How the NHTSA Has Become a Great Witness for Product Liability Litigation

By | May 1, 2016

Product liability? Very difficult claim to prove. However, the National Highway Traffic Safety Administration (NHTSA) has definitely helped many plaintiffs make their case. Most namely, the NHTSA has investigated many product liability claims involving the manufacturing of automobiles. 

Throughout the years, their findings in these investigations have been used by attorneys to help litigate claims against vehicle manufacturers. It is similar to how a finding from the Department of Labor that an employer violated labor law can be used as evidence in a civil suit against that employer.

So here’s how it works. Some type of safety issue takes place with an automobile and plaintiffs want to sue the manufacturer. In order to prevail on a claim, there must be evidence to prove the case. Unfortunately, finding evidence can be very expensive and time consuming for plaintiffs. Also, they should not expect too much cooperation from the manufacturers as they know they will be the target of the lawsuit.

Along comes the NHTSA. Formed by the federal government in 1970 based on public outcry to make automobiles safer, the agency is responsible for investigating transportation safety, including automobile defects from manufacturers.

Keep in mind that a lawsuit does not move the NHTSA to perform an investigation. In fact, the number of claims they investigate are a drop in the bucket compared to the overall number of lawsuits. However, when they do decide to investigate, their findings will more than likely (subject to any defense challenges), be used in that civil litigation.

How Toyota Got on the Wrong Side of the NHTSA

If vehicle manufacturers are scared of admitting a problem with a recall, they should be more scared of what can happen if they don’t. No one knows this better than Toyota.

In 2009, Toyota began issuing recalls for many of its vehicles, including its luxury brand Lexus. The problem? Vehicles accelerated without the driver doing so, causing accidents, injuries, and deaths. We all understand that defects are possible, especially when manufacturing complex items such as cars. Most manufacturers who see the problem issue a recall and then deal with any legal ramifications that take place. Toyota did the opposite.

According to the many worldwide reports, Toyota was aware of the issues and failed to warn people of it. Sounds like the Ford Pinto case of the 1970s doesn’t it?

“A vehicle manufacturer who is aware of an issue and does nothing about it can potentially face tougher penalties,” says attorney Robert May, founder of The May Firm. “This type of conduct shows willful negligence and will be documented in NHTSA findings when applicable.”

The NHTSA never found fault in the electronics of the vehicles involved. That means they did not determine a cause for this type of unintended acceleration. However, Toyota paid out hefty fines and civil settlements for its failure to recall the vehicles for known issues, misleading regulators, and misstating facts to Congress.

Had Toyota cooperated with NHTSA, it would have likely helped them when facing the massive litigation that followed. However, plaintiffs were able to introduce the NHTSA investigation of Toyota’s misleading investigators, something that Toyota obviously did not want to let get in front of a jury. They settled many lawsuits regarding the issue and paid a $1.2 billion settlement with the government.

Ford Motor Company Still Can’t Catch a Break From the NHTSA

Those unfamiliar with the Ford Pinto case I mentioned earlier can either watch the movie (“Class Action”) or go to Wikipedia. Long story short, Ford was found to be aware of an issue that caused the cars to catch fire under certain circumstances. They failed to warn people about the problem and received a $127 million verdict against them once the civil suit played out.

The award was the largest in U.S. history for a product liability case. Outside the monetary damage, Ford’s willful conduct still lives on to this day. The Ford Pinto case (known formally as Grimshaw v. Ford), is taught in law schools across the country as part of the mandatory curriculum. I remember having to watch the movie for a class and also argue the merits of the case with fellow students.

The continued issues between Ford and the NHTSA are either related to the fact that Ford is such a large manufacturer that they are always in the mix; or, the NHTSA has been watching them close since the Grimshaw case. Either way, Ford has been involved in numerous lawsuits over the years, many of which have findings from NHTSA investigations.

More recently, the NHTSA began an investigation into brake failures on Ford F-150 trucks. A total of 33 complaints were filed prior to the probe, with 31 of them being received within the last year. No injuries have been reported as a result of the brake failure issue, but four accidents and “serious property damage” have been reported. The investigation encompasses a total of 420,000 vehicles and is likely to result in an increase in the number of accidents previously reported.

The fact the NHTSA is becoming more diligent in cases such as these is what is leading to more recalls and potentially less litigation. “Vehicle recalls reached an all-time high over the past two years, partly due to the NHTSA’s diligence in taking consumer complaints seriously,” says Jason Stephens from Stephens, Anderson & Cummings. “Along with becoming a great witness for product liability litigation, the administration has given the public an outlet where they can share their concerns about potentially dangerous vehicles.”

Since there have been no reports of injuries in the above investigation, the likelihood of litigation is slim. After all, Ford would likely reimburse for any property damage caused as a result of the failures. However, this is a perfect example of how the government is doing the investigation on behalf of potential litigants and can even lead to a positive impact in absence of litigation.

Ford may just be given a reprieve with this one. We’ll have to wait and see.

Another Notable Cases With NHTSA Findings: Takata Airbag Lawsuit 

For product liability involving automobiles, the NHTSA has been able to help many plaintiffs with their lawsuits. Their findings in investigations have been connected to numerous class-action lawsuits against manufacturers. Most notably, the Takata airbag lawsuit.

Since 2008, more than 19 million vehicles with airbags manufactured by Takata have been recalled. Many people have died when the airbags allegedly exploded without any warnings. The case is still moving forward, but the NHTSA has fined Takata $70 million dollars based on the findings of its investigation.

“Without the NHTSA, the Takata case would be more difficult to prove,” says Attorney Trent Kelly from Terry & Kelly, PLLC. “There are so many moving parts that it was imperative the NHTSA got involved.”

Kelly is correct about Takata, but his comment can also be applied to every NHTSA investigation. Some litigation would have been impossible to pursue had it not been for the agency’s findings.

The NHTSA has taken its place in history as another government agency used by litigators to prove their case. Although it is just one of many agencies that do so, the NHTSA is one of the most notable. Their investigations run deeper than labor law. They serve as a witness that a defect exists, which is one of the key elements to prove a product defect claim.

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