The New York Times
July 12, 1999
Paper Trail Haunts G.M. After It Loses Injury Suit
By ANDREW POLLACK

The $4.9 billion verdict in a personal-injury lawsuit against General Motors on Friday might be only the start of the company's problems. Lawyers and safety consultants pursuing similar cases say corporate documents used as evidence in the case, many for the first time, could be troublesome for General Motors in the future.

The jury here awarded the record-setting damages to six people who were badly burned when the gas tank of their 1979 Chevrolet Malibu exploded after the car was rammed from behind by another vehicle. The plaintiffs have pledged to donate half of any punitive damages they collect after taxes to the state of California to pay for the care and treatment of burn victims, their lawyer, Brian J. Panish, said today.

Central to the case was a 1973 "value analysis" written by an Edward C. Ivey, an Oldsmobile engineer still employed by G.M., who calculated that fuel-tank fires after accidents were costing the company $2.40 per vehicle. Plaintiffs in the Los Angeles case had argued that General Motors did not design cars more safely because it would have cost the company more than it was losing in settlements with accident victims.

"The Ivey memo is an economic blueprint for lawyers," said Clarence M. Ditlow, executive director of the Center for Auto Safety in Washington, a group co-founded by Ralph Nader that is involved in similar cases. "It set a cost constraint on how much G.M. was willing to put into hardware to prevent a fire that was otherwise preventable."

General Motors argued that its vehicles were safe and that the Ivey memo was the work of a junior engineer and was never used in design.

"There was no evidence that any engineer who worked on this vehicle or any other vehicle at General Motors used the information in the Ivey document or used that approach in making decisions on design," said Richard W. Shapiro, a Phoenix lawyer who represented General Motors in the case decided on Friday.

Still, the company has long worried about the document and how it might be perceived. "Obviously, Ivey is not an individual whom we would ever, in any conceivable situation, want to be identified to the plaintiffs," in a lawsuit, a lawyer hired by General Motors wrote after interviewing Mr. Ivey in 1981. "The documents he generated are undoubtedly some of the potentially most harmful and most damaging were they ever to be produced."

General Motors has mainly succeeded in keeping the Ivey memo from being introduced as evidence since it first became known to plaintiff's lawyers in the early 1980's. Last year a judge in Florida threatened General Motors with "very severe sanctions" if it did not provide the memo and related documents. Some of that evidence was in turn used in the Los Angeles case.

The "cumulative effect" of documents released in successive trials allows plaintiffs to "lose less and win more," said Sheldon J. Schlesinger, a Fort Lauderdale lawyer who represented the plaintiffs in the Florida case.

In that case, a jury ordered General Motors to pay $60 million to the family of a boy killed in a fuel-tank fire after a trailer struck the 1983 Oldsmobile Cutlass station wagon in which he was riding. The award was later reduced to $33 million.

In the Los Angeles case, the jury in Superior Court of Los Angeles County awarded Patricia Anderson, her four children and a family friend, Jo Tigner, $107.6 million in compensatory damages and $4.8 billion in punitive damages after their Malibu, stopping for a red light, was rammed by a drunken driver on Christmas Eve 1993.

The award is the largest ever in a personal-injury lawsuit, said Thomas F. Harrison, publisher of Lawyers Weekly USA, a newspaper published in Boston that tracks such awards. He said the previous largest was $1.24 billion awarded in January by a jury in Wisconsin to the estate of a woman who had died from a fuel-related fire after a go-cart accident at a Florida amusement park.

General Motors said it was confident that Friday's decision would be overturned on appeal, and legal experts said it was highly likely that the award would, at the least, be significantly reduced.

Mr. Shapiro, the lawyer for General Motors, said the Los Angeles case might not have that much influence on other cases because other judges could have different views on what evidence is admissible. He contended that the Los Angeles judge, Ernest G. Williams, did not allow the company to present evidence showing that cars with the same body as the 1979 Malibu had explosions only once in every 23.5 billion miles.

Mr. Panish, the main lawyer for the plaintiffs in Los Angeles, said there were dozens of other cases involving General Motors cars with designs similar to the 1979 Malibu's, with the fuel tank close to the rear bumper, an estimate General Motors called exceedingly high. The company said that the Los Angeles and Florida cases were the only ones it had lost involving such cars and that the Florida plaintiffs were not awarded punitive damages.

Terry Rhadigan, a company spokesman, said the fuel tank had been moved forward around 1984. He said that the placement of the fuel tank behind the rear axle had been common in the industry before that time and that the change was made for overall design reasons, not because the design had been unsafe.

