Flax Verdict

Nashville Tennessee jury returned a verdict in the total amount of $105,500,000 against the DaimlerChrysler CORPORATION

PRESS RELEASE
11/23/04

Today a Nashville Tennessee jury returned a verdict in the total amount of $105,500,000 against the DaimlerChrysler Corporation (Daimler) brought alleging seatbacks in Daimler minivans were unsafe, defective, and unreasonably dangerous.

The case involved injuries to and the death of an 8 month old child, Joshua Flax, in a rear end collision which occurred in Davidson County, TN on June 30,  2001 . The case was brought by the parents, Jeremy Flax and Rachel Sparkman. Joshua was injured when his grandfather's minivan was hit in the rear. The front seat passenger's seatback collapsed backward, and the passenger's head hit Joshua's forehead, fracturing his skull. Joshua died the next day.

"Daimler has known for over 20 years that these seats are deadly dangerous and never warned anybody," Plaintiffs' attorney James E. Butler, Jr. said after the verdict. "Instead, they continue to claim there's nothing wrong and to try to mislead the press, public, and juries. This jury saw through that, and has warned Daimler to stop that misconduct."

Evidence of other wrecks where serious injuries or death have been caused by the collapsing seat backs showed that many times the damage to the minivan was so minor the minivan could be driven from the scene. "When the seats collapse in every crash test and in low-speed wrecks, there's obviously something wrong with the seats, and Daimler knows it," added Plaintiffs counsel George W. Fryhofer III.

Daimler declined to call any of its employees to trial to defend the seat design. "That sort of says it all," Butler told the jury in closing argument. Instead, Daimler brought two experts who testify regularly for automakers, Michael James and David Blaisdell. The evidence showed Daimler had paid those two some $4 million for testifying in cases since 1998. Each of those witnesses admitted that had the stronger seat been installed in the Sparkmans' minivan, Joshua Flax would not have been injured at all. David Blaisdell also admitted that deaths and injuries from the collapsing minivan seats would continue in the future.

For 20 years Daimler and, prior to the 1998 merger with Daimler Benz, Chrysler, have been marketing minivans as "safe family" vehicles, despite the fact that before the first minivan was ever sold Chrysler's crash tests proved that seatbacks were collapsing in relatively minor rear impacts. That defect, plaintiffs claimed, endangers both the occupant of the seat and children sitting behind the collapsing seats. DaimlerChrysler has sold over 7 million of the minivans.

It was undisputed at trial that Joshua Flax was seated properly in a child safety seat behind the front passenger seat in his grandparents 1998 Dodge Caravan. That vehicle was struck in the rear by a pickup truck driven at excessive speed by Louis Stockell of Nashville.

All five of the other passengers in the minivan walked away without any significant injury, as did Mr. Stockell. Only Joshua was injured, and all witnesses at trial agreed that he was injured only because of the collapsing seat back.

The evidence showed the impact was minor. Though Stockell was speeding at the time, the minivan was also moving forward and the change in velocity (Delta V) was only 17 to 20 mph.

Stockell did not defend himself. The Court found him at fault for causing the wreck. The jury returned a verdict at 4:00 p.m. on November 22, 2004 finding that Daimler was also liable and at fault, and that the seats were defective and unreasonably dangerous. The jury further found that Daimler was negligent for failing to warn at the time of sale of the known dangers of collapsing seatbacks, and for failing to warn after the sale when information continued to come to Daimler's knowledge demonstrating the seats in all its minivans were unsafe and dangerous. The jury awarded $5 million for the wrongful death of Joshua, and $2.5 million for his mother's claim for negligent infliction of emotional distress - she witnessed the injury and death of her 8 month old son.

The jury also decided that punitive damages should be returned against Daimler, and returned today to hear evidence and argument regarding what amount of punitive damages should be imposed against Daimler to punish it and deter it from continuing such misconduct. The jury imposed $98,000,000 in punitive damages against Daimler.

The evidence showed that, in addition to the seats failing in crash tests for the last 24 years, customer complaints began to come in to Chrysler's call center in the 1980s. Customers complained that seats were collapsing, and that children were being injured. Chrysler responded with form letters claiming the seats performed as designed and there was nothing wrong with the seats.

Plaintiffs presented evidence that the seats had failed in every rear impact test conducted by Chrysler known to plaintiffs. Daimler failed to produce a single such test in which the seatbacks did not collapse.

In fact, in one rear crash test conducted by Chrysler in 1984, the test engineers braced the driver's front seat to keep it from collapsing on and damaging instruments which had been placed in the seat behind.

The evidence showed that many claims had been made against Daimler for damages, and that Chrysler's own employees had considered such seats "deficient".

For years, Daimler has warned parents to put children in the 2nd row of seats behind the front seats, even including photographs in advertisements telling parents to put their children there. When Daimler began selling an "integrated" child seat in its minivans, it put that seat behind the driver's seat. Daimler knew that those front seats were liable to collapse in rear and, on occasion, in other impacts, and that children had in fact been injured as a result. Yet Daimler had never done any crash testing with a child-sized dummy in the back seats.

The owners of the 1998 Dodge Caravan involved in this wreck, Rachel Sparkman's parents Jim and Sandra Sparkman of Nashville, testified that they had bought the Caravan because they believed it to be a "safe family" vehicle. They did not know what Daimler knew - that there was a severe danger of the front seats collapsing in rear impacts.

Daimler had also never done any side by side testing showing the performance of the weaker minivan seats with stronger seats which have been available for more than 20 years. In fact, Daimler itself has sold vehicles with much stronger seats - the Chrysler Sebring, the Ram pickup truck, and all Mercedes vehicles.

