Class Action Settlement Valued at Between $1 Billion and $3 Billion to Consumers

This was a national class action brought on behalf of purchasers of certain automobile tires manufactured by Cooper Tire & Rubber Company. Plaintiffs filed class action lawsuits in 33 states across the country against Cooper Tire & Rubber Company alleging that Defendant’s tires contained a manufacturing defect undetectable by consumers and that Defendant sold its tires without disclosure of material facts. Plaintiffs alleged that these manufacturing defects could result in catastrophic tire failures during vehicle operation. Plaintiffs have alleged that Defendant fraudulently induced Plaintiffs and Class Members to purchase its tires in violation of the New Jersey Consumer Fraud Act and other similar state laws or theories. Specifically, Plaintiffs’ allegations include challenges to (1) the ingredients used by Defendant, which allegedly lead to the production of defective tires, e.g., tires with adhesion problems in various layers of the tire (which may manifest as visible gas/air bubbles or blisters at the inner liner); (2) the decision by Defendant to sell many of these tires instead of discarding or rejecting them; (3) the decision by Defendant to awl or otherwise eliminate the manifestation of these adhesion problems prior to sale, although non-manifest bubbles or adhesion problems remained elsewhere in the tire; and (4) the decision by Defendant to cover up the foregoing in various ways, including but not limited to its adjustment processes and warranty practices.Plaintiff’s counsel made a thorough investigation of the law and facts relating to the allegations in the lawsuit and the denials thereof. That investigation included the submission of extensive written discovery and review of responses thereof, the review and analysis of thousands of documents produced by Defendant or gathered from various government agencies or other public sources, the taking of numerous depositions, the retention of and consultation with experts and the briefing of numerous questions of law. The case settled in its entirety in the New Jersey Superior Court, Middlesex County. The settlement has a total value estimated at between $1 Billion and $3 Billion to Consumers. It is believed the settlement substantially increased safety to consumers and the public by changing for the better the way these tires are manufactured. Discussing the settlement the Court commented:

THE COURT: I feel because we have had a situation unlike any that I am aware of in jurisprudential history, either in this state or nationally, where we had worked together, attorneys working on dual tracks of rigorous advocacy in litigation, and also the settlement mediation track with the assistance of a common special master appointed by consolidation and affirmation of five State Court Judges, all of whom conferenced together, made an understanding of division of labor, and had agreements in dividing up different tasks, each one formed, as was the M-D-L Judge, as to each step of progression. I know that I am not aware of such an action taking place.

Talalai, et al. v. Cooper Tire & Rubber Co., No. L-008830-00-MT, (N.J. Sup. Ct.)(Corodemus, J.S.C.), Transcript of Hearing, p.69:21-70:8. These same sentiments were raised by the Special Master that oversaw the matter:

PROFESSOR MCGOVERN: One item that also hopefully will come out of today’s or at least this week’s rulings regarding notice that is to say what we have today is quite historic conference call. I asked the attorneys if any of them had ever heard of four state judges participating in a common hearing. No one had ever heard of it. I never heard of it. And so we’re breaking new ground.

Krystyan, et al. v. Cooper Tire & Rubber Co., No. 00-039524-CP, Transcript of Hearing (7/2/01) (Corodemus, J.S.C., Colombo, J., Humphrey, J., and Wefald, J., coordinated hearing on motion for protective order) Plaintiff’s counsel invested great efforts and assumed enormous financial risks in the aggressive prosecution of the claims of the Class to achieve the outstanding results embodied in the Settlement.



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