Japanese Company to Settle Bulletproof Vest Lawsuit

Toyobo Co. (search) is paying $29 million to settle class-action litigation in the United States that sought damages from the Japanese textile manufacturer for bulletproof vests suspected of defects, the company said Wednesday.

Toyobo received a preliminary approval for the settlement from the Mayes County District Court (search) in Oklahoma. The pact covers class-action suits in seven states — West Virginia, Missouri, Louisiana, New Jersey, California and Michigan, in addition to Oklahoma, according to Toyobo.

Those suits were consolidated into the Oklahoma class-action suit. Members of the class potentially include individuals, municipalities and police agencies across the country who wore or paid for the vest.

The case involves some 150,000 bullet-resistant vests.

Judge James D. Goodpaster (search) in Pryor, Okla., said the $29 million will be put in an interest-bearing fund for claims against Toyobo, and the company is going to pay attorney fees and administrative costs through a separate fund that will total about $9 million.

Notices on the settlement will be sent out and the settlement is to be finalized on Sept. 23 and the judge will then order distribution of the money.

Other lawsuits are still pending against Toyobo, which supplied the fiber called Zylon for the vests, and Second Chance Body Armor Inc., based in Central Lake, Mich., which supplied the vests. They include a suit filed by the family of a California police officer killed while wearing the vest.

In another lawsuit, the U.S. government sued Second Chance and Osaka-based Toyobo earlier this month, contending they conspired to hide evidence the vests could be defective.

Only after the officer was killed and a Pennsylvania officer seriously wounded while wearing Second Chance vests in June 2003 did the company stop selling certain models and disclose safety problems, the federal lawsuit said.

Second Chance, which has since declared bankruptcy, is facing lawsuits by states, police agencies and individuals. Second Chance is also suing Toyobo, alleging that the material is behind the problem vests.

Toyobo and Second Chance have blamed each other.

Toyobo says the problem was caused by the design and production of the vests, not the Zylon material. Toyobo supplies eight other companies with Zylon for bulletproof vests, and there hasn't been a single accident in the other vests, the official said.

Toyobo offered the settlement because it wanted to avoid a long legal fight and to deal responsibly with the possibly defective vests, he said. Under the settlement, the plaintiffs can buy bulletproof vests from Armor Holdings Inc. at a discount.

Toyobo is taking a 4.4 billion yen ($39.7 million) special charge to cover the costs of the settlement and $9.4 million in legal fees during the first half of this fiscal year, the company said in a statement. That will not change its full-year forecast for a 12.5 billion yen ($113 million) profit for the fiscal year ending March 31, 2006, it said.

(Copyright 2005 by The Associated Press. All Rights Reserved.)

APTV 07-13-05 1118EDT