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autos

Olympia, Wash.: “A community college says it’s the pride of their automotive technology program: a rare Dodge Viper donated to their school worth hundreds of thousands of dollars.” It’s believed to be the fourth one off the assembly line. But now Chrysler has “ordered the destruction of their entire educational Viper fleet.” It seems that while the prototypes were never meant to be driven on public roads, “two of them somehow got out and into accidents, costing Chrysler’s parent company millions of dollars.” Things might be different if our law respected a sale or other contractual agreement between Chrysler and the school as reason to release the manufacturer from a suit filed by an injured third party. But it doesn’t. Chrysler’s deadline for ordering the cars crushed has now passed; no word at present as to whether any of the cars have been reprieved or otherwise survived. [KING, AutoWeek, Tacoma News Tribune, Motor Trend]

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Last week the Department of Justice announced a deal with Toyota in which the Japanese automaker would fork over $1.2 billion and place itself under supervision for allegedly not being forthcoming enough with information at the height of the 2009-2010 panic over claims of unintended acceleration in its cars. The acceleration claims themselves had turned out to be almost entirely bogus, and were refuted in a report from the federal government’s own expert agency, NHTSA. Instead, the prosecution relied on a single count of wire fraud: Toyota had supposedly given regulators, Congress and the public an erroneously positive view of its safety efforts. It should therefore have to “forfeit” a huge sum supposedly related to the volume of business it did over a relevant period.

I’ve got an opinion piece in Monday’s Wall Street Journal (unpaywalled Cato version here, related Cato post here) about this whole appalling affair, which should frighten other businesses that might face draconian charges in future not just for compliance infractions, but more broadly for defending their products in the court of public opinion. Meanwhile, the Justice Department’s grandstanding and demagogic press release goes to some lengths to leave the impression “that unintended acceleration is some mysterious phenomenon of auto design unrelated to flooring the accelerator.” Someone here is irresponsibly misleading the motoring public and withholding vital safety information, but it’s not Toyota.

A few related links: NHTSA unintended acceleration report, Car & Driver’s coverage, and my 2010 opinion piece. And Holman Jenkins at the WSJ (paywalled) compares the still-unfolding story of ignition problems at GM, also discussed by Paul Barrett at Business Week.

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Labor notes from Tennessee

by Walter Olson on February 17, 2014

VWChattanoogaHilarious: Steven Pearlstein column gloats re: unstoppable UAW-at-Volkswagen tide of history, reaches print after vote [WaPo; "claque," "rabid," "Babbitts," etc.] “We also looked at the track record of the UAW. Why buy a ticket on the Titanic?” [Reuters] “No wonder they wanted card check.” [Mickey Kaus; more, Kevin Williamson]

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Police in Santa Cruz, Calif. say the driver of a new Tesla had fallen asleep at the wheel last November when his car struck and killed a bicyclist. 63-year-old retired tech executive Navindra Kumar Jain told police that “new car smell” had caused him to nod off and that there were no other mechanical problems with the vehicle. A lawsuit filed by the victim’s family names both Tesla and Jain as defendants. [Santa Cruz Sentinel, San Jose Mercury-News, San Francisco Chronicle]

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  • “Live or travel within 100 miles of a US Border? America’s Internal Checkpoints” [Wes Kimbell, Reason]
  • EFF, ACLU sue Los Angeles seeking disclosure of how automatic license plate readers [ALPRs] are used to track motorists [The Newspaper]
  • Would cops run unauthorized background checks on someone appointed to a police oversight board? [Ed Krayewski/Reason, St. Louis County, Mo.]
  • “How the NSA bulk data seizure program is like gun registration” [Randy Barnett]
  • Text sent to Kiev protesters points up downside of cellphone location signaling: “Dear subscriber, you are registered as a participant in a mass disturbance.” [NY Times]
  • As New York AG Schneiderman pursues AirBnB, privacy is collateral damage [Ilya Shapiro and Gabriel Latner, Daily Caller]
  • Oops! California Obamacare exchange passed along visitors’ personal info to insurance agents without permission [L.A. Times]

