Tire Recall Fuels Drive to Bar Secret Settlements
The pervasive practice of sealing product liability settlements from public view, even when doing so could jeopardize lives, is coming under new scrutiny as a result of last month’s Firestone tire recall.
The recall of 6.5 million tires came only after accidents and deaths had piled up for eight years. Many of these cases were kept out of the public eye because Bridgestone/Firestone Inc. and the Ford Motor Co., without acknowledging liability, quietly settled many lawsuits resulting from tire-related crashes.
Typically, these settlements contained confidentiality agreements, sometimes barring all parties from discussing aspects of the cases.
Key documents in many of the court files were sealed or returned to the two companies, which helped keep the recurring problem out of the public eye.
It is a pattern that has been repeated many times over the years in product-liability cases.
McNeil Laboratories’ popular painkiller Zomax, linked to a dozen deaths and more than 400 severe allergic reactions, was taken off the market in 1983 only after dozens of settled and sealed lawsuits.
For several years, General Motors quietly settled more than 200 cases brought by victims of fiery car crashes involving the auto maker’s side-mounted gas tanks before the defect came to light in the early 1980s.
Pfizer’s Bjork-Shiley heart valves were linked to 248 deaths. Pfizer insisted on secrecy agreements in settling dozens of lawsuits before the Food and Drug Administration finally removed the valves from the market in 1986.
Such secret deals are sought not only by manufacturers accused of making defective products such as tires, drugs and medical devices, but by retail giants like Home Depot and Wal-Mart, which now routinely use them to settle suits brought by shoppers who slip and fall in their stores or have been injured by falling merchandise.
“This practice has exploded in the last 20 years,” said Arthur Bryant, a senior attorney with the nonprofit Trial Lawyers for Public Justice, which has filed several suits across the country to unseal court records. “Corporations have realized how they can be successful, and it’s cheaper to hide the truth from the public.”
Support is spreading in Washington for legislation barring manufacturers from sealing court records in cases in which the public safety is threatened.
Sen. Herbert Kohl (D-Wis.), who in the past has unsuccessfully pushed for such legislation, said he would use the Firestone recall to garner support from other lawmakers.
U.S. Rep. Lloyd Doggett (D-Texas) said the Firestone recall and the injuries and fatalities that preceded it “are the perfect illustration of why the public needs access to defective-product complaints.”
“The public has a right to protect itself, and information is the best safeguard,” he said. “Concealing information when its release would protect public safety is not in our country’s best interests.”
A Firestone spokesman said the company is still trying to determine what, if anything, caused some tires to fail. He and a Ford spokeswoman declined to say how many suits involving failed Firestone tires the two companies have settled. Both said that asking courts to seal information in such suits is common and that they are only seeking to protect their trade secrets.
But the Firestone recall, said Richard Zitrin, a legal ethics expert at the University of San Francisco, is another case in which “a manufacturer appears to be buying silence at the public’s expense.”
Indeed, consumer activists say scores of deaths could apparently have been avoided if critical information involving the tires had not been kept under wraps.
Documents released by lawmakers last week showed that Firestone and possibly Ford knew about a pattern of tire failures at least several months before the recall.
What Firestone knew and when is now the subject of a federal investigation.
A Times examination of court records from across the country shows that the company was repeatedly warned in court documents and the deposition testimony of former employees about serious problems with its tires, but chose to shield that evidence from consumers.
Firestone launched a recall of its tires only after information in one of those court files leaked out, triggering a chain of events leading to the investigation by the National Highway Traffic Safety Administration.
That case involved Daniel Paul Van Etten, a West Virginia University football player who was killed in March 1997 after the left rear tire, a Firestone ATX, separated on his family’s Ford Explorer, causing the vehicle to flip and roll. Van Etten, 19, was thrown onto Interstate 95 and died from head injuries.
Statesboro, Ga., attorney Rowe Brogdon, hired by Van Etten’s parents to file a $21-million suit against Firestone and Ford, found dozens of similar suits against both companies. Many of them had been settled, but none of the plaintiffs’ attorneys would talk about their cases. Confidentiality agreements not only prevented them from disclosing settlement amounts but also required them to return all documents to Ford and Firestone.
But Brogdon tracked down a former employee of Firestone’s plant in Wilson, N.C., where the tire of the Van Ettens’ Explorer was made. The man, 33-year-old Alan Hogan, provided deposition testimony that shoddy quality-control practices persisted at the Firestone plant and that workers were pressured to meet quotas and frequently used substandard materials, including old rubber stock, to make the ATX tires.
After securing Hogan’s cooperation, Brogdon got Firestone to produce documents relating to the operation of its North Carolina plant. But Firestone lawyers insisted that those documents be covered by a protective order, which meant that Brogdon could not share them with the public, government regulators and lawyers who filed similar suits on behalf of other victims.
