Suzuki Entitled to Jury Trial in Consumers Union Suit
A federal appeals court in San Francisco on Monday narrowly reaffirmed a decision that Suzuki Motor Corp. is entitled to a jury trial on its claim that Consumer Reports magazine rigged a test to show that the Suzuki Samurai sport utility vehicle “rolls over too easily.”
Consumers Union, the parent organization of Consumer Reports, failed by a 12-11 vote on the U.S. 9th Circuit Court of Appeals in its bid to get a rehearing.
Judge A. Wallace Tashima, writing for the majority, said a jury was entitled to hear whether the magazine acted with reckless disregard for the truth and be permitted to hear whether Consumers Union published the story in an attempt to benefit financially because the article was used as part of fund-raising solicitations in 1996 while the organization was in “substantial debt.”
Suzuki’s managing attorney, George F. Ball of Newport Beach, said the company was pleased with the ruling and looked forward to getting its case in front of a jury.
“We think [Consumers Union’s] test was structured to support a predetermined result” that the vehicle was unsafe, Ball said. “The evidence shows that in 1988 the Samurai was tested 71 times; 42 times more than the Isuzu Trooper, 36 more than the Jeep Cherokee and 17 times more than the Jeep Wrangler. They kept testing until they got it to tip up and make it look dangerous,” Ball said.
Jim Guest, president of Consumers Union, said “The record of our testing of and publication about the Samurai demonstrates our high testing standards” as well as “consistent concern ... for accuracy, fairness and impartiality.” He added, “We make our judgments solely for the benefit of consumers.”
Guest said the organization would seek a stay of the ruling and ask the Supreme Court to review the case. “We believe that this significant split [in the 9th Circuit] warrants a review of these important 1st Amendment questions by the U.S. Supreme Court,” he said.
Judge Alex Kozinski, who wrote the dissent on behalf of 11 judges who believed a rehearing was warranted, predicted dire consequences unless the Supreme Court reverses the decision. He emphasized that the magazine had described its testing methodology in detail in the 6,500-word article.
The article told readers that the Samurai “did well on CU’s standard course, that CU then modified the course to make it more challenging and, as a result, the Samurai did far worse than its competitors,” Kozinski wrote. “I find it incomprehensible that a review truthfully disclosing all this information could be deemed malicious under New York Times Co. vs. Sullivan,” the landmark 1964 decision that has shaped libel litigation for the last four decades.
“If Consumers Union can be forced to go to trial after this thorough and candid disclosure of its [testing] methods, this is the death of consumer ratings: It will be impossible to issue a meaningful consumer review that a band of determined lawyers can’t pick apart in front of a jury,” Kozinski wrote.
“The ultimate losers will be the American consumers denied access to independent information about the safety and usefulness of products they buy with their hard-earned dollars,” he added.
Kozinski also warned that the decision could have ramifications for “virtually any research group that criticizes corporate interests....Today it’s Consumers Union panning the Samurai; tomorrow it could be Greenpeace claiming that some oil refinery is killing fish.”
Constitutional law professors Eugene Volokh of UCLA and Erwin Chemerinsky of USC predicted that the Supreme Court would take the case. Volokh said the majority opinion was in conflict with rulings in at least two other federal circuits about the appropriate standard of review by an appellate court in a 1st Amendment case.
Chemerinsky said the case was important and unique. “Very few defamation cases have involved corporations. I can’t think of any Supreme Court case where an organization like Consumers Union was sued over” a story evaluating a product, Chemerinsky said.
In June, a sharply divided 9th Circuit panel ruled 2 to 1 that Suzuki was entitled to present evidence to a jury that the magazine set out to harm the company’s reputation and knowingly published false information to achieve that goal.
