Sears accused of misleading public on Craftsman line
A lawsuit says the company wrongly claimed its tools were made in America. A California judge refuses to certify class-action status, but plaintiffs say they will appeal.
That issue is at the forefront of a claim that the company snookered consumers into believing that its famous Craftsman tools were made in the U.S. Sears has beaten back the lawsuit for now, but the battle appears to be far from over.
A California judge rejected an effort late last month to certify the suit as a class action. In his 42-page decision, Los Angeles County Superior Court Judge Anthony Mohr argued that there were "serious problems" with the case and that it would be a "nightmare" to manage because there are 40 million potential class members, according to the National Law Journal.
Sears, which registered the Craftsman trademark in 1921, cheered the decision. But Barbara Hart, the attorney representing the plaintiffs, said the ruling will be appealed. In an interview with MSN Money, Hart said that her clients will seek certification under a narrower class definition.
"We are pleased with the court's ruling but as the matter is still pending, we decline to comment further," Sears spokesman Larry Costello wrote in an email.
Costello declined to say how many Craftsman tools were made in the U.S. and Hart, who filed suit against the retailer in 2004, isn't sure either. After the suit was filed, Sears took Craftsman tools off the shelves and blacked out the words "Made in America," she said.
Sears will not share records about where its Craftsman tools are made, but Hart said the company utilizes more than 130 Chinese manufacturers for the Craftsman line.
Craftsman has been one of the few bright spots for Sears in recent years as the retailer has struggled to compete against larger rivals such as Wal-Mart (WMT) and Target (TGT). The stock has slumped more than 20% in the past year. Sears not a bargain for investors, trading at more than double its average 52-week price target of $17.83.
According to a recent report in the New York Times, the "Made in the USA" label has grown in popularity because it is a "signifier of old-school craftsmanship." It's also hard to find in today's global economy. The U.S. trade deficit with China alone is about $232 billion.
--Jonathan Berr is long Target. Follow him on Twitter@jdberr.
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How can they possible say "made in America" on the tools if they are not? Isn't that fraud (at least)?
Both Sears and Kmart are virtually DEAD, though the doctor hasn't informed them yet!
You know, Craftsman tools and thousands of other products could still be made here in America if it were not for the unions.
Nobody wants to pay $20 for a pair of pliers made by some union yahoo making $30 an hour plus benefits.
The reason Wal-Mart, Target and the like are so busy, people want a product that does the job and doesn't cost an arm and a leg.
If the people at McDonalds flippin burgers were union, the cheap burger would cost you $4.
ABOLISH the unions and you'll bring jobs back to America.
In 1999 there was a scandal known as the "Saipan Scam" - very deceiving in there advertising, but Sears; I am disappointed they have their tools made in another country now, but it is labeled on their tools.
I also would like to add there are many products made in America. General Electric washers and dryers are 100% made in America and we bought a set. GE brought all their washers and dryers production back from overseas to American shores - parts and all.
Many of our retail stores pile up on products from overseas to make a profit. How they make the profit can be a very sad story when at times it is off the backs of children and adults. But, there are legit businesses too. We as the consumer have to take the time and research. And as my 95 year old grampa friend says: "Even if I have to pay more for a product made in America I am willing." It is a tough market and we are the buyers. We have a responsibility too.
I bought a huge tool set from Sears MANY years ago in the mid 80's. When I received them I found a lot of them said "Made in Taiwan", The catalogue I ordered them from had many statements:
Made in America, (USA) always has been and always will be.
I took all the ones marked "Taiwan" back to Sears and they replaced them with the Made in USA
ones. For a lot of years after that they still said made in USA. Don't know about now though.
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