Tuesday, June 23, 2015
Rena I. Steinzor (University of Maryland Francis King Carey School of Law) has posted (Still) 'Unsafe at Any Speed': Why Not Jail for Auto Executives? on SSRN. Here is the abstract:
Americans can be forgiven for wondering what has gone so drastically wrong with the companies that sell automobiles. In 2014, 64 million, a number equivalent to one in five of the cars on the road, was recalled. Safety defects such as the lack of torque in ignition switches installed in GM compact cars like the Cobalt put motorists in the terrifying position of coping with a stalled engine and loss of power brakes while traveling at high speeds. GM had the audacity to classify this condition was not a safety defect, but instead was merely “inconvenient” for its customers. It persisted in this position for many years until a private lawsuit forced the company to acknowledge that stalled engines also meant disabled airbags. This Article uses the ignition switch debacle to consider two crucial questions. First, is the regulatory system capable of stepping into the marketplace and stopping corporate malfeasance that creates too many incentives for executives to deny the existence of safety defects well past the time when they should be acknowledged? Concluding that the answer to this question is no, the piece then considers whether criminal prosecution of mid- and senior-level managers, including in-house counsel for the companies, is a feasible and effective alternative to traditional regulation? I argue that publicly available facts justify criminal prosecution of GM as well as individual managers for reckless homicide under state law, as well as such federal crimes as failure to disclose a safety defect and obstruction of justice.