For immediate release - Thursday, November 8, 2001.
Contact Bill Brauch -- 515-281-8772.
Miller: Firestone to Make More Consumer Refunds and
Pay Half Million to State
Bridgestone/Firestone Inc. agrees to nationwide settlement that includes over $50 million in payments to states and consumers.
DES MOINES. Attorney General Tom Miller announced today that Bridgestone/Firestone Inc. will pay Iowa over half a
million dollars and make additional consumer restitution as a result of a nationwide settlement the company has reached
with all fifty states. Nationwide, the company will pay $51.5 million for consumer restitution, payments to states, and
The settlement was approved this morning by the Polk County District Court. The court order also permanently enjoins
Bridgestone/Firestone from misrepresenting the safety, maintenance, use, expected life, or wear patterns of its tires. "This
is a very good outcome," Miller said.
The settlement resolves allegations that the company sold defective tires and made misrepresentations in promoting the
tires and during the tire replacement process. Starting in August 2000, Bridgestone/Firestone recalled millions of tires in
the wake of reports that some tires failed suddenly, allegedly causing thousands of accidents and more than 250 deaths.
Miller said the overall $51.5 million in payments includes several elements: an estimated $10 million nationally for
refunds to consumers who previously were denied refunds by the company; $26.5 million in monetary payments made up
of $500,000 to each of the fifty states, plus the District of Columbia, Puerto Rico, and the US Virgin Islands; $10 million
to the states for investigation and litigation costs; and $5 million for a national tire safety public education project.
Miller said Iowa will receive $528,000 -- the $500,000 share plus $28,000 in litigation and cost-share payments. He said
the entire $528,000 total will go to the State's general fund.
"Our Consumer Protection Division provided significant help in crafting this settlement, but Iowa's actual costs were
modest. This is a good example of multi-state cooperation that ends up benefitting people all over the nation," Miller
"One of the reasons the states pursued this is because the U.S. government cannot obtain substantial penalties in this kind
of case," he said. "The $26.5 million monetary payment to the states is not strictly labeled a penalty, but it is a means for
the company to make payments as a consequence of its alleged unlawful conduct under Iowa's Consumer Fraud Act and
similar laws of other states. This sends a strong message that states will take action against alleged wrongdoing
concerning safety defects."
Miller said Bridgestone/Firestone already has made substantial payments to Iowa consumers - almost $5.7 million of
about $450 million the company has paid nationwide for consumer reimbursement and tire replacement. At that rate of
about 1.3% of the total, Iowans could receive about $130,000 of the $10 million earmarked for consumer restitution in the
settlement announced today. Iowans already have been reimbursed for replacement of over 65,000 tires.
Miller said the consumer reimbursement provisions of the settlement apply to persons who already have filed complaints
with the state or who have been denied refunds by the company. (For example, consumers may have complained about
being denied because they didn't have original receipts.)
Persons who filed complaints with Miller's office will be notified that they will receive a refund, or that their complaint
has been referred to an independent arbitrator for the case who will review the claim. The arbitrator's decision is binding
on the company but not on the consumer.
Persons who were denied a refund by the company will receive a letter by January 7, 2002, giving them an opportunity to
request reconsideration by the company of the denial. If there is credible evidence that the consumer essentially meets
each requirement of one of the refund programs, the consumer will be paid. If the company denies the claim, the
consumer will be provided notice of the denial and the option to submit the claim to the independent arbitrator, at no cost
to the consumer. Again, a decision by the arbitrator does not foreclose private action if the consumer wishes to pursue it.
The settlement includes a battery of injunctive provisions regulating the company's future conduct:
Bridgestone/Firestone may not misrepresent the safety or safety characteristics of any tire or tread pattern. The company
may not misrepresent the characteristics, manufacturer or appropriate uses of a tire. The company must be able to
substantiate with competent and reliable scientific evidence any specific claims of tire safety, performance or durability.
The company may not make misrepresentations during a recall or customer satisfaction program. The company must not
provide or facilitate inconsistent information to consumers about tire pressure. The company must not make
misrepresentations in or retroactively change any guarantee or warranty. The company shall not misrepresent that it has
given an expert all requested information. The company shall not misrepresent the expected life or wear pattern of a tire
tread. The company must handle consumer complaints in a truthful, ethical and timely manner.
Under the agreement, Bridgestone/Firestone also will provide consumers with detailed safety information at the time of
delivering tires, including information about proper tire maintenance, load capacity, and air pressure; proper tire repair;
and warranty terms.
Bridgestone/Firestone also agreed to provide truthful sworn testimony and cooperation
for the Multi-state Working Group in related investigations. The company
denied any wrongdoing in agreeing to settle the matter.
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