An eight-year legal battle between Suzuki Motor Corp. and Consumer Reports magazine over a review that said the Suzuki Samurai sport utility vehicle easily tipped ended Thursday when both sides agreed to settle out of court.
Suzuki had sued Consumers Union, which publishes the widely respected product-rating magazine, alleging that Consumer Reports had rigged driving tests in 1988 of the Japanese automaker's Samurai.
Sales of the then-popular SUV plummeted after Consumer Reports branded the vehicle "not acceptable." Suzuki -- whose U.S. operations are based in Brea -- stopped selling the SUV in 1995.
Suzuki then filed its product-defamation suit in U.S. District Court in Santa Ana in 1996 and sought $60 million in damages. Consumers Union, a nonprofit organization based in Yonkers, N.Y., denied the allegations and stood behind its tests.
The lengthy lawsuit also raised fears within news organizations about the media's free-speech rights.
Suzuki did not receive any money in the settlement, the two sides said in a joint statement. But Consumer Reports agreed to a "clarification" about the Samurai's danger.
The joint statement said Consumer Reports' use of the adverb "easily" in describing the Samurai's tendency to roll over might "have been misconstrued and misunderstood." The magazine was referring to the results of "severe turns" in certain tests and "never intended to state or imply that the Samurai easily rolls over in routine driving conditions," the statement said.
It also said Consumers Union "has never questioned the safety of any other Suzuki model it has tested."
Cam Smith Arnold, a vice president at American Suzuki Motor Corp., said the clarification was "a huge issue for us." The automaker's lawsuit "was about restoring Suzuki's reputation, particularly with the Samurai in this country, and we were able to do that with the settlement," she said.
Suzuki, which is 20% owned by General Motors Corp., has been struggling, with less than 1% of the U.S. auto market. Suzuki plans a big rollout of new or redesigned vehicles as part of its ambitious plans to triple its U.S. sales of cars and trucks by 2007. Ending the legal fight will allow Suzuki "to focus all of our energy and resources" on boosting sales, Arnold said.
Consumers Union President Jim Guest said his group was "certainly pleased with the way the lawsuit has been resolved." He noted that Consumers Union still has never lost or paid damages in a product-defamation case in its 68-year history.
"We've issued no retractions or corrections; we paid no money" in the Suzuki case, Guest said. "We stand behind our test protocol, and the matter is now behind us."
Suzuki's lawsuit was dismissed by a trial judge, but the U.S. 9th Circuit Court of Appeals in San Francisco reinstated the case in June 2002, saying the company should get a jury trial.
Consumers Union appealed to the U.S. Supreme Court, arguing that the 1st Amendment's guarantee of freedom of the press should shield the group's magazine from being forced to stand trial for a report critical of a product it viewed as a danger.
Many leading news organizations, including Tribune Co., which owns the Los Angeles Times, also urged the high court to block the trial. Media companies asked the court to rule that judges should skeptically review Suzuki's evidence before forcing Consumers Union to spend hefty sums to defend itself.
But in November, the Supreme Court refused to stop the case, clearing the way for a trial.
Thursday's settlement leaves a cloud of uncertainty over the media's reporting of critical consumer product stories, said Ronald Collins, a scholar at the First Amendment Center in Arlington, Va.
"To me this is a loss in the 1st Amendment category," Collins said. The media "still must think twice about whether they'll go with this kind of story, given the time and cost of litigation."
In its settlement with Suzuki, Consumers Union agreed not to mention the tests or the lawsuit in advertising or fundraising efforts. But the magazine is still free to cite the Samurai matter in its editorial pages.
Consumers Union also is embroiled in a similar case with Sharper Image Corp., a consumer products merchant based in San Francisco.
Sharper Image sued in federal court in September after Consumer Reports said the company's Ionic Breeze room air cleaner was "ineffective." Sharper Image alleged that Consumer Reports used "unfair and inappropriate" measures to test the Ionic Breeze's technology, a charge the magazine denied.