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June 27, 2001
Dear Senator:
On June 24, 2001, the New York Times published a story asserting that a traffic safety research consultant and some consumer lawyers may have known about a failure pattern of Firestone tires on Ford Explorers in 1996 and did not alert the government safety agency about this pattern "out of concern that private lawsuits would be compromised." Only one lawyer was identified in the story.
Sean Kane, the safety consultant quoted making boastful statements about his early knowledge of the Ford-Firestone problem, has since issued a statement disputing key elements of the Times’ story, including the allegation that he was aware of a pattern of Firestone safety defects as early as 1996. He now says this awareness occurred in 1998, at which time, he claims, he informed the national media. In short, there now appears to be a substantial question about the accuracy of his statements in the article.
According to Kane, in 1998 he was aware of only five Ford/Firestone lawsuits, of which one resulted in a defense verdict. Another two of the five had been publicized in 1997 by a Texas television station. The remainder of the claims of which Kane was aware consisted of consumer complaints that were filed with the National Highway Traffic Safety Administration (NHTSA) and publicly available, yet did not trigger an agency investigation. An investigation finally began after a reporter for KHOU Houston in January 2000 blew open the manufacturers’ cover-up. Her major source of information was the consumer attorneys representing victims of the Ford/Firestone fiasco.
The Times story provides only a partial picture of who has the responsibility to report suspected safety defects and the impact of such information, and thus could be used to lay blame at the wrong doorstep. Without the information provided by consumer attorneys, the true Ford/Firestone story may never have been told and consumers might still be driving on bad tires. Below is the rest of the story.
The Legal Duty to Report Safety Defects Belongs to Vehicle and Equipment Manufacturers
The plain and simple fact is that the legal obligation to report possible vehicle-related defects lies with Ford and Firestone, not the victims of defect-related crashes and their attorneys.
Under the National Traffic and Motor Vehicle Safety Act of 1966, as amended, a manufacturer is obligated to "notify" NHTSA when it learns of any safety defect in its products. See 49 U.S.C. § 30118. Ford and Firestone knew of problems associated with their products, knew there was a significant number of lawsuits, knew that consumers were suffering tread separations and related rollover crashes, and knew of approximately one thousand consumer complaints.
The companies did not provide NHTSA with this data, which included information as to deaths, injuries and property damage claims, insurance reports, warranty claims and repair records, as well as changes in the design parameters of the vehicle and tire. After evaluating their products in the early 1990s, Firestone replaced the ATX tire with the new Wilderness AT tire in 1995, and Ford redesigned the Explorer suspension system for the 1995 models. The companies, abrogating their statutory duty, knowingly failed to inform NHTSA of the growing problems with this lethal tire and vehicle combination.
In 1999, a year before the Ford/Firestone U.S. recall, Ford conducted foreign "recalls" of the Firestone tires in Venezuela and the Gulf Coast countries, a fact which the companies’ in-house counsel believed was necessary to report to NHTSA, and yet did not. Internal company memoranda uncovered in litigation show that the two companies made a conscious decision to withhold facts concerning the foreign recalls from NHTSA despite the fact that identical tires and vehicles had been and were being sold to millions of American consumers.
A new law, the Transportation, Recall Enhancement, Accountability and Documentation (TREAD) Act was enacted by Congress in November 2000, in recognition of the failure of manufacturers to disclose, and NHTSA to discover, the Firestone tire/Ford Explorer defect. The law clarifies the duty of companies to provide information regarding foreign recalls, and requires NHTSA to collect "early warning" information from the manufacturers, including lawsuits, complaints, warranty claims, deaths and injuries, etc. NHTSA is currently engaged in a rulemaking to define how this "early warning" information will be reported to the agency by manufacturers on a regular basis.
NHTSA Did Not Act on the Firestone Complaints Received Through 1999
On September 6, 2000, NHTSA Administrator Sue Bailey testified before the House Commerce Committee
that:
Firestone originally began producing the tires under investigation in 1991. By the end of 1999, approximately 47 million had been produced. By that time NHTSA had received 46 reports, but they were scattered over 9 years, about incidents involving these tires. The tires were on a variety of vehicles, primarily, though, on Ford Explorers. In view of the large number of tires that have been produced and the variety of possible causes of tire failure and the fact that all types of tires can fail and do in use, the reports we received did not warrant opening a defect investigation at that time.
Furthermore, the informal submission by State Farm in 1998 of 21 claims also were over a period of several years, almost 8 years, and that also did not warrant at that time initiating an investigation.
