A federal judge has approved a class settlement resolving multidistrict litigation involving lead paint in Mattel Inc. toys.
In approving the deal following a fairness hearing on Monday, U.S. District Court Judge Dale Fischer of the Central District of California rejected claims by objectors that it amounted to a "coupon" recovery contrary to the Class Action Fairness Act of 2005. Objectors also noted that attorney fees of nearly $13 million exceeded the value to the class.
"We're pleased that the judge approved the settlement," said Joe Whatley, a partner in the New York office of Whatley, Drake & Kallas who served as co-lead counsel. "It is not a coupon settlement. And we believe it's a meaningful settlement."
The other co-lead counsel, John Stoia Jr., of counsel at San Diego's Coughlin Stoia Geller Rudman & Robbins, did not return a call for comment. Neither did Elwood Lui, a partner at Jones Day in Los Angeles, who represents Mattel.
The settlement involves millions of toys that were recalled or removed from the market in 2007 by Mattel or its subsidiary Fisher-Price Inc. due to excessive lead content. The settlement also involves toys recalled due to small magnets that could come loose. No personal injury claims against Mattel are covered in the deal.
The class is estimated to include more than 1.5 million parents or guardians who purchased the recalled toys for their children, according to a joint motion filed by the parties on March 8.
Some class members already have returned recalled toys and received a voucher for full value that that they can apply toward the purchase of another Mattel product. These plaintiffs would receive checks worth half that value.
Class members who return toys now would be entitled to a check or voucher equal to the price of the recalled product. Class members without a proof of purchase could receive vouchers for as many as three toys per household, as long as the total settlement amount for those members does not exceed $10 million.
Class members who paid for lead testing of their children within six weeks of the recall announcement can seek reimbursement, as long as the total amount for the class does not exceed $600,000.
Mattel agreed to pay $275,000 to the National Association of Children's Hospitals and Related Institutions and to implement a quality assurance program.
"Mattel had previously settled with [state attorneys general] around the country to improve their quality control and safety programs to make sure this doesn't happen again," Whatley said. "We were able to enhance that and make things happen quicker than they were in the A.G. settlement."
The A.G. settlement, reached in 2008, required Mattel to pay $12 million to more than 35 states, including California, Massachusetts and Illinois.
Fischer granted preliminary approval of the private action on Oct. 23. Objections raised since then focused in part in the plaintiffs' request for as much as $12.9 million in fees.
"Class counsel has not provided any detailed information about the actual time spent on the case," wrote one objector, Kathleen Tucciarelli. The $12.9 million "appears to be a windfall," she wrote.
Another objector, Chase Thompson, called the deal a "coupon settlement." Thompson's lawyer, Steve A. Miller, a solo practitioner in Denver, did not return a call for comment.
During the fairness hearing, Fischer rejected the objector claims and approved the deal but asked the firms for more detailed information about their fee request, Whatley said. Specifically, she sought historical billing rates and resumes, as well as more justification for work done by lawyers who were not involved as lead counsel, work done after the settlement was reached and time billed for paralegals.
Whatley estimated about 25 plaintiffs firms were involved in the litigation.