Product liability roundup

by Walter Olson on January 21, 2014

  • “Furniture company founder files federal chair-collapse suit against rival manufacturer” [ABA Journal]
  • Wrangling over Pennsylvania tobacco settlement aftermath “a never-ending buffet for attorneys” [Allentown Morning Call] Florida $27 million smoking award upheld [Daily Business Review]
  • Autonomous cars and tort liability [Kyle Colonna, Case Western RJLTI/SSRN]
  • Asbestos: Death of single fiber theory [Sean Wajert, Pa.] Radiologist Herron says he did nothing wrong [W.V. Record]
    Peculiar tale of Russian asbestos-mining town [Foreign Policy] More: Lester Brickman on smokers’ asbestos cases [Chamber-backed LNL]
  • From the defense side, Beck chooses favorite and least-favorite drug and medical-device decisions of 2013;
  • One can always hope: Will 3-D printing end product liability litigation as we know it? [Nora Freeman Engstrom, SSRN] “Philadelphia Becomes First City To Ban 3D-Printed Gun Manufacturing” [Zenon Evans] Once again on the vacuous but oft-repeated “NRA is a front for gunmakers” line [Tuccille]

The capabilities of onboard GPS systems keep getting more impressive. And the product liability implications might nudge Detroit into using the information in ways unwelcome to customers, for fear of being blamed otherwise for crashes they might have prevented. [Volokh]

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At least ten states have now adopted variations on the idea that motorists who unlawfully drive without insurance should give up at least some of their right to sue for pain and suffering in a later accident. Missouri has become the latest, its legislature overriding a veto by Gov. Jay Nixon (D). Organized insurers have backed the idea, which one recent study says can reduce the number of drivers on the road without insurance. It should be noted that trial lawyers’ collective interest in the issue is subject to some ambiguity: while they will recover less in a given lawsuit if their uninsured-motorist client cannot sue for pain and suffering, a rise in the share of drivers that are insured improves their chances of recovering funds in cases generally. [Insurance Journal, Billy Smith/Wolters Kluwer Compliance Corner, PCIAA, Susan Ladika/CarInsurance.com]

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It’s behind a paywall, but the WSJ columnist looks into a question touched on repeatedly in this space and connects it to the unpredictability with which juries may credit expert testimony, as an Oklahoma jury recently did in Toyota litigation:

Toyota had been vigorously fighting hundreds of complaints that its cars are prone to unintended acceleration. Now it’s moving toward a global settlement as a consequence of a single Oklahoma lawsuit that appears to establish that Toyota can’t prevail if it can’t prove a negative—that its software didn’t go haywire in some untraceable and unreplicable manner. …

The Bookout jury was apparently impressed by the testimony of software expert Michael Barr. He said a single “bit flip” (the smallest instance of data corruption) could cause uncontrolled acceleration when the driver had been using cruise control, stopped using cruise control, then resumed using cruise control to let the car accelerate back to its selected speed. …

The connection to Ms. Bookout’s crash, which didn’t involve cruise control and took place on an exit ramp? None, except Mr. Barr claimed that “software failure is consistent with the description of the [Bookout] accident” and “more likely than not” a factor.

Jenkins notes, as have others, that if some mysterious and unreplicable bug is causing Toyotas to accelerate suddenly while disabling the brakes, it seems to differentially appear in cars being driven by elderly drivers, which are greatly overrepresented in the crash statistics.

More: Kyle Graham on whether vaccine liability limits make a plausible precedent for limits on liability for driverless cars.

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How tort law harms privacy

by Walter Olson on December 2, 2013

Per Eugene Volokh‘s new article, a wide range of actors from landlords to employers to colleges to product manufacturers correctly see themselves as being at legal risk if they don’t surveill, probe, and share information about those they deal with:

Gathering or disclosing information about people’s backgrounds, tendencies, and actions is increasingly inexpensive, and increasingly effective at helping avoid, interrupt, or deter harm. …Failure to take those precautions thus becomes negligent. … Failure to provide camera surveillance is now a common claim in negligence cases.

