The message of the Firestone/Ford tragedy.
As the 2001 legislative session opens, the civil justice system is likely to face an onslaught of federal and state legislative attacks. State legislators, for example, are already facing proposals that excuse certain groups, individuals, or the government from responsibility for causing injury to another. By either fully immunizing parties against liability or by arbitrarily limiting their responsibility, these proposals force injured families to shoulder the financial burdens of their injuries.
For example, self-audit privilege proposals immunize certain groups by allowing them to hide incriminating information in connection with activities that may cause harm to public safety and health that is revealed in self-audits.
To counter these attacks, plaintiff lawyers need to communicate effectively, to the broadest audience possible, the importance of preserving civil justice rights. They need to discuss legal issues in language that can be commonly understood and appreciated.
Recent revelations about Firestone tire tread separations and related Ford Explorer rollovers can help advocates for civil justice do just that. Trial lawyers can cite these revelations to illustrate how special interest groups are endeavoring to restrict consumers' rights regardless of the severity of the wrongdoing and the seriousness of the injury.
No cases in recent memory illustrate so well how desperately the protections of the civil justice system are needed. The Ford and Firestone cases demonstrate how secret settlement agreements can kill. They show how joint and several liability ensures that plaintiffs are compensated, how noneconomic damages provide crucial compensation to the most vulnerable, how punitive damages can deter bad corporate conduct, and how the contingent fee system works to protect consumers. The cases also illustrate how regulatory self-audit rules for businesses leave the fox in charge of the product henhouse and how class actions can provide redress for large numbers of injured people.
Special interest groups' denial of and resistance to legitimate personal injury claims has an effect beyond any individual products liability claim. It is, in fact, an attack on the entire civil justice system.
Unveiling the truth
While Firestone and Ford were secretly settling cases, plaintiff attorneys were working to unveil the truth about the tire tread separation tragedies. Plaintiffs, using the civil justice system, sounded the alarm and began the process of holding the companies legally accountable for their actions. The system compensated victims and, by forcing the companies to come forward with information about their products, prevented even more tragedies from occurring. Consider the following:
It was the civil justice system that first alerted the public to the problem. Over the course of a decade, victims' lawyers exposed internal Firestone and Ford documents that the companies had fought to keep secret. These documents are now being used to warn drivers around the world about these defective tires, as well as the rollover propensities of the Ford Explorer, and to alert people about the companies' knowledge of the dangers.
It was the civil justice system that first held wrongdoers accountable. Corporations often will not remove a harmful or dangerous product from the marketplace until they are provided with a sufficient economic incentive, such as a series of jury verdicts or settlements large enough to offset profits. The civil justice system ensures that this incentive exists. Although the total amounts of both settlements and jury verdicts paid by Ford and Firestone are as yet unknown, one thing is certain: Lawsuits brought by crash victims and the publicity surrounding them have hit the companies where it hurts--their profits.
It was the civil justice system that first took care of victims. The civil justice system forced Firestone and Ford to compensate those who had been injured by the companies' irresponsible behavior. Settlements paid by the companies have already helped devastated victims get their lives back in order.
It was the civil justice system that first prevented further tragedies. Initially, no one outside Firestone and Ford had publicly tracked incidents of tire tread separation, and those companies chose not to share that information with the public or the federal government. Without the lawsuits filed by victims, a pattern of crashes might never have emerged, the press might never have reported on the danger to consumers, and drivers might never have been alerted to these lethal hazards on the road.
Settlements hid defects
It has become increasingly common for companies involved in personal injury claims to demand that claimants sign broad secrecy agreements before settling valid claims. These agreements can take many forms, including protective orders, confidentiality agreements, and sealed court files.
The dangerous and, in the case of the Firestone/Ford tire failures, deadly consequence is that critical health and safety information is concealed from the public. By keeping this information out of the public's reach, secrecy agreements lead to an even greater number of injuries and deaths. The Firestone/Ford controversy is particularly illustrative of just how dangerous these agreements can be.
On March 3, 1997, Daniel Van Etten, a 19-year-old college student, was thrown from his Ford Explorer while returning to school. The crash led to a $21 million lawsuit against Bridgestone/Firestone and Ford. The case was settled confidentially in November 1999, just days before trial.(1)
A few months later, Francisca Gutierrez--the mother of a two-month-old baby--was killed while operating a vehicle equipped with Firestone tires. The secret settlement of Van Etten's case denied the Gutierrez family and others vital information that most likely could have prevented other tragedies.(2)
Secrecy orders not only restrict the information available to consumers, but also deny the media and government regulatory agencies access to the information, threatening to obscure injury patterns caused by dangerous products.
