The Arizona attorney general filed a consumer fraud lawsuit against two major retailers: Wal-Mart and AutoZone. They are charged with intentionally defrauding customers by posting inaccurate product prices, or not posting prices at all. The state’s consumer fraud act carries stiff penalties, $10 thousand per violation. Hundreds of violations were found by the State Department of Weights And Measures. The companies could face millions in fines.
Michael Grant:
Tonight on "Horizon," you may have heard about that consumer fraud lawsuit filed against Wal-Mart and AutoZone for failing to post accurate prices on products. Tonight we will talk with attorney general Terry Goddard about the suit. Plus, groundbreaking studies to develop new vaccines to protect the world's children from dangerous diseases are being conducted at ASU's Biodesign Institute. Those stories, next on "Horizon".
Michael Grant:
Good evening. Welcome to "horizon." I'm Michael Grant. First up, in the news can people being smuggled be charged with conspiracy to commit human smuggling under Arizona's unique "coyote" law? That is the question being examined today in Maricopa county superior court. The trial began Monday for a Mexican national accused of being a "coyote," or human smuggler, and two other men accused of conspiring with him to enter the state illegally from Mexico. The judge ruled earlier that while there is evidence that human smuggling was committed, no evidence has been shown on whether a conspiracy violation had occurred.
Michael Grant:
Mosquitoes carrying the West Nile Virus have been found in La Paz County. The two mosquito samples that tested positive were collected on June 27th by health officials. 20 deaths in Arizona have been attributed to West Nile Virus. The Arizona Department of Public Health is encouraging people to take precautions against the disease, such as eliminating standing water and using insect repellant.
Michael Grant:
The U.S. Senate today approved a plan that would allow prescription medications to be imported from our neighboring nation to the north. The proposal would create a loophole on an FDA ban on importing prescription drugs into the United States from Canada. The plan is part of a nearly $32 billion homeland security department spending outline for the fiscal year that begins October first. The measure was approved 68-32.
Michael Grant:
The Arizona attorney general filed a consumer fraud lawsuit against two major retailers: Wal-Mart and AutoZone. They are charged with intentionally defrauding customers by posting inaccurate product prices, or not posting prices at all. The state's consumer fraud act carries stiff penalties, $10 thousand per violation. Hundreds of violations were found by the State Department of Weights And Measures. The companies could face millions in fines. In a moment, attorney General Terry Goddard joins us. First, here's a look at some of the violations.
Merry Lucero:
According to Arizona law, the State Department of Weights And Measures routinely checks store shelves to make sure retailers post product prices on the shelves and that those prices match the prices scanned on the item's bar codes. Weights and measures found repeated violations at Wal-Mart and AutoZone stores across the valley. Some examples: cases of motor oil and car wash products with no price posted. An advertisement for this auto maintenance manual says: great low price, but no price is listed. And nine price posting violations in this photo. Wal-Mart responded with the following statement: "Wal-Mart is committed to complying with the law in every state it does business including pricing accuracy and committed with working with the Attorney General to resolve this issue". Calls from AutoZone were not returned.
Michael Grant:
Joining us now to talk about this consumer fraud lawsuit and more about product pricing law Arizona attorney general Terry Goddard. Welcome back.
Terry Goddard:
Thank you very much.
Michael Grant:
There are a couple of different things going on here. Why don't we lay a little foundation. Under the pricing laws as it pertains to these consumer product suits, what are Arizona consumers entitled to at the shelf and for that matter, I guess at the cash register?
Terry Goddard:
Right, you're entitled to a correct price. You're entitled to have the same price at the shelf be the one that you are charged when you checkout. Something most people take for granted and often is not the case. And the second thing you are entitled to is to have the price clear in the vicinity of the product and on the shelf and lined up in a way you clearly see when you reach for the product. You saw in the film clip some of AutoZone shelves where the prices were noticeably absent. Under Arizona law each one of those is a violation, each failure to post and each scanned price ends up high or low is considered violations.
Michael Grant:
Were there changes in the laws awhile back?
Terry Goddard:
Yes, in 1984. They came to us and said we have bar codes and scanners. It's unnecessary and excessive to put as required before a product price tag on each package. That was a big change and in order to accommodate the retailers who requested it the legislature said well, now, you don't have to put it on every package, but you do have to put it in very obvious ways on the shelf where that product is displayed. And so there are other ways to determine, as been pointed out both before and after bringing this lawsuit, a customer can in most stores find a scanner, somewhere in the store if the product isn't priced. They can scan it and find out or ask a clerk to go find it. The law doesn't speak to that. The law is basically clear. Weights and measures is enforcing and you have to have a price on the shelf. That's how you do comparison shopping. If you have a shelf with no price and no price on the product, how do you tell if it's the lowest price or the one you want.