There are about 50 cases pending against the company resulting from fires in pre-1988 G.M. pickup trucks in which the fuel tanks were mounted outside the frame on the side of the vehicles, said Mr. Ditlow of the Center for Auto Safety.

News of the huge Los Angeles verdict could prompt more people to sue for older accidents. One is Linda McOscar, who said she and her three children were sitting in a 1980 Malibu beside a highway in South Texas in June 1980, when their car was rammed from behind by a truck driven by a drunken driver. The Malibu spun around and caught fire. Mrs. McOscar managed to crawl through a window, pulling her 10-year-old son, Spencer, who was in the front passenger seat, out with her. But 13-year-old Joey and 13-month-old Hillary, who were in the back seat, were killed.

Mrs. McOscar, of Monroe, Mich., said that when she heard about the Los Angeles verdict on the news, "It just blew my mind."

"I kept waking up in the night thinking in 1973 they knew there was a defect, " she said. Although she and her husband received about $55,000 from General Motors in a settlement, they say they are thinking about suing based on the new evidence.

General Motors in the early 1980's hired six law firms to scour its records to find documents that could be damaging in such cases. These lawyers have been nicknamed the "fire babies" by plaintiffs' lawyers.

One such document is the Ivey memo, only one and a half pages long. It estimated how many fatalities there were from post-accident fuel-related fires and assumed a value of $200,000 per fatality. By dividing by the number of G.M. cars on the road, Mr. Ivey came up with an estimate of the cost to G.M. of $2.40 per vehicle. But Mr. Ivey also cautioned that "it is really impossible to put a value on human life" and that "a human fatality is beyond value, subjectively."

The memo does not say why the analysis was done. In depositions in this and previous cases, Mr. Ivey said that he could not remember anyone asking him to do the study and did not believe it was distributed.

But the lawyer's interview with Mr. Ivey in 1981 seems to contradict that position. According to the report by the lawyer, who worked for an outside firm hired by G.M., Mr. Ivey did not specifically recall being asked to do the analysis but said he thought he had been asked by a superior to help in "trying to figure out how much Olds could spend on fuel systems." Mr. Ivey said it was probably distributed to several people, though he did not know if it had ever been used.

Some other G.M. memos presented at the trial also showed that cost-benefit analysis was used on safety questions. In a 1974 memo, a G.M. official named R. G. Fischer performed a calculation similar to Mr. Ivey's and concluded that G.M. could spend $2 a car "effectively for rear impact protection." A Jan. 1, 1973, memo said that "cost/safety benefit is to be evaluated before releasing components" for performance that exceeds Federal requirements for fuel system integrity.

"This was literally an 18-year cover-up, and the jurors were outraged," said Mark Robinson Jr., one of the lawyers for the plaintiffs, who said the Los Angeles case was stronger than one two decades ago in which he won a big award for fuel-tank fire in a Ford Pinto -- $128 million in punitive and compensatory damages, which was later reduced to $7 million.

Coleman Thorton, the foreman of the Los Angeles jury, said in an interview that the Ivey memo had been just one factor in the verdict. More important, he said, was that Mr. Ivey, who testified through a videotaped deposition, and other General Motors officials appeared to be evasive.

"People who were well-qualified are not supposed to have instant amnesia," Mr. Thorton, a retired custodian, said. "That is the way that most of the witnesses for the defendant reacted."

The New York Times
July 10, 1999
$4.9 Billion Jury Verdict In G.M. Fuel Tank Case
By ANDREW POLLACK

In what is believed to be the largest award ever in a personal-injurylawsuit, the General Motors Corporation was ordered today to pay $4.9 billion tosix people severely burned when the fuel tank of their 1979 Chevrolet Malibuexploded after a rear-end collision.

The verdict was reached by 12 jurors in state court here after a 10-weektrial in which the accident victims had produced some evidence purporting toshow that General Motors had known the car's design was unsafe but had notchanged it because of the cost.

The verdict, which included $107.6 million in compensatory damages and $4.8billion in punitive damages, is likely to raise questions once again aboutwhether jury verdicts in personal-injury and product-liability cases have gotout of hand.

"It's an enormous, incredible windfall to whoever gets it," said GregKeating, a law professor at the University of Southern California, who said hecould not recall another award of that size. "It turns the court system into alottery."

But Mr. Keating, who said he is not a big critic of current court procedures,said it was highly likely the verdict would be reduced on appeal or that theparties would settle for a lesser amount. "I think it's true that the chance ofthis verdict surviving is almost nonexistent," he said.

But if the verdict were to stand, it would be a burden for G.M., whichreported earnings of $3 billion from continuing operations in 1998.

