SE Texas Record

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Attorney says publication reaching 32 million not sufficient notice of Sunbeam settlement

By Michelle Massey, East Texas Bureau | Jan 16, 2008

George McLaughlin

TEXARKANA – Although Sunbeam agreed to a settlement regarding the safety of its electric blankets, an attorney said the company's announcement of the settlement through the mail and in two national newspapers was not a sufficient way to notify plaintiffs.

The settlement will refund consumers around $10 for new electric blankets and pay attorneys more than $7 million.

After a recent fairness hearing on Dec. 14, 2007, in an Arkansas courtroom, Sunbeam announced it had notified 101 potential class members by full settlement notice through direct mail.

Colorado attorney George E. McLaughlin was dissatisfied with that number, and filed an objection to Sunbeam Products Inc.'s performance of its notice obligations.

Lead counsel for the potential class members are Texarkana attorneys John Goodson of the law firm Keil and Goodson and George L. McWilliams of the law firm Patton, Roberts, McWilliams and Capshaw.

The Texarkana firms of Haltom and Doan L.L.P and Patton, Tidwell, and Schroeder L.L.P are representing Sunbeam.

A preliminary settlement approval order, signed on Aug. 14, 2007, by Judge Jim Hudson, provides notification for potential class members through direct mail notifications and notices in Parade Magazine, with a circulation of 32 million, and USA Today, with its circulation of 2.5 million.

Sunbeam also provided the claims administrator with 101 names and addresses of persons who are known to have purchased eligible products between 1991 and 2000.

McLaughlin is co-counsel in class action suits that began in West Virginia and Tennessee and later merged into the Texarkana suit. McLaughlin did not object to the terms of the settlement agreement, but to Sunbeam's efforts to notify the potential class members. He claims that more than 30 million of the products in question were purchased.

"No inquiry was made concerning Sunbeam's compliance with its Notice obligations as to individual consumers Sunbeam should have been able to identify; what sources were used; what efforts were made; and whether further efforts would have been reasonable or unreasonable," McLaughlin's objection argues.

He argues that his discovery efforts in West Virginia and Tennessee produced more than 250,000 potential class members.

In the original suit filed Dec. 30, 2004, in the Miller County, Ark., Circuit Court, plaintiffs alleged that safety circuits on Sunbeam electric blankets and mattress pads were malfunctioning. The suit named products manufactured between 1991 and 2000 that contained a C100 Safety Circuit, which allegedly could fail, not only rendering the blankets unusable but also made them "likely to ignite fires."

Although Sunbeam firmly denies the products are unsafe and believes the lawsuit is without merit, it agreed to the settlement terms to reduce the time and expense of defending itself in the lawsuit.

The settlement agreement provides for an extended warranty, monetary payment -- and $7.5 million in attorney fees.

Both parties agree that McLaughlin's current opposition to the settlement agreement is without merit.

In the joint motion for final approval of the settlement, the parties agree that because the C100 line of products have not been manufactured for more than seven years, potential class members cannot be easily identified. It was agreed that notice through publication provides the best practice and satisfies due process. If the Circuit Court approves the final settlement, four more notices advising potential class members will be published.

McLaughlin claims he never received copies of the signed preliminary settlement order, notice of the fairness hearing or copies of the full settlement notices that were mailed directly to his clients.

The attorney is seeking an opportunity to object and a new fairness hearing, and is considering a "mini-class action" on behalf of potential class members who should have been notified.

McLaughlin argues that the fewer the number of class members notified the lower the cost to the defendant and less chance for adverse public relations for Sunbeam.

He also points a finger at the plaintiffs' attorneys and class counsel, who "remained mute" at the December fairness hearing.

McLaughlin claims that if the court finds Sunbeam has not fulfilled its notification obligations, it should be found in contempt of court and sanctioned "in the form of enhanced attorney fees and costs."

Of the $7 million in attorney fees and costs, McLaughlin states his firm has spent more than 5,000 hours in discovery time in the related cases and has submitted documentation for more than $200,000. He says the firm has around $54,000 in expenses still outstanding.

According to the terms of the settlement, to receive a monetary payment a class member must first contact Sunbeam and request a pre-paid shipping and return form. Then the consumer has to disassemble the bedding product and remove the C100 terminal block. The terminal block and proof of purchase of a new C104 bedding product must be returned to the claims administrator.

Within 45 days, Sunbeam will send $10 to purchasers of C100 products prior to 1997 and $15 for products manufactured between 1998 and 2000. The deadline for making a claim is 130 days after the settlement's effective date.

Class members alleging personal injury or property damages are not included in this settlement agreement.

Case No.: CV2-2004-407-2

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