Federal Appeals Court Upholds Goodyear Sanctions

The Safety Record Blog has been most pleased to inform our readership, from time to time, of the skullduggery emanating from the corporate offices of the Goodyear Rubber Company. Goodyear has made quite name for itself as champion discovery hardball player – years-long production delays, withholding relevant documents, offering less-than-truthful testimony from corporate reps and lying repeatedly right to the judge’s face about the evidence in its possession.

Litigating the Goodyear Way

Earlier this month, the Goodyear legal team was prepared to argue before a judge in the Philadelphia County Court of Common Pleas – in essence – that a 2007 Customer Satisfaction campaign to replace 400,000 P215/70R14 tries sold in the U.S. under 23 different names was confidential business information.

This assertion was never put to the test in court. But it’s another one of Goodyear’s litigation tactics designed to turn the discovery process into the two-dimensional version of a waterboarding. Delay, delay, delay. Deny, deny, deny. Goodyear is all about full-throated declarations about the non-existence of evidence and its legal team does not flinch in making them to a judge. In Walden v. Goodyear, Safety Research & Strategies obtained non-existent documents via garden-variety research methods and if you want to read them, click here.

The claim arose in Walden v. Goodyear, a case that involved the catastrophic failure of a Douglas Xtra Trac P215 70/R14. On July 26, 2010, Cynthia Eure was driving her van westbound on the Pennsylvania Turnpike, when her right rear tire suffered a tread separation. The vehicle departed the highway and rolled over.  Five-year-old Tashi Walden was ejected and died of his injuries; two other passengers in the van were injured, but survived. Eure’s failed tire was among those that are part of the customer satisfaction campaign.

Haeger High-Stakes Poker

So, if you bluff your way out of handing over legitimate discovery after the case settles, do you really owe the plaintiff’s attorney $2.6 million? That’s the story Goodyear may be telling in its appeal of a November sanctions order in the Arizona G-159 tire tragedy otherwise known as Haeger v. Goodyear, now in its eighth year of litigation.

When we last left the case, attorney David L. Kurtz, who represented Leroy and Donna Haeger, sought damages from Goodyear on a separate but parallel track (see The Wages of Fraud). In June he filed a seven-count, 153-page lawsuit, in Arizona State Superior Court, seeking punitive damages via a jury trial for five years of delay and deception in the original product liability action. But the history of Goodyear, the G159, and the Haeger case is so long and sad, we’re going to start from the beginning.

In June 2003, Leroy and Donna Haeger, along with their passengers, Barry and Suzanne Haeger, were seriously injured when the right front G159 tire on their Spartan Gulf Stream Coach RV failed, causing a rollover. The G159 and a Class A motorhome had a lousy marriage; the tire design was prone to overheat on RVs that typically travel at greater than 65- mph speeds for extended periods. Goodyear knew that from its internal testing – but, loathe to miss a market-share – it promoted the match successfully in the 1990s and 2000. Eventually, though, the G159 and RVs produced numerous lawsuits when the tires failed, injuring and killing motorhome occupants. The Haegers were among them, and in 2005 they filed suit. The action was torturous, with more than 1,000 pleadings. Kurtz had asked for all internal testing regarding the G159, and Goodyear responded by employing a tactic that it had used – with varying degrees of success in other cases – turning over as little as possible, and swearing to the court that it had no more.  The Haegers settled in 2010.

In June 2010, Kurtz learned from The Safety Record Blog about a $5.7 million plaintiff’s verdict in another G159 case, Schalmo v Goodyear. At trial, the blog reported, Schalmo’s attorneys presented Goodyear documents including internal heat and speed testing and failure rate data showing that Goodyear knew the G159 was improperly approved for 75 mph continuous highway use. Kurtz began corresponding with Basil Musnuff, formerly of Roetzel & Andress and formerly Goodyear’s national coordinating counsel, to determine if Goodyear had withheld such tests in Haeger. Eventually, Musnuff conceded that Goodyear had, but wasn’t obligated to turn over any more than its NHTSA compliance test results.

The Wages of Fraud

We’re not sure how often federal Chief Judges invite plaintiffs’ attorneys to sue individual defense lawyers for committing fraud upon several courts, but we’re guessing that if it were more often, the temptation to deliberately obfuscate discovery would be less compelling. And we definitely wouldn’t see lawsuits like the one Scottsdale attorney David L. Kurtz filed against Goodyear Tire and Rubber Company; its Arizona counsel, Graeme Hancock, and his firm, Fennemore Craig; lawyer Basil Musnuff, and his former Akron law firm, Roetzel & Andress; and Goodyear’s Associate General CounselDeborah Okey.

