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Graco Recall Leads to Graco Lawsuit

Graco Recall Leads to Graco Lawsuit 4

 

Over 3.7 million car booster and toddler seats are to be recalled by Graco Children’s Products Inc of Atlanta with a class action lawsuit filed in Pennsylvania, alleging that Graco had bought rivals in the spray foam equipment market pursuing a plot to dominate the market and increase prices.

Fast-set equipment is used by contractors to install foam insulation in residential and commercial buildings and apply polyurea coatings to protect bridges, holding tanks, marine hulls and other structures, the complaint says.

Fast-set equipment manufacturers sell their products almost exclusively through a channel of distributors that act as intermediaries between the manufacturer and contractors, according to the complaint.

Graco Children’s Products Inc. said it is recalling the Cozy Cline, Comfort Sport, Classic Ride 50, My Ride 65, My Ride with Safety Surround, My Ride 70, Size 4 Me 70, Smartseat, Nautilus, Nautilus Elite, and Argos 70 models. Graco said the alleged defect involves difficulty in depressing the red button that unlatches the harness buckle.
Insulate SB says that distributors who sell foam installation equipment to contractors used to sell multiple brands until Graco bought Gusmer Corp. in 2005 and GlasCraft Inc. in 2008. Those acquisitions gave Graco more than 90 percent of the market and allegedly empowered it to enter dealing arrangements with distributors to keep new entrants out of the market, which in turn enabled the distributors to charge anti-competitive prices, the complaint says.

“This case involves multiple conspiracies,” the complaint says. “First, there exists a hub-and-spoke conspiracy with Graco as the monopolist hub and with the agreements between Graco and its distributors maintaining the spokes, while the agreements among the distributors to exclusively deal with only Graco maintaining the rim of the wheel.”
Child seat manufacturer Graco Childrens Products is recalling over 3.7 million toddler and booster seats as well as facing a lawsuit

Under government pressure, a major child safety seat manufacturer said Tuesday it is recalling 3.77 million toddler and booster seats built from 2009-13.

“In some cases, the buckle becomes stuck in a latched condition so that it cannot be opened by depressing the buckle’s release button,” the National Highway Safety Administration said. That could prevent removal of a child from a car in an emergency situation.

The lawsuit follows Graco’s April Federal Trade Commission settlement that bars it from pressuring distributors into not carrying its competitors’ equipment products.

The lawsuit alleges that after Graco bought Gusmer and GlasCraft, it conspired with its distributors to raise their discount and inventory thresholds, which reduced their willingness and ability to carry products from other manufacturers.

See: Law360

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