In view of NHTSA’s testimony, it is questionable whether information about a small number of lawsuits would have changed the agency’s actions in this case, or even reached agency decision- makers given the deficiencies in NHTSA’s record-keeping and defect investigation systems.
In the Firestone case, for example, complaints were filed under various key words, making any trend difficult to discern. The agency must standardize the complaint database and employ cross-references to make it a more useful tool. In addition, NHTSA is grossly underfunded and understaffed for its key task of discovering and prosecuting safety defects. Its enforcement budget is 50 percent below 1980 levels in real dollars. It has only about 15 investigators to evaluate vehicle safety defects for the nation. It needs more funding and staff to effectively uncover safety defects. Another credibility problem faced by the agency is that, over the years, more than 20 of NHTSA’s top officials have left the government and gone to work for the automotive industry.
Attorneys Should Be Encouraged to Report Alleged Safety Defect Complaints to the NHTSA Consumer Complaint Database
There is no question that consumer attorneys who become aware of potential auto safety defects should be encouraged to report the information to NHTSA or encourage the consumer to do it, although attorneys have no legal duty to do either. Many consumer attorneys, and the groups working with them, already file such reports as a matter of course. For example, NHTSA’s database of Ford/Firestone consumer complaints has been updated based on the continual work of Safetyforum.com, a group that works with trial lawyers and regularly supplies defect information to NHTSA. Even now, the NHTSA database reflects the fact that Safetyforum.com has reported 19 of the known fatalities, whereas Ford reported merely three and Firestone reported 24.
Filing individual complaint information with NHTSA has no adverse impact on the legal system, nor does it adversely affect individual liability cases. Maintaining a central database system is crucial in the ongoing struggle to uncover defect patterns, particularly in cases like this where the manufacturers have a demonstrated history of concealing known problems.
Although NHTSA’s database has been in existence for several decades, NHTSA has not encouraged lawyers to update the database, nor has it reached out to trial attorneys to discover repetitive problems associated with consumer use of automotive products. Many, if not most, trial attorneys are unfamiliar with the NHTSA data base. Both the public and the agency would benefit from knowledge of problems experienced by consumers on the highway, and lawyers can be helpful in achieving this goal.
Lawyers’ Duty to Zealously Represent A Client Can Discourage Them From Formally Asking NHTSA to Investigate Potential Defects
Lawyers representing the victims of tragedies such as Ford/Firestone have an ethical duty to represent their clients first and foremost. Lawyers sometimes consider whether they should file a formal defect petition with NHTSA about a particular alleged defect. But because NHTSA has demonstrated a pattern of rejecting such petitions, despite considerable evidence that a defect exists, and the manufacturers often use the agency’s rejection as evidence in pending litigation, attorneys are reluctant to petition NHTSA to investigate a safety defect, regardless of the strength of their evidence.
If such a petition is rejected, a lawyer could be acting against a client’s best interests. When NHTSA closes a case, it never makes a finding of "no defect," because new information could re-open the case. NHTSA should mitigate the concerns of consumer attorneys by, for example, issuing a clear disclaimer when the agency closes a defect investigation to clarify that ending an investigation cannot be used in litigation as evidence that "no defect" exists.
Some lawyers ameliorate this problem by disclosing information about the potential safety defect to the media or consumer safety organizations, so that the public can be made aware of the information and risks. But lawyers also regularly encounter another conflict. Manufacturers routinely demand protective orders for information secured in discovery. These gag the lawyer and the client, and depending on the scope of the order, can prevent a lawyer from disclosing any information, whether to NHTSA or the public. While most consumer lawyers dislike protective orders, they do facilitate the adjudication of the case as well as settlement. Orders that conceal safety defect information should be deemed unethical when imposed as a condition of settlement, because they force the lawyer and client to choose between the timely completion of their case and withholding important safety information from the public.
Conclusion
It is clear from the facts of the case that Ford and Firestone engaged in a concealment of the defect or defects and that they failed to inform NHTSA, as was their statutory duty, of the mounting evidence that a defect existed. I hope this information clarifies the charges that have been made, particularly in view of the ongoing debate on legislation for a Patients’ Bill of Rights, which should ensure that patients have a right to sue healthcare insurers following a wrongful denial of eligibility or treatment.
Sincerely,
Joan Claybrook
President, Public Citizen
Firestone Recall Page
To learn about Public Citizen, visit www.publiccitizen.org
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