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A state district judge in Texas has approved a nationwide settlement, valued at up to $149 million, between Bridgestone/Firestone Inc. and consumers who allege in a class petition that their Firestone tires had a tendency to fail. But lawyers representing a small group of class members oppose the settlement, saying it provides little value to the class members, and vow to appeal 172nd District Judge Donald Floyd’s March 12 order approving the class settlement. The class of 10 million to 15 million is composed of those who owned or leased Firestone Radial ATX, Radial ATX II and Wilderness AT tires that were subject to an investigation in 2000 by the National Highway Traffic Safety Administration in the wake of reports of accidents allegedly caused by tread separation. The settlement class does not include those who filed personal injury, wrongful death or property damage suits against Firestone and/or Ford Motor Co., which equipped its Explorer SUVs with the tires. The largest chunk of the settlement money, an estimated $70 million, will pay for new tires for class members who still have Firestone tires that were recalled and replaced by the company in 2000 and 2001. An additional $15.45 million will go to pay for educational programs over three years, and $41 million will go to ensuring that Firestone will produce safer tires in the seven-year period that began on Jan. 1. Also, Floyd approved the payment of $19 million in fees and expenses to the plaintiffs’ lawyers in Terri Shields et al. v. Bridgestone/Firestone Inc. et al., which was filed in June 2003. The settlement calls for the 45 named plaintiffs to receive $2,500 each. But the remaining class members will receive no monetary compensation — a key issue for the plaintiffs’ lawyers who object to the settlement and vow to appeal it. “They don’t get anything. Zero,” said Beaumont lawyer Mitchell Toups, a partner in Weller Green Toups Terrell. “What they get is to have Firestone say they are safer on the road right now.” “It’s a fantastic settlement for Firestone,” he said. But Don Barrett, a Mississippi plaintiffs’ lawyer who led the negotiations with Firestone, said the settlement does benefit the class members — safer tires and the opportunity to get their tires replaced even though recall and replacement programs have long closed. “The class members are getting something. They are getting the chance to get their tires off the road. They are getting the educational program,” said Barrett, of Barrett Law Offices. “The lawsuit was about public safety. We wanted to force them [Firestone] to redesign them,” he said. Hugh Whiting, a partner in Jones Day in Houston who represents Firestone in the litigation, referred comment to Gary Garfield, vice president and general counsel at Bridgestone Americas Holding Inc. in Nashville. Garfield did not return a telephone call seeking comment before press time on March 18. In a 69-page order approving settlement and final judgment, Floyd found that while not all the settlement benefits to the class are pecuniary, “all are clearly beneficial.” “These benefits respond directly to the class demands for relief related to public safety advanced by plaintiffs in this litigation and provide substantial value to class members,” he wrote in the order. In their first amended class action petition, the plaintiffs brought claims under the Texas Deceptive Trade Practices Act and alleged breaches of express and implied warranties. They alleged Firestone designed, manufactured, advertised and sold defectively designed tires that “have an unreasonably dangerous propensity to suffer complete or substantial tread separation.” Floyd wrote in his order that he analyzed the settlement using the factors outlined in the 1996 Texas Supreme Court opinion in General Motors Corp. v. Bloyed. He found the settlement was negotiated at arm’s length, the litigation is complex, sufficient discovery has occurred to allow the parties to make an informed decision to settle, there are significant legal and factual obstacles to the plaintiffs prevailing on the merits, the plaintiffs would have difficulty proving damages and the range of possible recovery is small, and the settlement has overwhelming support from the class representatives. According to Floyd’s order, about 2,300 class members have opted out of the settlement, and 125 are objecting to it. BUSINESS-FRIENDLY The settlement in Texas follows earlier unsuccessful attempts to resolve the tire allegations in a federal multidistrict suit. In May 2000, the NHTSA launched an investigation into Firestone ATX and Wilderness tires, and three months later, Firestone announced the recall of about 14.4 million tires. Including tires under a replacement program announced in 2001, Firestone agreed to replace about 18 million of nearly 60 million tires that were subject to the NHTSA investigation, according to Floyd’s order. Litigation filed by tire owners was consolidated in federal court in the Southern District of Indiana in In Re: Bridgestone/Firestone Inc. Tires Products Liability Litigation before U.S. District Judge Sarah Evans Barker of Indianapolis. In 2001, Barker certified a class for consumer claims, but the 7th U.S. Circuit Court of Appeals in Chicago decertified the class in 2002 and ruled in 2003 that the MDL class members couldn’t seek nationwide class certification in state court. But the 7th Circuit injunction prohibiting the MDL class members from seeking to certify statewide litigation classes, according to Floyd’s order, doesn’t apply to a nationwide class certified for settlement only. In July 2003, less than a month after Shields was filed in state court in Beaumont, plaintiffs’ lawyers representing the class and Firestone defense lawyers filed a proposed settlement. Barrett, the lead lawyer for the plaintiffs, said settlement negotiations began well before the 7th Circuit decertified the national class. In fact, he said, the 7th Circuit decision came down just days before they were ready to present a proposed settlement to Barker. “Eventually we resumed settlement discussions and reached a settlement,” he said in describing the talks that led to the settlement Floyd approved. After the 7th Circuit decertified the MDL class, class members filed litigation in state courts in about 30 states, but Barrett said lawyers on both sides agreed to proceed in Texas. “Firestone wanted to make sure it went to a business-friendly climate, and Texas appellate courts are certainly business-friendly,” Barrett said. Barrett said he negotiated the settlement with assistance from lawyers from several firms, including Provost Umphrey of Beaumont. According to Barrett, Whiting and Garfield took the lead for Firestone. For his part, Toups said he and the other plaintiffs’ lawyers representing the class members who object to the settlement expect to raise several issues when asking the 9th Court of Appeals in Beaumont to overturn Floyd’s order. He believes a better settlement would have provided some small monetary payment to the class members, or a voucher that could be used to buy new Firestone tires or to rotate tires at a Firestone dealership. He said, “There is no compensation to the class at all, so without compensation, you cannot support a settlement, much less a settlement with $19 million” in attorney fees and expenses. But Zona Jones, a Provost Umphrey partner who helped negotiate the settlement, disagreed, saying the settlement is fair and reasonable. He said, “While there may be many folks who won’t actually put a dollar in their pocket, or [get] a coupon to put $10 down on another set of tires . . . we feel the safety benefits that have been achieved for our society and our country are significant.” This article originally appeared in Texas Lawyer , a publication of American Lawyer Media.

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