Possibly more significantly, secrecy undermines the effectiveness of our civil justice system. Courts are public institutions financed by taxpayers. Their purpose is to safeguard people's rights and civil liberties. Since the courts are public institutions, they operate under a presumption of openness, which means that, generally, public issues brought there are matters of public record.
Secrecy agreements erode the public's trust and confidence in the court system by approving efforts to bury critical information, instead of disclosing facts that, if made public, could safeguard the public. By allowing corporations to keep health and safety information secret, these agreements prevent companies from being held fully accountable for the pain and suffering their products cause consumers. The fact that secret transactions occur under the auspices of courts suggests that courts endorse the concept that organizations need not be responsible when they cause injury.
Succinctly stated, secrecy orders are being used to settle public disputes in a private manner, which helps dismantle the judicial process. Courts, which are taxpayer-supported institutions, should not sanction private interests over public well-being. If people lose faith in courts and their ability to function for the public good, confidence in our whole system will begin to erode.
The most effective way to prevent injuries and deaths--and resulting tort claims--is to ensure that consumers have adequate information about the safety of products and services. A free flow of information will increase consumer awareness about hazards and opportunities to avoid harm, which could result in fewer injuries and less litigation.
The reported number of deaths linked to the lethal Firestone tires is 174 in the United States(3) and more than 150 in other countries. It makes sense to question whether the number of deaths and injuries would be as high if courts had not allowed the companies to insist on secrecy in exchange for settling the early cases.
The first tire lawsuits were filed in 1992, which gave notice to Ford and Firestone that others recognized there might be a serious problem with tire tread separation. Despite the fact that lawyers and others have worked to expose documents that demonstrate Ford and Firestone had early knowledge of the problem, the companies spent nearly a decade pretending it never existed. Meanwhile, the companies were entering into secret settlements with victims.
Why did it take so long to hold these companies accountable? Why are financial settlements, which have the potential to reveal the scope and depth of the tire separation problem, continuing to be signed today and kept secret under the watchful eyes of the courts?
Joint and several liability
The principle behind joint and several liability is that an innocent person should not be forced to pay the cost of injuries caused by another party's misbehavior. Only the responsible parties should pay the cost of the damages. Eliminating joint and several liability would force families who suffer losses to subsidize the parties that hurt them. Who should be responsible for the injury, the person who was hurt or those who caused the injury?
Joint and several liability dictates that if Firestone and Ford are both found responsible for corporate misbehavior that resulted in injuries or death, the companies will not be allowed to escape liability simply by pointing fingers at each other or declaring bankruptcy.
Suppose Ford knew it had a rollover problem with the Explorer and decided to minimize it by underinflating the Firestone tires included as standard equipment on its vehicles. If Firestone's tires proved to be more prone to tread separation when underinflated, both Firestone and Ford would have some responsibility for injuries. Firestone would have responsibility due to design and manufacturing defects in its tires. Ford would have responsibility due to design defects in the Explorer.
Without joint and several liability, the burden of paying for the loss would be shifted to the victim if either Firestone or Ford went bankrupt. (If either company were to become insolvent, it would most likely blame its financial woes on the lawsuits. But the blame should lie with the tires and vehicles that caused the injuries.) Joint and several liability ensures that drivers who have suffered debilitating injuries--such as the permanent loss of health, the loss of an organ, or the loss of mobility--receive full compensation.
Noneconomic damages compensate people for injuries that cannot be measured in terms of lost income or out-of-pocket expenses. Examples of these damages include the very real suffering associated with loss of the senses, loss of limbs, loss of fertility, or the devastation of witnessing a family member's death. These damages ensure that drivers and passengers seriously harmed by tire separations are fully compensated.
Unfortunately, nearly every tort "reform" bill that has been proposed or enacted ignores the devastating impact of these injuries. The "reforms" impose severe limits on the amounts that those responsible for causing injuries must pay to compensate their victims for noneconomic damages. It is ironic that, just as society is expressing concern about a decline in family values, proposed tort "reform" measures seek to diminish the value of a family.
Noneconomic damages often make up the bulk of awards given to those who do not earn any income, such as children, homemakers, and the elderly. Limiting noneconomic damages sends a message that these people are of less value than working men and women.
