THE WALL STREET JOURNAL / CALIFORNIA
MERCED -- When Rite Aid Corp. agreed on Friday to pay $1.4 million to
settle a consumer-protection lawsuit filed in Alameda County Superior
Court in Oakland, champagne corks may well have been popping in this
dusty agricultural center, 124 miles away.
That's because the lawyer who wrested the money from the giant
drugstore chain, whose headquarters are in Camp Hill, Pa., is the local
district attorney, Gordon Spencer. And for Mr. Spencer, whose
predecessors spent more time chasing cattle rustlers than chain stores,
the settlement is just the latest in a string of cases that have had an
impact across California. "I'm probably unsophisticated, but I won't ignore the facts," says
Mr. Spencer, 49 years old. Those "facts" have led him to take on
everyone from computer-monitor manufacturers to deadbeat parents,
winning renown -- and perhaps a bit of jealousy -- from prosecutors
statewide.
But Mr. Spencer's aggressive approach to consumer issues has also won
him enmity from some fellow Republicans -- including the 1998 GOP
nominee for state attorney general, David Stirling.
"Spencer was a Republican, but I felt like he had no practical
understanding of how you deal with the business community," says Mr.
Stirling, who served as chief deputy to former Attorney General Dan
Lungren. "If you go after them in this way, it becomes harder and harder
to do business in your county."
And Merced County, population 207,000, desperately needs business.
Known mainly for sprawling almond ranches and cheap motels on the road
to Yosemite, the county had a May unemployment rate of 12.9%, well above
the 4.9% statewide number. But macroeconomics was far from the district
attorney's mind when the Rite Aid case landed on his desk in January.
A Merced woman -- Mr. Spencer will only say she's a "longtime
resident" -- had sent her husband to buy baby formula at Rite Aid store
No. 6007, on G Street here. After noticing that the expiration dates on
some of the cans had passed, she called the District Attorney's Office
to complain.
Mr. Spencer dispatched investigator Lucrisia Boyenga to buy some
formula. Ms. Boyenga bought expired formula, complained to the store
manager, and was assured that the cans would be replaced shortly. But
after repeated complaints -- and repeated visits -- Ms. Boyenga
continued to find expired products on the shelf. Spot checks of other
Merced County Rite Aid outlets found the same.
Mr. Spencer asked his counterparts in other counties to check their
Rite Aid branches; altogether, investigators found about 200 expired
products -- including contraceptives, pregnancy tests and ibuprofen --
in about 50 of the approximately 640 Rite Aid stores in California. Some
of the condoms were four years past their expiration dates, Mr. Spencer
says.
Rite Aid officials denied -- and continue to deny -- that there was
any policy to sell outdated products; they maintained that isolated
management problems at individual stores were the cause of the mistakes.
The company promised to remove all the expired products by Feb. 22 --
but follow-up inspections continued to find them. Unwilling to accept
more promises from Rite Aid, Mr. Spencer -- joined by Alameda and Santa
Barbara counties and the city of San Diego -- filed suit last month.
"We told them, `This is really aggravated conduct, and we're going to
go after you,'" the prosecutor says. Rite Aid knew Mr. Spencer meant
business: In 1998, he was one of 10 California district attorneys who
extracted a $2.1 million settlement from the drugstore chain for
charging consumers more at the cashier than the posted price.
The expiration-date settlement came quickly. Rather than face a
"lengthy and expensive trial," Rite Aid said in a statement, the company
agreed to pay a $700,000 civil penalty, a $400,000 "restitution payment"
to a consumer-training trust fund, and $300,000 in costs and attorneys'
fees to Merced County and the other plaintiffs. The company also agreed
to post notices in its stores through October, offering to replace
outdated merchandise.
"We took all of the attorneys involved in this case very seriously
from day one," says a Rite Aid spokeswoman. "We have made this a top
priority."
Mr. Spencer, born in Pensacola, Fla., comes from a fighting
background. His father was a Navy pilot who flew in the Korean War, and
Mr. Spencer received a presidential appointment to the U.S. Naval
Academy in 1967. But his nearsightedness disqualified him from aviator
training, and a knee injury from high-school football kept him from
actually entering Annapolis. Enrolling instead at the University of
Washington in Seattle, he entered the Marines Reserve Officer Training
Corps.
"I was young and brash and would have gone to Vietnam," Mr. Spencer
says. But he says the knee injury didn't let him; in 1970, he was
discharged from ROTC. He says he then "stumbled into" law, attending the
night program of the University of the Pacific's McGeorge School of Law
in Sacramento.
Mr. Spencer emerged with job offers from district attorney's offices
in two counties: Merced and Monterey. He chose inland Merced, and its
sweltering summers, over the breezy, coastal town of Monterey. Merced
"is small," he acknowledges, "but I could live better on the same amount
of money." He moved up from prosecuting drunken drivers to chief deputy
district attorney; in 1990, the county Board of Supervisors appointed
Mr. Spencer to fill an unexpired term as Merced's top prosecutor. He has
since run unopposed for the $102,000-a-year job in three elections.