The evidence showed without dispute by Daimler that Chrysler had considered putting stronger seats in the minivans back in 1980, but did not do so because of cost considerations. The evidence showed that when the minivans were redesigned for the 1996 model year, Chrysler again considered putting in stronger seats with dual recliners - which doubles the seat strength - but again, did not do so because of "cost".

It was not disputed that Daimler had available to it stronger seat designs that could have been used at minimal increased cost. Dr. Saczalski said, without dispute by Daimler, that the stronger seats would have cost Daimler $7 per seat.

The only side by side comparison of weaker and stronger seats showed the jury was that done by Dr. Saczalski. It showed that the stronger seats would not have collapsed and would not have caused injury to Joshua Flax.

Daimler defended the case by arguing to the jury that there was a "debate" among engineers about whether stronger seats were better than weaker seats, and that stronger seats could cause whiplash and other neck injuries to occupants of the seats because they would not "yield" enough. That was the point of the testimony by defense experts James and Blaisdell. But Daimler did not present any evidence that there had ever been any such "debate" within Daimler or Chrysler, or that stronger seats - including those used in some of Chrysler's vehicles and all of Mercedes' vehicles - had in fact caused any injury, or that Chrysler or Daimler engineers ever considered any of the opinions of James and Blaisdell in designing minivan or any other seats.

"Daimler does not believe the defense its lawyers presented at this trial," Butler told the jury in closing argument. "Chrysler and Mercedes have both been selling stronger seats that all agree would have prevented this injury, and Mercedes has been trashing this 'weaker is better' defense for 15 years," Butler said after the verdict.

In 1992, Chrysler appointed a "Minivan Safety Leadership Team" to investigate safety problems with its minivans, and named Paul Sheridan, a Chrysler manager, to chair that team. The Safety Leadership Team concluded that the seatback problem needed to be fixed, and criticized Chrysler for defending allegations against the seats by claiming the seats satisfied the federal safety standards (Federal Motor Vehicle Safety Standard (FMVSS) # 207). Sheridan testified at trial that Chrysler's response was to destroy meeting minutes of the Safety Leadership Team, disband the team, and fire Sheridan. Chrysler sued Sheridan for $82 million in an attempt to muzzle him. Chrysler collected zero from Sheridan. (Chrysler's claims and Sheridan's counter claims were dismissed.)

Sheridan also testified that in the mid-90s, Chrysler, the National Highway Traffic Safety Administration ("NHTSA") - the federal agency charged with automotive safety - and the U S Department of Justice (DOJ) reached a deal whereby they agreed to keep information about Chrysler minivan safety problems from the press and the public. The deal was that DOJ would defend NHTSA against any Freedom of Information Act ("FOIA") requests for the information.

Daimler did not bring any witnesses to dispute Sheridan's testimony.

There was considerable other testimony at trial about NHTSA's involvement, or lack of involvement, in improving auto safety standards. Every witness who testified agreed that the federal seat standard, #207, was inadequate and irrelevant. Indeed, Daimler's own Mercedes engineers had been arguing that the seat standard was obsolete for years. NHTSA's own staff had written that the standard was inadequate. In 1989, plaintiffs' expert witness, Dr. Ken Saczalski, had filed a petition with NHTSA asking it to increase the safety standard. Most automakers, including Chrysler, had opposed that request. When the trial commenced, Dr. Saczalski's petition had been pending for 15 years, while NHTSA "studied" the issue.

At 9:00 a.m. on the morning of November 16, 2004 , during the presentation of Daimler's evidence at trial, Daimler's lawyer introduced a posting by NHTSA that very morning in the Federal Register, announcing that it was suspending its study. Defense counsel argued that announcement "gutted" plaintiffs' case. Plaintiff responded that it simply confirmed what the evidence had already demonstrated - that NHTSA was never going to do anything about seat safety. Plaintiff also pointed out that the sudden NHTSA announcement was not coincidental - that it was timed for use by Daimler at this trial. NHTSA notified no one of its decision except Daimler. NHTSA did not even notify the scientist who had started the issue by filing a petition 15 years before, Dr. Ken Saczalski. The decision was no coincidence: NHTSA's current Chief Counsel is Jacqueline Glassman, who came to NHTSA from the legal staff of Daimler, and the past Associate Administrator of NHTSA for Rulemaking, Barry Felrice, now works for Daimler.

"NHTSA has become a fraud," Butler said after the trial. "It's got a revolving door - those in charge come from the auto industry and leave to go to the auto industry, and they keep the technical staff from getting anything done to improve safety." In fact, nearly every top official of NHTSA since 1981 has gone to work for the auto industry upon leaving the agency.

It is not known exactly how many adult occupants of those seats and children sitting behind those seats have been killed and injured. Daimler has made no attempt to find out. Plaintiffs did present evidence of "other similar incidents" at trial, but those were limited by the Court to incidents involving the same or similar seats, similar impacts at similar speeds, and serious injuries. Plaintiffs proved that 3 adults and 3 children had been killed as a result of the collapsing seats prior to the wreck which injured Joshua Flax, and another 31 adults and children had been seriously injured, including paraplegia, skull fractures, and brain damage.

Judge Hamilton Gayden III of the First Circuit Court of Davidson County Tennessee presided over the trial.

Plaintiffs were represented by James E. Butler, Jr., George W. Fryhofer III, Leigh Martin May , and Cliff Orr of the Butler Wooten & Peak LLP firm, and by Gail V. Ashworth of Gideon & Wiseman, a law firm in Nashville, and were ably assisted by paralegals Beth Glen and Ashley Vinson .

Daimler was represented by Lawrence Sutter of Cleveland Ohio and Joy Burns of Franklin, Tennessee.