An especially fertile source of such incentives is the duty (much expanded by modern developments in liability law) to take reasonable precautions against criminal acts by others. It will soon be feasible at low cost, if it is not already, for automakers to install electronic components in new cars that send a warning communication — to police monitors, for example — when a motorist tries to drive at very high speed. What will happen after automakers begin to be sued after accidents for not installing such components?

Banking and finance roundup

by Walter Olson on November 21, 2013

  • J.P. Morgan and the Dodd-Frank system: “With Wall Street’s capable assistance, government has managed to institutionalize and monetize the perp walk.” [Michael Greve, related from Greve on the self-financing regulatory state]
  • Harvard needs to worry about being seen as endorsing its affiliated Shareholder Rights Project [Richard Painter]
  • Under regulatory pressure, J.P. Morgan “looking to pull back from lending to politically incorrect operations like pawn shops, payday lenders, check cashers” [Seeking Alpha]
  • Rare securities class action goes to trial against Household lending firm, HSBC; $2.46 billion judgment [Reuters]
  • Car dealers only thought they were winning a Dodd-Frank exemption from CFPB. Surprise! [Carter Dougherty/Bloomberg, Funnell]
  • “Memo to the Swiss: Capping CEO Pay is not an Intelligent Way of dealing with Income Inequality” [Bainbridge]
  • American Bankers Association vs. blogger who compiled online list of banks’ routing numbers [Popehat]

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“A new analysis from the Brookings Institution’s Ted Gayer and Emily Parker found that the program was fairly inefficient as economic stimulus and mostly pulled forward auto sales that would have happened anyway. It also cut greenhouse-gas emissions a bit — the equivalent of taking up to 5 million cars off the road for a year — but at a steep cost. … ‘In the event of a future economic recession,’ they conclude, ‘we would not recommend repeating the [Cash for Clunkers] program.’” [Brad Plumer, Washington Post; earlier]

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Driverless-car chasing

by Walter Olson on September 13, 2013

The driverless car, it’s increasingly clear, is a technology with transformative potential, and among its key advantages would be its promise in reducing accident rates. Yet without attention to liability reform the progress could stall, according to Megan McArdle. “Even if the overall number of accidents drops, the number of accidents where the automaker is perceived to be at fault will approach 100 percent.” Would a massive, New Zealand-style effort to replace the whole tort system do better? [Bloomberg; more on New Zealand no-fault compensation here, here; the original 1967 Woodhouse report here]

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After a road collision, what happens when plaintiffs begin adding ride-matchmakers Uber or Lyft or RelayRides as a defendant, on grounds of inadequate screening or some other theory? [Emily Badger, Atlantic Cities]

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An idea destined to come here as well? “Under the [European Commission] proposals new cars would be fitted with cameras that could read road speed limit signs and automatically apply the brakes when this is exceeded. Patrick McLoughlin, the [British] Transport Secretary, is said to be opposed to the plans, which could also mean existing cars are sent to garages to be fitted with the speed limiters, preventing them from going over 70mph.” [Telegraph]

More: EU denies having such plans (see comments). And in the U.S., federal regulators (NHTSA and the Federal Motor Carrier Safety Administration) have considered speed governors on heavy trucks, drawing objections on safety and other grounds from independent truckers (2007), while the idea of speed limiters on ordinary passenger cars has drawn regulatory interest in both Canada and the U.S., as well as favorable note from such commentators as Matthew Yglesias and Ryan Avent.

