State Claimed Illegal Sales Tactics : Sears Cleared of Most Charges in Maine Suit

A judge Thursday cleared Sears, Roebuck & Co. of most charges in a consumer-protection suit that accused the nation’s largest retailer of “bait-and-switch” sales tactics and selling service contracts for repairs already covered under warranties.

State Atty. Gen. James E. Tierney called the ruling by Superior Court Justice Donald G. Alexander “a defeat for Maine consumers.”

“I think we are reaching a point where we need increasing protection,” he said, citing testimony from consumers who said they traveled long distances only to learn that an advertised item was not available at Sears stores.

Tierney said he had not decided whether to appeal.

8 Stores in Maine

John J. O’Leary, the attorney representing Sears, described the ruling as “a big victory” for the Chicago-based company and consumers. He said that, if the state won, Sears would have had to raise its prices.

Sears has eight stores in Maine and about 800 nationally.

The judge did conclude that Sears salesmen who sell service contracts by telephone may be illegally misleading consumers by advising them that major appliances and other big-ticket items are less reliable than they are.

But he stopped short of ordering an immediate halt in those solicitations, customarily made after a consumer has bought a product. He gave Sears 45 days to submit a plan for modifying sales manuals that suggest such tactics.

Alexander also drew a distinction between telephone solicitations made after the sale and attempts to sell the service contracts at the time the appliance is sold.

Confidential Evidence

Further, he chided the state for implying that Sears had a “sinister motive” in its admitted attempts to boost sales of the contracts.

“Making a profit, even perhaps a significant one, is not yet an unfair trade practice,” the judge said.

Alexander, who presided over the non-jury trial, based his ruling on thousands of pages of evidence, much of it confidential, and an array of exhibits that included refrigerators and other appliances wheeled into the courtroom.

He rejected claims that Sears systematically lures consumers by advertising bargains, then advising them that the advertised product is not immediately available and trying to substitute a more expensive alternative--the so-called bait and switch.

Alexander pointed to a 1977 Federal Trade Commission consent decree that requires Sears to include in its newspaper ads a statement that all advertised items are “readily available” for sale. The state maintained that the items should be in stock. However, Alexander said the FTC “specifically approved” Sears’ policy of storing major appliances at a central warehouse, not at individual stores.