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Kmart settles dispute with New Jersey

A business can face a lawsuit from any variety of sources. One source people may not consider commercial litigation to come from is the New Jersey state government. However, on occasion, New Jersey will sue a business for violation of some commercial practice or law.

Recently, issue between the state of New Jersey and retail-giant Kmart has settled. Kmart was investigated by the Division of Consumer Affairs — a state agency. During this investigation, investigators claim that they found expired baby formula for sale in 19 Kmart stores. These stores were in 13 different New Jersey counties. In all, investigators say they found 257 containers of expired baby formula on the shelves that were at least nine months past their expiration date. In some cases, the formula was as much as 29 months past its usable life. According to investigators, they were even permitted to purchase this expired food.

As a result of the investigation, the Division of Consumer Affairs claimed that Kmart was violating consumer safety laws and litigation ensued. However, Kmart and the state have now come to a settlement. Under the terms of the deal, Kmart will pay civil penalties totaling $255,000. Furthermore, Kmart will donate $25,000 worth of baby food to local charities. Kmart will also be responsible for paying for random searches of its stores to ensure compliance with consumer safety regulations. In total, under the settlement Kmart owes $302,500.

Settlement is often a good option for any business involved in business litigation — even when the other party is not a governmental agency. Settling the dispute allows both sides to craft an agreement specific to their needs while reducing costs and the length of the litigation.

Source: South Jersey Times, “Kmart, state reach settlement over expired baby formula,” Jason Laday, Jan. 11, 2013

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