Goodyear Will Pay Up to $236 Million Over Defective Radiant-Heating Hoses
October 20, 2003
By Charles Toutant
The Goodyear Tire and Rubber Co. has agreed to pay up to $236 million to
settle a class-action suit over defective hoses in radiant home-heating systems.
U.S. District Judge Stanley Chesler gave preliminary approval on Oct. 9 to
the settlement, which covers purchasers in 44 states and Canada. A class action
on the same product in the six New England states is pending in Boston's federal
court.
The plaintiffs sued under New Jersey's Consumer Fraud Act and Product Liability
Act and raised claims of failure to warn, design defects and negligence. They
claimed Goodyear knew the Entran II rubber hoses it produced and sold from
1989 to 1994 tended to crack and break. The tubing, installed under floors
for radiant heating and under driveways and sidewalks to melt snow, was a
component in systems made by Heatway Radiant Floors & Snowmelting of Springfield,
Mo., which is now in bankruptcy.
The pact calls for Goodyear to pay at least $196 million and up to $236 million
into a fund over five years, depending on the company’s financial performance.
Plaintiffs' lawyers, in a memorandum, estimated that the settlement amount
represents 18 percent to 30 percent of the damages suffered by the class of
8,000 to 12,000 members, whose specific relief will be decided by an allocation
plan.
Chesler is expected to hold a final approval hearing on the settlement in
about four months, says Harris Pogust, one of eight lawyers designated as
class counsel. The judge is also expected to appoint a special master to supervise
the disbursements to class members.
The settlement is also subject to a final approval hearing by a judge in
the Ontario Superior Court of Justice, says Pogust, a partner at Sherman,
Silverstein, Kohl, Rose & Podolsky in Pennsauken.
Pogust says he is pleased with the settlement terms, especially considering
that Goodyear’s finances are in dire condition. “This number is
very, very fair, and if you litigate these cases, there is a very good possibility
Goodyear would have gone into bankruptcy,” Pogust says.
The lead plaintiffs' counsel was Jonathan Cuneo of the Washington, D.C.,
firm of Cuneo, Waldman & Gilbert.
Lead defense counsel was David Kott, a partner at McCarter & English
in Newark. He declines to comment on the settlement and refers questions to
Goodyear’s headquarters in Akron, Ohio.
Goodyear spokesman Skip Scherer confirms the settlement terms but disputes
the plaintiffs’ dire characterization of company finances. Scherer also
says plaintiffs’ lawyers overestimated the number of aggrieved parties
and the amount of their damages. Goodyear, which no longer makes tubes for
home heating systems, says the problems suffered were caused not by its tubing
but rather by Heatway's improper design and installation of the systems.
