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Burden of Proof

Lawmakers in Washington Put a Magnifying Glass on Ford and Firestone

Aired September 21, 2000 - 12:30 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

GRETA VAN SUSTEREN, CO-HOST: Today on BURDEN OF PROOF: Lawmakers in Washington are putting a magnifying glass on Ford and Firestone. This week, Ford CEO Jacques Nasser sent a letter to Capitol Hill clarifying his earlier testimony about tests conducted on recalled tires.

(BEGIN VIDEO CLIP)

REP. W.J. TAUZIN (R), LOUISIANA: Neither Firestone nor Ford tested Ford Explorers with Firestone tires subject to this recall in high-speed tests at 26 miles per square inch. While testing occurred, it occurred on other vehicles and very often in other types of conditions.

REP. EDWARD MARKEY (D), MASSACHUSETTS: There should be a grade which every one of these vehicles, in combination with a particular set of tires, has been given, because, in fact, that's why people buy these vehicles: to protect their families.

REP. FRED UPTON (R), MICHIGAN: I don't believe that we will, today, find out precisely what was causing those defects. We may never learn the answers, in fact. But I'll tell you one thing: There was something rotten in Decatur.

(END VIDEO CLIP)

ANNOUNCER: This is BURDEN OF PROOF, with Roger Cossack and Greta Van Susteren.

VAN SUSTEREN: Hello and welcome to BURDEN OF PROOF. Roger is off today.

Today on Capitol Hill, two House subcommittees are holding hearings in the massive recall of more than 6 million Firestone tires. The tires are commonly found on Ford Explorer vehicles. On Tuesday, Ford CEO Jacques Nasser sent a letter to the chairmen of the two subcommittees, clarifying his previous testimony on Capitol Hill. Nasser says Ford, not Firestone, conducted the high-speed tests on the tires at its training grounds in Arizona. Yesterday, Ford officials said the tests were not actually conducted on Explorers but on what is called a "mule," a vehicle designed to emulate an Explorer.

(BEGIN VIDEO CLIP) TAUZIN: First of all, we have received a letter from Jacques Nasser of the Ford Motor Company correcting his sworn testimony that was presented to us at our last hearing. Contrary to his testimony, Ford, not Firestone, he now says, performed high-speed testing on tires at 26 pounds per square inch at the Arizona Proving Grounds. So that Mr. Nasser's written letter now confirms that Ford did not ask Firestone to do testing.

(END VIDEO CLIP)

VAN SUSTEREN: Joining us today from Los Angeles is product liability lawyer Bart Williams. And in Boston, we're joined by former federal prosecutor Dan Small. Here in Washington, Sam Potolicchio (ph), Joan Claybrook of Public Citizen, and Luis Gonzalez (ph). And in our back row, Andrew Kilpatrick (ph) and Rachel Scolnic (ph).

And also joining us here in Washington is CNN correspondent Carl Rochelle.

Carl, first to you. What is going on on Capitol Hill today about these recalled tires?

CARL ROCHELLE, CNN CORRESPONDENT: Greta, the hearing is going on right now, still going on, started about 9:00 this morning. You heard a little bit of it in the testimony that you heard from Chairman Tauzin of the subcommittee. He wants to know why Ford didn't test those tires at 26 pounds per square inch of pressure on the Ford Explorer.

Now, Ford explained to them that they tested it on a test vehicle. They call it a "mule," but it's a test bed that mimics a Ford Explorer. They said it's actually even better because it's a little heavier and they get a little more duress, and that's why they tested it that way. Tauzin is not satisfied with that. He says it should have been done on a Ford Explorer and he feels like he was misled when they were told.

VAN SUSTEREN: All right, let me stop you right there about the issue, about testing on a "mule."

Joan, does it make a difference if the testing is done on a "mule" than an actual Explorer?

JOAN CLAYBROOK, PUBLIC CITIZEN: I think it's far better to test it on an actual Explorer. And one of the provisions that was in the original McCain bill that was introduced the other day has been knocked out by the auto industry which requires testing before they can certify compliance with the standards.

VAN SUSTEREN: But what is a "mule"? I mean, why wouldn't they test on the real Explorer. I don't understand the wisdom of testing on a "mule" versus an Explorer.

CLAYBROOK: Well, they like to test on a "mule" because they can do it far in advance of introducing the vehicle in production. But they do do mockups of the production vehicle, hand-made versions of the production vehicle. And I believe that before they certify compliance for safety standards, they should have to test based on the mockup -- the actual hand-built version of the vehicle.

