Blitz to close Miami factory, sell assets

[tulsabug]

This actually happened over on Cherry Street a few years ago. Guy pulled his Porche out of a parking lot and floored it. Even a Porche will lose traction under certain conditions. He lost it and ran over a couple of pedestrians. However, you never see Porche advertising their cars as extensions of male anatomy.

Porsches are actually some of the most difficult cars to drive and handle properly and can easily lose traction in most every condition (I'm talking 911s here, not Cayennes). They handle completely differently than every other car out there other than aircooled VWs (and even then you really have to gun the horsepower into the 150+ range). Driving a high-horsepower, rear-engine, short-wheelbase car is just not something twits in Camrys are used to or frankly capable of. Usually people who buy them know this and are more skilled drivers than most, but you'll still get some idiots driving with their dicks - it was probably daddy's car.

But, back to the thread - Blitz clearly was run by an idiot who felt that they should market to the lowest common denominator (Wal-Mart customers). Never market to the cheap, they are always crap customers. After the first lawsuit they should have learned and changed their business plan.

[Teatownclown]

I hear there'll be a real bidding war for the assets. New owner can come in with a safety device and restart with the payout being less than 3 years. Bankruptcy court will insure the price gets bid up, but one man gathers what another man spills.....

[Teatownclown]

WSJ article re Blitz from 7/23/12 and  today, the WSJ published a Letter to the Editor (see below) with the attorneys' responses to the article. 
WSJ: The Tort Bar Burns On - A case study in modern robbery: Targeting the red plastic gas can
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.
A version of this article appeared July 23, 2012, on page A12 in the U.S. edition of The Wall Street Journal, with the headline: The Tort Bar Burns On.
WSJ: Letter to the Editor: Tort Suits Exist to Punish Bad Behavior, Help Victims
The story you present in your editorial "The Tort Bar Burns On" (July 23) of lawyers ambushing an innocent corporation because adults pour gasoline on fires makes a captivating tale, but it is pure fiction. Try telling that story to Rob Jacoby who was walking with his Blitz gas can, William Melvin who was filling a lawn mower, four-year-old Landon Beadore who knocked over a can with his tricycle or Chad Funchess who was fueling his chainsaw. Each individual ended up in a burn unit fighting for his life when a Blitz gasoline can exploded. Although there are instances of rekindling a fire, most of those were unsuspecting young boys who paid for the mistake with their lives. Blitz on the other hand was not unsuspecting.
Beginning in the 1920s, gasoline cans were equipped with flame-arresting screens to prevent explosions, including Blitz's metal gasoline cans. Arrestors prevent explosions in a variety of products from water heaters to charcoal lighting fluid to Bacardi 151 Rum. Arrestors cost four cents if designed into a spout and 75 cents if placed inside the can. Tragically, Blitz removed these safety devices from their plastic cans.
Had Blitz's customers foreseen their gruesome injuries, none would have touched a Blitz can. In stark contrast, Blitz's management foresaw the danger and made a conscious decision to sell the product, knowing many of the injured would be children.
Understandably, insurance companies have refused to insure Blitz, speaking with one clear voice that Blitz's product is too dangerous. As Blitz's final insult to its workers and injured customers, Blitz paid its CEO hundreds of thousands of dollars in bonuses as it threw its workers into the street.
A strong and effective civil justice system provides accountability when dangerous products harm consumers. Look no further than Blitz for proof that this is needed.
Diane Breneman, Esq.
Kansas City, Mo.
Hank Anderson, Esq.
Wichita Falls, Texas
Terry Richardson, Esq.
Barnwell, S.C.
The small business- and jobs-destroying tendencies of opportunistic personal-injury litigation in America are well demonstrated by the story of Blitz USA, a gasoline-can maker sued into bankruptcy, but you stop short of demanding that both major parties' candidates for office this November openly debate the problem and offer solutions.
If President Barack Obama and Gov. Mitt Romney are continuously going to trade barbs about "outsourcing," "off-shoring," "vampire capitalism" and "crony capitalism," along with their impact on economic growth and employment, then the candidates also should be obliged to speak to the toll that incessant and wholly preposterous lawsuits take on our economy.
White House visitor logs make clear that Mr. Obama is quite friendly with trial lawyers, and their generous campaign support for him and his party help explain his administration's efforts to expand liability and the prospect for evermore lawsuits.
Mr. Romney has been very slow on the stump to make the obvious connection between reasonable tort-reform legislation and economic growth (see Texas and other tort-reforming states that are faring better economically than most).
In too many jurisdictions across the country, the tort system grows more absurd each year as risk-averse investors move more capital and jobs overseas.
Meanwhile, physicians practice "defensive medicine" to the tune of perhaps $200 billion annually, hoping to avoid lawsuits but raising the cost of health care for everyone. Surely those who are genuinely injured by actual negligence or recklessness of another must have access to our courts for fair and prompt recompense. But allowing gas-can makers to be sued out of business because a few people handled gasoline imprudently is to willfully burn down America's economic house. Our presidential candidates must tell us how they'll put out the fire.
Darren McKinney
American Tort Reform Association
Washington
A version of this article appeared July 31, 2012, on page A12 in the U.S. edition of The Wall Street Journal, with the headline: Tort Suits Exist to Punish Bad Behavior, Help Victims.

