SANTA ANA, Calif. (BRAIN) — Retailers would get more tools and training to process Shimano's Hollowtech II crank recall, and consumers would get an extra two years of warranty coverage under a proposed settlement reached between a group of plaintiffs and Shimano North America. A judge must still approve the agreement.
Less than two weeks after Shimano announced the recall in September 2023, three Shimano crank owners sued, naming Shimano, Trek Bicycle, Specialized Bicycle and Giant in California Central District Court in Santa Ana. Eleven more plaintiffs were later added as the case became a consolidated class action suit. None of the plaintiffs was physically injured from a crank failure but said they were harmed and endangered because they said Shimano was aware of the crank failures for 10 years before the recall and the recall action was inconvenient and inadequate.
BRAIN reached out to Shimano on Tuesday for comment but a representative was not immediately available.
The parties have been negotiating a settlement since early in the proceedings. As one of the final steps toward asking the court for approval of their settlement, the plaintiffs filed a second amended complaint in June, repeating their claim that Shimano's recall remedy is "a nightmare for riders and bike shops." They continued:
"Owners are left without usable bicycles while they get in line with hundreds of thousands of other impacted cyclists to schedule and await an inspection," the amended complaint reads. "When the inspection finally happens, a local bicycle mechanic is tasked with making a complex engineering judgment to determine whether the crankset shows sufficient deterioration to merit replacement. Worse, those consumers whose Defective Cranksets are judged not to warrant immediate replacement – i.e., those consumers whose cranksets do not 'show signs of bonding separation or delamination during the inspection' – are left in the frightening position of having to continue riding a dangerous bicycle, waiting on their cranksets to separate and potentially cause a crash before Shimano will give them a new one."
The second amended complaint removed some claims and one plaintiff from the earlier complaint.
Shimano denied the claims in a motion to dismiss the case in February 2024. "There is a fundamental problem with this class action: it seeks to punish a company that has responded correctly to consumers’ concerns — standing by its products, its customers, and its warranty," Shimano said in the motion. It continued:
"According to Plaintiffs’ own complaint, 99.4% of those cranksets functioned exactly as intended. However, in September 2023, Shimano voluntarily recalled Hollowtech II cranksets manufactured before July 2019, based on a small number of reports of “bonding separation”— that is, separation or delamination of metal components. Shimano acted responsibly and with integrity in response to these reports. It offered, and continues to offer, free inspections and (if there is any sign of separation) free replacements with free installation to owners of the cranksets Plaintiffs claim are “defective” (“Designated Cranksets”). Shimano worked cooperatively with the U.S. Consumer Product Safety Commission to develop this voluntary recall, and the agency approved Shimano’s plan.
Shimano has gone beyond what the law requires ..."
Under the proposed settlement Shimano must overhaul its voluntary recall inspection process, mandate enhanced training and equipment for retailers handling the recall, and guarantee a free replacement crankset for any units showing signs of bonding separation or delamination, among other remedies.
A settlement hearing is set for July 28 before Judge James V. Selna, and the sides submitted a proposed approval order dated Aug. 4. If the order is approved, the settlement asks for a final approval hearing on Feb. 2.
Under the settlement terms, Shimano will provide retailers with an “approved enhanced manual” developed in consultation with “an expert who reviewed the defendants documents and analyzed the root causes of bonding separation and breakage." The brand also has to make a “retail assistance agent” available to support retailers who have questions about how to perform the inspections.
In addition, Shimano:
- Must notify every recall retailer of the enhanced inspection process and ensure each retailer has reviewed and understands the training materials, use a magnifying device provided during all inspections, and contact the retail assistance agent with any questions regarding inspection protocols. Court documents indicate Shimano will provide a magnifier similar to this $33 Carson device. Previous Shimano dealer recall materials recommended that retailers inspect with an 11x magnifier but did not provide the device.
- Must extend its express warranty’s coverage of bonding separation and delamination by two years from the date of the settlement's preliminary approval.
- Will reimburse settlement class members who previously replaced a defective crankset for out-of-pocket costs associated with those replacements.
- Pay each of the 14 plaintiffs, as Class Representatives, a $500 Service Award.
- Hire a firm that communicates class action notices, Epiq Legal Noticing, to promote the settlement to potential members of the class, via targeted digital advertising and other media, starting Aug. 25.
In addition to a jury trial, the plaintiffs were asking for among other remedies the purchase price of the crankset and/or the bike it came on reimbursed with interest, expenses for damages and attorney fees, and for Shimano to disclose the safety risks of the cranksets and the bikes they were spec’d on to anyone who could be at risk of using them in the future.
Shimano and the Consumer Product Safety Commission jointly announced in September 2023 that 760,000 cranks in the U.S. needed to be examined for signs of delamination with consumers being told to visit an authorized retailer for inspection. Shimano submitted the proposed settlement agreement to the CPSC in May this year; the commission approved the settlement.
According to Shimano's recall notice, the cranks requiring inspection — Dura-Ace and Ultegra Hollowtech II models manufactured before July 2019 — can separate and break. Shimano received reports of 4,519 incidents of separation, and six reported injuries, including bone fractures, joint displacement, and lacerations.
The suit's lead plaintiff is Jarett Hawkins, a Solana Beach, California, man who bought a Specialized Tarmac SL 6 Comp Edition with a Shimano Ultegra crank in July 2020. In 2022, more than a year before the recall, Hawkins broke a crank, which Shimano replaced under warranty. However, the complaint reads, the replacement was still "defective and substantially certain to fail."
"Thus, Mr. Hawkins is left with a dangerous Defective Crankset and he is forced to either continue riding a dangerous bicycle equipped with a Defective Cranks — risking a crash or personal injury — or choose to pay, out of pocket, to replace the Defective Crankset," the amended complaint read.
A retailer's perspective was provided by Roderick Russell, owner of BG Bicycle-Pro Bicycle Shop in Houma, Louisiana, who filed a declaration that the plaintiffs submitted to the court in June. Russell declared that the visual inspection Shimano instructed mechanics to perform was inadequate to identify bonding separation or delamination that could lead to crank failure. He said he had inspected about a dozen cranks that were subject to the recall and "failed" all of them because he lacked the tools to determine if a crank was safe.
"I will not send cyclists back out onto the road with a crankset that may spontaneously fail in the future," he wrote in part. He also said he stopped selling some Shimano cranksets and returned his inventory to the company.
In its 2024 full-year financial highlights report, Shimano said it had set aside 17.6 billion yen (about $123 million at current exchange rates) to pay for its global "free inspection" Hollowtech II program, accounting for costs incurred and predicted. The company hasn't itemized the program's costs since that report.
Bicycle Retailer reported on the recall and retailer reaction to it in a March 2024 article.
Steve Frothingham contributed to this article.