VAN SUSTEREN: All right, let me go back to you, Carl. I interrupted you. Can you tell me what else is going on today in terms of the tires?

ROCHELLE: Well, that was one of the two arguments that are out there today. The other argument is Firestone testing. Now, Tauzin and other members of the committee say that Firestone tested tires in 1996 and seven of eight or eight of nine of the tires that were tested at the Decatur plant failed. Now, Firestone said that was a side wall failure and they did a redesign and everything was OK. But Tauzin says, if you had a failure with the tire, if you had a problem with the tire, then you should have issued a recall then. He wants to know why they didn't do that, why the testing is not real-life..

And, also, NHTSA has come under question, too, for using a 30- year-old standard to test the tires. Thirty years ago, steel-belted radials were just coming into the very beginning of use. Most of the tires are the old bias-belted tires and members want to know why NHTSA hasn't update its testing standards in 30 years, Greta. So that's what they're doing up there right now.

VAN SUSTEREN: All right, Joan, let me talk about this failure rate. I read this morning that 13.5 percent failure rate on 229 tires, that was what happened during their testing. Is there an acceptable rate of failure? I mean, what -- does NHTSA set standards where upon you can have a 5 percent failure rate or a 2 percent? I mean, explain this 13.5. Is that unacceptable for standards?

CLAYBROOK: I think it's unacceptable.

VAN SUSTEREN: Well, what about -- does the government have standards? You may think it's unacceptable, but do we have standards?

CLAYBROOK: The government standard is an absolute standard. You cannot fail the government standard. Now, the standard is very out of date. But whatever government standard there is, you have to comply with every piece and part of that.

VAN SUSTEREN: But doesn't that require perfection, and isn't that a little bit unrealistic? I mean, obviously we would love to achieve perfection in every product we put out there for the consumer, and something that could be life-threatening. But isn't a zero percent failure rate unrealistic?

CLAYBROOK: Well, it's a minimum standard, it's not a maximum standard. And often the companies have their own higher standards to which they test. And that's one of the confusing things to the public. The government standard is a minimum test. No one should be below that test.

VAN SUSTEREN: All right, Carl, there is some legislation that Sen. McCain was interested in yesterday. Can you tell us what that was? ROCHELLE: Commerce Committee reported out legislation yesterday requiring the companies -- that would require the companies if, of course, passed by the full Congress, to tell everything they know about any problems that come up with tires in the testing, anything that they've found, whether in the United States or in other countries. And they have assessed criminal and civil penalties for failure to do so.

The House is probably going to do about the same thing. They say they'll get it done by some time later this week, we think. But McCain's committee has already reported this legislation out and looking for the House to catch up with them. So they're moving forward on it, Greta.

VAN SUSTEREN: Dan, let me go to you in Boston. Would criminal penalties, do you think, enhance the consumer issue about getting companies to report when they discover a defect in a product, or does it discourage it?

DAN SMALL, FORMER FEDERAL PROSECUTOR: I think it would enhance it. I think that the problem is companies and executives every day are making these decisions balancing profits against lives, and they've got to know that there's more at stake than money and PR. They've got to know that there is a price to pay if those decisions go this far awry.

VAN SUSTEREN: All right, I'm going to take us now to the United States district courthouse in Washington, D.C. We have a developing story there. We have a man named Klayman who has filed a lawsuit on behalf of Kathleen Willey against the United States president, his wife, and the White House and others. Let's listen.

(INTERRUPTED BY COVERAGE OF BREAKING NEWS)

(COMMERCIAL BREAK)

VAN SUSTEREN: Officials at Ford Motor Company and Bridgestone/Firestone are facing new inquiries from two congressional subcommittees today.

New evidence indicates that problems with now-recalled tires were detected as early as four years ago. So far, the tires have been linked to 101 traffic deaths in the United States.

Let's go to California to Bart Williams.

Bart, let's talk hypothetically, since the facts are, at least from my perspective, I think they're a little bit -- they're not determined yet. But when can a corporation and its chief executives be held criminally responsible for a product that may have caused harm?

BART WILLIAMS, PRODUCT LIABILITY ATTORNEY: Well, the first point, I think, it's important to make is that, in the United States it's unusual, as compared with other countries, for -- that a corporation can be held criminally liable as opposed to individuals. In Mexico, for example, you can't hold a corporation criminally liable for something; so that's something that's relatively unique to the United States that bears pointing out.

