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Injured rider sues Costco and e-bike brand over right-front brake lever setup

Published March 25, 2022
The Arizona woman lost an eye and had other injuries she blames on an illegal brake-lever setup.

By Dan Roe

SAN DIEGO (BRAIN) — An Arizona woman is suing San Diego e-bike company Phantom Bikes and Costco Wholesale for $6 million. Carol Penkert's suit claims her bike came set up so the right brake lever operated the front brake, which caused her to flip over the handlebar and sustain serious injuries.

The Consumer Product Safety Commission mandates that bikes sold in the U.S. be set up so that the right brake lever activates the rear brake. 

Phantom Bikes' marketing materials show The right-side front brake lever appears to be a design choice that affects an unknown number of Phantom Bikes Swirl step-through e-bikes, a BRAIN review of the company's marketing materials has found.

Reached by email, Phantom Bikes president and CEO David Toma did not reply to multiple requests for comment after initially acknowledging the existence of the November lawsuit. Phantom's attorney, Kyle Carroll of the Newport Beach office of Bremer Whyte Brown & O'Meara, said he couldn't provide meaningful information at this point in the firm's investigation of the complaint.

Costco, also named as a defendant in the lawsuit for allegedly having sold the bike fully assembled without verifying its safety, filed a cross complaint against Phantom Bikes to indemnify itself from a potential judgment. Costco representative Muriel Cooper said the wholesaler's management would decline to comment on the suit. In court documents, Costco attorneys deflected blame to Penkert, claiming she was negligent in the face of "open and obvious" perils.

One month after the COVID-19 pandemic swept through the country, Penkert embarked on her first significant ride of her Phantom Bikes Swirl. She bought the bike in February 2020 online and fully assembled through Costco but hadn't ridden it past her driveway until April 15, her attorney told BRAIN. When she came upon a speed bump, Penkert instinctively grabbed the right-hand brake lever to slow down, thinking it would actuate the rear brake. Instead, the front brake locked up, throwing her over the handlebar in a crash that resulted in multiple facial fractures and the loss of her right eye.

Penkert's attorney, Nick Verderame of the Phoenix personal injury law firm Plattner Verderame, said the right-hand positioning of the Swirl's front brake violates federal law governing bicycle design. The law states a bicycle's front brake must be actuated by a control on the left side of the handlebar. Reversals are only allowed for custom bikes.

Penkert discovered the cause of her crash when a mechanic identified the right-hand front brake lever while servicing the damaged e-bike.

"They did not put a warning on the box. They didn't put a warning on the bike. They didn't put a warning on the manual. The only way anyone could ever find out about this would be to happen to stumble upon their YouTube page," Verderame said.

In a November 2018 YouTube video uploaded by Phantom Bikes, and now removed, a company representative identified the right-hand brake lever on the Swirl as the front brake. Instagram posts and other YouTube videos posted by the company between 2017 and 2020 show right-rear levers. 

The lawsuit also includes the claim that even if Penkert had grabbed both cable-actuated disc brakes with equal pressure, the bike's improperly aligned rear brake caliper would have shifted the vast majority of braking duties to the front. A customer review of the Swirl on Costco's website also complained of a misaligned rear brake that couldn't be fixed at an e-bike repair shop. 

Verderame said the bike required finishing touches when it arrived at Penkert's home in Scottsdale, including the installation of a front basket, but otherwise came fully assembled. In Costco's response to Penkert's complaint, the wholesaler also alleged Penkert had modified or misused the bike.

The Swirl is available for sale on for $2,295. Costco still lists the bike for sale on its website. Walmart appears to have sold the bike as well, although it's currently out of stock. The number of Swirls sold in the U.S. is unknown, although Toma said in an August 2020 interview with his vendor platform, C2FO, that Costco had ordered $400,000 worth of Phantom e-bikes in November 2019. The Swirl is currently the only Phantom Bikes e-bike available for sale on Costco's website.

Phantom Bikes started out in 2009 in the shed of Del Mar, California, resident John King, according to a 2017 interview King gave to the San Diego Voyager. At the time, King was building gas-powered bicycles that looked more like motorcycles — Jay Leno's Garage even featured an early Phantom bike. Toma, a former Hollywood producer, came into the company in the mid-2010s and began pushing it in the direction of e-bikes. He bought the company from King in April 2019 and began selling e-bikes to Costco that summer. San Diego county court documents indicate King sued Toma for breach of contract in March 2020; the case was dismissed last April.

Today, Phantom Bikes sells the gamut of popular e-bike styles, including a beach cruiser, a fat-tire mountain bike, a hardtail mountain bike, a folding bike, and the motorcycle-styled Phantom 1910. The Phantom Vision, a $2,800 beach cruiser-looking e-bike, is also shown on the company's website with a front brake actuated by the right-hand lever. The orientation of the brakes on the company's other models is unclear from photos.

Tracing the 2020 bike boom, Phantom Bikes sales increased 500% between January and April 2020, Toma said in the interview with C2FO.

Verderame said Penkert's helmet broke in the crash that fractured her orbit, her jaw, and her nasal bones. With her right glass eye, she's relearning daily tasks due to her altered depth perception. The attorney said he hopes to settle the case quickly but is prepared for drawn-out litigation.

In December 2020, a group of New Yorkers sued Lyft — the owner of Citi Bike — after they claimed they were injured in falls caused by what they felt was excessive front braking force generated by the bike-share bikes' Shimano brakes. (Shimano was also named in the lawsuits.) Lyft and Shimano subsequently hired elite New York law firms Crowell & Moring and Eckert Seams Cherin & Mellott to defend against the complaints. The following summer, all of the riders dropped their suits.

Screen shot from a 2018 Phantom Bikes Youtube video, since removed.
Topics associated with this article: Lawsuits/legal

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