By on February 23, 2011

In what may be one of the most important Supreme Court rulings for the car industry in some time [full opinion in PDF here], the highest court in the land has found that compliance with minimum federal safety standards is not a defense against personal injury or wrongful death suits brought in state courts. The case in question involved a 2002 accident in which Than Williamson was killed when a Jeep Wrangler hit her family’s 1993 Mazda MPV. The Williamson MPV had only lap belts because shoulder belts weren’t required by federal law until 2007. A California court has already barred the lawsuit from coming forward, arguing that federal regulations supersede any local rulings, and that then-legal seatbelts should protect manufacturers from personal injury liability. But in the wake of another ruling involving pharmaceutical companies, it seemed that the court might overturn that ruling, which it now has.

The issue, according to Justice Stephen Breyer’s majority opinion, comes down to the government’s intent. A previous ruling had held that

a different portion of (an older version of) Federal Motor Vehicle Safety Standard 208 (FMVSS 208)—a portion that required installation of passive restraint devices—pre-empted a state tort suit that sought to hold an auto manufacturer liable for failure to install a particular kind of passive restraint, namely, airbags. We found that the federal regulation intended to assure manufacturers that they would retain a choice of installing any of several different passive restraint devices. And the regulation sought to assure them that they would not have to exercise this choice in favor of airbags. For that reason we thought that the federal regulation pre-empted a state tort suit that, by premising tort liability on a failure to install airbags, would have deprived the manufacturers of had assured them.

The lower courts used this logic to protect Mazda from a lawsuit by the Williamson family, but the Supreme Court found that in the case of three-point seat belts, however, the issue changes. When it comes to the previous ruling about airbags, wrote Breyer,

That regulation required manufacturers to equip their vehicles with passive restraint systems, thereby providing occupants with automatic accident protection.  But that regulation also gave manufacturers a choice among several different passive restraint systems, including airbags and automatic seatbelts. By requiring manufacturers to install airbags (in order to avoid tort liability) the tort suit would have deprived the manufacturers of the choice among passive restraint systems that the federal regulation gave them.

In that case,

the regulation’s history, the agency’s contemporaneous explanation, and its consistently held interpretive views indicated that the regulation sought to maintain manufacturer choice in order to further significant regulatory objectives.

But, in this case

these same considerations indicate the contrary.  We consequently conclude that, even though the state tort suit may restrict the manufacturer’s choice, it does not “stan[d] as an obstacle to the accomplishment . . . of the full purposes and objectives” of federal law.  Thus, the regulation does not pre-empt this tort action.

Why?

The more important reason why DOT did not require lap-and-shoulder belts for rear inner seats was that it thought that this requirement would not be cost-effective. The agency explained that it would be significantly more expensive for manufacturers to install lap-and-shoulder belts in rear middle and aisle seats than in seats next to the car doors. Ibid. But that fact—the fact that DOT made a negative judgment about cost effectiveness— cannot by itself show that DOT sought to forbid common- law tort suits in which a judge or jury might reach a different conclusion. For one thing, DOT did not believe that costs would remain frozen. Rather it pointed out that costs were falling as manufacturers were “voluntarily equipping more and more of their vehicles with rear seat lap/shoulder belts.”

…to infer from the mere existence of such a cost-effectiveness judgment that the federal agency intends to bar States from impos- ing stricter standards would treat all such federal standards as if they were maximum standards, eliminating the possibility that the federal agency seeks only to set forth a minimum standard potentially supplemented through state tort law.  We cannot reconcile this consequence with a statutory saving clause that foresees the likelihood of a continued meaningful role for state tort law.

It’s a complicated ruling that centers on regulatory intent, but it’s already having a huge impact. Bloomberg reports:

Auto shares plunged following the ruling. Ford Motor Co. shares fell as much as 4.38 percent to $14.44, the lowest price since Nov. 3. Ford fell 43 cents, or 2.8 percent, to $14.80 at 10:27 a.m. in New York Stock Exchange composite trading. General Motors Co. fell 48 cents, or 1.3 percent, to $35.30.

This is definitely a ruling to remember if and when the Motor Vehicle Safety Act comes back to congress.

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23 Comments on “SCOTUS: Complying With Regulations Is Not A Tort Defense...”


