Lieff Cabraser: Consumer Law Newsletter Issue No. 7

Consumer Law Newsletter:
Issue No. 7

December 21, 2001

Top News

Recalled Chrysler Minivans Still Operating
Mediator Appointed in Sulzer Hip and Knee Cases
FDA Recalls Mini-Gel Snacks Due to Choking Risk for Children
Baxter Dialysis Filters Recalled Due to Presence of Fatal Processing Fluid
Complaint Submission Deadline Approaches in Providian Credit Litigation

Introduction

The Consumer Law Newsletter is published quarterly by the national law firm of Lieff Cabraser Heimann & Bernstein, LLP. The Newsletter is sent to persons who have contacted our firm via the internet and provided their e-mail address. We hope you find the Newsletter of interest.

Top News

Recalled Chrysler Minivans Still Operating

The Detroit News reported on December 16, 2001, that over a year after DaimlerChrysler agreed to a recall of 1.16 million minivans to fix leaky fuel seals, the vehicles are still on the road and at risk of engine fires. On September 8, 2000, the automaker agreed to the voluntary recall, after 19 fires had been reported to the National Highway Traffic Safety Administration. No notifications have yet been mailed to affected minivan owners.

The recall has not taken place, and in the interim, six more engine fires have been reported and another 56 consumers have complained of fuel leaks in 1996-2000 model Chrysler, Dodge and Plymouth minivans according to government documents obtained by The Detroit News. In response, DaimlerChrysler stated that it would commence the recall in January 2002. The newest version of the minivan, which went on sale in fall 2000, is not affected.

About 500 automotive recalls are initiated each year. Consumers are usually notified within 60 days after an automaker informs the government of its recall plans. It is incumbent upon the manufacturer, however, to inform consumer of the recall and provide a remedy for the problem.

Mediator Appointed in Sulzer Hip and Knee Cases

On November 30, 2001, Texas-based Sulzer Orthopedics, Inc., and its Swiss parent company Sulzer Medica entered into an agreement with plaintiffs' counsel, including Lieff Cabraser Heimann & Bernstein, LLP, for the appointment of a third-party mediator to assist in the settlement of the litigation. Subsequently, U.S. District Court Judge Kathleen O'Malley appointed John Calhoun Wells as mediator. Mr. Wells has settled some of the most bitter U.S. labor disputes, and served as mediator in a host of other cases. The role of the mediator is to retain an investment banking firm to conduct a thorough analysis of Sulzer's financial condition and prepare a proposed refinancing and restructuring of the company in order to enable Sulzer to raise sufficient monies to fund a settlement for claimants with recalled Sulzer hip and knee implants.

In exchange for Sulzer agreeing to the appointment of a mediator, plaintiffs' counsel agreed not to initiate any court proceedings against Sulzer Orthopedics and Sulzer Medica through January 2002. At this time, no agreement has been reached with Sulzer concerning the final resolution of the case.

As explained by Lieff Cabraser partner Richard M. Heimann, "The purpose of this agreement is for Sulzer to come forward with a new settlement offer that is materially more favorable to the injured patients than Sulzer's current offer. We are hopeful that by the end of January 2002, the investment banking firm will have completed its analysis and plaintiffs' counsel and Sulzer will have negotiated a new proposed settlement."

To date, over 2,700 Sulzer hip patients and 525 knee patients have been forced to undergo additional surgery to replace the defective implant.

FDA Recalls Mini-Gel Snacks Due to Choking Risk for Children

On December 10, 2001, the Food and Drug Administration ("FDA") announced the recall of the recall of 16,000 packages of mini-cup gel candies sold nationwide because they were deemed a choking hazard. This follows earlier action by the FDA banning the importation of the gel candies.

The recalled candy was produced in Asia, by the Taiwanese manufacturer Sheng Hsiang Jen Foods Company. The snacks are plug-shaped, packaged in small sealed plastic cups the size of individual coffee creamers and contain gelatin. In the U.S., the candy was sold under the names of Mother's Pride and NATA, and the label describes the candy as a mini-fruit bite.

It has been reported that the gel is so thick that it does not dissolve in boiling water, and it cannot be swallowed without being chewed. Safety experts have criticized the candy's shape, saying it acts like a plug in young throats, and its viscosity, which makes it extremely difficult to dislodge from the windpipe of an asphyxiated child.

Baxter Dialysis Filters Recalled Due to Presence of Fatal Processing Fluid

On November 5, 2001, Baxter International, Inc., a leading manufacturer of products for kidney dialysis patients, announced that its internal investigation revealed that the use of a processing fluid in the production of its dialysis filters may have played a role in the sudden deaths of over 50 patients worldwide. The processing fluid, a chemical solution called perfluorohydrocarbons sold by 3M, was purportedly used in the manufacturing process to identify whether the filters would leak during kidney dialysis treatment.

According to press reports, the fluid was designed to clean electronic equipment such as circuit boards. It was never approved as safe for the cleaning or testing of any products used for medical purposes. Additional press reports stated that the fluid has a low boiling point and becomes gaseous when warmed to body temperature. Once inside the blood stream of patients, it turned into lethal gas bubbles causing the patient pulmonary distress, cardiac arrest or stroke symptoms during or within hours of being dialyzed. For further information, click here.

Complaint Submission Deadline Approaches in Providian Credit Card Litigation

In November 2001, the San Francisco Superior Court granted final approval to a class action settlement in excess of $100 million in cash, credits and other benefits to a nationwide class of Providian credit cardholders. The settlement requires Providian to halt the use of certain business practices and includes a complaint review process.

The settlement also creates a "Providian Settlement Ombudsman" to monitor Providian's resolution of certain customer service complaints. The Providian Settlement Ombudsman has the power to require Providian to "fairly evaluate and take appropriate action(s) to correct any actual harm caused to the class member by the fault of the bank." The deadline for submitting a complaint to the Settlement Ombudsman is December 31, 2001. For further information, including the address of the Settlement Ombudsman, click here.