Many of the Firestone/Ford crashes injured family members, including stay-at-home parents and children, and these victims should be allowed to recover fully for their injuries.
What is the best way to get a multibillion-dollar corporation to change its behavior after it has ignored evidence that its own product is taking human lives? When criminal sanctions are not an option, punitive damages are often the only means available to change the reckless behavior of businesses. When companies such as Firestone and Ford have already engaged in harmful conduct, punitive damages penalize and discourage them and other businesses from repeating reckless behavior.
Punitive damages are a rarely used but crucial means of getting businesses to take product safety seriously. Juries award these damages in cases that involve the most egregious misconduct--for example, when a corporation knowingly or recklessly disregards public safety. Because these cases are rare, so are punitive damages. These damages pack a punch because they are the exception rather than the rule. They send the powerful message to wrongdoers that flagrant misconduct and disregard for public safety are intolerable.
Evidence emerged during the Firestone/Ford congressional hearings indicating that the two corporations knew years ago that the tires commonly used on certain sport utility vehicles had lethal defects.(4) Yet the companies deliberately withheld the information from consumers and regulators, choosing to continue manufacturing and marketing the hazardous tires and using them with vehicles that had a propensity to roll over.
Ford posted a profit of $6.8 billion in 1999.(5) Firestone's net profit for 1998 was $546 million.(6) In this multibillion-dollar financial landscape, $250,000, a typical state punitive damages cap, is an anthill--hardly a punishment or an effective deterrent for willful misdeeds leading to many deaths.
Tort "reform" measures that limit or even abolish punitive damages send the message that it is acceptable for corporations to favor profit above safety. Capping punitive damages allows wrongdoers to engage in a cost-benefit analysis in which they weigh the cost of changing their harmful behavior against their potential liability. Evidence surfaced in a 1981 Ford Pinto case that the manufacturer knew that the Pinto's fuel tank and rear structure would expose consumers to serious injuries or death. The court also found that Ford calculated a cost-benefit analysis and, weighing human safety against corporate profits, chose not to correct the design defects.(7)
The Firestone/Ford crashes have killed or seriously injured three times as many people as the Ford Pinto. When these companies post millions of dollars of profit, a small punitive damages award has no more impact on wrongful behavior than a slap on the wrist. Limits on punitive damages send the message to other businesses that they, too, can endanger the safety of families and be let off the hook.
The `loser-pays' rule
Critics of the civil justice system often find fault with contingent fees and suggest that implementing the "loser-pays" rule will discourage litigation. Under this rule, the losing side in a trial pays the winning side's legal costs and fees. Since the average person does not have the money to risk financial hardship if he or she loses the case, this rule would discourage injured victims from holding wrongdoers accountable.
The loser-pays rule, commonly referred to as the English rule, may also prevent consumers from receiving fair compensation. The system creates a situation where experienced institutional defendants with enormous resources and expert legal talent can bully injured plaintiffs into unfair settlements of meritorious cases for fear of losing. How many victims of blown Firestone tires and Ford Explorer rollovers would challenge these multimillion-dollar corporations in court if they faced the prospect of paying the companies' legal fees?
The loser-pays rule would disproportionately affect poor families by ensuring that only the wealthiest could afford to undertake a civil action. Families who are already shouldering the costs of an injury at the hands of a careless party are the least able to afford the risk of paying the costs and fees of a corporate giant whose legal strategy is simply to overwhelm the plaintiff with its vast resources.
Procedural rules already screen out nonmeritorious claims and, contrary to assertions by supporters of the loser-pays rule, there is no evidence that court dockets are clogged with frivolous civil cases. Furthermore, juries are very careful about the damages they award. The idea that juries simply hand out excessive verdicts is a myth. Only about 6 percent of the few cases that have gone to trial resulted in verdicts of $1 million or more.(8)
The contingent fee system ensures that more people have access to the courts. Under a contingent fee arrangement, injured people know their attorneys will finance the sometimes enormous costs of litigation. The attorney is not paid anything unless the client wins. Through this system, ordinary citizens can hold even the most powerful responsible, improving public safety and fostering positive change.
Businesses have increasingly been lobbying for the passage of self-audit laws. These laws stipulate that any time a company conducts an internal review, any materials generated in the course of the investigation and any internal documents relied on become privileged information. This privilege would be just another way for businesses to hide information about their activities that have potentially caused harm to public safety and health.
