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Unsafe at Any Speed University of Maryland Francis King Carey School of Law DigitalCommons@UM Carey Law Faculty Scholarship Francis King Carey School of Law Faculty 2015 (Still) "Unsafe at Any Speed": Why Not Jail for Auto Executives? Rena I. Steinzor University of Maryland - Baltimore, [email protected] Follow this and additional works at: https://digitalcommons.law.umaryland.edu/fac_pubs Part of the Consumer Protection Law Commons, Criminal Law Commons, Torts Commons, and the Transportation Law Commons Digital Commons Citation 9 Harvard Law & Policy Review 443 (2015). This Article is brought to you for free and open access by the Francis King Carey School of Law Faculty at DigitalCommons@UM Carey Law. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of DigitalCommons@UM Carey Law. For more information, please contact [email protected]. \\jciprod01\productn\H\HLP\9-2\HLP209.txt unknown Seq: 1 29-MAY-15 14:47 (Still) “Unsafe at Any Speed”1: Why Not Jail for Auto Executives? Rena Steinzor* I. “THE YEAR OF THE RECALL” 2 In 2014, the manufacturers of motor vehicles sold in America recalled sixty-four million vehicles, an astounding number that represented about forty-five percent of all passenger cars registered in 2012, the last year for which numbers are available, and that also exceeded the combined total of cars recalled during the previous three years.3 The momentum for this bad run began to build in 2009 when motorists reported sudden acceleration problems with Toyota cars, a brand that had been the gold standard for safety.4 Motorists’ anxiety escalated when General Motors (GM) admitted that faulty ignition switches could cause its compact cars to stall if drivers brushed their key chains with their knees, disabling both the power steering and air bags.5 The final straw was the discovery that air bags manufactured by the Takata Corporation, which dominates the U.S. market for that essen- tial part, could shoot shrapnel into people’s faces upon deployment.6 1 This famous phrase is the title of book published by Ralph Nader in 1965: Unsafe at Any Speed, The Designed-In Dangers of the American Automobile, which is largely credited with inspiring the creation of the auto safety regulatory system in the U.S. * Rena Steinzor is a professor at the University of Maryland Carey Law School and the president of the Center for Progressive Reform, www.progressivereform.org. She is the author of Why Not Jail? Industrial Catastrophes, Corporate Malfeasance, and Government Inaction published by Cambridge University Press in December 2014. She thanks research librarian Susan McCarty and research assistant Diana Griffin for their help. 2 Several commentators used this language to describe the behavior of automobile manufacturers in 2014. See, e.g., Paul A. Eisenstein, After ‘Year of the Recall’ Watchdog Needs an ‘Enforcer’, NBC NEWS (Dec. 14, 2014), http://perma.cc/9SH6-86RW (quoting Mike Rozembajgier, a vice president at Stericycle, which works with car companies to implement safety-related service). 3 Christopher Jensen, A Record Year of Recalls: Nearly 64 Million Vehicles, N.Y. TIMES, Feb. 12, 2015, http://www.nytimes.com/2015/02/13/business/auto-safety-recalls-set-record-of- nearly-64-million-vehicles-in-2014.html, http://perma.cc/6342-Q7VE. According to the U.S. Department of Transportation, 183 million “light duty” vehicles, a category that includes pas- senger cars and trucks, were on the road in 2012, the last year for which such statistics are available. Bureau of Transportation Statistics, Table 4-11: Light Duty Vehicle, Short Wheel Base and Motorcycle Fuel Consumption and Travel, U.S. DEP’TOF TRANSP., http://perma.cc/ 4XVB-3B4V. 4 Scott Evans & Angus MacKenzie, The Toyota Recall Crisis: A Chronology of How the World’s Largest & Most Profitable Automaker Drove into a PR Disaster, MOTOR TREND (Jan. 2010), http://perma.cc/TCQ9-X82E. 5 See Peter Valdes-Dapena & Tal Yellin, GM: Steps to a Recall Nightmare, CNNMONEY (2015), http://perma.cc/RMG5-QVBN. 6 Pete Bigelow, The Long History Behind Takata’s Massive Airbag Recalls, AUTOBLOG (June 27, 2014, 4:29 PM), http://perma.cc/FTT5-PXFU. \\jciprod01\productn\H\HLP\9-2\HLP209.txt unknown Seq: 2 29-MAY-15 14:47 902 Harvard Law & Policy Review [Vol. 9 Outraged members of Congress hauled top auto executives and govern- ment officials into oversight hearings where blame was dished out in hearty portions. Mary Barra, GM’s new chief executive officer (CEO) and the first woman to head a major U.S. automaker, testified four times,7 doing her best to appease the audience by pledging to make things right.8 Unfortunately for GM, Takata, and their customers, however, recalls did not provide an imme- diate solution because replacement parts were in short supply, delaying re- pairs by as much as two years.9 