CHICAGO (CN) - Retail giant Sears, Roebuck and Co will have to continue fighting lawsuits over stainless steel washer drums after losing its bid to foreclose future copycat class actions in the 7th Circuit.
The proposed 500,000-person class action, which has come before the 7th Circuit four times thus far, was filed by Tennessee Sears customer Steven Thorogood. Thorogood, a self-described "highly educated metallurgic engineer" purchased a Kenmore clothes dryer from Sears that had been advertised as "all stainless steel." The drum in fact contained a piece of "mild" steel coated with ceramic, Thorogood discovered, which allegedly caused the steel to rust and stain his clothes.
On its first review, the 7th Circuit summarily dismissed the Thorogood's claims, finding no common issues of fact sufficient to warrant class action status. Judge Richard Posner then described the suit as "near-frivolous."
"It was inconceivable that all or even many other members of the proposed class had the same understanding of Sears' advertising as Thorogood claimed to have. Sears hadn't advertised the dryers as preventing rust stains on clothes, doubtless because such stains are not a common concern of owners of dryers," Posner wrote.
"One would have to have a neurotic obsession with rust stains (or be a highly imaginative class action lawyer) to worry about Sears' drum. We said that, judging from the record and the argument of his lawyer, the concerns expressed by Thorogood were a confabulation."
Thorogood's lawyer, Clinton Krislov, then sought an individual judgment in the case.
"He wanted it not only as a premise for an award of attorneys' fees but also so that he could use it as 'offensive' res judicata in other cases (that is to preclude Sears' defending similar cases on the merits); for he was already planning to circumvent our order decertifying the class by bringing class actions elsewhere," Posner explained.
Krislov soon appeared as counsel in a class action filed by member of Thorogood's suit Martin Murray in California state court. The case was removed to federal court, where Sears sought to have it tossed but was denied.
Sears again petitioned the 7th Circuit for an order enjoining Murray's class action, which was granted. Thorogood appealed the order, technically issued in his case, to the Supreme Court.
The Supreme Court granted certiorari and asked the 7th Circuit to reconsider its order in light of Smith v. Bayer Corp., which the Court had decided while Thorogood's action was pending. Bayer prevents federal courts from enjoining copycat class action suits filed in federal or state courts by nonparties to the original litigation.
Writing for the 7th Circuit, Posner did not attempt to conceal his feelings towards Thorogood and Murray's class actions, but acknowledged that the Supreme Court's precedent was controlling.
"We unsay nothing we said... in our other opinions in this protracted litigation, in criticism of the suits and of lawyer Krislov and his cocounsel (in Murray's case), Boling; nothing we said about the susceptibility of class action litigation to abuse; and no part of our statement that abuse of litigation is a proper ground for the issuance of an injunction under the All Writs Act."
Posner went so far as to critique the logic of the Supreme Court's ruling.
"The Supreme Court noted in Smith v. Bayer Corp. that 'Bayer's strongest argument [for enjoining the Murray-type class action in that case] comes not from established principles of preclusion, but instead from policy concerns relating to the use of the class action device,'" he wrote.
"The Court, which not infrequently bases decisions on policy concerns, for they are legitimate tools for making rules of law, could have changed the rule of nonparty preclusion but decided to stick with it, and instead listed alternatives to preclusion: stare decisis, comity consolidation of overlapping suits by the Panel on Multidistrict Litigation... changes to the Federal Rules of Civil Procedure, and federal legislation. Sears will have to tread one or more of these paths if it wants relief from this copycat class action and perhaps more such actions to come; we can't save it."
Thorogood was ultimately awarded the $3,000 in damages, representing the amount in controversy, over a $20,000 settlement offer by Sears that was struck down by the district court.
In another previous ruling, the 7th Circuit had also declined Thorogood's request for $246,000 in attorneys' fees, writing that "no sane person incurs fees in that amount to prosecute a claim worth at most $3,000."
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