Good reading.....


Who will end up with the golden goose? Too bad the employees who devoted their lives to this company won't qualify.

[nathanm]

I love the bit about tort reform bringing down medical costs. That has not been the case in Texas; they still have some of the highest cost metropolitan areas by Medicare's count. Too bad truthy passes for truth these days.

[Conan71]

Until this case, I had always assumed the screen in the nozzle on metal cans was a crude filter for the fuel.  No idea it was a flame-arrester.  At four cents a copy, Blitz foobared up.  I'm not excusing the moronic actions which resulted in many of the injuries, but Blitz at least would have had a defense that they made them as safe as possible.

TTC is right, there's a great opportunity for someone to step in and buy the assets, re-design the cans and put 117 people back to work.  Unfortunately, I don't have that much cash laying around at the moment.  

[DowntownDan]

Until this case, I had always assumed the screen in the nozzle on metal cans was a crude filter for the fuel.  No idea it was a flame-arrester.  At four cents a copy, Blitz foobared up.  I'm not excusing the moronic actions which resulted in many of the injuries, but Blitz at least would have had a defense that they made them as safe as possible.

TTC is right, there's a great opportunity for someone to step in and buy the assets, re-design the cans and put 117 people back to work.  Unfortunately, I don't have that much cash laying around at the moment.  

I do not know the details of the case, or whether the flame arrestor theory is what prevailed, but I am familiar enough with litigation and tort reform to know that it is not a solution.  It only serves to prevent injured people from recovering for injuries.  And the people behind it are companies that don't want tob e sued.  I am always skeptical of overly simplified fact patterns to make lawsuits look ridiculous.  I always suspected there was more to it than some idiots pouring gas on a fire.  You'll never convince me that 12 jurors would award these types of judgments if there wasn't more to the story.  Cheapening the product by removing a safety device would explain that.  Like the McDonalds coffee lady.  Yeah, it makes for a good antecdote to say some dumb lady spilled coffee on herself and won millions of dollars.  There was much more to that story if you actually study it and the debate is not that simple.

[nathanm]

Like the McDonalds coffee lady.  Yeah, it makes for a good antecdote to say some dumb lady spilled coffee on herself and won millions of dollars.  There was much more to that story if you actually study it and the debate is not that simple.

Pro tip: Do not look at the pictures of that injury if you have recently eaten or plan to eat in the near future.

[cannon_fodder]

A study by U of Texas with the u of Illinois shows "Tort Reform" had no impact on the number of doctors per capita in texas (it has continued to decline against the national average) or the cost of medical services (rising at a higher rate).  The conckusion was other factors far outweigh any effect med mal lawsuits and the restrictions of citizens rights might have.

Even though Tort reform advocates in Oklahoma touted the Texas success when lobbying for OkC to limit the power of citizens, the facts show they knew it was BS.

Plaintiffs attorneys found a company too dumb to correct a defective product.  Anyone confused still hasnt read this thread.  Sorry for the people losing their jobs, but thats what happens when "job creators" do a poor job.

