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.
Sears Holdings (SHLD) says its Craftsman line is America's most trusted tool brand. But are those tools even made in America?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.
More from Money Now
The first Craftsman ratchet I bought lasted over 30 years. The last one, clearly labeled made in USA failed after 6 mos. It was a 20" 1/2" inch ratchet and the shaft snapped. You could clearly see the inferior metallurgy. Had to fight with Craftsman to honor their warranty.
For all the complaints about unions, can you live on a bowl of rice and a fish-head a day? An American citizen with bonafide citizenship is on the hook for rent, auto insurance, a mortgage, health-insurance, etc. I don't like unions either but I know they are the only thing between us an a standard of living equal to that in the Industrial Revolution.
Any business that sells a product in the US must operate in the US and hire US citizens. The sham of the maquilladores must stop now. NAFTA must stop now. Require that elected officials be capable of utilizing basic math. Oh, and while we are at it, stop the expedited green cards for foreign educated workers. Hire only American citizens!!!!
Not only have they been fibbing regarding "made in America" but recently (allegedly) they stole the design from a supplier of a universal wrench that really was made in America. The owner of the company that made the wrench couldn't figure out why his orders from Sears had dried up. (BTW, he had to sign an agreement that he would sell to no other company but sears.) With a little investigation he found that they were having the same tool as his made in China and putting the Craftsman name on it. He is suing.
Scoundrels.
chinese tools (everything) suck! They can not stand up to daily use Lowes and Home Depot tools break...chinese tools are sh..poop..it! If Sears are making Craftsman in china, they should rename the line of tools to"Crapsman tools"
Why do you think that the Middle Class Chinese want American goods?!?...because of the quality built into our goods!
They have had so many issues claiming to be made in the U.S. and they told people they were made somewhere else several times so why sue if you like the tools You people are getting sue happy if you don't like it don't buy the DAMN thing. If you have that mush time to sit and pick at everything GO volunteer and hekp ibstead hurting and YES I love AMERICA I always will but people its getting down right stupid another person got burnt with hot tea and sued so who do you sue at home when you burn yourself or lie to your kid same thing different time GET A LIFE
DATA PROVIDERS
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
Japanese stock price data provided by Nomura Research Institute Ltd.; quotes delayed 20 minutes. Canadian fund data provided by CANNEX Financial Exchanges Ltd.
RECENT POSTS
While incompetent bosses like Michael Scott and Andy Bernard typically can’t survive in the workplace, office romances are a very real part of corporate culture.
- Southwest Airlines turns less legroom into $773M
- 'American Idol' gets sorry ratings for season finale
- Powerball's wacky sense of humor
- Millions of Facebook's users are actually pets
- Can crowd funding rescue the LA Times?
- Domino's debuts a DVD that smells like pizza
- Average US retirement age climbs to 61
- McDonald's aims to slim down its 145-item menu
- Bathroom reading goes digital with iPad TP stand
MARKET UPDATE
[BRIEFING.COM] The S&P 500 ended this week with a bang, roaring to a new all-time high on the back of stronger-than-expected economic data, influential leadership, and an ongoing appreciation for the Fed's monetary policy support.
The bullish bias was evident in premarket action as the S&P futures pointed to a higher start without the benefit of any definitive news catalyst. Stocks indeed benefited from a blast of buying interest at the opening bell on this ... More
More Market News
TOP STOCKS
All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.
MSN MONEY'S
- Shared
- Commented
- Viewed