  • avatar
    Steven02

    Interesting read.  I can see this both ways.  I wouldn’t want automakers to only do the minimum to meet the standards, and if the regulations aren’t updated as fast as technology and pricing is, I wouldn’t want it to be ok for manufactures not to include safety equipment.  For instance, take Toyota’s problems with UA.  Looks like 2 recalls fixed it and that brake override technology regulations will come out of this.  Would it be ok for Toyota to be exempt because brake override wasn’t mandatory?  How about with SUVs not having stability control and having rollovers.  Would it have been ok for Ford and Firestone not to be sued because stability control wasn’t required (I understand at the time it probably wasn’t available on anything)?  Granted my examples involve defects, but I don’t think regulation should be the standards set for not having lawsuits filed against you.
     
    At the same time, I can see that as an auto manufacture, you don’t want to have a lawsuit because you omitted a particular piece of gear that the customer was fine purchasing that way.  It is a slippery slope for both consumer and manufacture.

    • 0 avatar
      SVX pearlie

      If a car meets Federal standards, that should be sufficient defense.

      Otherwise, we have a case of retroactive mandates that cannot be reasonably foreseen.

      Does the mean that pre-airbag, pre-ABS, pre-ASC cars can retractively sue OEMs for deaths, injuries, and damage that simply weren’t reasonably foreseeable?

    • 0 avatar
      Steven02

      I would disagree there.  Technology changes and prices change faster than regulation.  That means that regulation shouldn’t be a minimum defense.  But, at the same time, it was also purchased this way, and IMHO, that should be the defense.  Unless than can prove that Mazda knew the design was bad.
       
      Think about it this way…
      GM had issues with gas tanks outside the frame.  If hit there, it could start a fire.  Is there regulation then or today that states where the gas tank should be or how well it should be protected?  Using future regulation as a defense in this case wouldn’t make sense.  So, I would have to say that meeting minimum regulation is not a defense.

    • 0 avatar
      SVX pearlie

      Meeting *minimum* Federal standard should absolve the OEM of *ALL* liablity. Period. That was the requirement, and it was met.

      Imposing an expectation of exceeding the requirement makes a new requirement which isn’t codified or testable.

      As for those GM gas tanks, the fact that NBC had to use “igniters” to create a fire shows that the design was safe.

    • 0 avatar
      Steven02

      In a fatal crash in GM’s trucks at the time, it was more likely than other vehicles to have a fire as well.  Depending on who what you read and believe, it could have been that the occupants didn’t survive the crash and the fire made little difference.  Interestingly enough though, side impact fatalities were in line with other trucks of the time.  But GM engineers did want to move the tank inside of the frame citing safety reasons.  BTW, GM did lose money in court cases here and the defense of meeting minimum safety standards didn’t apply to them.  Especially when they had internal notes about wanting to move the gas tank inside of the frame.
       
      Hyundai just lost a case with seat reclining.  2 people in an accident, one has minor injuries, the other was thrown from the vehicle and died.  The difference is how far the seat reclined.  Currently there is no standard for this in cars.  While, I agree that the occupants should know better in this particular case, the jury found Hyundai 45% responsible for the death.  It currently meets all safety standards.  Apparently, in the vehicle that they are in, the seat can recline to more than 45 degrees.  The NTSB and NHTSA couldn’t agree on a standard for this back in 1988.  Hyundai argued that the seat recline was to be used only when the vehicle was parked.

  • avatar
    gslippy

    Remember that chart the other day which showed the number of weeks of income required to buy a new car?  Expect that number to increase.
     
    Congress will have to step into this mess.
     
    What’s the point of having minimum standards when you could be liable for much more, particularly without having evidence of ‘intent’ or ‘negligence’ [insert Pinto story here]?  Does this mean the Ford Crown Victoria police cruisers which exploded when rear-ended at 70 mph are now open to lawsuit, even though they met the safety criteria in force at the time?

  • avatar
    CJinSD

    This may be a bad enough precedent that fans of our lotto tort system will be able to see and understand the harm done to their standards of living by their avarice.

  • avatar

    So the accident happened in a 9 year old car that didn’t meet current requirements.  Logically extended, if I get hit in my 1965 Mustang with NO BELTS, then I can sue Ford because they didn’t have the foresight to install a 3 point harness…
    This is very similar to what killed the light aircraft industry when manufacturer were getting held responsible for structural failure on 50 year old airframes…

  • avatar
    Russycle

    I’m no lawyer, but I can’t see how Mazda can be liable here.  There’s no manufacturer defect, they met applicable safety requirements, it was obvious to the customer that they were purchasing a vehicle with a center lap belt, how is this Mazda’s fault?  As I read the decision, the court is claiming that juries have the right to retroactively decide what constitutes minimum safety standards.  That’s just nuts.

