Starr Wins Verdict for Muffler Chain

Kenneth W. Starr won a $390-million victory for a muffler chain Wednesday, two days after the independent counsel wrangled a confession from President Clinton that he had an inappropriate relationship with a former White House intern.

A three-judge panel of the U.S. 4th Circuit Court of Appeals threw out a jury’s verdict against Starr’s client, Meineke Discount Muffler Shops, in a class-action suit filed by the company’s franchise dealers.

The lawsuit was returned to a federal judge to give the dealers a chance to pursue a smaller award.

The appeals court agreed with Starr’s argument that the case arose from a simple contract dispute and snowballed into a huge lawsuit alleging fraud and unfair trade practices.

Franchise dealers accused Meineke, a subsidiary of the British conglomerate GKN, of illegally skimming as much as $32 million they contributed to headquarters for advertising.

In 1986, the Charlotte, N.C.-based company set up its own ad agency, which negotiated discounts and kept the savings as its commission.

The appeals court said the franchisees’ case should not have been certified as a class action because many dealers did not want to participate.

The lawsuit is one of a few private cases Starr has taken while serving as the independent counsel investigating the Whitewater land deal and, subsequently, Clinton’s relationship with Monica S. Lewinsky.

The administration has criticized Starr for taking outside cases like the Meineke lawsuit while serving as independent counsel, although the moonlighting is allowed by law.

In addition to Meineke, Starr has represented the tobacco industry, the National Football League Players Assn. and Chiquita Brands International.