Although the media uniformly condemned all three carmakers, none was higher profile nor more controversial than GM. Mary Barra’s contrition before Congress contradicted the company’s lower-profile behavior in court. GM strongly resisted judicial “park it” or- ders that would advise consumers to stop using their cars until they were fixed10 and fought successfully to invoke a liability shield against many con- sumer damage suits, which it obtained as part of the federal bailout that released it from bankruptcy proceedings in 2009.11 The company’s split personality did not win it any friends at the Depart- ment of Justice (DOJ). As this article goes to press, federal prosecutors have reportedly discovered “criminal wrongdoing” at the company and “are ne- gotiating what is expected to be a record penalty.”12 Anonymous sources briefed on the inquiry said charges could be brought against both the com- pany and individual employees.13 Beyond the satisfaction they took in scolding some of the most power- ful business people in the world at oversight hearings, members of Congress had what appeared to be the even more gratifying experience of excoriating the civil servants in charge of the National Highway Traffic Safety Adminis- tration (NHTSA). The condemnation was bipartisan: Senator Claire McCas- kill (D-MO) said that NHTSA was “more interested in singing ‘Kumbaya’ 7 Melissa Burden & David Shepardson, GM CEO Mary Barra Won’t Attend Awards Event, DETROIT NEWS, Nov. 12, 2014, http://perma.cc/XXC9-NNV8. 8 Bill Vlasic & Danielle Ivory, Barra Faces Scrutiny in House Over G.M. Recalls, N.Y. TIMES, June 18, 2014, http://www.nytimes.com/2014/06/19/business/house-hearing-on-gen- eral-motors-recalls.html, http://perma.cc/PJX3-6LBX. 9 Jerry Hirsch, Many Recalled Vehicles Do Not Get Repaired, Posing a Safety Risk, L.A. TIMES, Dec. 27, 2014, http://perma.cc/Z82C-7PAE (reporting on delays in repairs at GM deal- erships); David Sedgwick, Airbag Inflator Shortage Plagues Industry: With Tight Capacity, 2 Years Needed for Replacements, AUTOMOTIVE NEWS (Nov. 24, 2014), http://perma.cc/RF66- 2YPH (explaining that Takata Corporation will not be able to produce an adequate number of replacement airbags to satisfy a Honda recall for two years and that other manufacturers would have to invent such replacements); Hilary Stout & Rebecca R. Ruiz, Recalled G.M. Cars Remain Unrepaired, N.Y. TIMES, Nov. 3, 2014, http://perma.cc/5NTG-A5D4. 10 Katie Lobosco, Judge Won’t Force GM to Issue ‘Park It Now’ Order, CNNMONEY (Apr. 17, 2014), http://perma.cc/AGX5-M6LA. 11 Mike Spector, GM Heads Back into Court, WALL ST. J., Feb. 16, 2015, http://www.wsj .com/articles/gm-heads-back-into-court-1424128905, http://perma.cc/N378-UQ45. 12 Danielle Ivory, Ben Protess, & Bill Vlasic, G.M. Inquiry Said to Find Criminal Wrong- doing, N.Y. TIMES, May 22, 2015, http://www.nytimes.com/2015/05/23/business/gm-inquiry- said-to-find-criminal-wrongdoing.html, http://perma.cc/FK6R-ZRN2?type=live. 13 Id. \\jciprod01\productn\H\HLP\9-2\HLP209.txt unknown Seq: 3 29-MAY-15 14:47 2015] (Still) “Unsafe at Any Speed” 903 with the manufacturers than being a cop on the beat.”14 A report written by staff for Republican members of the House Energy and Commerce Commit- tee attributed the recall crisis to NHTSA’s “lack [of] focus and rigor.”15 As this article goes to press in the early summer of 2015, mixed messages prevail. The independent administrator of GM’s victim compensa- tion fund has acknowledged that 104 people were killed in accidents caused by faulty ignition switches.16 NHTSA says that as many as 89 people were killed in Toyota sudden acceleration accidents.17 These numbers will almost certainly increase as product liability lawsuits are resolved and the GM-initi- ated compensation fund processes more claims. Despite the worst safety re- call crisis it has endured in many years, GM was quite profitable in 2014, allowing CEO Barra to retain her star status in business media.18 NHTSA has a new administrator who has pledged extensive reforms although he has yet to receive sufficient additional resources to make many of those changes feasible.19 A consortium of ten automakers led by Toyota has taken the unu- sual step of convening to fund an independent engineering firm to develop a permanent fix to the airbag problem.20 Most noteworthy of all, federal prose- cutors have launched criminal investigations at GM and Takata.21 As federal prosecutors seem to recognize, criminal prosecutions of indi- vidual executives are a promising route to real change in an industry that makes equipment that is as dangerous as it is essential. Although the regula- tory system was intended to prevent such deadly outcomes, it has failed, and 14 Kevin Robillard, Congress Blasts Auto Safety Regulator, POLITICO (Sept.
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