    • 0 avatar
      SVX pearlie

      Who bought the car without the rear belts?

      Right.

    • 0 avatar

      This isn’t a decision saying Mazda is liable, it’s a decision saying Mazda can’t use “Minimum standards” as a get-out clause. The plaintiffs will now have to prove that Mazda’s seatbelts were dangerous and Mazda knew it before they can claim any cash. Mazda will probably contest that even with a three-point belt the lady would have died. My guess is they’ll settle without any admission of liability.
       
      This isn’t a retro-active enforcement. A ’65 Mustang can not be made to comply with current standards. The argument here is that Mazda could have used three-point belts in ’93 but didn’t to save some cash as lap belts satisfied the minimum permissible. This is like buying a car with a one star crash rating today; it may be legal but probably not safe, though I think anyone buying such a car should take responsibility for their own actions.

    • 0 avatar
      Philosophil

      Good point [email protected] It sounds to me the the courts are saying, not that Mazda (or any other car company) is actually liable for these kinds of ‘omissions’ if you will, but that their arguments trying to dismiss such cases by claiming they met minimum requirements is not sufficient to stop someone from trying to make a case about potential liability.
       
      It sounds like the onus would still be on person trying to make such liability claim to prove their claims in court (which is often a very expensive and time-consuming proposition).

  • avatar

    One thing is certain, cars are going to get more expensive, and lawers are going to get richer.

  • avatar
    Sinistermisterman

    So by the same twisted logic, if someone was killed and injured in a vehicle without airbags that was built after 1952 (when they were invented) then the car manufacturer can be sued? Talk about opening up a can of worms – more like a shipping container full of worms.

  • avatar
    FleetofWheel

    By this logic, govt is itself responsible for every injury and death since it did not mandate sufficiently higher car (baby crib, chain saw, etc) safety standards.
     
    Anti-smoking activists often say, “The tobacco companies knew for decades that smoking causes serious health problems!”
    Well, so did the govt who ran numerous health studies and required ever dire warnings on the pack. Govt even aided an efficient cigarette market with tax stamp and licensing laws and support to tobacco farmers.

    But it was the tobacco companies in the end who had to pay huge settlements…to govt.

  • avatar
    DenverMike

    Makes perfect sense to me… When you stick the manufacturer with victim’s medical bills, ongoing healthcare and disability, it frees up more federal dollars for Lincoln Navigators and such.

  • avatar
    beken

    Let me get this right, somebody buys a minivan that meets the safety requirements of the day, when the vehicle was built.   Minivan gets t-boned by person driving a jeep wrangler and happens to kill somebody in the minivan.  Lawyer for minivan victim sues the car manufacturer for not retroactively updating safety equipment to a level that did not exist when the car was manufactured.  Hence it was the car manufacturer’s fault that victim died.
    I shake my head.  Americans are all screwed up.  Sorry for the generalization.
     
     
     
     

    • 0 avatar
      AlexG55

      Nitpick: 3-point seatbelts certainly did exist in 1993- I have a car that came out of the factory with them in 1965, and rear 3-point belts have existed since the 70s.
      Still, I don’t think that manufacturers should be liable for not installing all possible safety equipment in every car they make. Maybe the woman’s family should be able to sue (after all, it’s possible for a manufacturer to make an unsafe car that still meets all safety standards at the time), but they shouldn’t get anything…

  • avatar
    getacargetacheck

    Everyone including Mazda knew how dangerous lap belts-only were in 1993.  No doubt the government wanted stricter regulations sooner but industry lobbyists fought against them as they always do.  Mazda should pay.

  • avatar
    M 1

    What actually happened here was that SCOTUS absolved the government of any liability for the value of the standards it imposes.

  • avatar
    stevelovescars

    As stated earlier, this isn’t a finding of liability againgst Mazda, it just allows the plaintiff to sue them and make their claim in front of a jury… or more likely to just extort a settlement out of Mazda because it’s cheaper than fighting the suit.

    This bugs me, but not as much as when manufacturers get sued because they used technology MANDATED by government regulators.  All of the lawsuits about injuries caused by airbags bother me more because the DOT specifically mandated high-power airbags and ignored warnings from the manufacturers about injuries to children and smaller adults.  The DOT even disallowed the OEMs from putting stronger and more ominous warning stickers in the cars thusly equipped. 

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