Lawyer loses lawsuit over Costco shrimp, plans to appeal

A few months ago, Marc Verzani, an attorney based in New York City, filed a lawsuit against Costco, alleging that the discount superstore was shorting its customers on its $9.99 shrimp trays. District Judge Judge Colleen McMahon rejected the lawsuit, stating that it was "simply ridiculous."

On one level, you have to feel bad for lawyers. Barely a year ago, there was tons of money floating around and a law degree was second only to an MBA as a license for snatching it up.

As massive companies inked gargantuan deals, battles over little details put millions of dollars into the pockets of the lawyers who were tasked with greasing the skids of commerce. For Verzani, a real estate and general business lawyer, it was a lucrative time, indeed.
Fast forward a year and things are a little tougher. While the failure of numerous companies has left the field ripe for lawsuits, the sad fact is that it's getting harder and harder to find someone who is able to sign the check on a juicy settlement. Of course, places that focus on offering bargains to struggling consumers are doing better than most. Places like Wal-Mart, Dollar General, Target ... and Costco.

As the old saying states, "idle hands are the devil's workshop." This goes double for idle minds, particularly when those minds rest between the ears of a New York lawyer. One day, after buying a one-pound "shrimp platter" from Costco, Verzani apparently got the feeling that the shrimp were somewhat lacking. Upon weighing the little crustaceans, he noticed that there were roughly 13 ounces of shrimp, not the 16 ounces that he feels he was guaranteed.

At this point, the few people who were obsessed enough to continue might look at the packaging, re-read the words "One pound shrimp tray," and assume that Costco's wording meant that the package -- including the cocktail sauce, lettuce, and lemon slices -- weighed one pound.

While some might feel that the title was slightly deceptive, the vast majority would probably accept that Costco was well within its rights to fill out the last few ounces with less expensive accoutrements, particularly given that they were, after all, serving a fully-prepared, nicely-plated, highly-perishable commodity. Given the amount of work that went into each tray, and the amount of shrimp that the store probably had to throw away, their profit margin on the dish was probably paper-thin.

However, for Verzani, intrepid defender of the law, such mealy-mouthed justifications were totally insufficient. No, he decided that this required his keen mind, sharp legal skills, and dogged determination.

Never mind that the overcharge -- if, indeed, there was an overcharge -- only amounted to $1.25 to $1.69 per tray. Never mind that Costco was, as previously mentioned, probably operating at a paper-thin profit margin. Never mind, in fact, that any remotely savvy consumer is aware that preparation-heavy foods always cost a lot more. Verzani was on the job, and he was going to get his pound of flesh. Or shrimp, as the case may be.

Verzani hired fellow lawyer William Weinstein, and the two embarked on an epic adventure to discover just how much shrimp is in a Costco shrimp tray. After conducting a coast-to-coast investigation, they found that all Costcos put roughly 13 ounces of shrimp into their one-pound shrimp trays.

Calculating out that Costco's 410 stores sell between 500 and 1,000 shrimp platters per week, Verzani decided that the company was cheating its shrimp-munching customers out of between $13 million and $40 million per year.

Their mouths watering at a truly gargantuan payday, Verzani and Weinstein sued Costco for compensatory damages, disgorgement, and restitution. They also sought an injunction that would keep Costco from selling the platters until they are relabeled.

Although the two filed their lawsuit in March, it was finally settled at the end of June, when Judge McMahon rejected it, noting that "a reasonable consumer would understand that purchasing a ready-to-serve, prepackaged convenience item is different from purchasing shrimp at a fish counter, cocktail sauce in a jar, and a lemon at the produce department."

Verzani and Weinstein have decided to appeal, adding untold thousands to Costco's tab. As those charges work their way down into the price of the store's tomatoes, carrots, and shrimp, it's easy to imagine how pleased most consumers will be to have a staunch defender like Verzani on their side.

With this case once again wending its way through the courts, perhaps it is time to reconsider punishment for frivolous lawsuits.

Personally, I propose the stocks: there's nothing like being pelted with food in a public setting to inspire some serious behavior adjustment. Who knows, Verzani and Weinstein might even get their last few ounces of shrimp.,feedConfig,entry&id=363289&pid=363288&uts=1250015482
Stores Closing Their Doors
Just as Costco faces financial troubles, they get slapped with a lawsuit! Browse through this gallery to find out which stores are closing their doors.
Paul Sakuma, AP
Paul Sakuma, AP
Read Full Story

From Our Partners