Wheels of Justice
Four lawyers tell why they defend—or do battle with—the troubled auto industry
Published in 2009 Michigan Super Lawyers magazine on September 9, 2009
The world-famous Motor City has captured more headlines over the past year for bankruptcies and billion-dollar bailouts than for improved fuel efficiency or high-tech upgrades. Despite the turmoil, the Detroit auto industry remains a major Michigan employer, and its products continue to stand as worldwide symbols of the American Dream.
And there still is plenty of litigation to keep industry-focused attorneys on both sides of the aisle busy. We checked in with four Michigan lawyers who focus on the auto industry to ask about interesting cases and what the future might hold for the Big Three. Detroit attorney Thomas Branigan sums it up: “We’ve all got our fingers crossed here in southeastern Michigan. But whatever happens, things are changing—and changing rapidly.”
Thomas P. Branigan: Industry on trial
Defense attorney Thomas P. Branigan, managing partner at Detroit-based Bowman and Brooke, knew from a young age that he was headed into law. “I didn’t come from a family that had any lawyers in it. But I came from a family that liked to discuss current events and politics, and I was always arguing with people,” he says with a laugh.
“When I was in college and law school—back in the late ’70s and early to mid-’80s—I worked for an auto supplier. I was laid off at least two or three times. So I kept telling myself that, once I got out of law school, I was going to work in an area of law that had nothing to do with the automotive industry.”
Ironically, Branigan’s first job was with a large Detroit firm, where he worked on the bankruptcy proceedings of the DeLorean Motor Co. “I literally launched right into a job that had me working on all issues related to cars. But I found the case incredibly interesting.” After launching the Detroit office of Bowman and Brooke in 1991, he says, “I’ve done pretty much nothing but automotive-related litigation, either product liability-related litigation, defending auto companies, or some kind of commercial litigation that relates to the auto industry.
“The last significant case I had was a case that we settled for General Motors in southern California. Had we completed the trial, it would have been one of the first cases to go to verdict involving technology that’s just showing up in cars and trucks: electronic stability control [ESC]. ESC helps drivers maintain control of their vehicles under road conditions that may be slippery, icy or have varying levels of friction.
“The case involved a single-vehicle rollover of a Suburban that was filled with a family traveling to a graduation party. The Suburban was traveling at a pretty good clip on an interstate in southern California.” At one point, according to Branigan, the driver drifted onto the shoulder at highway speeds, overcorrected, sped across all lanes of traffic, then overcorrected again, fishtailing the vehicle and then rolling it at least four times. The driver and a young passenger were killed. The family claimed it never would have happened had the Suburban been equipped with ESC.
“The driver overreacted at high speeds,” Branigan contends. “ESC can’t change the laws of physics. If a driver makes a steering input that’s really extreme, coupled with the vehicle traveling at a high rate of speed, there’s not much ESC can do to correct that.”
Branigan is disappointed that science didn’t have its day in court. “It was going to put the technology to an early test in the courtroom. Was it really ready to be rolled out to the Suburban and other very large sport-utility vehicles? And if it had been on the vehicle, would it have worked to prevent this accident? To this day, we’re dealing with the claim that we didn’t roll the technology out fast enough, so that would have been a real test of our defense of the way the industry—not just General Motors, but the industry as a whole—has rolled safety technology out to motor vehicles.”
He acknowledges that the industry is facing other tests and trials. “It’s a really tough time for the entire automotive industry,” he says. “I think it’s causing some plaintiff’s lawyers to seriously question whether they should file a lawsuit [against the car companies]. Other plaintiff’s lawyers are anxious to resolve their cases now, before there’s another bankruptcy filing.” Branigan wonders if that might lead some to accept reduced settlements from carmakers, “because less is better than nothing.
“It’s just going to be a very different situation over the next few years. We’re hoping the auto industry holds on.”
Craig E. Hilborn: Taking on The Powers That Be
Plaintiff’s attorney Craig E. Hilborn, president of Hilborn & Hilborn, grew up watching his father work as a defense attorney for Ford Motor Co., dealing with products liability cases. But it wasn’t defense that most interested the son. While attending Michigan State University, he was drawn to law because it seemed that “the only way that you were able to fight against the government and the higher powers in the universe—the corporations, the Powers That Be—was through the legal process. Even from an early age, I was always questioning, ‘Why?’”
One of Hilborn’s most memorable auto-industry cases was Theodoroff v. Tucker and General Motors, which began in 2007. Kia Tucker was driving her Chevy Blazer down the Lodge freeway when a tire fell off. Her vehicle was struck from behind by a car driven by Hilborn’s client Jason Theodoroff, who sustained a serious brain injury. The jury found GM responsible for the failure of the wheel assembly and awarded Theodoroff $3.2 million. “I think it was the first product liability verdict against General Motors in Michigan in some time,” Hilborn says.
But the success was bittersweet. “After costs and the reduction of the future wages lost to ‘present value,’ the amount of the verdict was significantly less than what we had expected.” Which brings Hilborn to something that has bothered him for years: Michigan’s products liability cap.
When Michigan passed the cap in 1995—later amending it to $410,800 for noneconomic damages and $733,500 for noneconomic damages for certain permanent disabilities or death—“it was to encourage manufacturers to come here to Michigan,” says Hilborn. “The rationale was that, if businesses felt comfortable making their products here without fear of excessive litigation, that would increase the amount of production in Michigan. Well, I think it’s been borne out that, since 1995, Michigan has lost more manufacturing jobs than any other state in the United States.”