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September 3 roundup

by Walter Olson on September 3, 2013

  • The bureaucracy in India brings Gilbert & Sullivan to life: “He has been corresponding with himself for the last 26 days as an officer wearing different hats.” [Deccan Chronicle via @tylercowen]
  • “Certificate of Need” laws: “You Shouldn’t Have to Ask Your Competitors for Permission to Start a Business” [Ilya Shapiro]
  • No massive shift to arbitration clauses in franchise world since SCOTUS rulings [Peter Rutledge and Christopher Drahozal via Alison Frankel; Andrew Trask]
  • Evergreen headline in slightly varying forms: “Anti-abuse group’s director quits after arrest in assault” [Sacramento Bee; related here, here, etc.]
  • Economic liberalization increases growth [Alex Tabarrok]
  • “With Auto Amber Alerts, We’re Opted In By Default To A ‘Little Brother’ Surveillance Society” [Kashmir Hill]
  • How Florida trial lawyers plan to crack the tobacco-verdict vault [Daniel Fisher]

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Yesterday, in the case of Maracich v. Spears, the Supreme Court ruled that the Driver’s Privacy Protection Act of 1994 (DPPA) prohibits trial lawyers from accessing names and contact information from states’ drivers license databases with the intention of soliciting potential clients for litigation. Under DPPA, the general rule is that states must keep the information in such databases private; there is a “litigation exception” for queries intended to investigate or prepare for legal proceedings, but the Court ruled that soliciting clients was not part of its scope. As I argue in a new post at Cato at Liberty, the dispute brought about a curious reversal in the polarities displayed in the case of Maryland v. King earlier this month: the pro-privacy justices in that case were more likely to be willing to dispense with privacy this time, and vice versa.

The underlying lawsuit (Kevin Russell at SCOTUSBlog and background here, here) also involves a bit of a reversal: class action lawyers are themselves being sued in a class action. The majority opinion by Justice Anthony Kennedy sketches in some of the background:

In the case now before the Court, petitioners are South Carolina residents whose personal information was obtained by respondents from the South Carolina DMV and used without their consent to send solicitation letters asking them to join the lawsuits against the car dealerships. Petitioner Edward Maracich received one of the letters in March 2007. While his personal information had been disclosed to respondents because he was one of many buyers from a particular dealership, Maracich also happened to be the dealership’s director of sales and marketing. Petitioners Martha Weeks and John Tanner received letters from respondents in May 2007. In response to the letter, Tanner called Richard Harpootlian, one of the respondent attorneys listed on the letter. According to Tanner, Harpootlian made an aggressive sales pitch to sign Tanner as a client for the lawsuit without asking about the circumstances of his purchase.

Some of these points may be relevant on remand, because the court will be asked to consider whether the original solicitation letter (marked “SOLICITATION”) had the predominant purpose of investigating the developing lawsuit, or of attracting clients for it. And this leads to the third turnabout. In the second class action, the one over privacy and the lawyers’ use of the DMV database, petitioners are seeking specified statutory damages of $2,500 for each person whose privacy was breached, which could add up to an “astronomical” (as Justice Ginsburg put it in her dissent) sum of hundreds of millions of dollars in all. Indeed, the majority opinion as well as the dissent signaled disquiet at a possible assessment of damages so far out of proportion to any actual harm done — a phenomenon we have seen again and again in statutory class or group damages cases in the past. Some trial lawyers have in the past pooh-poohed, as the griping of sore losers, complaints about mechanical multiplication of statutory damages into huge sums (e.g. FACTA, junk faxes, song piracy, California Labor Code). In this case, such multiplication could pose a threat to the fiscal well-being of some of their own number. (& welcome TortsProf, Legal Ethics Forum, SCOTUSBlog, JOLT Digest (Harvard Journal of Law and Technology) readers)

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EPA-mandated diesel-engine governor shuts down ambulance carrying patient in cardiac arrest to emergency room. [WTTG; Washington, D.C.] The D.C. fire union says emissions-control engine governors, the result of an EPA mandate, have shut down rescue vehicles during missions at least three times since August. Following strenuous protests from rescue squads around the country, EPA last May waived the application of the rules for fire trucks and ambulances, but D.C. is apparently stuck with vehicles acquired before the waiver.

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