Legally Speaking: An American tragedy

John G. Browning Aug. 7, 2012, 4:50am

In a corner of sleepy Miami, Okla., (population 13,570) sits a factory that once epitomized the American dream: a "can-do" attitude reflected in the products built there by generations of local men and women and used by millions of consumers across the country.

As of July 31, however, that facility will shut its doors forever, put 117 people out of work, and instead become the symbol not of the triumph of the American spirit but of its failure—a failure brought about by our litigious society and its attendant high costs of doing business.

Blitz USA was once the leading manufacturer of gasoline containers in the United States, supplying an estimated 70 to 75 percent of the portable gas cans sold each year.

Like many companies, it got its start during the industrial ramping up of World War II, supplying metal gas cans to the U.S. military under the name U.S. Metal Container. By 1966, it was the only gas can manufacturer in the nation. A year later, the gas cans were painted bright red.

Although metal containers would eventually give way to plastic ones, the portable gas can became ubiquitous as the postwar baby boom generation traveled the highways on family vacations or refueled the lawnmowers that kept the sprawling suburbs tidy.

In 1992, U.S. Metal Container became Blitz USA. By 2011, the company had 300 employees at its Oklahoma plant and the plastic gas cans were sold at WalMart, Kmart, Sears, Lowes and other mass retailers.

Postwar America witnessed not just previously unheralded prosperity and the rise of companies like U.S. Metal Container/Blitz USA, but also gave birth to a new legal doctrine—strict liability. A creature invented largely by California appellate judges in the 1950s and 1960s, strict liability focuses scrutiny on the product itself (not the person using it) and asks if the product was defective and unreasonably dangerous as it was designed, manufactured, marketed and sold.

The theory was that by exposing manufacturers to such risks, companies would be motivated to design and make their products safer and to incorporate warnings about dangers associated with such products.

As strict liability theories gained traction, strict products liability lawsuits multiplied and so did safety warnings, such as the one imprinted on every gas can that clearly states that gasoline should never be used to start a fire.

Yet, despite such warnings, lawsuits never stopped focusing on the product itself rather than on the person using (or, more accurately, misusing) it to start or rekindle campfires, brushfires or even fires in an indoor fireplace.

At the same time, legislators stepped into the fray with increased restrictions on the industry in the form of such well-intended laws as the Children's Gasoline Burn Prevention Act of 2008, which required that all gas containers sold after Jan. 17, 2009, have child resistant safety caps.

As with so many other industries, gas can manufacturers were now expected to protect people from themselves (including ones they never would have foreseen as consumers, like children) and assume roles previously reserved to parents, like the supervision of children.

As courts and legislators made it easier for individuals to abdicate personal responsibility, lawsuits against Blitz USA proliferated. The company was hit with an average of four to seven new lawsuits a year.

In December 2007 alone, Blitz was sued three times in that plaintiff-friendly venue, the U.S. District Court for the Eastern District of Texas' Marshall Division. One of these lawsuits involved a man who tried to start a campfire with gasoline while hunting; another genius decided to burn a pile of brush using his gasoline can; and an unsupervised 14 year old tried to ignite a fire in a barbeque pit with gasoline and wound up burned over 80 percent of his body.

In 2009, another Eastern District case was filed against Blitz by the parents of a 2 year old who left both child and gas can unattended after filling a lawnmower with gasoline. Gasoline vapors ignited when the toddler carried the can to a storage room, and he was burned over one-third of his body.

In November 2011, Blitz USA filed for Chapter 11 bankruptcy protection in federal bankruptcy court in Wilmington, Del. At that time, the manufacturer was facing an estimated 42 lawsuits—as many as 22 of those having been filed against it since March 2011.

Amanda Emerson, Blitz's external affairs manager, reported that the company had spent $30 million in legal fees. In a press release, Rocky Flick, Blitz USA's president, was blunt about what had prompted the drastic measure, pointing out that "The decision to file for bankruptcy protection is due in large part to the increasing costs of defending the company's product liability litigation."

While Blitz initially planned on reorganization rather than liquidation, by late June the crushing burden of litigation proved to be too much for the beleaguered manufacturer.

In what he described as "a sad day in the 46-year history of Blitz and for our 117 employees," president and CEO Rocky Flick announced the closing of the gas can manufacturing facility in Oklahoma. "We appreciate the support of our employees and their families in our efforts to reorganize and develop a viable business plan," said Flick.

"Unfortunately, we were not able to address the costs of the increased litigation associated with our fuel containment products."

Among other lawsuits, Blitz was appealing a $4 million verdict against it in Utah. The jury in that case had awarded 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 gas can's nozzle into the stove and pouring gasoline onto the flame.

Evidently, the jury felt that Blitz's plastic container was unreasonably dangerous, despite being imprinted with the warning "Keep away from flames, pilot lights, stoves, heaters, electric motors, and other sources of ignition."

And so as 117 people in Miami, Okla., join the ranks of the unemployed, a chapter in American business history comes to a close. Blitz USA is just the latest casualty in a war on productivity and innovation, a war waged by a litigious army aided and abetted by a plaintiffs' personal injury trial bar willing to sacrifice personal responsibility and common sense on an altar of greed.

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.

Those sentiments are no doubt echoed by a number of people in Miami, Okla., nowadays. Like many Americans, in a corner of my garage sits a red plastic Blitz USA gasoline container, a testament to a fading era in which American ingenuity provided not only much-needed consumer products for its people, but jobs vital to small communities like Miami.

Your next gas can may or may not have a warning that will render the product idiot proof, but it will probably say something like "Made in China."

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