Mass Tort Litigation Blog

Economic Claims Against Toyota Move Forward

Last week, District Judge James Selna refused to dismiss the economic injury claims by Toyota owners who alleged that the unintended acceleration problems caused a decrease in their cars' value.  The multi-district litigation includes more than 200 economic injury class actions and around 100 personal injury and wrongful death claims.  Judge Selna will consider Toyota's motion to dismiss the cases alleging wrongful injury and death on December 9.  Here's a link to the National Law Journal story.

ECB

Two Families in Fatal Toyota Accident Join to Sue Toyota for Unintended Acceleration

The family who lost a son and granddaughter in the accident has come together with the man driving the Toyota to file a suit against Toyota for unintended acceleration.  Jan Crawford of CBS has the story.

BGS

Toyota Settles Unintended Acceleration Lawsuit

According to an article in the Wall Street Journal, Toyota has settled, for an undisclosed amount, an unintended-acceleration lawsuit involving the deaths of four persons.  The accelerator appeared to have been caught in the floormat.  The article notes that Toyota faces about 200 unintended-acceleration lawsuits.

BGS

Mass Tort Crisis Management

Recent crises stemming from BP's oil spill and Toyota's acceleration problems have brought a swarm of media coverage, congressional hearings, regulatory agency activity, corporate news conferences, and lawsuits.  Indeed, theories of liability may stem not only from the initial traumatic incident or incidents, but from the corporation's putative mishandling of the crisis once it unfolds.  On the corporate side, what's called for is thoughtful and coherent crisis management that moves the corporation through the crisis in a way that resonates with corporate core values, thereby maintaining the value of the ongoing enterprise, and that is mindful of impending theories of liability.

Despite the great need for such a coherent approach to mass tort crisis management, what's remarkable is the apparent paucity of attention given the subject by legal scholars.  That may be because crisis management involves public relations and communications, as well as management and leadership; hence crisis management has been the focus of public relations consultants and some professors in communications schools and business schools.  But at the heart of corporate crises are frequently the law and liability, so law professors should not be absent.  Lawyers and law firms already occasionally promote their ability to handle an emerging corporate crisis by quickly assembling a team of lawyers from a broad array of areas -- see, e.g., Skadden's Crisis Management; and lawyer practitioners have delivered various continuing education talks and papers on crisis management, as well as an interesting short symposium paper by Harvey L. Pitt and Karl A. Groskaufmanis, When Bad Things Happen to Good Companies: A Crisis Management Primer, 15 Cardozo L. Rev. 951 (1994).  But while practitioners bring on-the-ground expertise, they may lack the theoretical depth and interdisciplinary zeal of law professors, and practitioners present a conflict-of-interest risk in preferring, for example, fee-heavy litigation over other methods of mass tort crisis management and resolution.  A full academic account of mass tort crisis management would entail an awareness and integration of various legal areas -- tort, procedure, litigation, ethics, regulatory action, congressional investigations and activity (including possible compensation funds), and pertinent constitutional issues -- with public relations and management.  I look forward to turning my attention increasingly to that task.

Where do you look for corporate crisis management expertise in mass torts?  Books, articles, law firms, or consultants?  Does your law firm market itself as offering corporate crisis management; if so, what's your approach?  If you work at a consulting group that does crisis management, do you have in-house lawyers that assist you or do you work with the corporation's outside counsel?  Feel free to post a resource or comment.

BGS

I Call Shotgun!

The article referenced by Beth Burch below reads like a who's who of mass tort and class action litigation.  But really the reason for this post was the nerdy title. 

h/t Robin Effron at the Civil Procedure Blog. 

ADL

JPML Consolidates Toyota Lawsuits in Souther District of CA

See Robin Effron's post at Civil Procedure & Federal Courts Blog.

ADL

Toyotal Lawsuits - behind the scenes at an MDL

Here is an interesting article about the JPMDL oral arguments in the Toyota lawsuits: Lawyers Play Speed-Date in Toyota Tussle.

The issue the article discusses (rather disdainfully) is who will be the lead lawyers in the Plaintiffs' Management Committee because those lawyers will lead the litigation, garner the most fees, etc.

More needs to be written about procedures to allocate power among plaintiffs attorneys as well as fees, a process that could use more process.

Note too the names raised in the article: Mark Lanier (Houston based) who tried the Vioxx cases, Mark P. Robinson Jr (who according to the article was involved in the Ford Pinto litigation in the 70's), and Mark Geragos (who is best known for representing Michael Jackson).

h/t Todd Gilbert

ADL

Walter Olson Attempts to Defuse the Toyota Panic

His article, Exorcising Toyota’s Demons, was published today in the National Review online.

