The last Samurai, Suzuki’s knockabout sport utility vehicle, rolled off the assembly line in 1995. The Japanese automaker retired the popular model after just seven years of production.
Suzuki lawyer George F. Ball blames the early demise on Consumer Reports magazine, which heavily publicized the SUV’s rollover potential. “They wouldn’t leave it alone,” he said.
At least, that’s the case that Ball will soon roll out before an Orange County, Calif., jury.
Alleging a type of defamation known as product disparagement, the automaker is seeking $60 million in damages from the magazine’s corporate parent, Consumers Union (C.U.).
For the magazine and publications like it, the stakes may be much higher.
Last spring, a federal appeals judge warned that a loss by Consumers Unions at trial could signal the death knell for the entire consumer ratings industry.
Brushing aside the financial consequences, Consumers’ lead trial attorney, Steven N. Williams, said, “I don’t think they could survive the judgment of the public if they did what Suzuki said they did.”
Courtroom history, however, appears to be on the magazine’s side.
Since it was founded in 1936 by a group of activists that included American Civil Liberties Union founder Roger Baldwin and Brotherhood of Sleeping Car Porters organizer A. Philip Randolph, Consumers Union has never lost or settled a product disparagement suit.
Among the 14 losing plaintiffs are F. Korbel & Bros., purveyors of Korbel Champagne; the car battery manufacturer Exide Technologies; the Bose Corp., a maker of high-end stereo speakers; and Isuzu Motors.
Isuzu lost a four-week trial in 2000. Bose won $115,000 at trial in 1981, then lost in the U.S. Supreme Court.
Waiting in the wings is another case, filed by the high-end home products retailer the Sharper Image, which sued in September.
Suzuki sued Consumers Union in 1996, a year after it dropped the Samurai and more than eight years after Consumer Reports first reported that the vehicle had a tendency to roll over. Suzuki Motor Corp. v. Consumers Union of the U.S. Inc., No. CV 96-00340 (C.D. Calif.).
From his office in Aliso Viejo, Calif., Ball charged that C.U. rigged its tests to produce TV-ready footage of the SUV tipping up on two wheels as it navigated C.U.’s course. The nonprofit organization allegedly used the report and resultant publicity to raise money for itself.
Consumers’ lawyers deny the charges.
Three years ago, Suzuki lost a trial court motion for summary judgment. Then, in a 2-1 decision, it won reinstatement from the 9th U.S. Circuit Court of Appeals when the circuit court refused to apply principles laid down in the union’s precedent-setting Supreme Court victory in Bose v. Consumers Union of the U.S. Inc., 466 U.S. 485 (1984).
Bose complained that a 1970 article comparing stereo speakers said Bose’s speakers reproduced the music so that “individual instruments seemed to grow to gigantic proportions and tended to wander about the room.” At trial, the tester who first wrote those words said he really meant that the sound tended to wander along the wall between the speakers. The trial judge found actual malice-a reckless disregard for the story’s truth.
Reversing, the Supreme Court said appeals courts must give more scrutiny to libel verdicts than any others, to ensure that speech deserving of constitutional protection was getting it.
C.U.’s Bose story was opinion speech, six of the nine justices held, even if that opinion was flawed. Citing the court’s own precedent in New York Times v. Sullivan, 376 U.S. 254 (1964), Justice John Paul Stevens wrote that error “is inevitable in free debate, and . . . must be protected if the freedoms of expression are to have the ‘breathing space’ that they need to survive.” With that, the high court ended the 14-year-old Bose case.
Suzuki got a break when a 9th Circuit majority found a difference between a loss at trial and a loss afterward.
Bose applies only to post-trial verdicts, the court said, so it was not required to afford C.U. any more latitude than any other defendant in any other type of case. Suzuki had claimed the magazine reported with actual malice. The 9th Circuit said that is a triable issue of fact and remanded the case for trial.
In a later dissent, Judge Alex Kozinski railed against the court’s failure to follow Bose. “If C.U. can be forced to go to trial after this thorough and candid disclosure of its methods,” he wrote, “it will be impossible to issue a meaningful consumer review that a band of determined lawyers can’t pick apart in front of a jury.”
On Nov. 3, the Supreme Court rejected C.U.’s petition for certiorari. U.S. District Judge Alicemarie Stotler will likely set a trial date on Feb. 2.
C.U. General Counsel Michael N. Pollet argued both the Bose and Suzuki appeals. Asked why Bose didn’t control Suzuki’s outcome, he said, “The 9th Circuit applied an incorrect legal standard.”
Pollet has been the organization’s lawyer since 1968. Although he said that he is not a C.U. employee and still maintains his own practice, three years ago he moved that practice into the Yonkers, N.Y., headquarters of C.U.
