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Sears Case Could Invoke Industry ProblemsPosted 12/16/1998By Robert L. Redding, Jr.
The Eleventh Circuit United States Court of Appeals recently ruled on a Florida District Court's decision to grant summary judgment in favor of Sears, Roebuck and Co. The case involved a customer's purchase of four new tires from a Sears automotive center in Sarasota, Fla. The Court of Appeals reversed the lower court's decision and appears to have re-opened the class action. Most automotive repair industry observers would have agreed the Sears case ended in October 1992 when a California district court certified a mandatory class settlement after appointing class settlement representatives and counsel. The settlement included compensatory relief in the form of $50 coupons issued by Sears to affected consumers who purchased and had installed brake calipers, coil springs, shock absor- bers, master cylinders or an idler arm at a Sears Auto Center during a specific period of time. The settlement also contractually obligated Sears to review any complaints and concerns that unnecessary service was performed or incorrectly performed at a Sears Auto Center. The settlement injected Sears' "Satisfaction Guaranteed or Your Money Back" policy. Sears agreed to "re-communicate to all service employees in its auto centers its firm policy" that none of its employees should recommend unnecessary repairs. Lawyers for the Sears' customers received $3 million in fees, costs and interest. Sears was required to publish notice of the settlement in major newspapers, as well as in Sears stores. The automotive repair industry supported a legal process that held culpable parties accountable. Unfortunately, the retribution did not stop with the financial penalty or public impugnment. The National Association of Attorneys General (NAAG) followed with a set of national hearings designed to evaluate the automotive repair industry. After hearings in Washington, D.C., and Des Moines, Iowa, NAAG released a national report in October 1995. The report was much delayed due to a turnover in state attorneys general in the election process. This also impacted the staff persons directly involved in the hearings and later report. The report was quite critical of repairers and stressed the necessity of curtailing unnecessary repairs, more consumer disclosure, reform of the service writer's role and reform of incentive wage plans. Two items that were highlighted in the report but received very little public attention revolved around better training for technicians and the assurance of the availability of information to repair vehicles. To the dismay of the aftermarket, almost no attention was paid to an official Federal Trade Commission (FTC) report to Congress on Auto Repair Industry Practices released at the same time, October 1995. This official government report, unlike the much more politicized trade association report issued by NAAG, stated that deception and fraud were historically overstated. This report focused on "mechanic incompetence." "Most auto repair problems appear to result from misdiagnosis and faulty repairs made in good faith," stated the report. The report went on by concluding, "Mechanic incompetence has become more pervasive as vehicle components and systems have become more sophisticated." The FTC's message is for the original equipment manufacturers to enhance the flow of information for emissions and non-emissions repairs. The automotive industry as a whole has to do a better job of recruiting and training men and women for the repair industry. With the Sears case reopened, articles will be published again about the negatives of the repair industry, few based on facts. ASA's desire is to dispel the images of fraud and deception, and correct the issues that have been the focus for our regulators, a lack of information and better-trained technicians. In the original Sears lawsuit, the Florida consumer's complaint alleges that the "AccuBalance," a process of testing a rim-mounted tire and, if necessitated by the test, shaving rubber from parts of the tire making the tire/rim unit round, was not performed. The appeals court found deficiencies in the class action notices. The case now is remanded to the District Court. ASA is committed to monitoring and addressing policy issues impacting the integrity of the automotive repair industry. ASA testified during the NAAG hearings and conducted state-by-state analyses of automotive repair complaints during the period following the original Sears case. Consumer hotlines and complaint processes must be evaluated accurately. Mere totals or summations turned into the public for perusal are woefully insufficient if they do not include a specific universe of types of complaints. Many times issues unrelated to repairing an automobile are included in the automotive complaint file. This is not a statistically accurate method of determining repair complaints. Too often the public is left to draw conclusions based on misinformation and inaccurate facts. It is imperative that revisiting the Sears case does not allow an unfair, broad review of the automotive repair industry. Each case should be judged on its own merits. We must not let an entire industry fall victim to the mistakes of a few.
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