Remember, they could declare bankruptcy and reform the company with no debt... they have chosen not too.

[guido911]

http://www.facesoflawsuitabuse.org/2012/12/the-last-week-how-lawsuits-doomed-an-american-icon/

Look around this website, interesting to say the least. This one really got my attention.

http://www.aspentimes.com/article/20071219/NEWS/959420007

I'm sure CF will have some explanation why a seven year old should get sued.

Edited. That plaintiff ^^has given up the ghost.

[guido911]

A study by U of Texas with the u of Illinois shows "Tort Reform" had no impact on the number of doctors per capita in texas (it has continued to decline against the national average) or the cost of medical services (rising at a higher rate).  The conckusion was other factors far outweigh any effect med mal lawsuits and the restrictions of citizens rights might have.

If you are genuinely interested in "citizens rights", does that mean you would support "loser pays"? After all, as it stands a plaintiff/citizen really has nothing to lose except a filing fee and process cost to sue another citizen.

[Conan71]

http://www.facesoflawsuitabuse.org/2012/12/the-last-week-how-lawsuits-doomed-an-american-icon/

Look around this website, interesting to say the least. This one really got my attention.

http://www.aspentimes.com/article/20071219/NEWS/959420007

I'm sure CF will have some explanation why a seven year old should get sued.

Edited. That plaintiff ^^has given up the ghost.

Dumbass turns into the boy and sues the boy?  Really?

Even if the child did not call "On your right" which would have been prudent, I wouldn't call it recklessness or negligence.

The fellow suing also had responsibility for his own safety and that of others.  Skiing is an inherently dangerous sport and when he bought his season pass, I'm quite certain there is a hold-harmless clause in the fine print which says if you are injured you are on your own.

[Red Arrow]

I'm quite certain there is a hold-harmless clause in the fine print which says if you are injured you are on your own.

Does that hold-harmless include other skiers or just the ski facility?  I'm not a skier so I am just asking.

[Ed W]

Porsches are actually some of the most difficult cars to drive and handle properly and can easily lose traction in most every condition (I'm talking 911s here, not Cayennes). They handle completely differently than every other car out there other than aircooled VWs (and even then you really have to gun the horsepower into the 150+ range). Driving a high-horsepower, rear-engine, short-wheelbase car is just not something twits in Camrys are used to or frankly capable of. Usually people who buy them know this and are more skilled drivers than most, but you'll still get some idiots driving with their dicks - it was probably daddy's car.

It's not exactly relevant to the thread, but I came across this on Boing Boing.  It's a 520hp VW bus equipped with a Porsche engine, driving on a race track and eating most of the other competitors for lunch.  There's a Subaru WRX - no slouch at acceleration - that he blasts by as if he's passing on the interstate.  The bus has had extensive brake and suspension work too, probably a necessity for self-preservation.

[cannon_fodder]

Dead horse...  always sad when people lose their jobs.  But a company decided making an extra 10 cents per item was more important than their customers.  A very simple principle of products liability.  This is not a case where they "couldnt defend them" all.  They took cases to trial and LOST in very conservative venues (Utah, Texas, etc.).  We have covered this ad naseum.

What does someone suing a minor for a ski accident have to do with products liability?  Any idiot can file a lawsuit.  And in most states you get thrown out of court and sanctioned.  A remedy that needs to be enforced more often both ways.

Loser pays?  It would help my business greatly.  Assuming the Plaintiff attorney gets to bill at the same hourly rate as defense counsel (no longer contingency) it would make trial much more profitable.  If I try a case I win and beat any offer to confess 80+% of the time.  I could take a $10k case that isnt worth trying and make it profitable.  Better yet, if I lose my client is probably insolvent anyway... so the defense gets to take a number in bankruptcy court.

Of course, the "solution" to that problem would be to male lawsuits means tested.  Effectively making the courts closed to the masses.

In reality most lawsuits are funded by insurance companies.  Most TORT laws are now written for insurance companies.  Trial by jury is the best system ever devised and should be protected at all cost.  Frivolous suits should be tossed and those who bring them sanctioned.  A good SLAPP law in oklahoma would be a start... but that TORT reform does not profit insurance companoes.