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Mattel Settles Suits Over Dangerous Toys

Company agrees to consumer reimbursement, stricter quality control

By Jon Hood
ConsumerAffairs.com

October 15, 2009

• California Warns Retailers On Lead • Mattel Settles Suits Over Dangerous Toys • Target To Pay $600,000 For Violating Lead Paint Ban • Tougher Safety Requirements For Children's Products Now In Effect • Toys 'R' Us Launches Unsafe Baby Products Awareness Program • New Safety Agency Chief Pledges Greater Openness • Obama Names New Consumer Product Safety Chair, Boosts Budget • Toymaker Fined $1.1 Million For Consumer Violations • Maryland Stores Stop Selling Toys With Lead Paint • Toymakers, Craftspeople Up In Arms Over New Safety Law • Thrift Stores Protest Ban on Lead Toys • Target Launches In-Store Recall System • Do's and Don'ts of Holiday Decorating • New Jersey Finds Recalled Toys in Four Stores • Mattel Agrees to Lower Lead Paint Levels in Toys • Consumers Cautioned About Dangerous Toys • Soon-To-Be-Banned Plastic Toys Flooding the Market • Safety Agency Warns of Safety Hazards in Cribs --- • More Consumer Safety News • Recall Notices

Mattel announced Tuesday that it has agreed to settle a group of cases arising from the company's recalls of millions of dangerous toys. The settlement, filed in Los Angeles on Tuesday, would put to rest 22 consolidated cases stemming from the massive 2007 recalls, which implicated toys containing lead paint and magnets that could harm children if swallowed.

Under the terms of the agreement, customers who participated in the recalls will receive either $10 or 50 percent of the value of recall vouchers, whichever is greater. After Mattel initiated the recalls, consumers with defective toys received vouchers for the product's retail value. The settlement will allow those consumers another bite of the apple.

Class members who didn't take part in the recalls, but who have an eligible toy or proof that they once owned one, will receive either a check or a voucher for the amount they originally paid. Consumers who destroyed a recalled toy are eligible to receive reimbursement for up to three items. Class members may also recoup money they spent for lead testing, with up to $600,000 of the settlement set aside for that purpose.

A statement from Whatley Drake & Kallas, one of the firms representing the plaintiffs, said the settlement amounts to "tens of millions of dollars in monetary relief."

The recalls, announced in August 2007, shone an uncomfortable spotlight on the toy industry and raised questions about manufacturing oversight and quality control. On August 2, 2007, Mattel recalled 967,000 toys contaminated with lead paint. That recall implicated 83 separate products, including Dora the Explorer and Sesame Street-themed toys. Two weeks later, on August 14, Mattel simultaneously recalled 436,000 die-cast toy cars covered with lead paint and a shocking 18.2 million toys containing small magnets that posed dangers if swallowed.

The recalls also furthered concerns about the safety of foreign-made products. All of the recalled items were manufactured in China, and the incidents followed recalls of pet food implicating Chinese-manufactured ingredients. Even before the 2007 incidents, Mattel had initiated 16 recalls in a 10-year span.

Tests showed that, in some cases, the level of lead in affected toys was 180 times the legal limit of 0.06 percent. To put things in perspective, that means the toys' lead level was twice that allowed before lead house paint was banned.

A number of the recalled products contained tiny magnets with an unfortunate habit of falling out of the toys. The magnets were so small -- some measuring an eighth of an inch in diameter -- that parents often didn't notice them. If a child swallowed more than two, the magnets could attract one another and cause potentially fatal internal perforation. Three children were seriously injured when they swallowed more than one magnet, according to a recall notice by the Consumer Product Safety Commission (CPSC). The commission received over 170 incident reports of magnets falling out.

After the recalls were announced, in an apparent attempt at damage control, Mattel CEO Bob Eckert took out a full-page ad in several nationwide newspapers touting the company's "long record of safety" and assuring parents that "nothing is more important than the safety of our children."

The recalls were so extensive that Mattel had to set up a separate website to guide consumers through the process. That site includes links to the original recall announcement and a "recall brochure," an eight-page document with labeled pictures of recalled toys and a table listing affected date codes and the voucher amount for recalled toys. The incidents prompted Congress to pass new legislation that essentially banned lead in toys.

In addition to consumer reimbursement, Mattel has agreed to donate $275,000 to the National Association of Children's Hospitals and Related Institutions and to set up a stricter quality-control process. Specifically, Mattel is required to annually verify to the court that it is meeting certain benchmarks, and to comply with new federal regulations and rules created by the American Society for Testing and Materials (ASTM).

The settlement, which will require final court approval, follows Mattel's decision last year to pay $12 million to end investigations by a number of states into the recalls.

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