Wal-Mart Pays $25M to Numb the Blitz Gas Can Burn
Wal-Mart Stores (NYSE:WMT) is still getting burned by the dozens of lawsuits that have been filed about the company and Blitz USA for gas can explosions, but the retailer has agreed to contribute about $25 million to help settle those cases still unresolved.
According to NBC News, Wal-Mart and Blitz, formerly the country’s largest manufacturer of plastic gas cans, have been in hot water ever since consumers starting filing lawsuits charging that Blitz’s portable plastic gas cans were exploding, injuring or killing consumers in the process. As the largest seller of plastic gas cans, Wal-Mart has sold tens of millions of Blitz’s products, but the retailer maintains that it does not take responsibility for the accidents, even though it has agreed to contribute more toward the settlement.
Blitz, based in Miami, Oklahoma, insists that its cans are not at fault and that any alleged injuries were caused by users’ own negligence and/or misuse, but the two companies are still responsible for a proposed $161 million fund purposed to settle lawsuits on account of the incidents. A hearing on the proposed settlement is set for early next year.
NBC News reports that Blitz is now in bankruptcy and out of business due to the more than 80 lawsuits filed against it within the past 10 years, but Wal-Mart is still alive and kicking, which is why it’ll be interesting to see how the retailer fares in court next year. Wal-Mart has been named as a defendant in 24 of the lawsuits, but the retailer continues to defend itself with the assertion that the manufacturer of the can, rather than itself, is responsible for the safety of its product, and that Wal-Mart is therefore not in charge of testing the safety of the products; the supplier is.
It’s not that simple, though. Blitz has been the subject of more than 80 lawsuits, and attorneys now argue that Wal-Mart should have investigated its product after these charges, urging the manufacturer to make changes. Attorney Diana Breneman said to NBC News: “If you repeatedly are sued in cases and the allegations are people are being severely burned or burning to death, you can’t hide your head in the sand. You’re making money off of those cans. You have a responsibility to investigate it, to do whatever is necessary, if you’re going to continue to sell the product.”
Many believe that Wal-Mart should have forced Blitz to employ a flame arrest recommended by scientific experts. NBC News explains that this piece of mesh or disk with holes can lessen the likelihood of an explosion of a gas/air vapor inside a gas can. Wal-Mart representative Brooke Buchanan acknowledged that the company had not taken measures to encourage this change, instead noting, “We’re waiting on industry experts” while maintaining, “These types of events are tragic and we’re saddened that a small number of people have suffered injures from the misuse of gas cans.”
Blitz and Wal-Mart agreed to contribute $161 million to settle with many of the plaintiffs before the hearings, even though both parties still deny liability and any defect in the can that could have caused the incidents. According to NBC News, the Consumer Product Safety Commission reported that at least 11 deaths and 1,200 emergency room visits have involved gas can explosions during the pouring of gasoline since 1998, but the proposed settlement would only cover those injured by explosions between July 2007 and July 2012.
Wal-Mart has been criticized for its failure to take any responsibility and its resistance in supporting a national campaign to educate consumers about the potential dangers of misusing gas cans. The company continues to support its decision with the insistence that it is a retailer, not on expert, and that the CPSC should have called on Blitz to change the structure of the gas cans if it found an issue. The oversight agency didn’t call on the industry to add the protective devices to portable gas cans until NBC News published its investigation last week.
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