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Law Professor Tony Sebok Discusses the Threat of a Class-Action Lawsuit Against Firestone August 30, 2000 More chat transcripts ------------ Edward Lazarus - Medical Marijuana Edward Lazarus - Bush/Supreme Court Anthony Sebok - IBM/Holocaust Julie Hilden - KKK/Freedom of Speech Charles Compton - Microsoft John Dean - Rich Pardon Kevin Grierson - Napster Marci Hamilton - Napster Robert Precht - Embassy Bombings Yonah Alexander - Lockerbie Jonathan Nelson - Embassy Bombings John Dean - Bush Transition Victor Williams - Elections/Supreme Court Edward Lazarus - Elections/Supreme Court Michael Dorf - Elections/Recount John Dean - Elections/Watergate Catherine Christophillis - Drugs/Pregnancy Jennifer Granick - Drugs/Pregnancy Kevin Grierson - Napster Trial Ed Masry - Erin Brockovich Piere Thomas - Wen Ho Lee Lauren Gelman - Internet/Speech Anthony Sebok - Firestone Tires Neal Katyal - Clinton Sanford Levinson - Election Ruti Teitel - Ousted Leaders David Thibodeau - Waco Michael Dorf - Supreme Court Byron Sage - Waco David Linder - Scopes trial Marci Hamilton - Supreme Court Thomas Jurgensen - Human Genome Jeffrey Rosen - Privacy issues Solomon Wisenberg - Death penalty Ted Conover - Sing Sing prison Matthew Glavin - Clinton disbarment Anthony Sebok - Tobacco litigation Douglas Lichtman - Music copyright David Martin - Elian case

(CNN) -- Brooklyn Law School professor Tony Sebok joined Law Chat on Wednesday, August 30, to discuss the threat of a class-action lawsuit against Bridgestone/Firestone in the wake of the tire manufacturer's recall of certain tire models. Law Chat is presented by FindLaw. CNN.com provided a typist for Sebok. The following is an edited transcript of the chat:

CNN Host: Would class-action lawsuits against Firestone be successful?

Anthony Sebok: In addition to the lawsuits for individual injuries that have been filed, there have been class action lawsuits filed in the last few weeks in a number of jurisdictions, including Ohio and Florida. There is every reason to believe they will make out a claim that will survive a motion to dismiss, and they look like very serious lawsuits. So they are legally right there in the center of class-action products liability law.

Question from Realist: Isn't it easiest for Firestone to simply file bankruptcy and stay any legal actions? Should criminal charges be filed against the executives of Firestone?

Anthony Sebok: There would be (in this case) less reason to declare bankruptcy than in a case like Dow-Corning, or in the case of the asbestos industries, for two reasons: First, it's not clear that the number of injuries are so large as to pose a devastating penalty if they paid out jury verdicts, or as is more likely if they settled the case.

And the way to understand this is to contrast what Firestone is accused of compared to the asbestos cases. No one is accusing yet Firestone that all of Firestone's tires are defective; whereas in asbestos, the argument is that asbestos itself is defective. They would want to remain in the tire business as long as this lawsuit involves a very small subset of their product.

As to the second question, I'll be happy to explain in greater detail, but criminal prosecutions have followed products liability lawsuits, but it is very rare and very difficult to move from a products liability lawsuit to a criminal prosecution. And we would need to know many more facts about what the executives at Ford and Firestone did with the information that they are alleged to have had.

Question from apple: Do you feel citizens should have the right to bring forward class action lawsuits? Republicans seems to feel this is wrong, why?

Anthony Sebok: I do believe that citizens should be able to bring class action lawsuits and torts. In due respect to the questioner, the Republicans have proposed limiting but not eliminating the right to sue in a class action for tort, and their limitations are directed towards achieving what they believe is greater control over large class actions.

The criticism from the Republicans is that in addition to real strong cases being brought, weak cases are being brought to extort settlements. I don't agree with the Republicans, and I think that from what I have seen already in the reaction to the Firestone tire recall, even most Republicans think that a class action would be appropriate to resolve this problem.

Question from guest: Are there not individuals who have died with result to these tires being put on the vehicles?

Anthony Sebok: Yes. No one as far as I know disputes that at least 60 deaths have been linked to the Firestone tires in question. And that is why Ford and Firestone support the voluntary recall they initiated.

Question from Cowhide: Doesn't it seem that only those who had damages other than a tire change would have reason to sue.