But a corporation can be held liable where the conduct of the individuals who make up that corporation -- the employees of the corporation, people who are high enough in the corporation to bind the corporation -- take part in activity that meets the criminal standards, meets the elements of a particular crime.

VAN SUSTEREN: Dan, when does a corporation have to run scared, when do its chief executives have to worry, what do you think the point is?

SMALL: Well, it's a classic question: What did the president know and when did he know it?

At what point did they know that they were putting a defective product on the road that was, foreseeably, going to kill people; and that's the manslaughter, the old reckless endangerment, very well- established standard.

If you drive drunk and you kill somebody, you didn't intend to kill that person, but you acted recklessly and it was foreseeable that someone would be hurt. What's the difference if you knowingly put a defective tire on that car and send it out on the highways?

VAN SUSTEREN: Bart, do you have to have a smoking gun, do you have to have a memo that says, essentially, I know this is going to happen, but let's hide this because it will cost us too much money if we tell anybody?

WILLIAMS: Well, you don't have to have that type of evidence. As a former prosecutor, a federal prosecutor, I can say that it sure helps if you have that kind of information.

But, in my view, it does help to try to wait until you have that kind of evidence that demonstrates real criminal intent...

VAN SUSTEREN: Is it, though, Bart, is it actual knowledge or is it, you should have known?

I mean, let's say that you have a lot of statistics coming in which shows that you've got a serious problem, but you just decide to look the other way. You don't really know, but, boy, I tell you, something certainly smells funny.

Is that enough for criminal responsibility?

WILLIAMS: Well, no. The fact that something merely smells funny is not enough to establish criminal liability; which is one of the reasons why I think, in this particular case, it makes sense to let the civil process go forward, let these congressional hearings go forward, see what evidence develops, before you hear the healing cry for a criminal investigation. If there are such documents or other pieces of evidence, believe me, they'll come out in this civil investigation, and then I think it would be appropriate to go criminal.

VAN SUSTEREN: And I emphasize I'm speaking hypothetically; I don't know.

But, Joan, I imagine you want to get in on this topic. Where do we draw the line?

CLAYBROOK: Well, I think that, if a corporate official ratifies the actions of someone below, then the corporate official can be held liable, as well as if they knowingly did something themselves, if they knowingly ratified it as opposed to signing off and saying...

VAN SUSTEREN: How about looking the other way -- ignoring? Is that a ratification, in your mind?

CLAYBROOK: Well, they don't really -- I don't think that is what happens.

What happens is, they have safety review committees in these big corporations. If a problem emerges, they're going to be informed about it. They get lawsuits -- the standard at the Consumer Product Safety Commission is: You get three lawsuits, you've got to let the government know of the same make, model, alleged defect.

So they have reasons to know from consumer complaints, from lawsuits, from their own testing before it went into production, from information they get from dealers. There's a huge array of information that comes into these corporations, and if they wait, as they did here, for 10 years since this vehicle and tire combination were first sold, that is a pretty bad thing.

And then, what they did in this case, a recall abroad before they did the United States, they've certainly known for the last year; and so I think that there's no question they knew.

But the problem is that, under the auto safety law, there's no criminal liability spelled out if they refused to recall or delayed recall. So it would have to be -- today, for this case, it would have to be under the RICO statute, but Congress is putting criminal penalties into the bills that they're considering, the auto industries trying to knock them out.

VAN SUSTEREN: All right, we're going to take a break.

Up next, Ford and Firestone are fighting to keep documents in a civil lawsuit sealed, but should the information be released for the good of consumers? Stay with us.

(BEGIN Q&A)

Q: Why has the Miss America Pageant sued Philadelphia radio talk show host Howard Eskin? A: Eskin is being sued for slander. The suit alleges that comments Eskin made about contest being fixed could hurt the pageant's ability to raise scholarship money.

(END Q&A)

(COMMERCIAL BREAK)

VAN SUSTEREN: Welcome back to BURDEN OF PROOF. We're talking about Firestone tires and the hearings on Capitol Hill.

Dan, let me go to you. Oftentimes, when lawyers settle civil lawsuits, one of the things they do is, they ask the court to seal the documents, so the consumers never hear about the problems.

Why do lawyers do that Dan?

SMALL: Well, both sides have an interest in having the case go behind them. The company doesn't want someone else coming along and basically taking advantage of all of the discovery that's happened in the -- in the earlier case. So, it's fairly common to have a confidentiality agreement as part of the settlement.