To be sure, Mr. Spencer has won plaudits for some of the familiar
work of a district attorney. In 1997, the Oakland-based advocacy group
Children Now ranked his office first in California for collecting
child-support payments from deadbeat parents. And Mr. Spencer claims to
be the first district attorney in the state to publicize the whereabouts
of convicted sex offenders who have served their prison time.
But it's as a consumer advocate that Mr. Spencer has gained the most
attention. The computer-monitor case started in 1994 with a complaint
from an Air Force airman who had bought a 15-inch computer monitor, took
a tape measure to it, and found only 13.2 inches of visible area. From
there, the case grew into a cooperative effort with Los Angeles, San
Diego and San Francisco counties. The local prosecutors concluded that
the industry, as a matter of course, defined the size of computer
screens in a way that misled consumers.
Mr. Spencer soon found himself meeting with "the big-company lawyers
in their Armani suits," he says. "They were so fancy, and they would
hand you business cards that said, `I've got an office in Bangkok and
Singapore and Tokyo.' They thought we were the rubes and the idiots
because we were from Merced."
Mr. Spencer responded with a jab; he had new business cards printed
for the next meeting, he says, listing "every four-corner stop in
Merced" as an "affiliated office." Among his 24 new branches: Red Top,
Snelling and Tuttle.
It was that case that brought Mr. Spencer into conflict with the
state Department of Justice, headed by then-Attorney General Lungren.
Mr. Stirling, the former chief deputy attorney general, says that his
department, which shares jurisdiction over consumer protection with
local district attorneys, wanted a quick settlement with manufacturers.
"We didn't want to go overboard and go after businesses on a
technical violation on which no one had been deceived," says Mr.
Stirling, now vice president of the Pacific Legal Foundation, a
conservative advocacy group in Sacramento. But Mr. Spencer wouldn't
bend, and Mr. Lungren's office found itself reluctantly signing on to a
$2.1 million settlement -- including $500,000 for Merced County schools
-- with 20 computer makers.
For many, the case highlighted Mr. Spencer's resolve. "It is a
testament to Gordon that he hung in there against Lungren, who was
clearly heir-apparent as governor," says Merced County Chief Deputy
District Attorney Larry Morse. "They say it's not ever personal with who
gets what from the Attorney General's Office or the governor but . . .
you never know." Says Mr. Spencer: "I got calls from fellow Republicans
saying I was committing {professional} suicide by doing this."
Indeed, says Mr. Stirling, "I didn't use the words, `bounty hunter,'
but that certainly was what was in my mind. What I thought I saw was a
use of {the district attorney's powers} as a means of generating
revenue" for Mr. Spencer's office. It was either that, Mr. Stirling
figures, or naivete. "The D.A. in Los Angeles and San Diego and Alameda
-- those offices are much more sophisticated consumer operations," he
says. "The Merced County D.A. gets so few cases that, all of a sudden,
they get this case that they try to blow up into something it really
isn't."
But at least some big-city prosecutors praise Mr. Spencer's work.
"You've got to give credit to Merced, because these cases are a big
investment," says San Francisco District Attorney Terence Hallinan. "How
many of us have the time to make sure everything checks? . . . He's an
aggressive litigator."
Mr. Spencer's zealous pursuit of commercial crooks has made him
something of a cult figure among the state's district attorneys. At the
annual California district attorneys conference, held in Long Beach last
weekend, David R. La Bahn, deputy executive director of the California
District Attorneys Association, left his hotel room at 10 p.m. to buy
formula for his infant daughter. The only place open: Rite Aid. He found
himself inspecting the expiration dates on formula cans.
And, to his surprise, Rite Aid had already posted a sign encouraging
customers to check expiration dates and offering a refund for outdated
products (the settlement requiring the notice did not take effect until
the next day.) Says Mr. La Bahn: "I almost took it back to the
conference and said, `Here's what Gordon did.'"
---
For the People
D.A. Takes On Big Firms,
Winning Raves and Jeers
By Ryan Tate
Staff Reporter of The Wall Street Journal
07/07/1999
The Wall Street Journal
CA1
(Copyright (c) 1999, Dow Jones & Company, Inc.)
Gordon Spencer
District Attorney -- Merced County
Age: 49
Residence: Merced
Education: B.A., political science, University of Washington,
Seattle, 1970; J.D., McGeorge School of Law, University of the
Pacific, Sacramento, 1975.
Career: Joined Merced County D.A.'s Office in 1976, prosecuting
mostly drunk driving cases. Appointed in 1990 to complete unexpired
term as district attorney; unopposed in three subsequent elections.
Career Highlights
1999: $1.4 million statewide settlement with Rite Aid Corp. after
expired contraceptives and baby formula were found.
1998: Joined with other district attorneys in reaching a $2.1 million
settlement with Rite Aid Corp. after consumers were charged higher
prices at the cashier than were posted on the shelf.
1997: Rated No. 1 California district attorney for child-support
collections by Oakland-based advocacy group Children Now.
1995: Obtains $2.1 million statewide settlement with 20 computer
manufacturers for misrepresenting the size of their monitor screens.
Copyright © 2000 Dow Jones & Company, Inc. All Rights Reserved.