There are other policy arguments against these laws. First, every investigation would require a separate mini-trial on the issue of which parts of an audit are privileged. This would significantly increase the expense of protecting public safety. Second, the threat of criminal and civil sanctions is what encourages companies to perform self-audits and correct problems. The proposed laws would remove this enforcement hammer because companies could use self-audits as a way to hide incriminating information.(9)
If a self-audit law had applied to the Firestone anal Ford crashes, it would have been impossible for lawyers to expose internal documents that are now being used to alert consumers to the dangers associated with the defective tires and Ford Explorers.
Limits on class actions
Class action lawsuits let large numbers of plaintiffs with similar claims gather together to seek justice from defendants and provide a deterrent to further misconduct. When many claims are grouped into one, fewer judicial resources (including judges' and clerks' taxpayer-paid time) are used, and dockets are kept clearer. Most important, class action verdicts and settlements often serve as financial deterrents to other companies that might consider engaging in harmful conduct that would yield profit.
Even though society clearly benefits from class actions, corporate-sponsored tort "reform" measures seeking to cripple class actions are frequently proposed in Congress and state legislatures. If class action limits had been enacted, those who suffered at the hands of Firestone and Ford might be forced to bear the burden of seeking compensation separately, increasing their costs and delaying justice by crowding court dockets.
Clearly, if incriminating Firestone and Ford documents had never been exposed, the lives of even more drivers and their families would be at risk. As defenders of the civil justice system, trial lawyers must communicate this message to the public in terms stripped of legalistic language.
An enormous financial incentive exists for corporate wrongdoers to favor secrecy. If the civil justice system had not helped unveil the truth, secrecy agreements would probably have kept Firestone/Ford cases cycling through settlement without revealing to the public the companies' roles in causing the serious injuries that victims suffered in these crashes.
Our civil justice system roots out dangers, holds people and corporations accountable for creating those dangers, compensates those who are victimized, and prevents others from being hurt. Knowing the power of the civil justice system to protect consumers, why would anyone want to restrict it from protecting consumers and preventing misconduct? Could it be that Ford, Firestone, and other businesses simply want to go unpunished when they place profit ahead of consumer safety?
(1.) See Van Etten v. Bridgestone/Firestone Inc., 117 F. Supp. 2d 1375, 1377-78 (S.D. Ga. 2000);see also Ralph Ranalli, Lawyers Want to Limit Secret Settlements, BOSTON GLOBE, Nov. 25, 2000, at A1.
(2.) Gutierrez v. Bridgestone/Firestone, No. 3:98-CV-484 (E.D. Tenn filed July 31, 1998).
(3.) Cindy Skrzycki, 26More Deaths Linked to Tire Failures, WASH. POST, Feb. 7, 2001, at E3.
(4.) See Bridgestone/Firestone Inc. Tire Recall: Hearing Before the Subcomm. on Transportation of the Senate Comm. on Appropriations, 106th Cong., 2d Sess. (2000); Reports on Tire Recall: Hearing Before the House Subcomm. on Telecommunications, Trade and Consumer Protection and the House Subcomm. on Oversight and Investigations, 106th Cong., 2d. Sess. (2000).
(5.) Mark Truby, Bonuses at Ford to Top $6,000, DET. NEWS, Jan. 19, 2001, at 1.
(6.) Justin Boyd, Ono's Graceful Attentiveness Propels Bridgestone/Firestone, RUBBER & PLASTICS NEWS, Dec. 13,1999, at 1.
(7.) See Mark P. Robinson Jr. & Kevin F. Calcagnie, Fuel System Design: The Crashworthiness Angle, TRIAL, Nov. 1996, at 32.
(8.) CAROL J. DEFRANCES & MARIKA F.X. LITRAS, U.S. DEP'T OF JUSTICE, CIVIL TRIAL CASES AND VERDICTS IN LARGE COUNTIES, 1996, at 9 (1999).
(9.) See Russell Mokhiber, Don't Hinder Pollution Police, N.Y. TIMES, Oct. 15, 1995, [sections] 3, at 11.
Roselyn Bonanti is ATLA's associate director of State Affairs. Ed Lazarus is director of State Affairs. Catherine McCullough serves as the association research counsel in Media Relations. The authors would like to thank Kristin Loiacono and Nancy Marcus For their help in preparing this article.
|Printer friendly Cite/link Email Feedback|
|Date:||Apr 1, 2001|
|Previous Article:||Defending the American system of justice.|
|Next Article:||Climbing up from tragedy.|