Does tort system make America safer? Lanier rebuts ‘blame the lawyers’ prof

November 21, 2014

Mark Lanier, one of the most successful trial lawyers of the past quarter century – and also a Texan – isn’t the type to roll over for adversaries.

Lanier saw a post I wrote earlier this month about a new working paper by Vanderbilt University law professor Kip Viscusi. He didn’t much care for Viscusi’s ideas. The paper, to summarize ruthlessly, argues that GM, stung by previous punitive damages awards, avoided conducting an analysis of the risks and rewards of replacing its faulty ignition switches because the company didn’t want to give ammunition to trial lawyers. Viscusi suggested that to encourage companies to study the costs and benefits of safety modifications, the federal rules of evidence should be changed to bar plaintiffs’ lawyers from showing those studies to jurors, as long as companies used a life valuation benchmark that places a high value on safety and made decisions that accord with regulators’ risk calculations.

Lanier agrees with Viscusi that companies should use a higher value for lost lives in their risk calculations – but not that those analyses should be shielded from jurors. On Thursday, he and Ryan Ellis, an associate at his firm, sent me a three-page commentary on Viscusi’s paper. I asked Viscusi for his reaction to their comments, and then asked Lanier and Ellis to respond to Viscusi. I’ve highlighted key points from both sides, as well as providing links below to full versions of what they sent me. I’m grateful for the opportunity to use my column to stoke an important discussion of an elemental question: Does the tort system make America safer?

Lanier and Ellis say it does (no surprise there). Their argument for why Viscusi is wrong on that point is pretty clever, throwing Viscusi’s own paradigm, GM and the ignition switch disaster, back at the Vanderbilt prof. According to Lanier and Ellis, GM’s reaction to the exposure of the ignition defect – which came about because of a product liability suit – shows just what trial lawyers can accomplish.

“Thanks in part to the pressure applied by victims and their attorneys, GM promptly created a new position – Vice President of Global Vehicle Safety – to spearhead the company’s newfound commitment to safety,” they wrote. “Additionally, GM has been quick to issue subsequent recalls on other vehicles, saving customers from an untold number of accidents, and saving itself from future litigation costs.”

Lanier and Ellis also use evidence from Viscusi’s own paper to try to undermine his argument that trial lawyers should be blocked from showing jurors cost-benefit studies if those analyses meet certain criteria. Viscusi conducted a study, using mock jurors, of what happens when a defendant clearly explains cost-benefit analysis. He found that companies can actually fare a little better with juries when they explain that their safety decisions were rationally based on risk analysis.

Based on that finding, Lanier and Ellis say, it should be clear that jurors are perfectly competent to evaluate cost benefit studies so those analyses needn’t be barred from trial. “When jurors see outrageous conduct, they respond appropriately, just as any of us would,” they wrote. “As a society, we should be extremely reluctant to embrace any proposal that would further disempower juries.”

The real lesson of the GM ignition switch disaster, the trial lawyers said, is that companies wouldn’t have to worry about jury verdicts if they placed a higher value on saving lives. And Viscusi’s “victim blaming,” they said, “cuts against public policy and common sense. Can anyone honestly imagine blaming a burglary victim for reporting a thief’s identity and methods?”

In his rebuttal to Lanier and Ellis, Viscusi said he never blamed victims – drivers and passengers injured in crashes – for auto companies’ fear of conducting safety studies. Nor did he call for defendants to get a free pass from the jury system, he said. Viscusi said his point is that “systematic examinations of safety issues should not be included in the evidence used against the company in court if the safety measures don’t provide safety benefits in excess of the costs.”

He also did a little trash talking: “The commentary by Mr. Lanier and Mr. Ellis is more concerned with losing opportunities to reap blockbuster court awards than with advancing product safety,” Viscusi wrote. “Apparently the ‘victims’ that they are worried about are trial lawyers.”

Viscusi said his proposal, which calls on auto companies to conduct risk analyses using the U.S. Department of Transportation’s $9.1 million value-of-life benchmark, “will do more to advance motor-vehicle safety than do random jackpot punitive damages awards,” he wrote. The only losers from his approach, Viscusi said, “are the trial lawyers who will miss out on opportunities to reap blockbuster punitive damages awards that dwarf the award amounts appropriate to promote safety.”

Lanier and Ellis responded that Viscusi’s “glib” remarks overlook “the positive change that consumer lawsuits bring about on a regular basis.” The plaintiffs’ lawyers emphasized that, like Viscusi, they believe companies should change the benchmarks they use in risk calculations to place a higher value on safety. But changing the law to shield those analyses from the eyes of juries, they said, undermines a system that works.

“Attempting to stack the deck at trial by gutting age-old legal principles is a horrible notion, and companies and their legal counsel should instead focus on developing a safety culture that will protect the public and help the companies present themselves to juries in a positive light,” Lanier and Ellis said.

I’m going to end the debate there for now. I’m sure we haven’t heard the last of it.

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