VAN SUSTEREN: And, is it not true, Dan, I mean, let's say that you are suing an auto -- someone who makes cars and is it not -- is it not true that oftentimes they say, we will pay, you know, $500,000, but if you agree to have it sealed we will think about make it $600,000, and the lawyer then has the obligation to the client.

SMALL: Absolutely, and if I'm representing a victim and I'm trying to get money for the victim, my interest -- I don't care what is going to happen to the next person as much.

VAN SUSTEREN: How can you not care what happens to the next person? What if you know there's a bad product? And, you've been part of this. You've hidden the documents because you squeezed more money out of the company for your client. Don't you feel bad about that?

SMALL: That's the problem. Your job, as a lawyer, is to represent the individual and get the best result for that individual, and there are cases where it's -- you walk a very difficult line trying to figure out what is your obligation to your client and what is your obligation to society.

And, here particularly where the building blocks --and I have to disagree with Bart -- cases are built circumstantially, very often, and the building blocks are going to be each one of these deaths and what happened and who knew what.

VAN SUSTEREN: Bart, what about this business about -- I call it hiding documents, although I must confess I've been -- I've been a party to this sealing business myself when I practiced law.

What about a corporations pushing to have document sealed so the rest of us never hear about the problems? Do you have a problem with that?

WILLIAMS: Well, it depends on the circumstances. Sometimes I do have a problem with it.

What often happens, though, is that the corporation has to articulate some sort of a reason why the documents need to be sealed, some proprietary information, that type of thing.

VAN SUSTEREN: Bart, when both sides agree to it, you can just skip the judge, can't you? If both sides agree, look, we're going to settle this case and part of the settlement agreement is, look, we're going to ask that these records be sealed or withdrawn from the court record, or whatever it is.

I mean, lawyers do this without the judge, do they not?

WILLIAMS: Well, actually, there are two different things you are talking about. Actually, during litigation, the judge has to agree to it, even if the parties would stipulate to it. For purposes of a settlement, though, after a case is being disposed of, you are quite right. The parties can decide between themselves that they are going to be confidential, things should be kept confidential, and that happens quite often.

VAN SUSTEREN: Joan, in the 40 seconds or so we have left, I do it -- I did it all the time practicing law. We all stand behind it. What does the government --

CLAYBROOK: I think it is unethical...

VAN SUSTEREN: As a lawyer?

CLAYBROOK: Yes, I think the bar association ought to say that the corporation can't ask for...

VAN SUSTEREN: Wait a second, the court says represent your client as effectively, it doesn't say represent the rest of consumers.

CLAYBRROK: No, but I think that when health and safety, critical health and safety information is available, I think the Bar Association ought to say lawyers cannot ask for protective orders or gag orders because it is a public policy issue and the -- the corporation is the one who puts the plaintiff's attorney in the awkward position. They have to represent their client. I don't think the corporation should be allowed to ask for secrecy of non-trade, non-commercial information that effects the health and safety of the American public.

VAN SUSTEREN: Dan, unethical?

SMALL: Well, I agree with Joan. I don't think it is unethical. Now, it's required, now, to represent your client. But, it would be wonderful if a corporation was prohibited from asking for it, and then I wouldn't be in the position having to decide on behalf of the victim. VAN SUSTEREN: But, when they dangle that money out in front of your client, Dan, what are you going to say? Listen, client, accept the less. This is more ethical. Forget the other $100,000 to pay for your starving children at home.

SMALL: If there is no clear bar to doing it that way, you have to, as a lawyer, represent your client vigorously. And, your client is that victim. It is not all other possible or future victims, that's the problem.

CLAYBROOK: But, if there is a bar...

VAN SUSTEREN: And, Joan, I'm sorry. I have to cut you off because that's all the time we have for today.

Thanks to our guests and thank you for watching.

Today on "TALKBACK LIVE," 135,000 actors are walking the picket line. Weigh-in with your questions for today's guest, Richard Dreyfuss. That's at 3:00 p.m. Eastern time, noon Pacific.

And tonight, on "NEWSSTAND," tune in to my report on the uranium workers at a Paducah, Kentucky nuclear plant. They made the fuel for the nation's nuclear bombs and now they claim they are suffering from illnesses caused by high levels of radiation. How will Congress compensate them? That's at tonight at 10:00 p.m. Eastern time, 7:00 Pacific.

And, of course, we will be back tomorrow with another edition of BURDEN OF PROOF. We will see you then.

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