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Lead-Tainted Toys Push Mattel Into $50 Million Settlement; Plaintiffs Firms to Get $13 Million
Settlement follows an agreement to pay $12 million to 39 states to end an investigation, and a more recent agreement to pay another $2.3 million for violating a federal lead paint ban
The National Law Journal
Lead-tainted toys have Mattel Inc. and its Fisher-Price subsidiary digging back into their pockets to resolve yet more expensive lawsuits.
Marking the latest fallout from the 2007 recall of 1.5 million toys, the companies on Tuesday announced that they have agreed to pay potentially more than $50 million to settle a consumer class action over the tainted toys -- of which $13 million will be divvied up among 20 plaintiffs firms.
The proposed settlement, filed in federal court in Los Angeles, will resolve 22 consolidated lawsuits by providing refunds or other reimbursements to consumers who purchased toys that were recalled or pulled off the market and those who paid for lead testing.
The settlement comes a year after Mattel and Fisher-Price agreed to pay $12 million to 39 states to end an investigation into contaminated toys. More recently, Mattel in June agreed to pay another $2.3 million civil penalty for violating a federal lead paint ban.
For plaintiffs attorney Joe Whatley Jr., one of several lawyers involved in the multidistrict litigation, the key was surviving the defendants' motion to dismiss last year. "That was the biggest legal battle," said Whatley, a partner in the New York office of Whatley Drake & Kallas. "So often, a company thinks that it can enter a voluntary recall, and that essentially ends [a lawsuit]. It means consumers can't recover anything."
Fortunately, Whatley said, the judge in this case rejected that theory and allowed the case to proceed.
Mattel, meanwhile, said that this latest settlement resolves "virtually all" U.S. claims related to its 2007 product recalls. It also defended its commitment to safety.
"Safety of our products remains Mattel’s top priority, overseen by our Corporate Responsibility group, which reports directly to the CEO," the company stated in a press release after announcing the settlement. "All of our efforts, from product design and development to manufacturing, reflect that commitment."
Under the settlement, class members who participated in the recalls will get a check for either 50 percent of the amount of the vouchers Mattel sent out following the recalls or $10, whichever is greater. Consumers who didn't participate in the recalls but have a recalled toy or proof of purchase of a recalled toy will receive a check or a voucher for the amount of the toy. And those who declare they bought or acquired a recalled toy but destroyed it after the recall will get a voucher for the amount of the toy, for up to three toys.
