WSJ...Like 19th century marauders, the trial bar attacks
any business it thinks will cough up money in its raids. The latest victims are
the people who make those red plastic gasoline cans.
Until recently, Blitz USA—the nation's No. 1
consumer gasoline-can producer, based in Miami, Oklahoma—was doing fine. It's a
commoditized, low-margin business, but it's steady. Sales normally pick up when
hurricane season begins and people start storing fuel for back-up generators and
the like.
Blitz USA has controlled some 75% of the U.S. market
for plastic gas cans, employing 117 people in that business, and had revenues of
$60 million in 2011. The Consumer Product Safety Commission has never deemed
Blitz's products unsafe.
Then the trial attorneys hit on an idea with
trial-lawyer logic: They could sue Blitz when someone poured gas on a fire (for
instance, to rekindle the flame) and the can exploded, alleging that the
explosion is the result of defects in the can's design as opposed to simple
misuse of the product. Plaintiffs were burned, and in some cases people
died.
Blitz's insurance company would estimate the cost of
years of legal battles and more often than not settle the case, sometimes for
millions of dollars. But the lawsuits started flooding in last year after a few
big payouts. Blitz paid around $30 million to defend itself, a substantial sum
for a small company. Of course, Blitz's product liability insurance costs
spiked.
In June, Blitz filed for bankruptcy. All 117
employees will lose their jobs and the company—one of the town's biggest
employers—will shutter its doors. Small business owners have been peppering the
local chamber of commerce with questions about the secondary impact on their
livelihoods.
The tort-lawsuit riders leading the assault on Blitz
included attorneys Hank Anderson of Wichita Falls, Texas; Diane Breneman of
Kansas City, Missouri; and Terry Richardson of Barnwell, South Carolina. All
told, they've been involved in more than 30 lawsuits against Blitz in recent
years.
The rest of the plastic-can industry can't be far
behind, so long as there's any cash flow available. The American Association for
Justice's (formerly the Association of Trial Lawyers of America) annual
conference in Chicago this month will feature, with a straight face, a meeting
of the "gas cans litigation group."
The Atlantic hurricane season started June 1, and
Blitz estimates that demand for plastic gas cans rises 30% about then. If
consumers can't find the familiar red plastic can, fuel will have to be carried
around in heavy metal containers or ad-hoc in dangerous alternatives, such as
coolers.
Trial lawyers remain a primary funding source for
the Democratic Party, but stories like this cry out for a bipartisan
counter-offensive against these destructive raids that loot law-abiding
companies merely because our insane tort laws make them vulnerable.
