Product Misuse & Lawsuit Abuse
Two weeks ago, Blitz USA, a manufacturing company in Miami, OK and the No. 1 consumer gasoline-can producer in the U.S., closed its doors, leaving 117 workers without jobs. Their product, small red plastic gas cans, were still in demand. With revenues of $60 million in 2011, they owned 75% of the U.S. market. What finally closed their doors was the company’s inability to obtain product liability insurance, for a product the Consumer Product Safety Commission has never deemed unsafe.
When the company filed Chapter 11 bankruptcy, they were facing 42 lawsuits. Blitz told a local television station, after they settled two lawsuits, one for $5 million and the other for $10 million, there were 26 more cases filed in a matter of months by the same law firms.
Among the lawsuits, Blitz was appealing a $4 million jury award in Utah. That case involved the father of a 2-year old girl killed when he tried to start a fire in a wood-burning stove inside his trailer home by inserting the $3.99 gas container’s nozzle into the stove and splashing gasoline directly onto the flame.
A Clinton-appointed federal district judge refused to throw the case out, and refused to let Blitz argue the “state-of-the-art” product liability defense or argue that it complied with government regulations for the manufacture of gas cans.
Evidently, the jury felt that Blitz’s plastic container was unreasonably dangerous, despite the 15 million containers produced annually being impressed with the warning: “Keep away from flames, pilot lights, stoves, heaters, electric motors, and other sources of ignition” and additional safety warnings.
The vast majority of all the lawsuits were similar, with total disregard for personal safety, plaintiffs ignored warnings which were permanently affixed to the product and poured gasoline directly on a fire.
“It’s been very frustrating to see that we’re the target of multiple lawsuits from the same law firms over and over again,” said Amanda Emerson, one of the managers at Blitz.
“The most heartbreaking part about the closure of Blitz is it did not have to happen. It’s not a result of mismanagement or a lack of demand of the product,” she said.
The lawsuits and their consequences gained national attention.
“Here is a company that provided good jobs with good benefits, and lawsuits took this company out,” said Bryan Quigley, a spokesman for the U.S. Chamber Institute for Legal Reform. “When we are looking at these things that are part of our economy, you can’t dismiss the role litigation plays in regard to jobs.”
Writing about the Blitz closing for the S.E. Texas Legal Journal, attorney John Browning provided his views on this case and the need for reform. “Roughly 15 million civil cases are filed each year in the United States. Americans spend more of their gross domestic budget on civil litigation than any other industrialized nation on the planet, yet less than 15 cents out of every dollar for the cost of a tort goes to providing compensation for the litigant. And in one recent survey, only 16 percent of Americans said they trusted the legal system to protect them from frivolous lawsuits.”
The Wall Street Journal in an editorial said, “… stories like this cry out for a bipartisan counter-offensive against these destructive raids that loot law-abiding companies merely because our insane tort laws make them vulnerable.”
We agree with Browning and the WSJ and are pleased to see attention being brought to this important issue.
We encourage members to become aware of those seeking public office who enjoy the support of the plaintiff’s bar. If elected, their decisions and appointments will continue to have a damaging effect on our industry, manufacturing in general and those who provide the services we all need.