BGS

Array of Lawsuits Expected Against Toyota

Professor David Owen (South Carolina) and I are quoted in a report tonight on All Things Considered on National Public Radio; the audio report -- Toyota Seen Facing Multiple Lawsuits, by Wendy Kaufman -- will also be posted on the web tonight at 7:00 p.m. EST.

BGS

Crisis Prevention and Toyota's Corporate Culture

The Economist suggests a connection between Toyota's continuing manufacturing problems and a corporate culture that fails to raise problems because it is overly deferential.  I have separately heard that Asian airplane co-pilots have had to be specifically trained to overcome their traditional cultural deference and challenge the actions of pilots, if warranted, in emergency situations.  Here's an excerpt from article:

Toyota’s problems are its alone, but they highlight broader failings in Japanese corporate governance that make large companies particularly vulnerable to mishandling a crisis in this way. Such firms typically have a rigid system of seniority and hierarchy in which people are reluctant to pass bad news up the chain, thus keeping information from those who need to hear it in a misguided effort to protect them from losing face. In many firms, including Toyota, family ties make challenging the boss all but impossible. Any attempt to short-circuit the hierarchy is deemed an act of disloyalty and a violation of the traditional consensual corporate culture. Groupthink becomes entrenched because there is so little mobility between companies: hiring from outside is thought to disrupt a firm’s internal harmony, and an executive willing to move will be stained as a disloyal “job-hopper”. This further hinders firms’ ability to take bold, decisive action. The preference for harmony crowds out alternative viewpoints.

BGS

Class Actions Against Toyota

Coverage at the National Law Journal.  h/t Civil Procedure and Federal Courts Blog

ADL 

Professors Opine on Toyota's Lawsuit Problem

At TortsProf Blog.  The article quoting torts professors David Owen (South Carolina) and James Henderson (Cornell) can be found here. 

ADL

Toyota Recall Spurs Lawsuits and Talk of Lawsuits

The ABA Journal article is here.  Apparently class actions have already been filed by consumers who claim that their cars are now worthless.  The article quotes the Wall Street Journal quoting Richard Nagareda (Vanderbilt)

"Since it will be hard to represent a nationwide class," he said, "I don't think this litigation will be a big moneymaker for plaintiffs."

(H/T Abovethelaw.com)

ADL

That's Dedication

 

Photo of Ted Frank's car -- Ted is founder of the Center for Class Action Fairness and former fellow at the American Enterprise Institute.  (Thanks to Ted for permission to post here.)

BGS

The GM Reorganization and Product Liability Claims

Article in the Wall Street Journal -- Car Liability, Dealers Pose New Hurdles For GM Plan, by Mike Spector and Jeffrey McCraken.  Here's an excerpt:

The U.S. Treasury Department is negotiating with more than a dozen state attorneys general to roll back two key features of General Motors Corp.'s bankruptcy plan that would have wiped out billions of dollars in potential claims from car-accident victims and closed auto dealers.

The discussions show how the federal government's GM rescue is brushing up against the limits of its ambitious legal approach, which attempted to use the Bankruptcy Code to override many state legal contracts and protections.

This could ultimately expand the cost of GM's $60 billion bailout, though government officials say it
shouldn't delay the emergence of a "new GM" from bankruptcy protection.
.

BGS

GM Receives Preliminary Settlement Approval in Nationwide Auto-Repair Litigation

The Recorder reports that Alameda County Superior Court Judge Robert Freedman has preliminarily approved a 49-state class action settlement between General Motors and plaintiffs over auto repairs. The settlement is worth approximately $150 million to car owners even though it reportedly compensates them for only about 50% of the repairs. Here’s an excerpt:

Under the settlement, the class would be split into three groups based on the cars they drive, the type of engine and the kinds of repairs performed. Plaintiffs would collect $50 to $800 per repair, with speedier repairs generating larger reimbursements.

The settlement does not cap the total amount GM would pay class members, though it does set maximums in other areas: court-approved attorney fees of up to $16.5 million, litigation expenses of up to $1.55 million and total named plaintiffs' incentive awards of up to $140,000.

Lawyers in California and Missouri first filed suit against GM about five years ago, claiming the auto manufacturer used an engine coolant in factories that created performance problems in more than 30 models of GM cars, including the Oldsmobile Cutlass and Chevy Impala. All of the cases targeted Dex-Cool, a coolant GM started using with the 1995 model year. The suits asserted claims for breach of warranty and violations of unfair business practices statutes.

