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Electrolux settles dryer-fire class action

Article-Electrolux settles dryer-fire class action

Electrolux Home Products has agreed to settle a class action lawsuit regarding fires alleged to have started in some models of its clothes dryers. Electrolux denied that the dryers were defective and agreed to the settlement to avoid further litigation. Electrolux Home Products is the United States subsidiary of Swedish-based Electrolux AB. The suit covers gas and electric clothes dryers designed and manufactured by Electrolux, all with the same design of "ball-hitch." Ball-hitch refers to the rear drum bearing shaft on some horizontal-axis (front-load) dryers.

The class action alleged that the dryer design allowed lint to collect near the dryer's heat source, resulting in fires.  The suit further claimed that Electrolux used flammable plastic parts—specifically, a plastic air duct below the drum and an adjacent plastic blower housing—making the fires more dangerous.

The class action complaint alleged that testing by Electrolux, conducted in 1998, showed the dryer design "permitted a fire to quickly spread outside the Dryer cabinet, but Electrolux did nothing to remedy this." The complain also stated that "from at least 2000 onward, Electrolux processed thousands of claims of dryer fires, conducted an internal investigation of the Defects, hired outside engineers to investigate the Defects, and litigated hundreds of cases involving the Defects." The complaint reports that GE Appliances, which was buying the dryers under a contract manufacturing agreement with Electrolux, "insisted in 1998 that Electrolux fix the Defect so that ball hitch Dryers Electrolux manufactured for sale under the GE brand name would pass fire containment testing."  The complaint claims Electrolux changed to plastics with fire inhibitors, but only for the dryers it made for GE.

On May 5, 2014, Judge Christina Snyder of the United States District Court for the Central District of California granted preliminary approval to the proposed settlement. The settlement stipulates that Electrolux is not admitting fault in the case. The settlement covers specific consumers who have experienced fires or those who experience fires in the future, up to 10 years after the purchase. Class members will may be eligible for reimbursement for certain expenses up to $1300, for cash rebates and discounts on purchase of Electrolux appliances, and for free cleaning service on their dryer.

Electrolux is currently in a silent period in advance of its second quarter financial report.  It is expected that the company will address the settlement, and the potential financial impact on the company, when it releases the second quarter report on July 18, 2014.

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