Value Village sues Washington attorney general over demands

By Gene Johnson / Associated Press

SEATTLE — The company that operates 300 Value Village, Savers and other thrift stores in the U.S., Canada and Australia is suing Washington state Attorney General Bob Ferguson, saying his office has violated the company’s rights by demanding $3.2 million to settle a three-year investigation.

TVI Inc., of Bellevue, said in the lawsuit filed in federal court Monday that it’s trying to head off an anticipated complaint from the attorney general’s office.

The for-profit company, which is represented by the prominent Seattle law firm of Davis Wright Tremaine, said Ferguson’s demand for payment does not appear to be connected to any alleged legal violations.

TVI also said the attorney general’s office insisted that its disclose to customers how much of the sale price of items in its stores goes to charities, something the company said would violate its free-speech rights and is precluded by Supreme Court precedent.

Brionna Aho, a spokeswoman at the attorney general’s office, noted the company paid $1.8 million to six Minnesota charities and agreed to overhaul its donation and disclosure practices in a 2015 settlement with that state’s attorney general.

“Value Village’s lawsuit is riddled with omissions and inaccuracies. There’s a reason they agreed to pay $1.8 million as a result of the Minnesota Attorney General’s investigation,” Ferguson said in a statement Tuesday evening. “No target is ever happy to be investigated by our office. However, my office will continue vigorously protecting consumers from deception.”

Ferguson, a Democrat, has garnered national attention for challenging the Trump administration on several fronts, including the travel ban and ban on transgender people joining the military. But he has also made consumer issues a priority, suing to hold opioid makers accountable for the national addiction crisis and agrochemical giant Monsanto liable over pervasive pollution from PCBs.

TVI said it operates 20 stores in Washington state. It pays charities such as Northwest Center, which supports developmentally disabled people, and Big Brothers Big Sisters of Puget Sound to collect items — clothes, furniture, electronics, other household items — which it then sells for a profit at the stores. The money the charities make providing the goods is a key part of their revenue stream.

In its complaint, the company said the attorney general’s office launched its investigation three years ago. TVI answered all of the investigators’ questions, provided 15,000 pages of documents, and sought to meet with them to address any concerns, the company said.

Ferguson’s office refused to meet with the company for a year and a half, the complaint said. When the sides did confer in summer 2016, the attorney general’s office issued a set of demands — the vast majority of which the company said it already complied with. TVI refused demands that it post signs telling people who donate goods what it pays the charities for those goods, and what bulk rates it pays charities for donations.

The attorney general also sought a $5.1 million penalty, which the company declined to pay. After that, the lawsuit said, TVI heard nothing for 11 months — until a meeting last August, when the attorney general’s office “reduced its monetary demand to $3.2 million, but admitted this amount was ‘untethered’ to any actual, specific alleged violations of law.’”

Again, the company refused to pay, and further attempts to negotiate failed. In an effort to avoid being sued, the company said it brought the chief executives of Northwest Center and Big Brothers Big Sisters of Puget Sound to a hastily arranged meeting with the attorney general’s office on Dec. 8, but the office’s representatives made no promises that they would continue negotiating.

“The AGO’s imminent threat to prosecute suit against TVI is apparent, necessitating this action to protect the First Amendment rights of TVI and its charity partners,” the complaint said.

Sara Gaugl, a company spokeswoman, said in an emailed statement the company is confident the issue will be resolved soon.

“While those conversations are ongoing, we remain fully compliant with all relevant Washington state laws,” she said.