From the road, it’s easy to mistake the offices for a factory, which it once was. The two-story sand-colored brick building was formerly home to Gestetner, a mimeograph machine maker. Behind the glass-barriered reception desk is a skylit atrium walled on one side by brushed metal panels bearing the names of C.U.’s donors, large and small, corporate and private.
Beyond the foyer, a type of controlled mayhem prevails as the organization tests vitamin pills, exercise treadmills, plasma-screen TVs and vacuum cleaners.
Road testing is not done here but at a test track in East Haddam, Conn., where a driver for the magazine is alleged to have induced the Samurai to tip up on two wheels.
Pollet’s small, ground-floor office is decorated with framed editorial cartoons lampooning the rollover-prone SUV.
As GC, Pollet has the job of reading every issue of Consumer Reports before it goes to press. The magazine’s objective, he said, is to publish its findings without exposing itself to legal liability. “If there’s a mistake, we correct it,” he said. “Even if it’s not actionable, we correct it.
“When we are sued and we believe we are right, we do not, as a matter of practice and policy, settle such lawsuits.”
Perhaps because of that stance, Pollet said, Consumers Union is rarely sued for product disparagement, even though each magazine contains hundreds of judgments.
A spokesman said that C.U. reviewed 2,800 products last year. Only one manufacturer, Sharper Image, was sufficiently aggrieved to file suit. Sharper Image Corp. v. Consumers Union of the U.S. Inc., No. 03-CV-04094 (N.D. Calif.)
The company claims that Consumer Reports twice disparaged its Ionic Breeze air purifier: first in a February 2002 article in which it called the device “ineffective” compared with others, and in October 2003 when, after more tests, it declined to change its opinion.
In the first tests, Consumers Union ran the Ionic Breeze, a fanless device that is said to use electrostatic fields to ionize and capture impurities, for a shorter period of time than the company says it needs to work properly. In the second, it tested the device for a longer time and got similar results.
Sharper Image lawyer E. Robert Wallach of San Francisco said Consumer Reports‘ methodology “is indicative to us that they just don’t get it, or they don’t want to get it.” The magazine’s reporting of its results under these conditions, Wallach said, shows malice.
Asked if the report would fall under the rubric of opinion and be seen by the court as protected speech, Wallach said, “That’ll be the argument for the judge or jury.”
Pollet said the case is really about a product that doesn’t work. “There is little or no chance that that suit will succeed,” he said.
Suzuki’s Ball rejects the notion that the Samurai story was a constitutionally protected opinion piece.
“This is no opinion,” he said. “If it’s subject to being proven true or false then it’s actionable.”
Consumers Union made the Samurai story a staple of its advertising and marketing campaigns, damaging his client’s reputation and hurting sales of its other vehicles, Ball said.
It also took some credit for the Samurai’s demise. As part of a “time line” in the magazine’s 1996 60th Anniversary issue, it said that after Consumer Reports‘ Samurai story, vehicle “sales dwindled away.”
C.U.’s Pollet said his organization was not the first to criticize the vehicle publicly. He cited as one example a 1986 article by the Washington Post‘s Warren Brown, titled “Hari kari on the highway.” Suzuki was sued more than 200 times by people claiming that they had been hurt in Samurai rollovers, he said.
“Every manufacturer of motor vehicles is sued,” Ball countered. “Every manufacturer of SUVs has vehicles that roll over.”
He said that between 1985, when the vehicle debuted, and the 1988 Consumer Reports article, only six Samurai rollover suits were filed. After the article the number jumped to 60 in two years, he said, calling many of them meritless. Just six went to trial, he said, only one successfully. Ball conceded that there have been 140 Samurai rollover deaths, a figure which, he said, is “unfortunate but well within the range of other vehicles.”
How to test
A likely key to the case is the answer David Pittle, a C.U. vice president, gave to a reporter’s question at a press conference announcing the Samurai findings. Addressing the effort needed to tip the SUV, Pittle said, “This is not turning the wheel like a stunt driver . . . .This is a very benign kind of maneuver.”
“What he meant,” Pollet explained, “was a maneuver that any ordinary driver can make.”
Ball called Pittle’s statement “a lie,” and said, “It takes massive and rapid steering to tip the vehicle up.” He claimed that the test was rigged and went on, “Consumers Union had the chance to call it as it should have been called . . . objectively. They went to the dark side.”
From his Burlingame, Calif., office, Consumers Union trial counsel Williams, a partner in Burlingame’s Cotchett, Pitre, Simon & McCarthy, said he’s unworried.
“Taking the statements at the press conference as a whole, I don’t think there’s merit to it,” he said. “I don’t see Suzuki ever having a verdict.” If it did, he said, “I don’t see a judge upholding that verdict.”
He pointed to his client’s no-settlement stance and said, “They’ll defend their name and defend on the merits. The case can’t really be about money.”
Harris’ e-mail address is email@example.com.