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Ford
settles tire lawsuits quietly
Automaker spends millions to protect Explorer's image
by Mark
Truby /The
Detroit
News
DEARBORN
-- Ford Motor Co., while publicly claiming its best-selling
sport-utility vehicle is not to blame, is paying out huge settlements to
people injured or killed in accidents involving the Ford Explorer
equipped with Firestone tires.
Ford and
Bridgestone/Firestone Inc. face about 400 personal injury and product
liability lawsuits in state and federal courts. So far, more than 100
cases have been settled, attorneys estimate. Most of the lawsuits stem
from accidents in which the tread peeled off Firestone tires, leading to
rollover accidents in Explorers. Plaintiffs' lawyers say Ford has been
unusually aggressive in settling the cases and has been willing to pay
millions of dollars to avoid trials. In several cases, Ford has settled
with victims before a lawsuit was filed. "I have never seen anything
like this in my life," said Mike Eidson, a
Coral Gables,
Fla.,
lawyer representing several plaintiffs suing Ford and
Bridgestone/Firestone. "Not in a million years would you see a company
settling cases like this." By settling cases quickly and quietly, Ford
heads off a series of lengthy, high-profile court battles that could
lead to big jury verdicts and further tarnish the image of the Explorer,
which generates huge profits for Ford. "For Ford, it's a simple business
equation," said Sean Kane, head of the litigation research firm
Strategic Safety in
Arlington,
Va. "It's worth the premium for them to clear the Explorer and stop the
discovery process in these cases."
Firestone slow to settle
Bridgestone/Firestone Inc. has been less eager to settle, typically
allowing Ford to come to terms with a plaintiff before entering
negotiations, lawyers say. The amount of the settlements vary widely
depending on the jurisdiction of the case and other factors, such as a
victim's future earnings potential, age and number of dependents.
Experts and lawyers involved in the cases estimate that Ford and
Firestone are paying no less than $1 million and usually between $3
million and $6 million in the majority of cases where a death is
involved. Settlements of $10 million or more are not uncommon in cases
where paralysis is involved because of the high cost of medical bills.
In each case, defendants agree not to disclose how much money they
received and Ford does not admit any blame or liability. But trial
lawyers say Ford's offers are often too good to turn down and clearly
show the automaker isn't comfortable arguing its case before a jury.
"The question is: Why would a company that had no fault at all pay out
millions of dollars in settlements?" said Bill Frates, a lawyer in Vero
Beach, Fla., who is handling several suits against Ford and Firestone.
Best
option, Nasser says
Ford
President Jacques Nasser said in a recent interview that settling the
cases is usually the best option for Ford and plaintiffs. "If we can
reach a compromise, a fair compromise with our customers where they have
some certainty and they have some peace of mind, that to us is a much
better situation than going into a legal court trial,"
Nasser said. "You'd like to get it behind you and
that's what we would like to do." The federal government has linked 174
highway deaths and more than 700 injuries to accidents involving
Firestone tires, mostly mounted on Explorers. Ford disclosed in its
latest annual financial report that Firestone-related lawsuits pending
against the company seek a total of $590 million. But the figure is
deceptively low because it represents only lawsuits that specify the
exact amount of money sought by plaintiffs.
Deals often preferred
Settlements are often preferable to a prolonged legal battle on both
sides of a lawsuit. Plaintiffs get money right away and limit legal
costs. For defendants, the settlements eliminate the possibility of
giant jury awards against the automaker. Ford and other carmakers have
been burned by blockbuster verdicts in the past. In 1978, a jury awarded
$128 million to the plaintiffs in a case where one person died and
another was burned when the gas tank of their Ford Pinto exploded. And
in 1999, General Motors Corp. was hit with a $4.9-billion jury verdict
because of an alleged design flaw on the 1979 Chevy Malibu. The award
was later reduced to $1.2 billion. Ford's legal position could be
weakened by its public feuding with Bridgestone/Firestone -- with both
companies releasing data that purportedly shows the other company is at
fault. "Before they were protecting each other in court filings," said
Robert Darling, who represents Chuck Burt. Burt was paralyzed from the
waist down last June when the right-rear tire -- a Firestone ATX -- on
his 1991 Ford Explorer peeled apart, sending the sport-utility into a
rollover accident on Interstate 96 in Livingston County.
More
fireworks expected
About 250
federal personal-injury lawsuits and class-action cases have been
consolidated for discovery before U.S. District Judge Sarah Evans Barker
in Indianapolis. Lawyers in the case are scheduled to depose
Bridgestone/Firestone chief executive John Lampe on Monday.
Nasser's deposition is set for July 20 in
Dearborn.
"It's going to be a very, very hot deposition," said Eidson, a lead
attorney in the litigation. No Ford-Firestone lawsuits have gone to
trial yet. Ford typically accelerates negotiations toward a settlement
when trial dates approach. Hours before her trial was set to began,
Donna Bailey of Portland, Texas, accepted a settlement offer from Ford
and Bridgestone/Firestone. Bailey, 44, suffered a spinal cord injury
that paralyzed her from the neck down after the two-door Ford Explorer
in which she was riding crashed March 10, 2000, near Poth, Texas. The
terms were not disclosed, but published reports estimate that Bailey got
between $20 million to $35 million.
Ford
changes stance
Prior to
the cases involving Firestone tires, Ford was known as a tough
negotiator in product liability cases. The automaker has deep pockets, a
large, veteran legal staff and plenty of experience with big-time
litigation. The automaker often fights lawsuits for years, exhausting
every legal option, to avert a large payout. Adam Studnicki, a
Phoenix,
Ariz., lawyer, was braced for a long, difficult battle with Ford. He
filed three lawsuits this year and was poised to file eight more suits
stemming from rollover accidents involving the Explorer and Firestone
tires. Five people were killed in the accidents and 26 were injured. On
May 23, Studnicki met face-to-face with Ford's lawyers for the first
time. By the end of the day, all 11 suits were settled. Negotiations
that would normally take weeks and months, were completed in hours. The
deals were cut without depositions, mediation sessions or the usual
flurry of paperwork flying back and forth. "They were very willing to
talk and they were very aggressive about settling these cases,"
Studnicki said. Nasser said Ford will not hesitate to go to trial if a
settlement cannot be reached. Legal experts say Ford is likely to
hand-pick a case where the company has a good chance to win. "Ford is
not scared of a trial if they think they have a good chance of winning,"
said Roger Braugh, a Corpus Christi, Texas, lawyer handling more than 60
cases against Ford and Bridgestone/Firestone. "So that should tell you a
lot about all these cases they are settling."
You can
reach Mark Truby at (313) 222-2082 or
mtruby@detnews.com.
Reprinted
with permission of The
Detroit
News.
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