TULSA, Okla.-After a major setback in Oklahoma's Supreme Court, the automotive service fraud lawsuit against Kmart Corp. is back to square one, though the attorney handling the case intends to proceed with it at full bore. A year ago, a Tulsa County district judge certified a national class-action against Kmart, putting into motion a suit charging the retailer's automotive service centers deliberately defrauded customers nationwide by selling unnecessary parts and repairs. The suit sought damages that could have amounted to billions.
But last July, in a 5-4 ruling, the state's Supreme Court reversed the circuit court and threw out the certification.
Tulsa attorney James Clinton Garland Sr., who has doggedly pursued Kmart for what he charges has been a ``corporate-wide fraudulent scheme'' to bilk auto service consumers, told TIRE BUSINESS the case is far from dead. He is now selecting an elective plaintiff, and will proceed with the litigation in one of two venues on the East Coast, though he wouldn't tip his hand as to where.
Meanwhile, Kmart spokeswoman Mary Lorencz said of the Supreme Court's decision: ``We feel vindicated and believe that that was the correct ruling.''
Despite Penske Corp.'s recent purchase of Kmart's auto service center operations, Ms. Lorencz acknowledged that Kmart still will be responsible for any continuation of the fraud lawsuit.
The Oklahoma Supreme Court refused to certify the class-action because of the amount of damages and, according to Mr. Garland, it also claimed there were so many misrepresentations of alleged fraud to individual members of the class that it ``destroyed the commonality of the case.''
While the attorney said he considers it ``a bad decision,'' nonetheless he vowed: ``We're not ever going to let (Kmart) go.''