Like Brogdon, many plaintiff attorneys agree to these protective orders because court fights could take years and cost their clients tens of thousands of dollars in legal fees. Manufacturers such as Firestone say they need these arrangements to ensure that their trade secrets don’t fall into competitors’ hands.
Extraordinary Steps to Safeguard Papers
In the Van Etten case, Firestone took extraordinary steps to safeguard the documents. On one occasion, the company agreed to let Brogdon review certain documents only on the condition that a Firestone lawyer deliver them personally and stand outside the conference room while Brogdon read them.
A week before the Van Etten case went to trial, the parties settled. As part of the settlement, Firestone required that Brogdon return the blown tire from the football player’s Explorer.
“They didn’t want to see this tire come up in other cases,” Brogdon said.
He said he found himself confronting the same dilemma faced by lawyers who had filed earlier suits against Ford and Firestone. Under terms of the settlement, Brogdon agreed to a confidential sum and to return all the documents the tire maker had turned over during the discovery process--although he said he worried that information in the case could have helped alert consumers to a serious hazard.
“You’re there to represent your client, not represent the world, although you wish you could,” Brogdon said. “Ethically, there’s no question that you have to do what’s in the best interest of the client.”
A year after the settlement, KHOU-TV in Houston reported that a large number of deaths were linked to Firestone tires. The station got Hogan to repeat some of his deposition testimony, which remains under seal. Since the revelation, several news outlets have reported that other former employees have described similar problems at Firestone’s plant in Decatur, Ill., where an overwhelming majority of the failed tires were made.
Susan Krusel, a Ford spokeswoman, said the confidential settlements are agreed to by both plaintiffs and defense attorneys. “If the plaintiffs think there is something in the documents that shows the public health and safety is threatened, they could bring it to the attention of the court and the court can review it,” she said.
Cynthia Moulton, a Houston attorney, said that in a tire-related case both Ford and Firestone insisted on secrecy orders before releasing any documents.
Moulton represented 41-year-old Bill Rogers, whose wife was killed in 1995 when the ATX tire on their Ford Explorer separated on Interstate 10 in Gonzales, Texas. Susie Rogers died when she was pitched out of their SUV.
Moulton said Ford and Firestone refused to produce information about similar accidents until a judge ordered them to do so. The case was settled before trial.
Bill Rogers, who in the crash suffered severe injuries requiring a hip replacement and long-term medical treatment, said he urged Moulton to settle.
“Under different circumstances, I would have taken this to trial and [tried] to get this in the public,” said Rogers, who has since moved to Nashville, where he manages two restaurants. “But I lacked the energy and stamina to go through a knock-down, drag-out court fight over documents and other things I have little control over.”
Such resignation is typical of clients, especially those who have lost loved ones in accidents, lawyers say.
“Some companies dangle this money in front of you and say this is yours if you keep everything confidential,” said David Vladeck, director of litigation for Public Citizen, a consumer advocacy group. “It’s a benefit some people get at the expense of future victims.”
Bruce Kaster, an Ocala, Fla., lawyer who specializes in representing plaintiffs in tire-defect cases, said clients almost always take the offer.
“They tell me they have to get the settlement money to take care of their child or parents who might have survived the crash, and they’ll leave me, the lawyer, to take care of the public good,” he said.
Rebecca Hamilton and her sister, Margaret Harrison, represent the rare exception.
Their mother, 79-year-old Mary Penturff of Santa Monica, was one of three Home Depot shoppers who in recent months have been crushed to death--in separate incidents--by falling merchandise. The sisters sued, and during discovery, when documents from both sides are exchanged, Home Depot’s lawyers refused to produce basic employee-training manuals, saying they were proprietary information.
“They give the same information to an employee receiving minimum wage, yet they don’t provide them to daughters trying to get information about their mother’s death,” said Stephen Rasak, a Torrance attorney for the daughters. “We felt their refusal was [intended] to maintain a veil of secrecy about the unsafe conditions at their stores.”
Last month, Home Depot lawyers offered to pay the sisters $900,000 to settle and asked them to sign a confidentiality agreement. Hamilton and her sister refused.
“I’ve been practicing law since 1976, and this was the first time that clients have said their silence couldn’t be bought, because they wanted to get the word out to the public,” Rasak said.
Home Depot, which agreed to settle without the confidentiality agreement, declined to comment.
Zitrin and consumer activists say the Firestone recall is reminiscent of other cases in which allowing public access to sealed records could have saved lives.
Dalkon Shield Deaths, Fiery Car Crashes
One example involved the settlement by Dow Corning after a San Francisco jury awarded $1.7 million to Maria Stern, a U.S. Forest Service employee who said Dow silicone gel implants had made her ill with joint pains and chronic fatigue. The settlement required Stern and her lawyers to keep key documents secret. Eight years later the FDA banned silicone implants, but only after hundreds of thousands of women reported the same illness.
