Struggling retailer Sears has a lot on the line in a multimillion-dollar class-action settlement over unwanted robocalls offering free Caribbean cruises.
A federal judge in Chicago is expected to decide next week whether Sears is entitled to as much as $6 million for thousands of sales calls received by its employees from Caribbean Cruise Line nearly seven years ago. The bulk of the Sears claim was initially denied for missing a filing deadline.
Caribbean agreed in late 2016 to pay between $56 million and $76 million to settle the class-action lawsuit alleging the company and its co-defendants made millions of unwanted robocalls offering the free cruise trips in violation of the federal Telephone Consumer Protection Act. Individual class members are to be paid up to $500 per call received, according to the settlement.
Learning of the settlement by “word of mouth” days before a Feb. 1, 2017, filing deadline, Sears put in an initial claim for 18 robocalls received by its employees and requested a 60-day extension to find more. After subpoenaing phone records from Verizon, Sprint and AT&T, Sears filed amended claims for 12,424 qualifying robocalls from Caribbean between Aug. 1, 2011, and Aug. 31, 2012, the period covered by the settlement.
A settlement administrator said Sears was too late and denied the amended claims. The company appealed the decision to U.S. District Judge Matthew Kennelly, who said Monday he would issue a written ruling on the request for review within the next seven to 10 days.
At $500 for each robocall, his ruling could mean the difference between a payout of thousands or millions of dollars for Sears.
Howard Riefs, a spokesman for Hoffman Estates-based Sears Holdings Corp., declined to comment Tuesday beyond the court filings.
The money might be something of a windfall for Sears, which has been closing stores and laying off employees amid slumping sales. Sears closed its last Chicago store earlier this month and is closing dozens more across the U.S.
Most of the claimants in the Caribbean Cruise Line class-action suit do not fall under a corporate umbrella.
Filed in 2012, the lawsuit was brought by Chicago-area residents Grant Birchmeier and Stephen Parkes, who alleged that Fort Lauderdale, Fla.-based Caribbean illegally contacted them multiple times on their cellphones. The settlement class includes consumers who received one or more of the automated phone calls offering a free cruise in exchange for taking a political survey.
The lawsuit called the survey a “scam” and a “marketing tool with no legitimate political basis.”
The settlement was approved in April 2017, but the claims are still being finalized and, in some cases, challenged before Caribbean writes the checks. A larger number of approved claims could push the payout to the higher end of the agreed-upon settlement.
The Federal Communications Commission revised its rules in 2012 to require telemarketers to obtain prior written consent from consumers before robocalling them, to no longer allow an “established business relationship” as an exemption, and to provide an “opt-out” mechanism during each robocall.
While Sears is seeking payment in the Caribbean settlement, the retailer allegedly has been blitzing consumers this year with unwanted robocalls itself, according to a lawsuit filed this month in federal court in Chicago.
The lawsuit, which is seeking class-action status, alleges that Sears made “unsolicited, autodialed calls to consumers without their consent” to pitch Sears Home Services, in violation of the same federal law.
Riefs declined to comment on the lawsuit against Sears.