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Claims against automakers increase

Defect claims against big automakers have risen, but winning hefty settlements an uphill battle

By ERIC TORBENSON / The Dallas Morning News
etorbenson@dallasnews.com

With Toyota Motor Co. making grim headlines over sudden acceleration of its cars and with nearly 20 million vehicles recalled this year, it would seem to be high season for auto defect lawyers.

Although Toyota's struggles have brought more than 200 new suits nationally and "given a breath of fresh air" to the specialty, according to Dallas attorney Todd Tracy, it's not a smooth road to easy wins or hefty settlements with automakers.

The hits to Toyota's reputation plus the financial struggles of General Motors Co. may have primed juries to award plaintiffs in these kinds of cases, but some attorneys say the carmakers are using a "scorched earth" approach to handling the suits by never settling cases and exhausting every appeal. That tactical change, plus friendlier appeals courts, have emboldened the companies.

In states such as Texas, where the mood toward plaintiff suits has soured, automakers may see little downside in fighting cases to the bitter end.

Spokespeople for GM, Ford Motor Co. and Toyota, the largest three automakers, each declined to comment on their respective legal strategies or the landscape for auto defect claims.

But Kurt C. Kern, a Dallas lawyer whose firm represents nearly all major carmakers, doesn't agree that there's been a shift in legal tactics, though there has been a noticeable increase in suits filed against carmakers.

"While there are certainly some unique circumstances that have arisen in the automotive industry recently, I don't necessarily believe there has been some universal shift in the approach automotive manufacturers take with respect to defending product liability cases," said Kern of Hartline, Dacus, Barger, Dreyer & Kern LLP. "Clearly, the manufacturers believe in the products they design, build and sell and so they have, and I expect they will continue to aggressively defend claims brought against them."


Suits increasing

 After a lull the last few years, suits against the big automakers have risen in recent months, the Dallas attorneys said. The bankruptcies of GM and Chrysler Motor Co. damped activity for two years, but the economic recovery for carmakers plus the recall publicity has auto defect lawyers much busier.

 The last flurry of auto defect suits came in 1998 and centered on Ford and its Firestone tire issue. The tire company's approach was to settle some of the cases quietly, Brown said, but Ford "took a very hard line" against lawsuits challenging the design of the Ford Explorer, and that approach has evolved into today's legal stances, he said.

 Jurors are upset at companies such as Toyota and BP PLC because of the bad press they've received, Brown said. That gives Toyota a big incentive to drag events out as long as possible so its newest safety-focused marketing messages can combat its image problem, he said.

Even with the bad publicity, the Toyota cases won't be slam dunks. Indeed, a report this month regarding sudden acceleration cases may make it harder for plaintiffs to win against Toyota.

The National Highway Transportation Safety Administration's examination of 58 cases of sudden acceleration suggested no defect with Toyota's electronics in many of the crashes and incidents studied.

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