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June 14, 2001 -Ford settles tire lawsuits quietly Automaker spends millions to protect Explorer's image

June 14, 2001 -Ford settles tire lawsuits quietly Automaker spends millions to protect Explorer's image

Ford Motor Co., while publicly claiming its best-selling sport-utility vehicle is not to blame, is paying out huge settlements to people injured or killed in accidents involving the Ford Explorer equipped with Firestone tires.Ford and Bridgestone/Firestone Inc. face about 400 personal injury and product liability lawsuits in state and federal courts. So far, more than 100 cases have been settled, attorneys estimate.

Most of the lawsuits stem from accidents in which the tread peeled off Firestone tires, leading to rollover accidents in Explorers. Plaintiffs' lawyers say Ford has been unusually aggressive in settling the cases and has been willing to pay millions of dollars to avoid trials. In several cases, Ford has settled with victims before a lawsuit was filed. "I have never seen anything like this in my life," said Mike Eidson, a Coral Gables, Fla., lawyer representing several plaintiffs suing Ford and Bridgestone/Firestone. "Not in a million years would you see a company settling cases like this."

By settling cases quickly and quietly, Ford heads off a series of lengthy, high-profile court battles that could lead to big jury verdicts and further tarnish the image of the Explorer, which generates huge profits for Ford. "For Ford, it's a simple business equation," said Sean Kane, head of the litigation research firm Strategic Safety in Arlington, Va. "It's worth the premium for them to clear the Explorer and stop the discovery process in these cases."

Firestone slow to settle

Bridgestone/Firestone Inc. has been less eager to settle, typically allowing Ford to come to terms with a plaintiff before entering negotiations, lawyers say. The amount of the settlements vary widely depending on the jurisdiction of the case and other factors, such as a victim's future earnings potential, age and number of dependents.

Experts and lawyers involved in the cases estimate that Ford and Firestone are paying no less than $1 million and usually between $3 million and $6 million in the majority of cases where a death is involved. Settlements of $10 million or more are not uncommon in cases where paralysis is involved because of the high cost of medical bills.

In each case, defendants agree not to disclose how much money they received and Ford does not admit any blame or liability. But trial lawyers say Ford's offers are often too good to turn down and clearly show the automaker isn't comfortable arguing its case before a jury "The question is: Why would a company that had no fault at all pay out millions of dollars in settlements?" said Bill Frates, a lawyer in Vero Beach, Fla., who is handling several suits against Ford and Firestone.

Best option, Nasser says

Ford President Jacques Nasser said in a recent interview that settling the cases is usually the best option for Ford and plaintiffs. "If we can reach a compromise, a fair compromise with our customers wherethey have some certainty and they have some peace of mind, that to us is a much better situation than going into a legal court trial," Nasser said. "You'd like to get it behind you and that's what we would like to do."

The federal government has linked 174 highway deaths and more than 700 injuries to accidents involving Firestone tires, mostly mounted on Explorers. Ford disclosed in its latest annual financial report that Firestone-related lawsuits pending against the company seek a total of $590 million. But the figure is deceptively low because it represents only lawsuits that specify the exact amount of money sought by plaintiffs.

Deals often preferred

Settlements are often preferable to a prolonged legal battle on both sides of a lawsuit. Plaintiffs get money right away and limit legal costs. For defendants, the settlements eliminate the possibility of giant jury awards against the automaker. Ford and other carmakers have been burned by blockbuster verdicts in the past.

In 1978, a jury awarded $128 million to the plaintiffs in a case where one person died and another was burned when the gas tank of their Ford Pinto exploded.

And in 1999, General Motors Corp. was hit with a $4.9-billion jury verdict because of an alleged design flaw on the 1979 Chevy Malibu. The award was later reduced to $1.2 billion.

Ford's legal position could be weakened by its public feuding with Bridgestone/Firestone -- with both companies releasing data that purportedly shows the other company is at fault. "Before they were protecting each other in court filings," said Robert Darling, who represents Chuck Burt.

Burt was paralyzed from the waist down last June when the right-rear tire -- a Firestone ATX -- on his 1991 Ford Explorer peeled apart, sending the sport-utility into a rollover accident on Interstate 96 in Livingston County.

More fireworks expected

About 250 federal personal-injury lawsuits and class-action cases have been consolidated for discovery before U.S. District Judge Sarah Evans Barker in Indianapolis.

Lawyers in the case are scheduled to depose Bridgestone/Firestone chief executive John Lampe on Monday. Nasser's deposition is set for July 20 in Dearborn.

"It's going to be a very, very hot deposition," said Eidson, a lead attorney in the litigation.

No Ford-Firestone lawsuits have gone to trial yet. Ford typically accelerates negotiations toward a settlement when trial dates approach. Hours before her trial was set to began, Donna Bailey of Portland, Texas, accepted a settlement offer from Ford and Bridgestone/Firestone.

Bailey, 44, suffered a spinal cord injury that paralyzed her from the neck down after the two-door Ford Explorer in which she was riding crashed March 10, 2000, near Poth, Texas. The terms were not disclosed, but published reports estimate that Bailey got between $20 million to $35 million.

Ford changes stance

Prior to the cases involving Firestone tires, Ford was known as a tough negotiator in product liability cases. The automaker has deep pockets, a large, veteran legal staff and plenty of experience with big-time litigation. The automaker often fights lawsuits for years, exhausting every legal option, to avert a large payout.

Adam Studnicki, a Phoenix, Ariz., lawyer, was braced for a long, difficult battle with Ford. He filed three lawsuits this year and was poised to file eight more suits stemming from rollover accidents involving the Explorer and Firestone tires. Five people were killed in the accidents and 26 were injured.

On May 23, Studnicki met face-to-face with Ford's lawyers for the first time. By the end of the day, all 11 suits were settled. Negotiations that would normally take weeks and months, were completed in hours. The deals were cut without depositions, mediation sessions or the usual flurry of paperwork flying back and forth.

"They were very willing to talk and they were very aggressive about settling these cases," Studnicki said.

Nasser said Ford will not hesitate to go to trial if a settlement cannot be reached. Legal experts say Ford is likely to hand-pick a case where the company has a good chance to win. "Ford is not scared of a trial if they think they have a good chance of winning," said Roger Braugh, a Corpus Christi, Texas, lawyer handling more than 60 cases against Ford and Bridgestone/Firestone. "So that should tell you a lot about all these cases they are settling."

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