For Hilborn and his clients, the cap has taken a large toll. “I have a case now against General Motors that involves a fuel-fed fire that caused the death of a boy up in Clinton County. His case, no matter if we prove everything, is worth a maximum of $733,500 because he doesn’t have any wage loss. When the expenses for going to trial on a case like that can be anywhere from $300,000 to $500,000, the cap really prevents lawyers from pursuing those cases. If you’re going to spend, say, $500,000 for a $733,500 recovery, you’re looking at a $73,000 fee when you’ve spent a half-million dollars.
“Even when you feel for the family, and you really believe that there’s a defect in the vehicle and you have experts who will testify to that, it becomes very difficult to take those cases. Because there’s no sure thing when you walk into a courtroom.”
Jules B. Olsman: Safety first
The Berkley offices of Olsman, Mueller, Wallace & MacKenzie are home to two cats, Vito and Johnny, named after characters in The Sopranos. “We’re major cat people here,” says firm president Jules B. Olsman. “Most people who come in love it. They add a warmth.”
While the often brutal characters on the television series aren’t usually associated with good-natured feelings, the juxtaposition is apt: Olsman is a plaintiff’s attorney with decades of experience battling the auto industry while pressing for improved safety measures.
Asked about the health of the auto industry itself, Olsman speculates, “Well, all of the American car companies will survive, clearly. But who knows what we’re going to see? Who would have thought a year ago we’d be sitting here talking about not if but when General Motors is going to go into bankruptcy?” (Editor’s note: Which indeed it did in May.)
Meanwhile, tort reform in Michigan has virtually eliminated the products liability caseload of Olsman’s firm in recent years. But he continues to take cases involving public-safety issues.
The most memorable series of cases—on which he worked with law partner Wolfgang Mueller—involved child-airbag safety and led to airbag warnings on front-seat visors.
“When the concept of a passenger-side airbag first came out in the early 1990s, Chrysler, particularly, with the minivans, marketed it as if you were a negligent parent if you had a car that didn’t have a passenger-side airbag to protect your kid,” Olsman recalls. “They had ads that showed children sitting in the front seat. Today, when you flip down your visor, there’s a warning that says don’t let children sit in front. That’s because of the deaths of children around the country due to airbags that jettisoned at one-tenth of the time it would take you to blink your eye.”
In a 1996 case handled by his firm, 5-year-old Frances Ambrose was riding in the front seat of her mother’s Chrysler minivan when the van was clipped by a high-school student. It was a minor accident, in which no one else was injured. However, Frances, who was wearing her seat belt correctly, was killed due to head injuries caused by an airbag. The Ambrose case was the fifth such child-airbag case to be settled out of court at that point, but the first involving a child wearing a seat belt properly at the time of impact.
For Olsman, the child airbag-injury and death cases were among the most rewarding of his career, leading to the introduction of less forceful airbags.
“Seat belts, seat restraints, collapsible steering columns, shatterproof windshields,” Olsman lists. “We would argue that litigation helped drive those changes. And it did. [Detroit attorney] Harry Philo once said, ‘Liability is the anvil on which you forge a safer society.’ It isn’t just about lawyers and money. It’s literally about trying to do something good.”
James P. Feeney: Fascinated by the Fine Print
James P. Feeney, an automotive defense attorney in the Bloomfield Hills offices of Dykema, is beaming.
“Two weeks ago, I got a $47 million verdict for Chrysler in Oakland County, in which I represented Chrysler against an auto supplier,” he reports. “That’s the largest verdict I’ve ever obtained on behalf of any company.
“It was a breach-of-contract case involving damages that Chrysler had incurred in fixing problems in an assembly on its 2005 minivan that had been the subject of two non-safety related recalls. It’s very unusual for an OEM [original-equipment manufacturer] like Chrysler to have to sue a supplier for those kinds of damages.”
In a typical recall, the supplier provides a part that fails in service, and the failure is so widespread that it is the subject of a recall. “Normally, either the OEM does nothing as it relates to the supplier, or, if they negotiate with the supplier, there’s some resolution and there’s no litigation,” Feeney explains. “But in this case, the supplier believed it had no responsibility at all. So Chrysler was forced into litigation with the supplier to try to recoup some portion of the damages.”
What interested Feeney most about the case was the jury’s interpretation of the contractual language involved in the OEM/supplier relationship. “Both sides agreed that in the event of a breach of warranty—in other words, in the event that the part they were supplying did not perform as represented or as intended—financial responsibility for that breach would be allocated in certain percentages.” In this case: 80 percent supplier, 20 percent Chrysler.
“The provisions said that this was intended as a guide to use between parties to resolve financial responsibility. The jury was told that in a special instruction. They didn’t have to apply it; they didn’t have to follow it. But in their verdict, the jury applied the exact contract terms that the parties had agreed to. … I think it sends a message both to OEMs and tier-one suppliers. These contract terms are fairly common within the industry, but I don’t think anyone has ever litigated their significance before. In fact, I think suppliers sort of dismissed them.”
Feeney agrees with Branigan that this is a particularly sensitive time for auto-industry litigation. “I have talked to several very successful plaintiff’s lawyers—automotive product-liability lawyers—around the country. Their view is that juries today would be unwilling to award any significant verdict against an auto company. The sense is that juries would be very concerned that this would be just one more economic hardship that the company would have to bear, and maybe that’s the one that sends them over the edge. They’re not interested in doing that.”
To an industry beset by troubles, a little public compassion would come as good news.