High Court to Rule in Air Bag Liability Case : Law: At issue is whether meeting federal product safety standards shields manufacturers from all damage claims at the state level.

The Supreme Court said Friday that it will decide whether the millions of Americans who own cars without air bags can sue the manufacturer if they are injured in an accident.

The court’s ruling, which can be expected early next year, could also have a big effect on the makers of products ranging from motorboats to medical devices.

At issue is whether manufacturers that meet federal safety standards are shielded from all damage claims in state courts.

Until recently, most judges have sided with manufacturers and ruled that federal product standards “preempt,” or sweep aside, the traditional state liability laws.

But in air bag cases, five state supreme courts have taken the opposite view. They have allowed suits against auto makers that chose not to install an air bag in a car that was later involved in an accident. And, more ominously for the industry, several Supreme Court justices in related cases have come to doubt whether federal rules that set a minimum standard can be seen as also setting a maximum standard for the product.

Since Sept. 1, 1997, federal regulations have required all autos made in the United States to have dual air bags. Before that, air bags were an option, often costing several hundred dollars extra.

To the dismay of the auto industry, the justices announced they would hear an appeal filed on behalf of a brain-damaged young woman whose 1987 Honda Accord skidded on a street in Washington, D.C., and struck a tree. The driver, Alexis Geier, was wearing a seat belt and shoulder harness, but her car did not have an air bag. Her family sued, alleging that American Honda Motor Co., the U.S. arm of the Japanese auto maker, had sold a dangerously defective product.

“Honda did the bare minimum required by law. Honda could have installed an air bag in this car and intentionally did not do so to save a few bucks,” said Geier’s attorney, Arthur H. Bryant of Trial Lawyers for Public Justice in Washington. “The question is: Are they immune from suit?”

In Geier’s case, both a federal judge and the U.S. Court of Appeals said yes. These judges threw out the woman’s lawsuit and said Honda’s compliance with the federal air bag regulations shielded the company from liability.

But Bryant, in his appeal to the Supreme Court, pointed out that the federal Motor Vehicle Safety Act says that “compliance with a . . . safety standard does not exempt a person from liability at common law.” Congress could have shielded the industry from all liability, but it did not do so, he argued.

In a brief order, the justices said they would hear the case of Geier vs. American Honda Motor Co., 98-1881, in early December.

Gloria Bergquist, a spokeswoman for the Washington-based Alliance of Automobile Manufacturers, said the key issue “is whether the industry should be held liable for doing what the government told us to do.”

In 1984, the Transportation Department ordered a gradual phase-in of air bags. When Geier’s car was made, regulations said auto makers had to offer either an air bag or a seat belt with a shoulder harness.

American Honda Motor, based in Torrance, said in a statement that it will urge the high court to affirm the lower-court ruling.

“All major auto manufacturers have faced similar claims for more than a decade,” it said, and most lower courts “have correctly reasoned that such claims would conflict with the federal government’s regulatory policy.”

Two former officials of the National Highway Traffic Safety Administration differed sharply on the issue.

Erika Jones is a former chief counsel of the agency who now represents Honda.

“The government wanted a phase-in for safety reasons, and here Honda is facing potential [liability] for doing what the government asked,” she said.

But Joan Claybrook, who headed the agency during the Carter administration, said auto industry lobbyists pressured the Reagan administration to go slow on requiring air bags.

“The federal requirement is a minimum standard, not a maximum,” she said. Auto makers could have installed air bags sooner and chose not to so so, she added.

If the high court sides with the injured woman, its ruling will clear her claim to go before a jury, but it will not necessarily mean she would prevail.

“We would lose at trial,” Bryant conceded. Jurors might be skeptical that a car without an air bag was a defective product in 1987.

On the other hand, a ruling knocking down the industry’s legal shield could expose auto makers to huge liability. Faced with a badly injured plaintiff, jurors have been willing to sock auto companies with large verdicts. The industry is still reeling from a $4.9-billion jury verdict against General Motors Corp. in July--since reduced by a judge to $1.2 billion--over a fiery auto accident in Los Angeles.

In a Pennsylvania case, a jury awarded $8 million in damages against an auto maker because a car did not have air bags, Bryant noted. Hundreds of other cases have been blocked from going to trial.

Friday’s announcement broke with the Supreme Court tradition of announcing on the first Monday in October new cases to be heard. The justices did not have enough cases to fill the schedule in December, so to give lawyers the usual three months to file their briefs and to prepare arguments, they moved up the schedule and granted appeals in six cases.

The justices also will decide whether West Coast states can impose stricter safety rules on oceangoing tankers to ensure against another Exxon Valdez oil spill.

In 1994, Washington state imposed heightened safety rules on tankers traveling in Puget Sound. Extra crew members must be on deck, and they must undergo routine drug tests. Last year, the U.S. 9th Circuit Court of Appeals upheld the state standards.

But the Clinton administration joined international tanker owners in challenging the rules in the Supreme Court. Administration lawyers say the states cannot go beyond the uniform federal rules, which follow international standards. The case is U.S. vs. Locke, 98-1701.

Times staff writer John O’Dell contributed to this report.