By MILO GEYELIN
Staff Reporter of THE WALL STREET JOURNAL
Even defendants who despise each other usually present a united front
to avoid helping plaintiffs in court. But Ford Motor Co. and
Bridgestone/Firestone are ignoring that legal maxim as they battle
lawsuits involving Ford Explorer rollovers and Firestone tires.
Defense lawyers experienced in product-defect
suits say the companies' very public squabble
could spell trouble for both Ford and
Bridgestone/Firestone as the cases head to trial.
"It's a plaintiffs lawyer's dream when co-defendants are fighting among
themselves," says Sheila Birnbaum, a prominent product-liability
defense lawyer at Skadden, Arps, Slate, Meagher & Flom in New York,
which isn't involved in the tire litigation. "All the plaintiffs have to do is
get them into a courtroom and let them point fingers at each other and
walk to a judgment. As a defense lawyer, you always try to work out
differences among the co-defendants."
Last month, during widely watched congressional hearings, Ford and
Firestone pointedly faulted each other for the injuries and deaths that
have resulted during the 10 years the popular Ford sport-utility vehicle
has been on the road. In August, Firestone recalled 6.5 million tires,
many of which were original equipment on Explorers, for a potential
Ford and Firestone, a unit of Japan's Bridgestone Corp., won't discuss
how the flap could affect the lawsuits they face. But plaintiffs lawyers
are already planning to use their statements against them.
"Now I've got the Goliaths fighting each other, instead of David fighting
Goliath," says Bruce Kaster, an Orlando, Fla., plaintiffs lawyer and
veteran of cases against Ford and Firestone involving tire-tread
separations and vehicle rollovers.
That rift will be difficult to paper over in upcoming court proceedings,
lawyers say. Mr. Kaster says he scans every newspaper he can find for
articles quoting Ford and Firestone executives blaming each other for
the tire recall debacle. "What's going to happen now is we're going to
start calling those executives that have been so free to speak and
depose them. We're not going to let them get away and hide the ball,"
Adds Dallas plaintiffs attorney John W. Bickel, who lost a case against
Ford and Firestone in 1997 but isn't involved in the current litigation: "If
they're pointing the finger at each other, there's almost an assumption
of liability. The jury just has to decide which one."
The potential for conflict among corporate defendants frequently arises
in large liability cases such as securities fraud claims naming both
publicly held companies and their accountants, or in suits against
medical device manufacturers in which doctors and distributors are also
Another area where such splits have arisen is tobacco litigation. Tiny
Liggett Group, a unit of Vector Group Ltd., turned on its four largest
competitors, helping lawyers representing states in suits against the
industry negotiate $246 billion in settlements. Last summer, in the giant
Florida class action brought by injured smokers, Liggett's chairman,
Bennett LeBow, testified against his onetime allies, assailing them for
their business practices and their positions on smoking and health. The
Miami jury returned a record punitive damage award of $144.87 billion
against the industry's top five cigarette makers. But Ligget's share of
the award, $790 million, was proportionally lower than that of the other
defendants, based on each company's market share.
"Certainly to the extent that you have somebody else in the courtroom
other than the plaintiff either explicitly or implicitly attacking your
conduct it doesn't make it any easier," says Philip Morris Cos. associate
general counsel William Ohlemeyer.
Some companies go out of their way to ensure a joint defense. When
plaintiffs lawyers launched a wave of suits over an alleged blood disorder
caused by the now-banned dietary supplement L-tryptophan during the
1990s, they named both the Japanese chemical company that made it,
Showa Denko KK, and its U.S. distributors.
Showa Denko moved quickly to pacify the distributors by creating a
fund to pay for their defense and any court judgments. "Liability for
L-tryptophan went all the way from Japan, starting with the
manufacturer, to the corner grocery store," says Washington, D.C.,
attorney Richard Hinds, whose firm, Cleary, Gottlieb, Stein & Hamilton,
represented Showa Denko. With the distributors as potential
adversaries, he says, Showa Denko's strategy was to defend them. "As
the price of that, we got to call the shots," he says. The strategy helped
contain the Japanese company's overall litigation exposure.
Co-defendants frequently sign joint defense pacts to share information,
strategies and costs. "Sometimes, co-defendants agree to split defense
verdicts so they won't fight among themselves or they'll agree to
arbitrate any apportionment of damages," says Ms. Birnbaum. "It's all in
an effort to avoid being in a courtroom where the parties are blaming
In fact, Ford and Bridgestone/Firestone have a joint defense pact under
which they have shared confidential information, among other things. In
the past they worked closely and presented a united front. In rollover
suits alleging both that Firestone's tires are defective and that the
Explorer is unstable, the two companies have consistently pointed to
outside factors as the culprit, such as worn tires or driver error.
Indeed, when the Ford and Firestone crisis first blew up in August,
following a report by the National Highway Traffic Safety Administration
that first identified a spike in accidents involving certain Firestone tires,
the two companies responded in lockstep. Firestone agreed to share
confidential warranty claims and other records to help Ford pinpoint the
cause of the tread separations, while Ford agreed to pay a portion of
Firestone's recall cost.
But after Firestone conceded a possible manufacturing defect at its tire
plant in Decatur, Ill., Ford began to distance itself. And last month, the
rift spilled into the open during testimony before two congressional
committees looking into the debacle.
"First, this is a tire issue, not a vehicle issue," Ford's president and
executive, Jacques Nasser, told a House panel. Countered Firestone
Executive Vice President John Lampe before a Senate committee: "We
firmly believe that the tire is only part of the overall safety problem."
Last week the war of words escalated. Bridgestone/Firestone's
Venezuela unit, Bridgestone/Firestone Venezolano CA, refused to join
Ford in negotiating possible settlements with victims of Explorer
rollovers involving tire tread separations in that country. "All along," said
Bridgestone/Firestone's Venezuelan unit in a statement, the company
"has emphatically maintained that it bears no responsibility [for the
accidents] because the tires provided by the assembler were
manufactured according to specifications given by the vehicle maker."
Ford's Venezuelan unit, Ford de Venezuela, met with about 50 accident
victims Wednesday and shot back in a statement: "The evidence
demonstrates the problem involves the tire."
Neither company will say how many rollover suits involving Explorers
and tread separations are now pending, though a half dozen have been
scheduled for trial next year. And while their joint defense agreement is
still in place, it is unclear to what extent the two companies will
cooperate in defending rollover injury and death suits.
"We will look at each case individually," says Ford spokeswoman Susan
Krusel. "We're still trying to work out how we're going to work out
these issues." Where the two companies still have common interests,
says Firestone spokesman Donald Adonitis, "I would hope we can
continue to work together."
One indication will come as lawyers for Ford and Firestone try to
consolidate about 100 suits pending in federal courts around the
country to bring them all before a single judge for pretrial preparation.
The move would benefit both companies by vastly streamlining the
suits. But a key issue has been where to send the cases -- to a federal
court close to Bridgestone's U.S. headquarters in Nashville, to Ford's
hometown near Detroit, or to some other federal jurisdiction.
A decision will be up to a panel of federal judges scheduled to hear from
both companies, as well as plaintiffs lawyers, next week in Washington.
But Ford and Firestone, says one lawyer involved in the negotiations,
have already reached a compromise venue -- U.S. District Court in
Write to Milo Geyelin at email@example.com