FLEMING SUIT ENDS WITH $16 MILLION SETTLEMENT

DALLAS -- Fleming here said last week it has agreed to pay $16 million in an out-of-court settlement of a class-action lawsuit filed by customers who said they had been overcharged by the wholesaler over an 11-year period ending in 1995.The lawsuit -- originally filed in U.S. District Court in Utah in 1998 by two customers in Utah and Idaho -- was subsequently consolidated with several similar suits

DALLAS -- Fleming here said last week it has agreed to pay $16 million in an out-of-court settlement of a class-action lawsuit filed by customers who said they had been overcharged by the wholesaler over an 11-year period ending in 1995.

The lawsuit -- originally filed in U.S. District Court in Utah in 1998 by two customers in Utah and Idaho -- was subsequently consolidated with several similar suits in U.S. District Court in Kansas City, Mo., that could ultimately swell the class to 240 current and former Fleming customers.

A final hearing on the preliminary settlement is scheduled for Sept. 10.

Still pending is a lawsuit against Fleming by 18 Missouri retailers, who are seeking an estimated $120 million against the distributor for alleged overcharges. That case is scheduled to be heard Aug. 13 in the same Kansas City courtroom.

Similar charges by other Missouri-based retailers who have arbitration agreements with Fleming are still pending.

A Fleming spokesman told SN last week, "The claims were related to contract disputes from the 1980s and early 1990s, and we vigorously deny those claims. But the settlement resolves the disputes without further expense or distractions and puts the matter behind us."

Part of the $16 million will be paid by Fleming's insurance carrier, he added, so it will not have a material financial impact on the company.

Orrin Harrison, one of the attorneys representing the retailers, said, "We're extremely grateful. This was a hard-fought settlement negotiation with a very favorable result, and representatives of the class told the court they felt the settlement was a good one."

The lawsuit that was settled last week was filed by Storehouse Markets, a five-store operator based in Provo, Utah, and Weiser IGA Supercenter, a single-store operator in Weiser, Idaho.

After the case had been given class-action status, it was combined with suits by other customers in Utah, Idaho, Nevada and Wyoming that may ultimately involve up to 240 current and former Fleming customers.

The suits claimed that Fleming had overcharged retailers between 1984 and 1995 and had withheld information from them about so-called inside margins -- payments from vendors to the wholesaler that actually reduced its cost of goods. The suit charged that Fleming never told the plaintiffs about the inside margins, although its supply agreements said it would sell products to customers at cost plus specified fees.

The suits also alleged that Fleming concealed information from customers by keeping at least two sets of books.

Lawsuits involving similar allegations were filed against Fleming by several customers over the last few years, including a 1993 suit by David's Supermarkets, Grandview, Texas, that Fleming settled by paying $19.9 million and a 1997 suit by Furr's Supermarkets, Albuquerque, N.M., which it settled by paying $800,000. It settled a similar 1997 dispute with Randall's Food Markets, Houston, through arbitration.

Fleming is in the process of acquiring Furr's; Randall's was acquired by Safeway in 1999.