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April 14, 2003

Sweeping Civil Justice Legislation is Anti-Consumer, Should Be Rejected

Public Citizen President Joan Claybrook Testifies Today Before Texas Lawmakers

AUSTIN – A bill pending before the Texas legislature would severely curtail the rights of consumers while giving an enormous handout to corporations, including product manufacturers, Public Citizen representatives said today.

Public Citizen President Joan Claybrook, who is scheduled to testify today before Texas lawmakers, denounced H.B. 4, calling it anti-consumer and warning that it would dramatically undermine the legal landscape in Texas. Claybrook is a longtime consumer advocate and auto safety expert. From 1977 to 1981, she was administrator of the National Highway Traffic Safety Administration.

"This bill reads like a corporate bean counter’s wish list," she said. "Each provision will facilitate practices ranging from corner-cutting to outright scams. The sponsors appear to have accepted in their entirety the suggestions of business lobbyists without any attempt to balance the concerns of business with the safety and health interests of consumers."

Added Tom "Smitty" Smith, director of Public Citizen’s Texas office, "This is draconian legislation that would do untold harm to the people of Texas. The fact that the bill is chock full of everything industry wants is a testament to the influence of industry lobbyists. We hope lawmakers see the dangers of this bill and soundly reject it."

In her testimony, Claybrook focused on a portion of the bill that would change state product liability law to the detriment of consumers by limiting manufacturers’ liability for products that injure or kill people if those products comply with federal safety standards. But regulatory standards alone are not sufficient to guarantee the manufacture of safe products, Claybrook said.

Federal safety rules set minimum thresholds and often remain unchanged for long periods, thereby becoming outdated. They don’t reflect the capability of a manufacturer to make a product safer because they apply industry-wide. Further, federal rules don’t regulate the safety of products over their foreseeable lifetime, but rather apply only at the time of manufacture. Also, they are often a function of political legislative decisions, which frequently are influenced by the industries that will be affected.

"Broad government performance standards are not a reliable predictor of defective designs and should not be a shield behind which companies can hide to avoid liability for their negligent or intentionally unsafe products," Claybrook said.

Consider the Ford-Firestone debacle, which involved defective Firestone tires that were prone to tread separations, leading to catastrophic crashes, many of them rollovers. More than 200 people were killed and 700 people injured seriously in crashes involving the tires. The tires passed the antiquated, 30-year-old federal tire safety standard, but the U.S. Department of Transportation found them to be defective and required them to be recalled. Under H.B. 4, Firestone wouldn’t be liable for injuries or deaths caused by the defect because the tires met the federal safety standards.

Consider also that numerous people, particularly police officers, have been killed or burned by explosions of the gas tanks of Ford Crown Victorias when the vehicle is rear-ended at highway speeds. The car meets the federal gas tank standard, which has not kept up with technology improvements since it was set in 1974. Common law rightly requires manufacturers to take this information into account and be responsible for design flaws. But under H.B. 4, the manufacturer wouldn’t be liable for those killed and injured in Crown Victoria gas tank explosions even if the government were to rule that the vehicle is unreasonably dangerous.

Making manufacturers liable for harmful products is important not only because consumers deserve to be compensated for injuries caused by the products, but because manufacturers need incentives to incorporate state-of-the-art safety elements into product designs, Claybrook said. Liability also provides incentive for victims, survivors and their attorneys to investigate whether a product is unreasonably dangerous.

"Time after time, lawsuits have exposed dangerous products, forced manufacturers to make them safer, compensated injured victims, and alerted the public and federal agencies to safety defects and hazards," Claybrook said. "Legal action was critical to consumers injured by the Dalkon shield intrauterine device, the Ford Pinto that exploded in rear-end crashes, super-absorbency tampons that caused toxic-shock syndrome in some women, and Redux, a drug that was frequently part of the weight loss combination Fen-Phen, was recalled from the market after widespread reports it was related to primary pulmonary hypertension, heart valve problems, and neuropsychological damage to the brain."

Claybrook and Smith blasted several other provisions of the bill:

  • It would put class action lawsuits in jeopardy if a state agency has jurisdiction over the subject matter.
  • It called for a losing plaintiff (usually the consumer) to pay the attorney fees of the defendant (usually a corporation), but if a defendant loses, it need not pay the plaintiff’s attorney fees.
  • It would immunize retailers from liability for defective products, which is particularly unfair with large sellers such as Wal-Mart, which for example, imports toys from foreign companies that are hard to sue.

To read the testimony, click here.

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