Court Rules Consumers Union Must Face Trial On Suzuki's Charges of Rigged Testing.

Business Editors & Automotive/Legal Writers

Suzuki Motor Corp. today announced that the U.S. Court of Appeals in California has issued an important ruling in favor of the company in its product-disparagement lawsuit against Consumers Union ("CU") and its magazine, Consumer Reports.

Reversing an earlier ruling by a federal district court in Santa Ana, Calif., the Court of Appeals held that Suzuki had presented enough evidence to warrant a jury trial on its charges that CU, for financial motives, published knowing falsehoods when it claimed, in 1988 and several times since, that CU's tests had shown the Suzuki Samurai "easily rolls over in turns" and was therefore "Not Acceptable."

In its decision, the Court of Appeals concluded that that the district court "did not give adequate credit to ... evidence of test-rigging" presented by Suzuki, and that "(a) reasonable jury could find by clear and convincing evidence that CU sought to produce a predetermined result in the Samurai test."

Among other things, the court relied upon a statement by CU's editorial director, after CU's test drivers had failed to make the Samurai roll over, that "If you can't find someone to roll this car, I will." The Court also emphasized that, at the time CU initially criticized the Samurai, CU had just purchased a new building and therefore "needed to boost its revenues to complete its capital campaign."

The court further concluded that this "evidence of financial motive dovetails with the evidence of test rigging." Based on this and other evidence, the Court of Appeals reversed the district court's earlier ruling against Suzuki, and sent the case back for a jury trial.

According to Suzuki's managing counsel, George Ball: "Today's ruling means that CU will now have to answer in court for the false charges it has spread and continues to spread regarding the Suzuki Samurai sport-utility vehicle. We look forward to presenting our evidence and moving the case toward final resolution."

Suzuki's lawsuit asserts claims for product disparagement based on statements by CU since April 1994. Those statements repeated CU's earlier allegations, dating to 1988, that the Suzuki Samurai is "Not Acceptable" because, according to CU, it is "likely to roll over during a maneuver that could be demanded of any car at any time."

Suzuki further alleges that these statements created substantial harm, not only to sales of the Samurai, but also to sales of other Suzuki automobiles. The court's ruling will allow Suzuki to seek damages for its lost sales of Samurais and other vehicles to the extent it can prove that those losses were caused by disparaging statements made by CU after April 1994.

In addition to Ball, Suzuki was represented on appeal principally by Robert Fiske of Davis Polk & Wardwell and Gene Schaerr of Sidley Austin Brown & Wood.

Additional information can be obtained at www.media.suzuki.com/auto.