Michael Grant:
Let's move to the allegations themselves. Two different things are going on with Wal-Mart and AutoZone primarily. With Wal-Mart, it is more the failure to post.
Terry Goddard:
That's right. Year in and year out. Our complaint deals with the last five years. Actually these violations have gone on significantly longer than that. Their major failure--although they fail inspections in both areas--is failure to post.
Michael Grant:
In that case let's use a hypothetical. I'm looking at a shelf. I have a six brands of let's say, paper towels.
Terry Goddard:
You may have one price or two prices but you don't have a price for every different brand. That tends to be fairly consistent both from my personal experience and what the inspectors have reported.
Michael Grant:
Incidentally, you have a great story that you went to Wal-Mart on July 4th.
Terry Goddard:
Yes, I did.
Michael Grant:
This was not a setup, right?
Terry Goddard:
Not at all.
Terry Goddard:
My family went to the Wal-Mart. One of the items we bought was a cash register for my 7-year-old with a scanner. And there was no price posted. He has now become a diligent scanner and scans everything in the house. I thought it was interesting and ironic that it was a scanner I bought at Wal-Mart.
Michael Grant:
Any idea if it checked out accurately on the price?
Terry Goddard:
I have no way to tell. There was no price posted in the store. I had no way to find it.
Michael Grant:
One of the things that occurs with Wal-Mart, I have to have-- I'm guessing--here 10 billion items. That's high. They have a lot of items. Isn't that a daunting task? I mean --to return to my hypo --on one shelf. I mean there are dozens and dozens of those.
Terry Goddard:
I'm sure it is a task and it's clear in the law in Arizona. They should be committed to following the law in the state they are working in. They have 82 stores in Arizona. They have 70 I believe of the superstores and those probably are the ones most likely to be in violation because they do have huge numbers of product. But other stores that have many, many products are among the best behavior. These are random samples across the retail spectrum. Nobody singled out Wal-Mart or AutoZone. The Department of Weights and Measures has 18 inspectors they send out on a random basis to make sure pricing laws are being followed. Wal-Mart and AutoZone failed over half of the inspections that were conducted in their bailiwick over the past five years. That over--let me think--over 500 inspections in both cases. Not a single shot. This is not just one thing that was wrong and quickly corrected. It's noted one store. We found it throughout both of these respective chains.
Michael Grant:
Over the years what has Wal-Mart said to Department of Weights and Measures in relation to, you know, here's why this is happening? Here's our excuse?
Terry Goddard:
Best of my knowledge they haven't offered an excuse. They have paid the fines. $450,000 in fines and AutoZone similarly have paid $470,000 of fines and accepted without appeal the judgment of Department of Weights and Measures. What they appear to do in my conclusion is paying the fines is an acceptable cost of doing business in Arizona. If they get caught, they don't offer excuses and say okay and pay the money and do exactly what they were doing before.
Michael Grant:
Let's shift to the fact set on AutoZone. It's a different fact set, is it not?
Terry Goddard:
The Department of Weights and Measures doesn't make a distinction between failure to post one type of violation and posting wrong. You're right. There's a slightly different error rate in AutoZone. They tend to have more of the wrong posting--the wrong price. When you see the price on the shelf and go to the checkout, almost invariably it will be--I'll take it back. If there's an error, it will be a price posting error not a failure to put the item on the shelf. Wal-Mart is far more on the failure to post. AutoZone far more on the posting wrong.
Michael Grant:
Was AutoZone the one with the statistic I read in the newspaper on one of inspections was 50/50?
Terry Goddard:
Actually Wal-Mart. One of the things they said in response to our complaints was well, sure, we've had mistakes. We've had bad inspections. But the consumer is just as likely to have a mistake in their favor as a mistake in the store's favor.
Michael Grant: Okay.
Terry Goddard:
And my problem is that both mistakes are basically not respecting the consumer's right to have an accurate price and buying at a retail store should not be a game of chance. It's not something you say maybe I'll win this time. Maybe I'll get something that's mispriced in my favor. That makes a travesty of the whole idea we have fair and accurate prices in the store. You know, Terry, we brought this up in the piece that preceded us talking. We have a picture. I want to turn this into a game show here. There are nine price posting violations in this picture. Can you--
Terry Goddard:
Let me look at it.
