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Steeltex suit survives latest challenge in Calif.

LOS ANGELES, April 24 (Reuters) - A $3 billion proposed class action lawsuit against Bridgestone Corp. survived the Japanese-based company's latest attempt to have it dismissed by a California judge, lawyers said on Thursday.

The lawsuit accuses the tire maker of concealing tread separation problems in its heavy-duty Steeltex tires and demands that Bridgestone recall 27.5 million Steeltex R4S, R4SII and A/T tires. The lawsuit claims the tires -- installed on 43 types of vehicles such as pickups, vans and mobile homes -- caused thousands of serious accidents including fatalities.

The ruling by Riverside Superior Court Judge Christopher Sheldon allowing the lawsuit to proceed came four months after a federal judge in Los Angeles declined to rule on whether to dismiss the case and returned it to state court.

A Bridgestone spokesman said the company does not want to litigate a potential recall in California courts.

"Our position has been consistent, that there is no reason for a recall of these tires," Bridgestone spokesman Dan MacDonald said. "(The National Highway Traffic Safety Administration) has reviewed these tires and clearly stated that they found no evidence of defect."

Sheldon disagreed, and left intact the lawsuit's five claims -- for design negligence, concealing problems with the tire, tort liability and unfair business practices, court officials said.

The judge also ordered the plaintiffs to refile the lawsuit without references to Bridgestone's alleged fraud against federal highway officials, their attorney Joseph Lisoni said.

Lisoni said seven major insurance carriers have joined the lawsuit as plaintiffs on behalf of clients who filed damage and injury claims caused by tire blowouts.

He said he expects to eventually represent some 8 million Steeltex tire owners, making the case one of the largest class actions in U.S. history.

Bridgestone is still fighting rollover lawsuits in courts across the United States allegedly stemming from tread separation problems in its Wilderness tires, which were standard equipment on the Ford Motor Co. Explorer and other sport utility vehicles. About 20 million Wilderness tires were recalled, 14 million by Ford and 6.5 million by Firestone.

The tire maker's lawyers have argued that only NHTSA has the authority to order a recall, and declined to recall the Steeltex line last April. Lisoni has asked the agency to reopen the probe.

A NHTSA spokesman said the agency is still examining Lisoni's petition and expect to make a decision by May 27.