Patricia Anderson, her four children and a family friend, Jo Tigner, weredriving home from church in Los Angeles on Christmas Eve in 1993 when she slowedto stop at a red light and a drunken driver plowed into their car from behind atwhat the plaintiffs' lawyers said was 50 miles per hour and G.M. says was 70mph. The people in the Malibu suffered severe burns. Mrs. Anderson's daughterAlisha Parker, now 11, was horribly disfigured on her face and lost her righthand.

"The jurors wanted to send a message to General Motors that human life ismore important than profits," Brian J. Panish, the lawyers for the accidentvictims, said.

Mr. Panish said that the gas tank on the 1979 Malibu was only 11 inches fromthe rear bumper; in some earlier models it had been more than 20 inches away. Hesaid the trial testimony showed that it would have cost General Motors $8.59 pervehicle for a safer design but that the company had decided it would be cheaperto settle any lawsuits that arose.

One critical piece of evidence, he said, was a memorandum written by anOldsmobile engineer, Edward Ivey, in 1973, in which Mr. Ivey estimated thatfuel-tank fires were costing G.M. only $2.40 per vehicle.

General Motors, in a statement, maintained that the car's fuel tank was safeand met or exceeded Federal standards. "This extremely severe crash was causedby a single factor -- drunken driving," the company said. It said it wouldappeal.

Richard W. Shapiro, a Phoenix lawyer who represented the auto maker, said theverdict was "shocking" and noted that the jury had not been allowed to hearevidence that the driver of the other car was drunk and went to jail. He alsosaid the company had been barred by the judge, Ernest G. Williams of Los AngelesCounty Superior Court, from presenting evidence showing the safety history ofthe vehicle and also crash-test data showing that the car's design was saferthan the one the plaintiffs advocated.

The National Highway Traffic Safety Administration has conducted two safetyinvestigations into the Malibu since the 1970's but neither involved the fuelsystem, said Timothy Hurd, a spokesman for the agency. He said the agency hadrecently notified auto makers that it was reviewing whether to tighten its ruleson protecting fuel systems but that this was unrelated to the case.

But Joan B. Claybrook, who was the administrator of the highway safetyadministration in the Carter Administration, said today that big verdicts inpersonal injury lawsuits were sometimes the first signal to regulators that aproblem existed. "Could this car be a problem and N.H.T.S.A. not know about it?"asked Ms. Claybrook, who is now president of Public Citizen, a consumer advocacygroup. "Absolutely."

Ms. Claybrook said she first learned of problems with Ford Pinto's gas tankand ordered a Federal investigation after a $125 million personal injury verdictin 1977. That award, and another big one involving the Pinto fuel tank, wassubsequently reduced substantially. But the Pinto was later recalled because ofthe fuel tank problem.

Mr. Panish, the lawyer for the Los Angeles plaintiffs, said there are 30 to60 other lawsuits involving fuel-tank fires of the Malibu and other so-calledA-body cars by G.M., including the Pontiac Grand Am, the Oldsmobile Cutlass andthe Chevrolet Monte Carlo, which have similar fuel-tank designs. A spokesman forG.M. said that number sounded exceedingly high and that the company had lostonly one other case involving fuel-tank fires on A-body cars. In that case, G.M.was ordered by a court in Fort Lauderdale, Fla., last year to pay $33 million tothe victims of an accident in which the fuel tank of a Cutlass exploded, killingtwo people and burning four others.

Ralph Hoar, an adviser to plaintiffs' lawyers in many lawsuits against autocompanies, including the Los Angeles case, said today's verdict was the largestever in a personal injury case. He said the plaintiffs might have beenparticularly successful because they had presented evidence that General Motorslobbied in the early 1970's against tougher standards for protecting fuelsystems in crashes. Other lawyers said that the size and wealth of G.M., thenation's largest company, were taken into account by the jurors in deciding onthe size of the punitive damages.

Jurors told reporters that they felt the company had valued human life toolightly. "We're just like numbers, I feel, to them," one juror, Carl Vangelisti,told Reuters. "Statistics. That's something that is wrong."

Mrs. Anderson, the plaintiff, said, "I'm just glad that justice was done."She said she was relieved, too, that the court had decided General Motors was atfault. "I have always blamed myself for this," she said "I couldn't give mychildren an explanation" for what happened to them.

CORRECTION:

An article on July 10 about a $4.9 billion award in a personal injury lawsuitagainst General Motors used an incorrect given name in some editions for aUniversity of Southern California law professor who commented on the amount. Heis Greg Keating, not Gary.