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From Products Liability Law Daily, July 25, 2016

$239 million settlement approved in gun defect class action

By Susan Lasser, J.D.

A class action settlement has been reached between a class of gun owners and the manufacturers of the guns at issue, and the settlement has been approved by a federal district court in Florida. The court found the class was properly certified and that the settlement reached was fair, reasonable, and adequate (Carter v. Forjas Taurus S.A., July 22, 2016, Seitz, P).

The class action centers on nine polymer striker-fired Taurus models of firearms alleged to have two defects that cause unintentional discharge when dropped or when the safety is on. The manufacturers of the firearms at issue are Forjas Taurus S.A., a Brazilian company, as well as Taurus International Manufacturing, Inc. and Taurus Holdings, Inc. (collectively, Taurus). The specific models are: PT-111 Millennium; PT-132 Millennium; PT-138 Millennium; PT-140 Millennium; PT-145 Millennium; PT-745 Millennium; PT-24/7; PT-609; and PT-640 (collectively, class pistols). The class is comprised of approximately 955,796 members, and includes all present owners of the class pistols. After two rounds of notice, four individuals opted out and only five individuals filed objections. The settlement release expressly excludes claims for death, personal injury, and damage to property other than to the pistols.

Class representative and defect claims. The plaintiff/class representative was a deputy with the Scott County, Iowa Sherriff’s Department in 2013 when his service weapon, a personally-owned Taurus PTl40 Millennium PRO pistol, fell from its holster while he was pursuing a suspect. The weapon dropped to the ground, and discharged on impact. He filed his initial complaint against the gun manufacturer in December 2013, and after several months of discovery, he filed his first amended complaint, asserting statutory, tort, and warranty-based claims arising from alleged safety defects in the class pistols. Specifically, the deputy alleged that the class pistols contain two defects (safety defects). The first is a "drop-fire defect" that the plaintiff alleged can cause the pistols to fire when dropped from a normal height. It’s alleged that the drop-fire defect is a common design defect attributable to the fact that the class pistols lack a "trigger blade safety." The second defect alleged is a "false safety defect" which allows a pistol to fire unintentionally even when the manual safety lever is in the "on" or "safe" position and the trigger moves rearward. While the manufacturers acknowledge that the class pistols lack trigger blade safeties, they deny that this results in the alleged common defects, and deny the plaintiff’s allegations and claims.

After reviewing the record and the parties’ submissions, and having held two final approval hearings, with a supplemental notice period in between, the court determined that the notice complied with due process and, pursuant to the federal rules on class actions, was "the best notice practicable under the circumstances." Further, the court found that the class was properly certified; and that the settlement was fair, reasonable, and adequate. The settlement also was the product of extensive arm’s-length negotiations by experienced counsel, providing reasonable and adequate value to the settlement class members, according to the court.

Settlement. The proposed settlement provides settlement class members who elect to return their class pistol with two options for relief: either an enhanced warranty or a cash payment. The settlement also provides online safety training.

Under the first option, settlement class members can choose to receive an enhanced warranty covering their class pistols—the manufacturers agreed to modify the existing warranty and repair policy for all class pistols to allow any owner to return their class pistol with a warranty claim at any time for the life of the pistol, to have the pistol inspected for the alleged safety defects and repaired or replaced with a model with a trigger blade safety. As part of the enhanced warranty, the manufacturers have waived fees and labor charges. Taurus will destroy all returned class pistols in accordance with Alcohol, Tobacco, and Firearms (ATF) regulations.

Alternatively, settlement class members can elect to return their class pistols to the manufacturers during the four-month claims period in exchange for a cash payment. The four-month claims period will begin to run 30 days from the conclusion of any appellate process. The payments will be based on the following schedule: (1) if less than 10,000 class pistols are returned, the payment for each returned class pistol will be $200; (2) if between 10,001 and 20,000 class pistols are returned, the payment for each returned class pistol will be $175; (3) if between 20,001 and 200,000 class pistols are returned, the payment for each returned class pistol will be $150; and (4) if more than 200,000 class pistols are returned, the payment for each returned class pistol will be less than $150 and will be equal to $30 million divided by the number of class pistols returned. To receive this benefit, class members must submit a two-page claim form. The maximum liability for the cash payments benefit is capped at $30 million. The only amounts included in the calculation of the $30 million cap are the cash payments made to settlement class members. None of the other settlement benefits, class counsel’s fees and expenses, incentive fee, or claims administration expenses are included in the $30 million cap. The parties estimate that the cap will be reached only if more than 25 percent of all settlement class members elect the cash payment option.

The parties’ valuation expert estimated the total value of the settlement if every class member were to make a claim to be $239 million. Assuming a more conservative 10 to 25 percent overall claim rate, the estimate of the settlement value ranges from $29.9 to $73.6 million, excluding claims administration and attorneys’ fees, which the manufacturers will pay separately.

Attorneys’ fees, the representative award, and objections. The court found that the plaintiff’s request for $9 million in attorneys’ fees and costs and a $15,000 service award for the plaintiff/class representative to be reasonable in light of the circumstances of this case. Therefore, the representative’s motion for attorneys’ fees and an incentive award was granted by the court. The court also found that the class received adequate notice and overruled the objections to the notice programs.

Settlement class certified and settlement approved. The court found the class certifiable based on the elements for class actions, and ruled that the settlement was fair, reasonable and adequate. The court also overruled all objections to the settlement’s fairness, reasonableness, and adequacy. The settlement was not insignificant, and no admission of liability was required. Further, the court found that the settlement was not unconstitutional.

The case is No. 1:13-CV-24583-PAS.

Attorneys: David L. Selby, II (Bailey & Glasser, LLP) for Chris P. Carter. John Patrick Marino (Smith, Gambrell & Russell, LLP) for Forjas Taurus, SA, Taurus International Manufacturing Inc. and Taurus Holdings Inc.

Companies: Forjas Taurus, SA; Taurus International Manufacturing Inc.; Taurus Holdings Inc.

MainStory: TopStory SettlementAgreementsNews ClassActLitigationNews WeaponsFirearmsNews FloridaNews

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