Value Village files federal lawsuit against Washington AG Bob Ferguson

The parent company of Value Village has filed a federal lawsuit against Washington Attorney General Bob Ferguson regarding whether the thrift store should be required to tell customers how much of its sales actually go to charities. Associated Press reporter Gene Johnson discussed the case with KUOW's Kim Malcolm.

Gene, before we get into the details of this lawsuit, tell me how Value Village actually operates.

Well, the business model is that Value Village is a for-profit company, and it has partnerships with these charities that collect goods that are donated from people. It also collects goods at many of the stores. It pays the charities kind of a bulk rate for a lot of these donations: 40 cents a pound, or something, for clothing. Then, when you buy the item, the sale price actually just goes right to the company.

The attorney general's office has been investigating Value Village's parent company, TVI, for a few years now. Why?

The attorney general's office has not publicly commented about this investigation, but it seems like the office is just concerned about making sure that people know when they donate goods that they know where their donations are going. That they know who is benefiting.

So, just to be clear, are companies like Value Village and its parent company required to disclose how much they give to charity?

In Washington state, Value Village does file with the Secretary of State's Office certain information about their contractual relationships with the [charities]. Part of the issue here is that the company says it's not obligated to post signs to this effect at donation sites or in their stores. They do post some information: there are signs in the stores that advise, essentially, that it's a for-profit enterprise. And, when people go and drop off goods, there are signs advertising what charity they're benefiting by doing that.

This week the parent company of Value Village sued the state attorney general. Why?

The company says it's been trying to resolve these issues, but it's reached an impasse, and it's suing to try to head off any lawsuit being filed by the attorney general's office against them.

[TVI] says that prior Supreme Court rulings make clear that forcing them to post some of these signs in their stores would constitute compelled speech under the First Amendment. They say they're not required to do it, but they are afraid that the attorney general's office is going to try to make them do it through a lawsuit.

They say that the attorney general's office is also seeking $3.2 million, has demanded that much, which they’re refusing to pay. They want the court to make clear that they don't have to do this.

So this appears to be a bit of a role reversal for Attorney General Bob Ferguson here in Washington. He's usually the one filing the lawsuits.How has he responded?

He says that the lawsuit filed by Value Village was riddled with omissions and inaccuracies. He says that obviously people are never happy to be targeted by his office, but that he wants to make sure that [the public is] not confused or defrauded by the practices of companies.

Full disclosure: TVI is represented by the law firm Davis Wright Tremaine, which also represents and underwrites KUOW.

This interview has been lightly edited for clarity.