Lawsuits and Motorsports and Auto Racing and Law and Sports Business

Impact Racing accused of counterfeiting safety labels

April 1, 2010

A group that sets standards for motorsports equipment intends to yank its approval of gear produced by Impact Racing LLC, the Brownsburg company owned by industry pioneer Bill Simpson, amid allegations of counterfeiting.

SFI Foundation Inc. has announced that it will decertify all Impact products, excluding helmets, effective April 27. That means drivers would not be allowed to use Impact's gloves, boots, suits or restraints at tracks that require those items to be SFI-certified.

Tracks' requirements vary, but SFI's reach in the racing world is extensive. The body includes 93 member manufacturers and affiliates, including NASCAR and the National Hot Rod Association.

As of late Wednesday, Impact was trying to head off the decertification and a court order to halt the sale of goods bearing the SFI label.

“Impact strongly denies it's done anything wrongful. Its products are safe,” said Ed Harris, attorney at the Indianapolis office of Cincinnati-based law firm Taft Stettinius and Hollister LLP.

A hearing was set for 3:30 p.m. Thursday in federal court in Indianapolis on SFI's motion for a temporary restraining order. SFI, based in Poway, Calif., filed a lawsuit Friday.

The not-for-profit group, which sets minimum performance standards for all types of racing equipment, claims that between November 2005 and August 2008, Impact hired an Asian manufacturer to produce look-alike SFI labels and put on them on seatbelts, arm restraints, fire suits, head socks, gloves and boots. SFI's complaint includes an affidavit from a former Impact employee, Darren Swisher.

Simpson started Impact Racing in 2002 after fending off rumors that a seatbelt made by his former company, Simpson Performance Products, played a role in Dale Earnhardt's death. The NASCAR driver died after a crash in the final lap of the 2001 Daytona 500.

Impact has its headquarters and a showroom at 1531 Northfield Drive in Brownsburg and factory stores in Mooresville, N.C., and Irwindale, Calif., according to the company Web site. The site includes video of the famously demonstrative Simpson set ablaze in one of his own racing suits to show its protective qualities.

Before the Earnhardt controversy, Simpson was known for inventing the parachute that slows drag-race cars. Harris would not disclose other details about Impact, including the current number of employees.

SFI's counterfeit-label claim is not the only such allegation Simpson faces. Hans Performance Products,  an Atlanta company that makes head and neck restraints, says Impact hired an Asian manufacturer to copy its helmet component, then sold and distributed it under the Hans logo.

Hans' parent company, the privately held Hubbard/Downing Inc., filed a suit in September in federal court in Atlanta. The SFI Foundation joined that suit as an intervening party.

Hans CEO Mark Stiles said it took a court order to stop Impact from selling the look-alike components.

“We were surprised to have to take the action we did,” said Stiles, who noted that Impact has become a significant player in the dirt-track and drag-racing market.

Hans makes a neck restraint that rests on the drivers shoulders and attaches to either side of the helmet with a tether and metal posts or clips. The company doesn't make its own helmets, so it distributes the helmet posts through authorized manufacturers. Stiles said Impact is not one of those manufacturers.

A former Impact manager tipped Hans off to the copies, and the company says it easily found them in use at several NASCAR tracks. The counterfeits were distinguishable, Hans claims, because they were made with a non-magnetic metal.

A deposition recently filed in the case quotes Simpson admitting that the components Impact used on its helmets were “copies.” “The only reason ... why they would be counterfeit is because somebody put 'HANS' on there,” he said, according to court records.

Impact Racing is making a similar distinction about SFI's complaint. A statement to customers on the company's  Web site says, “The allegation from SFI is in relation to the actual SFI tag only. We suggest at this time to continue to use your equipment, which is safe and has been certified and do not have anyone replace your tags on your products.”

Both SFI and Hans claim Impact's use of counterfeit labels could affect driver safety. In its lawsuit, Hans alleges that Impact doesn't have the means or equipment for testing head and neck restraints. SFI says Impact has also bought and used legitimate labels, so it's not sure which items meet industry standards.

Despite the allegations, Simpson has some loyal customers. Mike Hull, managing director at Target Ganassi Racing, said his drivers and crew use Impact fire suits and other gear. “There's nothing wrong with the quality of his product, or the safety of his product.”

Hull was aware of both lawsuits, and he said he didn't think Simpson would order up counterfeit goods.

“Safety is one of those things, you just don't do things like that. You make sure your product is above the mark all the time," he said. "You have to abide by industry standards. You try to go past that with everything you do.”

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