Kurtz, a products liability attorney for 30 years, who spent the first two-thirds of his career on the defense side says, “This is the worst corporate conduct that I’ve seen. I’ve never seen lawyers act this way. It breaks the system.”

The seven-count, 153-page lawsuit, filed in Arizona State Superior Court, seeks punitive damages via a jury trial for five years of delay and deception in a product liability action involving the G159, a tire Goodyear developed for the urban delivery vehicle market, but sold to the recreational vehicle market, even though it was wholly unsuited for that use. In June 2003, the Haeger family became one of the many victims of this mismatch. Leroy Haeger was at the wheel of his Spartan Gulf Stream Coach on Interstate 25 in New Mexico, when the right front tire failed. The Gulf Stream veered to the right and then rolled over, seriously injuring Leroy and Donna Haeger, along with their passengers, Barry and Suzanne Haeger.

Tire Aging: Is NHTSA Ready to Make Policy?

Last month, at the Society of Automotive Engineers’ annual government-industry conference, a National Highway Traffic Safety Administration (NHTSA) safety standards engineer presented a summary of the agency’s tire aging work, which continues despite not producing any regulatory changes.

The issue that took center stage more than a decade ago, in the wake of the Ford Firestone rollover scandal. The deadly Firestone tires at the center of the controversy met the federal safety standards but nonetheless were de-treading at high rates after several years in service.  In 2001, Congress suggested that the agency consider the feasibility of a tire aging test, and the agency and Ford embarked on a series of experiments to create an artificial oven-aging test for tires. In 2005, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users directed the Secretary of Transportation document NHTSA’s progress on tire aging research, and its findings and recommendations. The agency’s 2007 report to Congress did not make any policy recommendations, but did allow that it was “evaluating the feasibility of a regulation related to tire aging by analyzing the safety problem (tire aging as a significant causal factor in crashes) and potential benefits and costs of a requirement for minimum performance based on an aging method.”

Six years later, no policy and the tire aging docket NHTSA opened in 2005 is officially closed for comments. But the agency (and Safety Research & Strategies -- see SRS Tire Safety) continues to file the results of its tire age research periodically. (The most recent agency submission was in July 2012, a report entitled: “Tire Aging Testing Phase 5.”) Could NHTSA’s Dr. Merisol Medri’s SAE presentation herald the arrival of a rulemaking? Her Powerpoint was not released, (click here for a copy) but our ears perked up at this slide:

“Based on analysis of data from 2005-2007 including databases (NMVCCS, GES, CDS), 90 fatalities and over 3,200 injuries occurred annually as the result of crashes that were probably caused by tire aging or where tire aging was a significant factor.”

This statistic stands out against the agency’s numerical analysis offered in the 2007 Research Report to Congress on Tire Aging: “From 1994 to 2004, NHTSA estimates that about 400 fatalities, annually, may be attributed to tire failures of all types.”

Doing the rough math -- does this mean that about quarter of the annual tire-related fatalities are due to tire age? And, how did NHTSA arrive at that figure? Tire Identification Numbers (TIN) – the only way to discern a tire’s age – are not available in the public version of some of those datasets. (We are aware that NHTSA has begun to collect TINs for some sub-sets of crash data.) According to Medri the agency will be publishing a more detailed account of its research in a new report that will be published in the tire aging docket, at some unspecified time.

Pattern of Fraud Brings Down Goodyear

Is it time for Goodyear to just give up the ghost on the G159 tire? Sure, they had a good run for a while, selling the tire to the motor home industry – even though the tire was designed for urban delivery vehicles and speed-rated for only 65 mile per hour continuous use. And when those tires failed on motor homes, causing rollovers, catastrophic injuries, deaths and lawsuits, Goodyear had a good run limiting the damage by keeping the damning documents from spreading from one litigant to another – or just keeping them to themselves. But their run seems to be about done, for the tire and the legal strategy.

The Chief Justice of the United States District Court for the District of Arizona, Roslyn O. Silver, has issued a lengthy and devastating sanctions order against Goodyear, and attorneys Graeme Hancock of Fennemore Craig PC and Basil Musnuff formerly of Roetzel & Andress, who represented the tiremaker against the product liability claims lodged by the Haeger family.

 Judge Silver’s order starts like this:

“Litigation is not a game. It is the time-honored method of seeking the truth, finding the truth, and doing justice. When a corporation and its counsel refuse to produce directly relevant information an opposing party is entitled to receive, they have abandoned these basic principles in favor of their own interests. The little voice in every attorney's conscience that murmurs turn over all material information was ignored.”

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