Asbestos cases could rock Sears

By Sandra Guy, Chicago Sun Times

Sears, Roebuck and Co. finds itself sitting on a potential time-bomb: About 1,000 cases pending by customers who bought products that contained asbestos and who claim health problems as a result.

The latest setback took place May 8 when a New York appellate court upheld a judge's decision that Sears is responsible for paying a $1.5 million jury award to a man who said asbestos products he bought at Sears 50 years ago were partly responsible for his cancer.

Howard Plumb, the man who sued, died Nov. 4, 2001 from mesothelioma, a rare cancer tied to asbestos. The cancer can take as long as 40 years to develop.

Plumb, who worked for a few years as a Sears salesman, said that in the late 1940s and early 1950s, he bought floor tiles, boiler insulation and other items from Sears that contained asbestos.

The jury found that Sears breached its warranty because it advertised asbestos-containing products as safe.

A Sears spokeswoman insists that the asbestos-injury lawsuits pending against the Hoffman Estates-based retailer are without merit.

Sears is vigorously fighting the lawsuits, and the situation will have no effect on Sears' efforts to sell its credit-card business, said spokeswoman Jan Drummond. However, attorney Jordan Fox, who represented Plumb in the New York trial, said research is under way to determine whether Sears officials knew about asbestos hazards because Sears once owned Allstate Corp.

Fox said he believed Allstate would have had access to claims by people who believed their health had been hurt by asbestos exposure.

Sears spun off the Northbrook-based insurance provider in 1995 to help fund a retail turnaround strategy.

The Plumb verdict in September 2000 made Sears the first retailer held liable for an asbestos-related illness. Other cases involved companies that manufactured asbestos-containing products.

The jury assessed 98 percent of the responsibility for Plumb's cancer to General Electric Co., which made asbestos-containing electrical cable that Plumb said he handled when he worked as an electrician's helper at an Alcoa plant.

The jury assessed Sears for the remaining 2 percent, or $30,000. However, GE settled with Plumb before the jury reached its verdict, and the judge determined Sears should pay the entire $1.5 million.

Sears appealed the ruling. The appellate court upheld the judge's ruling by a 4-1 vote, which means Sears must get permission from the New York Court of Appeals to appeal again.

Sears has not decided what it will do next.

"We have not paid the judgment, and we do not believe it is appropriate for Sears to pay the $1.5 million," Drummond said.

She said Sears was dismissed from 52 other asbestos claims between January and March.

Of the 1,000 other complaints pending, none is at trial, she said.

Sears is assessing each case individually, and has settled two asbestos-related cases since January 2002 for a total of $250,000. Drummond declined to provide specifics of the settlements.

Discount stores eye move into malls
Sears, Roebuck and Co., an anchor store in malls nationwide, faces powerful new competition.

Retail goliath Wal-Mart Stores Inc., heralded for its massive free-standing stores, is opening a two-story store later this month inside a mall on Long Island.

It will be the first mall-based Wal-Mart in the New York market.

One retail analyst estimates that discount stores such as Wal-Mart and Target Corp. could take over as many as 200 to 300 of the estimated 600 to 800 anchor slots opening in the next decade.

To battle the discounters, Sears is opening free-standing stores called Sears Grand.

< Back