Briggs & Stratton Corp. has agreed to settle more than 65 class-action lawsuits filed against the company and other outdoor power equipment makers alleging misleading horsepower labeling on lawnmower engines.
Under the settlement, which still needs court approval, Briggs and other settling defendants would establish a $51 million fund to cover consumers' claims.
Consumers who bought mowers from 1994 to when the settlement is finalized could receive up to $75 each if the mowers have certain engines made by Briggs, the world's largest manufacturer of small gasoline engines.
Mowers sold by John Deere Co., Sears Roebuck & Co., Toro Co., and Electrolux Home Products also could be part of the settlement, along with mower engines made by Tecumseh Products.
If approved in U.S. District Court in Milwaukee, the settlement would resolve nationwide class-action litigation that was consolidated under Judge Lynn Adelman.
The plaintiffs alleged that small-engine manufacturers and companies selling outdoor power equipment overstated horsepower ratings in advertising and marketing.
Identical engines were labeled with different horsepower ratings, misleading consumers into believing they were getting more power by purchasing more expensive models, according to one of the lawsuits.
Briggs has not admitted any wrongdoing but said it wants to end the costly litigation that began about six years ago.
"Frankly, we want to put this to bed," said company spokeswoman Laura Timm.
It could be more than a year before the settlement is approved and a fund is readied to pay claims.
The settlement could cover more than 30 million engines, which means the fund would run out of money if even a fraction of eligible lawn mower owners filed for compensation.
The owner of a walk-behind mower could receive a check for $35, and the owner of a riding mower could get $75.
But for now, there's nothing for consumers to do but wait and see if the settlement is approved.
Eligible consumers would be notified of their rights by mail, or they could respond to notices published in newspapers.
The lawsuits began in Madison County, Ill., and later included Wisconsin residents.
In essence, plaintiffs said horsepower labeling practices were confusing and misleading.
Sometimes, the same engine was advertised as having different horsepower ratings depending on how it was sold.
"It was totally out of control. There was no question about it," said Doug Janisch, a retired engineer from Mequon who worked for Briggs & Stratton and other engine companies but is not associated with the lawsuits
"Back when I was at Briggs, I raised some eyebrows when I put an 18-horsepower decal on a lawn mower - just to make a point," Janisch said.
Kohler Co., a defendant in one of the original lawsuits but not part of the settlement group, declined to comment. Law firms that sued the engine makers and power equipment companies also did not return Journal Sentinel calls.
The plaintiffs' attorneys could receive about one-third of the $51 million, according to Briggs.
Small-engine manufacturers now use torque instead of horsepower as their power rating system for push mowers, snow throwers, pressure washers and generators.
In basic terms, torque is a measurement of the force needed to turn something such as a lawn mower blade. It's a better measurement of a mower's ability to cut grass, according to Briggs.
As part of the proposed settlement, Briggs has agreed to have its engines certified by the Society of Automotive Engineers, and to publicly post the SAE ratings
"Quite honestly, we never received a phone call from a consumer telling us that our engines did not provide the power they were looking for," Timm said.
The proposed settlement was not in Briggs' 2010 earnings guidance released in January
On Friday, the company said it expects to recognize a pretax expense of approximately $31 million, or $19 million after tax, in its third fiscal quarter.
