HILTON HEAD ISLAND, S.C.—Changes and new trends in product liability law are proving both good and bad for the tire industry, according to a longtime industry executive.
Court decisions jeopardizing trade secret information are negatives for the industry in liability cases, according to Jerry Leyden, president of Akron Rubber Development Laboratory Inc., who spoke at the 24th Annual Clemson University Tire Industry Conference March 12-14 at Hilton Head Island.
So are expanding issues involving compounding, tire aging and safer alternative design, not to mention the aggressiveness of the plaintiffs' bar and the growing need for investing time and money in litigation.
On the other hand, there are some positives related to product liability, Leyden said. These include the added protections to tire makers provided by newly strengthened tire testing standards and the mandate for tire pressure monitoring systems, as well as tort reform, new research and court precedents tightening credentials for expert witnesses.
“I've been in the rubber industry 44 years, 33 of which I've been involved in litigation—either as witness or as participant,” Leyden said. While many cases are frivolous, and most cases provide what Leyden called “a plaintiff's smorgasbord of potential defendants,” it's important to remember that some cases are more serious than they appear at face value, he said.
“I once worked with a lawyer who was a close friend of the jurist who tried the McDonald's 'hot coffee' case,” he said. “It's worth noting that the lady who filed the case had third-degree vaginal burns, and that she only wanted her medical bills covered. McDonald's fought it, and ended up paying a great deal of money.”
Developments such as electronic discovery are making litigation much more difficult and expensive for manufacturing firms, according to Leyden.
“Plaintiffs are now allowed to request recovery of documents in electronic form,” he said. “This includes e-mails, PDAs, Blackberries. It also includes voicemails, flash files and home computers used for business. The consequences are mind-boggling.”
Manufacturers that have any inkling they might be sued are now required to keep any and all electronic documents that might be demanded in a discovery proceeding, according to Leyden. One company, he said, recently had to spend $800,000 filtering e-mails in a discovery proceeding. Eighty-eight percent of those e-mails, he added, were irrelevant to the litigation.
Also, tire dealers and retreaders are being brought into product liability lawsuits with increasing frequency, according to Leyden. “If you take a look at tires, you are liable if the tire fails,” he said. “Training technicians what to look for is crucial, and so is keeping records.”
Never underestimate the savvy of plaintiffs' attorneys, Leyden warned. “The plaintiffs' bar is comprised of very smart people used to making a lot of money.”
Meanwhile, protecting trade secrets in litigation has never been easy and is getting harder, he said.
“It takes only one court with a weak judge or a non-thinking tire expert to allow the release of trade secret information,” he said. “It's an ever-greater threat to the tire industry.”
Tire makers need to rethink their approach to litigation, according to Leyden. This must include reorganizing the product teams to address all conceivable concerns, including failure mode and effects analysis in both design and manufacturing.
On the brighter side, the Class Action Fairness Act restricts the efforts of plaintiffs' attorneys to go “venue shopping” for jurisdictions that are famous for big payouts in class actions and other litigation, Leyden said.
Federal Motor Vehicle Safety Standard 139, the new tire testing standard, created a series of tests that relate much more to real-world road conditions than the old Standard 109, according to Leyden. Also, the “Daubert” decision by the U.S. Supreme Court gives judges a great deal of discretion as to what constitutes an acceptable expert witness.
Leyden noted one case of a federal judge questioning a man with a doctorate in chemistry as a potential expert witness in a product liability case.
“ 'Exactly what area are you an expert in?' the judge asked,” Leyden said. “The chemist replied, 'I am an expert in anything liquid, solid or gas.'
“ 'You are excused from my court, and don't trip over your ego on the way out,' the judge said.”