This Christmas’ “Hot” New Gift: Exploding Hoverboards

HooverboardWith holiday shopping in full swing and Christmas a week away, there are growing concerns over the safety of one of the season’s hottest items – hoverboards. The year’s “must have” gift harkens back to the popular ‘80s movie Back To The Future II and has captured the imagination of young and old alike, their popularity spurred on by celebrities posting “selfies” with their hoverboards on Twitter, Instagram, and Facebook. Reportedly, eBay sold 5,000 units on Black Friday and claims to have sold one hoverboard every 12 seconds on Cyber Monday. There is no doubt that a lot of happy techies – or Michael J. Fox fans – will be receiving hoverboards from Santa Claus in one week’s time.

Unfortunately, there is mounting evidence that certain hoverboards – more appropriately called “self-balancing scooters” or (for the real nerds) “personal transport devices” – may be extremely dangerous. A rash of alarming, disastrous fires connected to hoverboard defects has now led to action by governmental agencies and has caused some of the world’s largest internet retailers to ban all or some hoverboard sales, while other retailers may be choosing short-term sales over safety. The dramatic danger these devices represent can be viewed HERE.

Stories regarding explosions and fires relating to hoverboards began to spring up earlier this year and are now commonplace. The stories are frighteningly similar. Typically, a consumer purchases a hoverboard online. The hoverboard works properly for a short period of time. Then, either while in use or charging, the product “explodes” and a rapidly spreading fire results. The explosion is sometimes preceded by the hoverboard becoming hot and often a loud “bang” is heard before or as the device explodes. To date, there are at least 11 reported explosions and fires involving hoverboards in the United States, more globally. Some of the stories are chilling:

  • On November 21, 2015, Jessica Horne and her 12-year-old son lost their home when their charging hoverboard exploded and burned their house nearly to the ground. Ms. Horne witnessed the explosion and told reporters that fire shot out from the wheels like fireworks. The hoverboard was a “Fit Turbo” unit purchased from Amazon.
  • On December 1, 2015, a hoverboard exploded while being operated by a man in Alabama. Reports indicate the man was not hurt.
  • In early December 2015, a fire occurred in a Chappaqua, New York home while the device was charging. Someone at the home was able to put out the blaze after it damaged the living room. The homeowner has now filed suit and sought class action status.
  • On December 9, 2015, a Hong Kong flat was destroyed, 200 people evacuated from an apartment building, and a family left homeless when an unbranded hoverboard purchased from Shenzhen exploded while charging. The family who purchased the hoverboard heard a “bang” and their apartment was ablaze in moments, despite unplugging the device.
  • On December 9, 2015, a hoverboard caught fire at a home in Poland, Ohio, while charging.

The National Trading Standards, a British agency that enforces laws relating to selling goods, indicated that 17,000 hoverboards were examined at UK ports and borders over the past two months and 15,000 (nearly 90%) were seized as unsafe. The seizure was reportedly due to the products matching model products that had been lab tested and found to contain “serious electrical faults.”

In the United States, the Consumer Product Safety Commission has not yet banned hoverboards, but it has “encouraged” consumers who have experienced a problem to contact the agency and an investigation is currently underway that it described as “high priority”.

Some retailers are not taking such a middling position. Overstock.com recently discontinued sales of all hoverboards and Amazon announced recently that it was pulling 97% of hoverboards from its virtual store shelves. Nonetheless, other retailers, such as Sharper Image, Toys “R” Us, eBay, and Walmart are still selling the devices.

Despite the mounting scrutiny, tens of thousands of hoverboards are currently sitting neatly wrapped under Christmas trees across America, just waiting to be opened. It is likely more fires will result and insurance companies will bear the financial brunt of what could be some very sad holiday tales at the hands of defective products and non-existent or insufficient retailer quality assurance measures.

Among the most alarming concerns currently is the potential that a defective hoverboard could find its way onto a passenger airline. The devices were recently banned from airplanes, but there is understandable concern that an unsuspecting passenger could place a hoverboard in a piece of luggage that is not spotted by airport security.

Some believe that at least one of the defects can be traced to the quality of the product’s rechargeable lithium-ion (Li-ion) batteries, located in one of the foot rests. The more affordable brands are using cheaper batteries. When a cheap battery punctures, the separator between the anode and cathode may become misaligned. Small holes in the separator can result from impurities in metal particles that can puncture the anode/cathode separator, causing a short circuit, and a fire. There are also indications the electrical circuitry used by some hoverboard manufacturers is defective.

The most likely result of hoverboard defects will be property claims under homeowner’s policies. Home insurers should be ready to effectively subrogate any and all hoverboard claims. On the investigation side, it is critical that the product be preserved and the site properly investigated. Insureds should be asked to photograph all packaging and provide it to the insurer for preservation. Experts familiar with the issues plaguing hoverboards should be used where possible.

Teaming with the right attorneys and recovery partners is critical. Matthiesen, Wickert & Lehrer, S.C. (MWL) has been among those at the fore of investigating hoverboard defects and the companies involved in the United States and abroad. Just this week, Johnny Zhu, head of Swagway, claimed his company’s products are safe and allegedly told reporters that the batteries included with his company’s products come from LG and Samsung. LG has denied it.

The parties at fault and which can be held responsible for fires caused by defective hoverboards depends, in part, on the applicable state product liability framework. Certain states allow pursuit of the retailer directly (California, Florida, etc.) while others have distributor and innocent seller laws making this more difficult, if not impossible. Most of the allegedly defective hoverboards are manufactured in China. Not all subrogation professionals and law firms are equally equipped to pursue such claims and insurers with claims that partner with attorneys that have the requisite China experience and expertise will be at a distinct advantage.

As the holiday season is now upon us, be on the lookout for claims involving defective hoverboards. If you have questions or need assistance, contact Attorney Rich Schuster, who can be reached by phone at 262-673-7850 or via e-mail at rschuster@mwl-law.com. Attorney Schuster is Mandarin Chinese proficient, has deep industry contacts in Taiwan and China, lived and worked in Taiwan from 2008-2012, and has experience pursuing and quickly recovering against lithium ion battery manufacturers and their insureds. He also has a deep understanding of product liability legal frameworks that vary significantly state-to-state, gained by both pursuing and defending foreign manufacturers in matters throughout the country.

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Richard A. Schuster
Partner

Richard A. Schuster 蘇世達, a Wisconsin native, is a partner at Matthiesen, Wickert & Lehrer, S.C. Richard joined the firm in 2012 after years in Asia helping the industry’s leading international manufacturers with product liability and other business challenges. Richard is a trial attorney and a national and international speaker and lecturer on product liability defense and insurance litigation-related topics.