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IMAGE SOURCE: © Mattel Web site
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Mattel Inc., the world’s largest toymaker, reached an agreement to settle “virtually all” U.S. claims over its recalled toys.
The 2007 recalls involved 2 million toys, and were part of a cluster of recalls by several companies which resulted in a total of 21 million toys being recalled. The recalled toys included popular lines such as Dora the Explorer made by Fisher Price and Mattel toys such as Batman and Barbie accessories.
If approved, the proposed settlement will resolve 22 lawsuits filed against Mattel, its Fisher Price unit and major retailers on behalf of the millions of families who purchased or received defective toys as gifts prior to the recalls.
The settlement comes a year after Mattel and Fisher-Price agreed to pay $12 million to 39 states to end an investigation into contaminated toys. More recently, Mattel agreed to pay another $2.3 million civil penalty for violating a federal lead paint ban.
Terms of the Settlement
The settlement will provide “tens of millions of dollars in monetary relief,” said the plaintiff’s law firm in a statement.
The settlement agreement calls for cash payments to both class members who participated in the recall and those who did not. Additionally, class members may recover all out-of-pocket expenses incurred for lead testing.
The deal also requires Mattel to create a quality assurance program, which the court will oversee. Additionally, the company will make a donation in the amount of $275,000 to the National Association of Children’s Hospitals and Related Institutions (NACHRI) for the creation of child safety programs. NACHRI is a not-for-profit organization made up of children's hospitals, pediatric units and related health systems.
Toymakers were hurt by the sheer number of product recalls in 2007 which lead to millions of dollars in legal expenses, costs for testing and product returns. As a result, Congress passed The Consumer Product Safety Improvement Act of 2008, which requires all toys and infant products intended for children under 12, to undergo comprehensive testing before they can be sold. The act also bans harmful chemicals including lead in toys. #