Judge criticizes fees lawyer received in Sears settlement

Judge criticizes fees lawyer received in Sears settlement

A North Carolina business court judge has criticized a settlement for consumers who had wheel alignments at Sears in which attorneys received $950,000 in fees while consumers in the lawsuit got a total of $2,402.

But the judge also said he can't do anything about the settlement because it was approved in an Illinois court.

Superior Court Judge Ben Tennille said in an order issued in May that the class-action lawsuit lawyers and Sears tried to hide the settlement results from him. Tennille also said too little effort was made to find people who paid too much for alignments.

"Their efforts to keep the results secret are understandable," Tennille wrote. "The shocking incongruity between class benefit and the fees ... leave the appearance of collusion and cannot help but to tarnish the public perception of the legal profession."

Sears declined comment because it is appealing the case, The News & Observer of Raleigh reported Monday. But consumer lawyer Gary Shipman of Wilmington, who led the class action suit, said the judge was wrong.

Shipman said the order was issued without warning two years after a hearing had been held and that Tennille didn't have jurisdiction.

The lawsuit was filed in 2002 in Wilmington and in Illinois, where Sears is headquartered. The lawsuit contended Sears charged customers for four-wheel alignments on cars that only need two-wheel alignment, which is cheaper.

Tennille was critical of efforts by Shipman and other lawyers to locate the estimated 1.5 million customers who were overcharged. He said they should have insisted that Sears post notices and make claim forms available on auto center counters.

The judge said Sears put ads in newspapers, which he said wasn't an effective way of reaching the consumers.

In all, the company received 317 valid claims. Some customers received a $10 check and other a $4 coupon.

Shipman defended the legal fees, which the judge said amounted to about $3,000 per customer. Shipman said they were based on the time he and six other firms spent working on the case.

The lawyer said the newspaper ads reached 79.24 percent of people who might file a claim, according to a defense expert.

Shipman also said the Illinois judge who approved the settlement had authority in the case, but he would have given Tennille information had he asked for it. Tennille was given information the same year the Illinois court approved the settlement.

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Information from: The News & Observer, http://www.newsobserver.com">http://www.newsobserver.com