The Relationship Between Recalls and Class Action Lawsuits

The relationship between recalls and class action lawsuits can be a complicated one. Sometimes they happen completely independent of one another. Other times both tools are used in tandem to force companies to properly right the wrongs that plague the average consumer.

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So, when you hear about a recall, does that automatically mean a class action is coming? What happens when a recall isn’t enough – or what if one is nowhere to be found? Does a class action have the power to force change? Keep reading and we’ll answer all these questions and more.

The Basics

Before we get into the finer details, we need to cover a few basics. (If this is old hat for you, skip down to the more interesting bits.)

First off, what exactly is a recall? In general, a product recall is a request from a manufacturer to return a product after the discovery of safety issues or product defects that might endanger the consumer or, perhaps ironically, put the maker or seller at risk for legal action. Upon return, the recalled product may be replaced or repaired – or you may even get some money back.

Because of the wide range of products that can be recalled (for instance, vehicles, consumer products, medical devices, etc.) and potentially fixed, a recall does not necessarily mean that the affected product is forever pulled from the market. 

Then, our bread and butter: what is a class action? In short, a class action is a lawsuit filed by one individual or a group of individuals on behalf of a large number of people who have suffered a similar injury or financial harm – typically in a situation when pursuing an individual lawsuit would be too expensive to justify the amount of compensation being sought. (If you’re interested in more information on class actions, we have you covered.)

Now, with that out of the way…

Does a Recall Automatically Mean a Class Action Is Going to Be Filed?

Not necessarily. Some recalls – such as those for vehicles or consumer products – actually make it less likely for a class action to be filed because the consumer is being offered something as part of the recall. It could be a free visit to a dealership, a replacement part for a faulty product or something similar, but at any rate, most recalls will fix the problem in full.

For instance, on October 21, 2020, Bed Bath & Beyond recalled close to 10,000 SALT Lounge Chairs because the frame’s locking mechanism could fail and pose a fall hazard. Anyone who bought the product was encouraged to stop using the chairs and to take them to a Bed Bath & Beyond location for a full refund of the purchase price. Consumers are fully compensated by the recall for the cost of the faulty product, so no further action needs to be taken.

In an ideal world, all recalls would go off like this – without a hitch – but sometimes, a recall won’t adequately make up for the damage that has been done. Sure, you may get a replacement or a refund for the product, but what if related property damage or other financial losses aren’t covered? What if the fix the company is offering doesn’t quite solve the problem? This is where class actions can help make things right.

When a Recall Isn’t Enough: Enter the Class Action

In May of 2020, a $758 million settlement was reached to resolve litigation involving a potential defect thought to cause engine fires in certain Hyundai and Kia vehicles that were either part of – or left out of – a series of recalls.

It was alleged that the lawsuits were necessary because the recalls were too narrow in their coverage and didn’t fully compensate drivers for the issue at hand. For instance, according to one suit, the method dealerships used to test a driver’s coverage under the recall left many at risk for a future engine fire:

Hyundai’s December 2015 TSB in Recall No. 15V568000 only called for engine replacement if the vehicle did not pass the sound test. If the engine did pass, no actual repair was made to the vehicle, its engine, or any other parts. Hyundai simply instructed the dealers to swap out the vehicle’s dipstick and top off the oil. This left ‘passing’ vehicles and their owners vulnerable to future development and manifestation of the Engine Defect and its dire consequences.”

The suit further noted that “swathes” of vehicles that caught fire had been left out of the recalls, including the plaintiff’s car, which reportedly experienced an engine failure and fire that was “scarily similar” to the defect at the center of the prior recalls.

Because the litigation against Hyundai and Kia was successful, consumers were given the chance to claim the benefits of a class action settlement, in addition to or instead of those that were offered by the recalls. Here’s a quick rundown of everything drivers became eligible for under this one settlement:

Here’s another example. If you’ve been on our site for a while, you may have noticed a wave of lawsuits being filed in tandem with drugs and medications being recalled over contamination issues. From Zantac and blood pressure medication to diabetes drugs, recalls have been issued that admittedly help in the present, offering disposal options and potentially money back for whatever medication is still on hand – but what about those who have been using the drugs for years? They certainly aren’t being compensated for potentially years of use and all the money spent during that time – so lawsuits are being filed to help those who weren’t solely affected in the here and now, looking to recover relief for medication costs (and other damages) as far back as the law allows.

What Happens When There Is No Recall? How Class Actions Can Help

In our day-to-day lives, we’re in close contact with so many products that statistically, we’ll eventually come across one that isn’t quite up to snuff. So, what happens when our cars suddenly lose power in traffic due to a defect or when our strollers are prone to losing a wheel – and there’s no recall in sight?

When companies refuse to issue recalls and government intervention is nowhere to be seen, that’s when class actions can be a potent tool. Lawsuits can force companies to take responsibility for their products and provide recourse for those affected – and when these cases are filed and successful, sometimes the relief is better than what may be offered through a recall.

If the Hyundai and Kia settlement outlined above wasn’t enough of an example, we have another one for you. In March 2019, Sharp was sued for allegedly selling defective microwave drawers that came with a serious risk of catching fire – only this time, the complaint specifically noted that Sharp had failed in its duty to issue a recall.

Because that lawsuit was filed, relief arrived in September of this year in the form of a settlement. Under the terms of the deal, those who had issues with their Sharp microwave drawers were given a choice between a replacement microwave drawer, $250 cash or a $500 voucher for any Sharp-branded product. While recall benefits could have easily began and ended with a replacement microwave, the settlement went even further – offering $150 to cover labor costs associated with repairs or replacements, as well as another $200 to repair cabinets that were near the microwave.

Who Has the Power to Issue Recalls Anyway?

Recalls can be issued voluntarily by the manufacturer. Other times, regulatory bodies, such as the Food and Drug Administration (FDA), Consumer Product Safety Commission (CPSC), or National Highway Traffic Safety Administration (NHTSA), will have to force the action.

How Do I Find Out About Recalls for Things I Own?

You can find information on specific types of recalls via the corresponding regulatory body’s website. For example, you can visit the website of the:

The FDA also includes market withdrawals and safety alerts on its site, and you can search the NHTSA recall database using your car’s vehicle identification number (VIN) to simplify your search.

For the sake of convenience, however, all recalls from federal agencies are compiled over at Recalls.gov. There, you can search by recent recalls or by recalls for specific types of products.

What to Do If a Product You Own Is Recalled

Typically, the entity behind the recall will lay out the steps that need to be taken, but it generally looks like this:

For most products and vehicles, you will need to take it back to the store where you bought it or to a dealership where they will either allow you to return the product for a full refund or receive free repairs to fix the issue outlined in the recall. There may be other steps to take that are specific to the recall in question, but those will be outlined by the company or agency who issued the recall in the first place.  For instance, in the case of recalled drugs, you might be instructed to return the medicine to the pharmacy or safely dispose of it and to speak with your doctor about alternative medications before stopping.

In light of what has been outlined above, another solid step would be to check and see if a class action has also been filed over the issue so you don’t miss out on any of the benefits that may be provided.

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