Michael Grant:
Can you point them out?
Terry Goddard:
There were prices on the far left-hand side. I have looked at this picture a number of times which relates to only one of the products on the shelf. If you count, there are total of nine different brands of cleaner which have no price at all. Under our complaint, that would be nine separate violations of price posting. Because this has been so repeated by both of these chains of stores, we allege this is in fact a fraud that they have not tried to fix it. They know that it's wrong. As a result, this should be nine violations of the consumer fraud act. That's what we're going to court to attempt to prove.
Michael Grant:
Is there a pattern with AutoZone? Were the prices consistently higher than lower?
Terry Goddard:
Yes, the misprices at AutoZone were consistently higher. The misprices at Wal-Mart tended to be about 50/50.
Michael Grant:
As we discussed. The other thing I found interesting in the allegations of the complaint were the fact that most of these were revisits.
Michael Grant:
Oh, yes.
Michael Grant:
They were not surprises to either one of the retailers?
Michael Grant:
The Department of Weights and Measures I'm very, very impressed with what they do. They are not there on a gotcha basis. They are there by law to apply consumer complaints. People call up and they put it on list to be inspected. Half of the inspections are based on random analyst so they get to everybody eventually. If a store fails, in 90 days they will be back for a reinspection. One of surprising things with Wal-Mart and AutoZone is they failed over 50% of reinspections. Now we're thinking you're on warning. The first one was a surprise. The second one you knew exactly that the inspector was coming back and you knew exactly what the inspector was looking for. To fail that as well, seems to me that underscores the theory this is an acceptable cost of business. They will not make a change in policy or add extra employees to make sure the prices are right. They will just pay the fine.
Michael Grant:
Now, this is an action in consumer fraud. It's not for violation--
Terry Goddard:
That's right. The violations of pricing law are the evidence that fraud is being committed. The reason we come to the conclusion it is consumer fraud is it is consistent. It's year in and year out no improvement. 200 notices of violations have been sent out and $450,000 in case of AutoZone, 170,000 and Wal-Mart--excuse me--in AutoZone 170. This isn't something that escaped their attention and got lost at a lower level of the company. They never knew they had a problem. They knew perfect--perfectly well they knew they had had a problem. We did everything we could do make sure they knew what was wrong and had a chance to fix it. Other companies have been on low list and got it right, got it fixed. These are repeat offenders. Therefore, I think it's a conspiracy. It violates the state rights of Arizona. I'm pleased with what you had at the beginning. They want to work with us. It's our objective just to get it right.
Michael Grant:
Arizona Attorney General Terry Goddard, thank you very much.
Terry Goddard:
Thank you.
Michael Grant:
The development of new vaccines takes an enormous commitment of time, resources and talent. Researchers at Arizona State University's Biodesign Institute are conducting studies on vaccines that could deal with dangerous microorganisms, such as those that cause pneumonia, tuberculosis and salmonella. These efforts to create new vaccines could bring about better ways to protect people in developing countries and all around the world from dangerous diseases.
Announcer:
Each year tens of millions die worldwide as a result of infections caused by bacteria or viruses. Especially vulnerable are developing countries with limited public health resources. At the Biodesign institute at ASU research is underway to make vaccinations for infectious disease such as pneumonia more economical expense.
Roy Curtiss III:
It's a dreaded disease and affects the elderly and very young. The difficulty is there are 100 or so different types of streptococcus and streptococcus pneumonia is the name of bacteria that causes bacterial know. The only vaccines that are effective are injectable and work in team people 2 years of age and don't work so well in infants. Since infants are really at risk and so many die every year especially in the developing word there's real desire for an inexpensive vaccine it could be orally or in the first months of life.
Announcer: He first became acquainted with bacterial and disease and immunology working in New York City. Since then his work as microbiologist that is turned this pathogen into a potential allies.
Roy Curtiss III:
About 25 years ago I got the idea that we could genetically modify salmonellae. We could fix it so that instead of being a pathogen that causes diarrhea or typhoid fever and we could turn it into a friend and engineer it to do response in lifelong immunity against salmonellae and we could use the modified salmonellae to modify other pathogens. They have been searching research and deliver an immunological 1-2 punch. A critical break through was made.
