and electric scooters with additions such as communications devices that would allow them to call for help if they get stuck in aisles.
One class member, Uverda Harry, said she hoped the settlement would make shopping at Kmart less of an ordeal. Just last month, Harry said, a trip to her local Kmart in Oakland turned into a nightmare when her wheelchair became trapped between clothing racks and boxes. When she got to the checkout line, she couldn't fit through.
"I got stuck, I was banging into things, it was embarrassing," Harry said. "All I could do is see the things I wanted because I couldn't get to them."
Monetary damages would go largely to class members in California, where state law requires significantly more payout for violations of the federal law, Robertson said. Plaintiffs in Colorado, Hawaii, Massachusetts, New York, Oregon and Texas also will receive monetary damages for violations.
The suit, filed in 1999 in U.S. District Court in Denver, came to a standstill in early 2002 after Kmart filed for bankruptcy protection. The case resumed after the company emerged from Chapter 11 in May 2003 under the management of Chairman Edward Lampert, and the suit received class certification last year. The parties will seek approval of the settlement by Judge John L. Kane in late July.
"It sends a message to the retail industry that accessibility is a civil rights issue, and if you don't comply, you will be vulnerable," said Andrew Imparato, president of the American Assn. of People With Disabilities in Washington. Further, he said, he hoped that retailers recognized the value of the estimated $220 billion spent annually by Americans with disabilities.
Litigation arising from the Americans With Disabilities Act has rarely resulted in large settlements. One of the largest to date was the $2.8 million that the Macy's chain, a unit of Federated Department Stores Inc., paid in 2001 to settle accessibility claims.
The act, passed in 1990, sets detailed guidelines for making public places accessible to people with disabilities.
For Harry, the Oakland plaintiff, the agreement means looking forward to a day when she can hunt for bargains with ease.
"I just want to be able to go to Kmart and spend my money there like an able-bodied person," she said.