Anthony Sebok: That is correct. However, let me point out that in addition to the cost of replacing the tire, there is allegation of fraud. If fraud is proven, then even someone who had no more damage than a tire change, could ask for punitive damages, if the class action includes and proves a fraud claim.

Question from Realist: Don't class-action lawsuits serve the interest of the attorneys and not the victims?

Anthony Sebok: Class-action lawsuits bring together the interest of the attorney with the victims. The hope behind the class-action structure is to provide an incentive to a lawyer to bring a case on behalf of a large group of people who could not otherwise coordinate together to build a case.

That is why we see both individual lawsuits against Firestone for people who have suffered horrible injuries, and class actions for people who have not suffered physical injury, but who would like to have compensation for the fraud they allege behind the tire defect. This second kind of case may not be worth bringing alone by one person, but if 1,000 or 100,000 are bundled together, the case is worth bringing. And if the fraud is proven, then society is better off for having discovered and punished the fraud.

Question from Guest82302: What was Firestone's reason for not calling back their tires in the U.S. after the problems that started in Venezuela earlier?

Anthony Sebok: I do not know what they are going to say. I do know that so far I have not been able to discover a public explanation for the reason why they did not use the data from overseas more quickly than they did. Remember the recall is voluntary, so Firestone and Ford have taken the position that they acted responsibly. They have not yet fully revealed all of the steps they took, and therefore they have not allowed myself or the general public to know with what attitude they approached the overseas data. One of the virtues of a lawsuit is that that information will have to be revealed during discovery.

Question from Scranny: Is there evidence, such as inter-office memos, that prove that Firestone and /or Ford knew about the defective tires well in advance of the recall?

Anthony Sebok: Again, this information will only be fully available if discovery and other government investigations reveals it. There is a lot of anecdotal and partial information suggesting they had a lot of data, but I caution the audience to read this sort of info carefully, because usually a large manufacturer will possess a large amount of data in advance of a decision, but their failure to act on it is not always unreasonable. The real question is not, did they possess the data, but how did they treat it once they possessed it?

Question from mytie: What are some sources for people to find out more about defective tires?

Anthony Sebok: That's not my area of expertise. However, I think I noticed on CNN.com that there are links to resource centers, not just Ford and Firestone, but the U.S. National Highway Traffic Safety Administration , which is a government agency, and also consumers union, which represents the interest of consumers and is very interested in this problem. If concerned, please visit the Ford Web site, Firestone, NHSTA, and consumer's union Web sites, to get all perspectives.

Question from Realist: If Firestone and Ford are found guilty of fraud, how are monetary awards determined?

Anthony Sebok: First, my guess will be that if there is a good case of fraud against them, and it has been consolidated into a national class action, there will likely be a settlement.

However, if it goes to trial, then the fraud damages will be calculated on the basis of the out of pocket expenses to Firestone's customers, and punitive damages, which are determined independently of the out of pocket expenses, and can vary depending on the jury's judgement about how wrongful the defendant's conduct was.

Question from Guest44375: Why cannot the charter just be pulled for a corporation that knowingly hurts people?

Anthony Sebok: There have been attempts to use the secretary of state's power to charter corporations as a stick to punish corporations. The trouble with using charter revocation is that there are good reasons to believe that corporations can change conduct with a change in management, or with a change in board of directors.

And that capital punishment for corporations, like corporate punishment for individuals, may be too extreme a penalty, especially when there are shareholders and employees depending on the corporation. So in conclusion, efforts to execute corporations by revoking their charter have rarely been successful.

Question from tireguest: I own a Ford Explorer with the affected tires, live in the south, and drive on hot roads but still have not been contacted by Ford or Firestone. How does this effect their case, having relied solely on the media? I did not purchase the car from News Channel 12 or CNN; I would have expected reliable and accurate info from the Dealer.

Anthony Sebok: Well, I do not know whether or not Ford and Firestone have attempted to contact each of their customers on record. Traditionally, voluntary recalls rely on the manufacturer contacting the customer. However, I would urge this questioner to use the information that he / she now has from the media, and take steps to determine whether the tires should be replaced.

CNN Host: Do you have any final thoughts for our audience?

Anthony Sebok: I think this case is very good example of why class-action lawsuits are both good and bad for society. If Ford and Firestone did not engage in fraud, then a lot of time and energy that could be spent dealing with this defect will be spent fighting off lawyers. But if they did engage in fraud, then until we have a much stronger federal government, the only source of punishment for companies like this will be the plaintiff's bar.