A federal judge has awarded $1.7 million, plus attorney fees, to television shopping giant QVC after it had to recall thousands of faulty space heaters.
"QVC is entitled to recover the costs it incurred as a result of the sale by Soleus of defective heaters -- including the costs to conduct the recall -- because Soleus breached the warranties set forth in the purchase orders, and because QVC was entitled to conduct a voluntary recall of the heaters," U.S. District Judge Thomas O'Neill wrote in QVC v. MJC America and Soleus International.
QVC had sold nearly 20,000 of the portable electric heaters in early 2008 and quickly began getting reports from customers that they were bursting into flames. QVC sold them for $67.86, at minimum. It paid Soleus $36 per heater and paid about $5 to third parties for related costs -- meaning it had a profit of about $26.50.
According to the purchase orders agreed to by QVC and Soleus, the merchandise provided was required to be without defect, Judge O'Neill said.
Before the trial, Soleus had argued the heaters weren't defective and that QVC violated the terms of the purchase order by unilaterally issuing a recall. "A different story emerged at trial," Judge O'Neill said.
Soleus later conceded that all of the experts agreed the overheating in the units was due to a manufacturing defect, according to the decision, but argued that, in order to prevail, QVC had to "determine the scope of the intermittent manufacturing defect."
The judge disagreed, ruling the purchase order agreement required QVC establish that only some were defective.legalnews
Saranac Hale Spencer: email@example.com or 215-557-2449.