Central Sprinkler Litigation & Settlement
The Litigation
In April 2001, the law firms of Lieff Cabraser Heimann & Bernstein, LLP, and Berding & Weil, LLP, filed lawsuits in California and Pennsylvania on behalf of property owners that installed allegedly defective Glass Bulb fire sprinklers with O-rings, as manufactured by Central Sprinkler Company, a subsidiary of Central Sprinkler Corporation and an affiliate of Tyco International (US) Inc. Lieff Cabraser also filed a third action in Massachusetts on behalf of the Building Owners and Managers Association International ("BOMA"). BOMA is an international federation that represents commercial building owners in North America, and is the largest organization of its kind.
Since the mid-1970s, Central Sprinkler manufactured an estimated 35 million "wet" and "dry" fire sprinkler heads with O-rings, and those sprinkler heads have been installed in offices, schools, homes, apartments, hospitals, day care facilities, dormitories, nursing homes, hotels, supermarkets, parking garages, and warehouses nationwide. In the lawsuits, plaintiffs contended that the sprinkler heads, which were equipped with O-ring water seals, prematurely deteriorated, which could cause sprinklers to fail to operate during fires.
Central Sprinkler denied the allegations of the claims and moved to dismiss the three actions. The motions were not decided by any court, and no ruling of defect was made.
Summary of the Settlement
While the motions were pending, Central Sprinkler Company announced in July 2001, in conjunction with the U.S. Consumer Product Safety Commission, a voluntary replacement program ("VRP"). Pursuant to the VRP, Central Sprinkler Company has agreed to provide for the removal and replacement of O-ring sprinklers manufactured by Central Sprinkler Company and a smaller number of O-ring sprinklers manufactured by its affiliates under the Gem and Star brand names, at no charge to building owners.
Prior to this announcement and thereafter, Lieff Cabraser and Berding & Weil conducted an independent investigation, retained independent fire safety experts and reviewed a substantial number of documents relating to O-ring sprinklers produced by Central Sprinkler Company. Eventually, Lieff Cabraser and Berding & Weil, on behalf of plaintiffs, entered into negotiations with Central Sprinkler Company in an effort to enhance the VRP.
After nearly 10 months of negotiations, the parties reached a Settlement Agreement resolving all three lawsuits in May 2002. Although the Settlement does not create a class, all the enhancements provided by the Settlement are available to all owners of properties containing the O-ring sprinklers and who file claims through the VRP. The Settlement Agreement will be subject to a Consent Order issued by Judge Petrese B. Tucker, U.S. District Judge of the Eastern District of Pennsylvania, in Philadelphia, who will oversee the implementation of the Settlement Agreement.
The following is a summary of key points of the Settlement Agreement which will enhance the benefits already established under the VRP:
- Reimbursement of permit fees paid, if any, for the replacement work, up to $75.00;
- Use of a replacement contractor bonded against theft if your lease, management agreement or association bylaws require such bonding;
- Subject to certain conditions, reimbursement of the reasonable cost of replacement materials and labor incurred and paid by the building owners who replaced their Central O-ring sprinklers between February 2000 and July 19, 2001;
- Subject to certain conditions, the opportunity to arrange on your own for the labor necessary to install the free Replacement Sprinklers rather than having Central arrange for labor through the VRP, and to receive specific reimbursement amounts toward the cost of that replacement labor; and
- Appointing an ombudsman to assist VRP claimants in communicating with Central and resolving certain disputes.
Further Resources
A more complete description of these enhancements to the VRP can be accessed by reviewing the Notice of Enhancements to Voluntary Replacement Program. The Notice also includes the various claim forms that are necessary to receive the enhancements. To learn more about the VRP and enhancements and to obtain necessary documents and forms relating to the VRP and enhancements, please visit www.sprinklerreplacement.com.
About Lieff Cabraser
Lieff Cabraser Heimann & Bernstein, LLP is a fifty-plus attorney law firm that has represented plaintiffs nationwide since 1972. We have offices in San Francisco, New York and Nashville. We represent plaintiffs in class and group actions and in individual lawsuits in cases involving substantial losses. For the last six years, the National Law Journal has selected Lieff Cabraser as one of the top plaintiffs' law firms in the nation.
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