Sears Avoids Class Action Over Made-in-USA Claim
March 29, 2012 1 Comment
By JACK BOUBOUSHIAN
CHICAGO (CN) – A federal judge declined to certify a class against Sears which alleged the department store falsely advertised its Craftsman line of tools as “Made in the U.S.A.” to charge higher prices.
In multidistrict litigation, plaintiffs claim that the department store Sears, Roebuck & Company deceptively advertised its line of Craftsman tools as manufactured in the U.S., when in fact many of the tools are foreign-made.
Of the seven cases involved in the multi-district litigation, four were voluntarily dismissed, one was remanded to California state court, and one settled after the court declined to certify a class.
In the last remaining case pending before the Northern District of Illinois, Jeffrey Greenfield claimed that he bought a Craftsman ratcheting screwdriver from a Florida Sears store in 2004. He said he recalled in-store signage that stated: “Craftsman Quality, Guaranteed for life, Made in the USA, only $19.95.”
In fact, Greenfield alleged that, in 2000, 20 percent of Craftsman products were not made in the U.S., a percentage that rose to 70 percent by 2005. “Sears chose not to make it known that such a high percentage of its tools were not made in the U.S.A., despite the actual knowledge that its customers believed Craftsman products were made in the U.S.A., because such a disclosure would force Sears to reduce the profit margin on its Craftsman line of products,” Greenfield’s complaint stated.
Last week, U.S. District Judge John Grady denied Greenfield’s motion for class certification, finding that “each plaintiff in Greenfield’s putative class will have to show that the alleged ‘Made in the U.S.A.’ misrepresentation caused him or her damage, which would necessitate individualized proof.”
Referring to other cases in the multi-district litigation, Grady said that “the proposed Florida class suffers from the same problems we previously identified. It is overbroad because it contains a great many individuals who were not deceived and could not have been injured, and plaintiff has not shown that his claim is typical of those of the putative class.”
Grady stated that he refused class certification in a related case because the “plaintiffs’ proposed class definition was improper; it included many class members who were not deceived and therefore could not have suffered any damage.”
He continued: “Another reason for denying class certification was plaintiffs’ failure to demonstrate that their claims were sufficiently typical of the putative class. The evidence is that advertising for Craftsman tools varies greatly and is disseminated through a host of different media; plaintiffs themselves alleged that they saw or heard a number of different Craftsman advertisements. The putative class was exposed to a varied mix of representations, communicated through different channels and absorbed in different ways and to different degrees, and causation would also be different for each plaintiff; therefore, typicality was lacking.”
Greenfield relied on “Sears-commissioned marketing research in the years 2003-2005 showing that if it became known among Craftsman customers that Craftsman products were made overseas, nearly half of those customers ‘would expect to pay 10% to 25% less for such products,’ and 25 percent would not buy the products at all.”
However, Grady ruled that “the results of the marketing research – what some customers said they would expect to pay – are not relevant to Sears’s actual pricing practices. Plaintiff has no evidence (and Sears’s witnesses deny) that the buyers knew about or considered the research.”
Additionally, “it does not require much ‘experience regarding the calculation of damages in actions involving consumer fraud’ to conclude that plaintiff’s attempt to demonstrate a likely class-wide damages methodology is a wholesale failure,” the court said.