Judge Orders RadioShack to Cease Using ‘As-Is’ Sales Policy

Friday, January 24, 2003

Page 4

Judge Orders RadioShack to Cease Using ‘As-Is’ Sales Policy

By a MetNews Staff Writer

RadioShack Corporation has been ordered to cease engaging in unfair business tactics by telling dissatisfied customers that they purchased their goods on an “as-is” basis.

In a ruling released yesterday, Los Angeles Superior Court Judge William Highberger denied the company’s motion to reconsider his Jan. 6 order granting summary judgment in the private attorney general action brought by Roger M. Grace.

Grace is the editor and co-publisher of the MetNews. He represented himself, with Lisa Grace-Kellogg as co-counsel.

Highberger granted an injunction, of statewide effect, that bars the company from claiming that goods have been sold on an as-is basis unless it complies with Civil Code Sec. 1792.4 by giving customers a fair warning before the sale takes place.

The statute, part of the Song-Beverly Consumer Warranty Act, requires that a “conspicuous writing” be affixed to the goods to warn consumers that the implied warranty of merchantability is being waived and the goods sold as-is. RadioShack’s notice, printed on the back of a cash register receipt, does not qualify, Highberger ruled.

Grace yesterday urged Herschel Elkins, chief consumer law enforcer in the state Attorney General’s Office, to take action against RadioShack for continuing to use the non-conforming receipts. He noted that the attorney general has the power to seek a civil penalty of up to $6,000 per violation.

With 600 RadioShack stores in California using the same receipts, and each store committing a new violation each day the receipts are used, that means up to $3.6 million per day in penalties, Grace noted.

“I respectfully suggest that a failure on the part of your office to institute proceedings under [the unfair competition law] would be a serious dereliction,” he wrote to Elkins.

RadioShack’s local attorney, Daniel Crowley, did not return a MetNews phone call. Crowley earlier told Highberger that the judge was “being awfully harsh towards RadioShack” and suggested Friday that having to comply with the judge’s order would place the company at a competitive disadvantage.

Highberger responded that if other retailers were violating the law, RadioShack could sue for unfair competition, either as a direct victim or as a private attorney general like Grace, who was awarded $24,000 in attorney fees in the case.