GM was represented by Robert Ellis, a Chicago-based partner at Kirkland & Ellis. Through a Kirkland spokesman, Ellis referred calls about the settlement to a General Motors spokesman, who declined to comment.

Earlier in the litigation, plaintiffs attorneys experienced some bumps along the road to class certification.

Four years ago, Alameda County Superior Court Judge Ronald Sabraw denied a motion seeking class certification to get declaratory judgment on one issue in the California piece of the litigation.

In 2006, after Sabraw retired from the Alameda County court, the same plaintiffs filed a motion seeking certification of a California class to establish liability. Judge Freedman denied that but said the plaintiffs could bring a renewed motion supported by additional evidence. The plaintiffs asked to certify a California class last year for a third time, supporting it with affidavits from four expert witnesses. That time, Freedman granted class certification.

ECB

New Ford Recall

Earlier this week Ford recalled some 225,000 vehicles ranging in make and model over a concern about a faulty cruise control deactivation switch. Here’s an excerpt of the story from Forbes:

Ford discovered the wiring harnesses problem while repairing a vehicle in its own fleet and said no accidents or injuries have been caused by the problem.

The cruise control switch recall was due to engine fires linked to the cruise control systems in trucks, sport-utility vehicles and vans.

The vehicles in the new recall include 185,000 E-Series vans with model years ranging from 1992 to 2003.

Other affected vehicles include 1993-95 Ford Taurus SHO; 1992-98 Ford Crown Victoria and Mercury Grand Marquis; 1992-95 Lincoln Town Car; 1993 Ford Bronco; 1993 gas powered Ford Super Duty; and 1995-97 gas-powered Ford Super Duty stripped chassis.

Ford said not all vehicles in those model years had the faulty wiring harness installed, and it will contact affected owners.

ECB

Maryland Allows Product Liability Claims for Unmanifested Defects

Article in the ABA Litigation News -- Maryland Expands Product Liability for Unmanifested Defects, by Brian A. Zemil.  Here's an excerpt:

Rejecting the majority rule adopted by other states, Maryland’s highest court has held that unmanifested product defect claims can be actionable even when the plaintiff fails to allege personal injury.

In Lloyd, the Maryland Court of Appeals reinstated a class action brought by plaintiffs who had sued auto manufacturers that sold cars allegedly containing defective seatbacks—even though the defects had yet to manifest themselves, let alone cause actual injury to the class members. Because the flaws could potentially cause death or serious injury, the court held that the cost of repairing the seatbacks was actionable in tort and contract and as a consumer protection claim.

The decision forms “part of a hotly contested nationwide dispute over whether a product that has a possibility of malfunctioning is defective such that it can support a consumer-type product liability class action claim for economic loss,” says Scott L. Nelson, Washington, DC, former Co-Chair of the Section of Litigation’s Class Actions and Derivative Suits Committee.

BGS

Ford Recalls 3.6 Million Vehicles For Faulty Cruise Control Switch and Possible Fire Risk

Article on cnn.com --  Ford recalling millions of vehicles because of faulty switches.  Here's an excerpt:

Two years after his wife of 34 years died in a fire, an Iowa man continues to maintain the blaze was started by a faulty cruise control switch under the hood of her 1996 Ford F-150 pickup -- while it was parked in the garage attached to his home.

Although Ford has denied -- and continues to deny -- the switch started the fire that killed 74-year-old Dolly Mohlis in 2005, the company recently settled a lawsuit brought against it by Earl Mohlis. And last week, it issued a recall of an estimated 3.6 million vehicles -- bringing the total recalled over the past decade to more than 10 million -- every single car and truck built with a similar cruise control switch.

BGS

Chrysler Recall for Brake Problems

Article in the Chicago Tribune -- Chrysler recalls vehicles to reprogram brake system computers, by the Associated Press:

DaimlerChrysler AG's Chrysler Group said Friday it was recalling more than 60,000 vehicles to reprogram a brake system computer to avoid the loss of antilock brakes and traction control.

The recall involves 62,369 model year 2007 Chrysler Sebring, Chrysler 300, Jeep Commander, Jeep Compass, Jeep Grand Cherokee, Jeep Liberty, Jeep Wrangler, Dodge Nitro, Dodge Magnum, Dodge Charger and Dodge Caliber vehicles.

The automaker said that in a small number of vehicles, the instrument panel warning lamps might illuminate and be followed by the loss of its Electronic Brake Distribution, antilock brake system, traction control and speedometer functions. That could lead to a loss of vehicle control.

BGS