MIAMI, OK — Frivolous litigation ignited a series of lawsuits that is causing an Ottawa County gas can maker to close, said Rocky Flick, CEO of Blitz U.S.A.
Blitz U.S.A./F3 Brands in Miami filed for Chapter 11 bankruptcy Nov. 9. On Monday, the company announced it would close July 31 and lay off 117 workers.
“This is quite a blow,” said Chuck Evans, plant manager. “We hope another plant comes in and takes over.”
In 1992, U.S. Metal Container became Blitz U.S.A., partly due to a switch to plastic containers. For years, U.S. Metal Container sold gas cans to government agencies for military use. In 1966, it was the only gas can manufacturer in the U.S., and a year later the gas can was painted bright red and sold to thousands of customers nationwide, the company's website says.
Company officials said product liability lawsuits prompted the company to file bankruptcy. The lawsuits mostly involved people pouring gasoline out of a gas can onto an open fire, and the vapors igniting and causing injuries.
“We got 100 percent of the lawsuits even though we don't have 100 percent of the gas cans out there,” Evans said.
Flick said the company was unable to put together a reorganization plan.
The 50-year-old company will have its assets sold Sept. 6, he said.
Flick said once the first lawsuit was settled, the floodgates of litigation were opened.
“The insurance company thought it was best to settle,” Flick said. “The first lawsuit settled for around $1 million, the last lawsuit for around $10 million, but most of the lawsuits were between $5 (million) to $10 million.”
The company went to trial on two cases, winning one and losing the other, a $4 million verdict involving the death of a child.
The jury found Blitz 70 percent liable, Flick said.
The girl, 4, was living in an unheated camper in Utah when her father poured gasoline into a woodstove, which ignited, Flick said. The child and her father caught on fire, the father ran out of the camper and left the child inside while he tried to put flames out that were on him, Flick said. The case is on appeal.
Flick said Blitz has about 70 percent of the market selling the gasoline containers.
Miriam George, risk management supervisor, said several employees who started with the company when they were 18 years old are still there at 59. “They thought they would be here until they retired,” she said.
About 20 employees have been with the company more than 30 years, she said.
George said the company is providing employees with employment assistance in rebounding and securing another job.