Consumer Protection Update

Protecting Firestone and Ford
Federal Tort Reform

Federal tort reform would have protected Firestone and Ford, but deprived American families of justice and equity.

During the past several years Congress has debated more than a dozen tort "reform" proposals. These measures would have limited the legal rights of ordinary Americans and protected businesses that place dangerously defective products into the stream of commerce.

A number of these bills passed the House of Representatives beginning in 1995, and one even passed the Senate and reached the President's desk. Fortunately, President Clinton vetoed that bill in 1996, keeping it from becoming law. And despite Congress' repeated and continuing efforts to keep even the most dangerously misguided of these tort "reform" proposals afloat, none has been made the law of the land.

Now, in the wake of the recent rollover/tire tread separation tragedies, American motorists and their families are left to wonder how Congress came so close to enacting bills that would have allowed Firestone and Ford to avoid responsibility.

How could there be any justification for protecting these wrongdoers while making it more difficult - or even in some cases, impossible - for innocent families to receive justice? Here is just a sample of some of what was in these federal tort "reform" bills and how they would have protected Firestone and Ford at the expense of consumers:

LIMITS ON NON-ECONOMIC DAMAGES
Non-economic damages compensate people for losses that can't be measured by considering missed income or out-of-pocket expenses - such as the very real suffering associated with injuries (like blindness, loss of limbs, loss of fertility, and gross disfigurement). Non- economic damages often make up the bulk of awards given to those who don't earn any income at all - such as children, homemakers, and the elderly. Unfortunately, however, nearly every congressional tort "reform" bill proposes severe limits on the amount wrongdoers have to pay victims for their non-economic damages.

If these tort "reform" measures limiting non-economic damages were in place today, the rights of victims of the Firestone/Ford product defects would be severely curtailed. Since many of the cases involve injury to families - including women and children - victims of the Firestone/Ford accidents would be especially impacted. Victims wouldn't get fully compensated for the damage the companies caused, and Ford and Firestone would escape justice.

LIMITS ON CLASS ACTIONS
Class action lawsuits enable large numbers of plaintiffs with similar injuries to gather together to seek justice from defendants and provide a deterrent to further misconduct. By grouping many claims into one, fewer judicial resources (including judges' and clerks' taxpayer-paid time) are used, and dockets are kept clearer. In addition, class actions allow victims to disgorge the wrongdoers of their ill-gotten profits - showing others that they cannot harm individuals for profit.

Even though society clearly benefits from class actions, corporate wrongdoer-sponsored tort "reform" measures seeking to cripple class actions are frequently proposed in Congress. 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 justice separately. In addition, the thousands of consumers seeking to be repaid for their loses involved in replacing faulty tires might be forced into court, clogging our civil dockets.

CAPS ON PUNITIVE DAMAGES
Juries may award punitive damages in cases that involve the most egregious misconduct, such as when a defendant recklessly or knowingly disregards public safety. These cases are rare, and as such, so are punitive damages. As they are the exception rather than the rule, punitive damages pack a punch. They send the powerful message to wrongdoers that flagrant misconduct and disregard for public safety are intolerable.

Evidence has emerged during the Congressional hearings involving Firestone and Ford, that indicate that these two giant corporations knew years ago that the tires commonly used on certain SUVs contained a lethal defect. Yet they consciously withheld that information from consumers and regulators, choosing instead to continue manufacturing and marketing the tires.

Congress has considered passing bills that would cap punitive damages at as little as $250,000. This is a severe and arbitrary limit on penalties which are expressly used to punish reckless misconduct and deter similar future misconduct.

Ford posted a profit of $7.2 billion in 1999; Firestone sales for 2000 are expected to total $7.15 billion.* In the vast expanse of this corporate, multi-billion dollar financial landscape, $250,00 is an ant hill -- hardly a punishment for willful misbehavior, or an effective deterrent showing others that they, too, can endanger consumers and still be let off the hook.

ENGLISH RULE / LOSER PAYS
English rule, also known as "loser pays," means that the loser in a trial pays the winning side's legal fees and costs. This limitation on people's legal rights has been proposed in federal tort "reform" legislation.

In America, our civil justice system enables individuals of little means to challenge the harmful actions of the most powerful and profitable companies in the world. Our system - based on contingency fees - works because injured people can depend on their attorneys to expend the resources necessary on their clients' behalf for a trial. The attorney is not paid anything and does not recoup any spent resources unless the client wins - but winning is never guaranteed.

A "loser pays" system discourages injured citizens from holding wrongdoers accountable. How many victims of blown Firestone tire treads and Ford Explorer rollovers would challenge these multi-billion dollar corporations in court, knowing that these companies have endless resources with which to defend their actions?

"Loser pays" offers justice only for those who can afford it. Under "loser pays," the average American family simply would not have the money to risk financial hardship and probable bankruptcy if it lost its case and had to pay the legal expenses of Firestone and Ford. In effect, their right to go to court would be drastically eroded, if not eliminated.

* Knight-Ridder Tribune Business News, Jan. 27,2000 & Wall Street Journal, Sept. 12, 2000.

Article Reprinted with Permission from
American Association for Justice

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