Roy Curtiss III:
We worked off and on over 20 years. Three years ago we had a major success which we published and this led us to the belief that we could use our friendly salmonellae genetically modified to use as a vaccine hopefully for newborn kids against all the different types of strains of bacteria that cause pneumonia. That's our hope.
Announcer:
The ultimate success of Curtis' approach rests on research. He has compiled 15 researchers to meet disease around the world. Such a large effort requires large-scale funding.
Recently the project was awarded 14.8,000,000 from the Grand Challenges Global Health initiative which is found by the Bill and Melinda Gates Foundation.
Roy Curtiss III:
If I were getting funding from federal grant agencies, I put together such an awesome team, so this just enables a collective effort that could never have been done otherwise. And then the generosity of the level of funding to make sure that down the line it will be deliverable and hopefully a vaccine that can be administered to many throughout the world.
Announcer:
Curtiss, is co-director of the center for infectious diseases and vaccinology at the Biodesign Institute. In his lab at ASU researchers are busy on a number of fronts. It is not unlike an extended family with Curtis very much the patriarch taking a keen interest in everyone's activities. Including those of fellow microbiologist and wife, Josephine Clark Curtis who is working on another dangerous and well-known microorganism.
Josephine Clark-Curtiss:
My research group is basically doing two different things. So one of them is more of the nature of trying to understand a lot of the basic biology of the bacterium that causes tuberculosis. And so the second area of research that we're doing is taking advantage of Roy's salmonella vaccine delivery system and so we use the salmonella that have been genetically engineered sort of as a factory to produce the micro bacterial antigens. And individuals who have been vaccinated that way they come into contact with the tuberculosis then, rather than getting the disease, they will be able to mount an immuno response.
Announcer:
Like pneumonia tuberculosis remains a major health problem worldwide. Claiming the lives of some 2,000,000 people every year.
Roy Curtiss III:
We think collectively we can tap into a tremendous recourse of knowledge and experience and couple that with our own talents and design a vaccine strain. [inaudible] so it seems safe that we deliver it to the body by oral consumption and then during the next week or two induce an immunity that hopefully would be lifelong.
Josephine Clark-Curtiss:
For a long time he's had the desire to develop vaccines to really help prevent the variety of different infectious diseases with the understanding that it would be really helpful to many people in developing countries that don't have access to a lot of good medical care and in societies that don't have the ability to pay for a lot of antibiotics.
Announcer:
But the benefits of Curtiss's vaccine research are not limited to developing countries and could potentially benefit many Americans as well. Every year pneumonia is responsible for more than 60,000 US deaths. The bacterium that causes this disease can produce middle ear infections in children, which result in some 30,000,000-doctor visits. It is high stakes research with the help of so many on the line. And for Curtiss who has dedicated his career to the hunt for microbes, the work is far from over.
George Poste:
I think Curtiss is one of the foremost researchers of infectious diseases in the world. It's not a surprise that he's attracted some of the best and brightest students in the nation to work with him because he has a passion and that's what doing science is about. You have to have a passion for dealing with the unknown. And you have to have a passion to make sure that your science is translated to a laudable endpoint so the work professor Curtiss is doing is absolutely vital in driving innovation for new vaccines to meet diseases around the world.
Roy Curtiss III:
Being involved in this family of scientists endeavoring to attack many problems and that's going to be exciting. Not all experiments work and you learn by your mistakes and you get better and better. Someone comes up with something ingenious. The breakthrough that solves the problem of five years before nobody had a clue as for what to solve. So that's the neat thing about science. There's always discovery.
Nadine Arroyo:
The 2006 aims test results are released superintendent of education Tom Horne will talk about the results. A local film maker releases a film exposing the issue of immigration through the eyes of those who live with it every day on the border. And the Morison institute conducts a study about people's attitudes of science and technology. Join us Wednesday at 7 on Horizon.
Michael Grant:
For transcripts of "Horizon" and to find out more upcoming topics, please visit our web site at azpbs.org.
Michael Grant:
And next directly following "Horizon," stay tuned for "Arizona Stories". Among tonight's stories the Biltmore, Arizona's most famous hotel, and Ira Hayes, who helped win a war but could not find peace. "Arizona Stories" of our unique people, places and history, airs every Tuesday at 7:30 p.m.
Michael Grant
Thank you very much for joining us on this Tuesday evening. I'm Michael Grant. Have a great one. Good night.
Terry Goddard:Arizona attorney general;