Independent research later discounted the link between the implants and chronic illness but did not give the implants a clean bill of health. Dow Corning settled a class action suit for $3.2 billion in 1998 and did not put the implants back on the market.
The FDA suspended use of the birth control device known as the Dalkon Shield in 1974 after 11 deaths and 209 cases of spontaneous abortion. Before that, attorneys for A.H. Robins, maker of the intrauterine device, had reached numerous secret settlements and even tried to extract promises from plaintiffs’ lawyers never to take another Dalkon Shield case.
And only a few years ago, consumer advocate Ralph Nader showed how GM had quietly settled more than 200 cases brought by victims of fiery car crashes. GM employed secrecy orders to try to prevent the spread of evidence that the company knew it was endangering motorists by using the side-mounted fuel tanks. A memo written by a GM engineer calculated how much it would cost to relocate the fuel tanks versus the costs to pay victims burned in crashes. That memo and other key documents were sealed.
Firms May Fear Future Liability
Consumer activists say some manufacturers fear that releasing sensitive documents to the public could expose them to liability in future court action. The prime example is the tobacco industry, which for decades safeguarded its secrets, including extensive research linking cigarettes to lung cancer and other diseases. That secrecy was broken in the early 1990s after some of these documents began showing up in court cases, eventually turning the tide against Big Tobacco and costing it billions of dollars.
Self-interest aside, attorneys for corporations and insurers say allowing parties to seal court records helps to promote settlements. It is one reason why more than 90% of all civil cases are settled before trial, they say.
Advocates of court secrecy frequently cite writings by Harvard law professor Arthur R. Miller, who argues that litigants do not give up their right to privacy when they voluntarily, or involuntarily, enter the courthouse door.
“There’s no doubt you don’t want health and safety matters hidden from public view, but you don’t want to throw out the baby with the bathwater,” Miller said in an interview. “You would do a great amount of damage to [people’s willingness to] settle private cases. You don’t want to deter people from using the courts because they fear they would lose their privacy.”
During the last several years, insurer and manufacturer groups have successfully worked to defeat legislation--including previous bills by Sen. Kohl--that would have made it more difficult for courts to seal records in cases that point to the existence of a danger to public health and safety.
Only a dozen states have laws on keeping such secrets from the public, according to Zitrin, who has published several articles about the issue.
In 1991, then-California Gov. Pete Wilson vetoed a bill pushed by then-state Sen. Bill Lockyer outlawing agreements that conceal information about public hazards including defective products, environmental dangers and financial frauds. The law would also have disciplined lawyers who engaged in such settlements.
The Judicial Council of California, the state judiciary’s policymaking body, is working on rules to guide judges about when court records should be sealed.
Zitrin and other supporters of open records say they have no problems if courts protect a company’s trade secrets from being made public. But too often, they say, defendants seek these secret deals to avoid disclosing potentially damaging information--at the public’s expense.
Despite repeated cases in which evidence kept secret in court records could have prevented accidents and even tragedies, neither the FDA nor the NHTSA requires manufacturers to report settlements involving unsafe drugs or defective products.
Jane Francis, deputy director of the U.S. Consumer Product Safety Commission, which is required by law to protect the public against unreasonable risks of injuries and deaths associated with consumer products, said the agency requires manufacturers to report defects in their products if they have been involved in three court judgments or private settlements in a two-year period.
Relying on companies to warn consumers about defects with their products can sometimes be a risky proposition. On Aug. 30 the commission leveled a $750,000 penalty against L.L. Bean Inc. of Freeport, Maine, for failing to report defects in two of its backpack child carriers.
The agency said the company knew that children could fall through a leg opening or topple out of the carrier. One child suffered a concussion and fractured wrist, while six others received other injuries, ranging from cuts to bruises.
Harvard’s Miller and business-backed groups, including the Civil Justice Assn. of California, say that new laws aren’t needed and that judges should be the final arbiters about whether court records should be sealed.
“Judges are far more sophisticated on this issue than they used to be,” Miller said.
But therein lies the rub, say some consumer activists. Eager to clear crowded court calendars, many judges routinely accept settlements and seal court records, especially when both parties agree to the secrecy. Judges generally resist unsealing records after the fact because they don’t want to upset settlements, according to consumer groups.
In one recent case, a federal judge in Portland, Ore., agreed to seal a settlement between State Farm Mutual Automobile Insurance Co. and an Oregon woman who said the insurer defrauded her of benefits under her policy. As part of the settlement, the judge sealed more than 450 documents in the case file and agreed to erase the case from the court’s computer system.
State Farm has said in court papers that it earned such secrecy by agreeing to pay a monetary settlement.
Kathryn Clarke, a Portland attorney, is now representing three insurance-watchdog groups seeking to open the case file. “It’s plain wrong,” she said. “The public needs to know what’s going on.”