Over the years, manufacturers have invented an
arsenal of stonewalling tactics to prevent plaintiffs from gaining
possession of incriminating documents and to keep evidence of
corporate wrongdoing from reaching the public. Their tactics
are shockingly successful.
Corporate lawyers, generally paid by the hour
and equipped with abundant resources, are strongly motivated
to resist plaintiff attorneys requests for information.
Plaintiff attorneys, who usually are compensated only if they
win a case and then take a percentage of the monetary award,
view the discovery process as overhead. It is in
their best interest for discovery to move quickly. This rarely
occurs.
A lesson in stonewalling
In 1996, the CPSC teamed up with the U.S. Department
of Justice to bring suit against Cosco for failing to report
hazards associated with its toddler beds and guardrails. Section
15 of the CPSA requires manufacturers to report to the CPSC
within 24 hours if they have reason to believe that one of their
products presents a hazard.
The Justice Department maintained that Cosco
knew its toddler beds and guardrails were hazardous long before
the manufacturer reported the danger to the agency. Having recalled
the toddler beds in 1992 and the guardrails in 1994, the agency
already had well-documented evidence that the products were
hazardous. To win the case, the government would have to show
that Cosco knew of the products dangers and failed to
notify the CPSC when dozens of parents complained that their
children had been entrapped in the bed and guardrails.
Coscos lawyers stonewalled throughout discovery,
relying on a number of efficacious tacticsexcessive delays,
boilerplate objections, and evasive responses.
Department of Justice attorneys William Zoffer
and Joseph Gergits sent their first set of interrogatory questions
and document requests to Coscos lawyers in February 1996.18
Twenty-five pages long, the questions covered a lot of ground.
How did Cosco evaluate the products safety before they
were sold? What kind of internal system did Cosco have in place
to relay consumer complaints of entrapment to the companys
executives? What did Cosco do with the recalled toddler beds
that had been returned or that had never left the warehouse?
To try the case fairly, the Department of Justice needed answers
to these questions, as well as the companys records of
product tests, analyses, marketing, consumer complaints, and
entrapments.
A month after receiving the interrogatory and
document requests, Cosco lawyers Peter Winik and Minh Vu asked
for a 30-day extensionthe first of many delays.19 When
they finally responded in April, their incomplete answers suggested
there was much the company wanted to keep secret. Listing 15
boilerplate objectionsincluding the Justice Departments
definitions of Cosco and the original toddler
bedCoscos lawyers quibbled with any question
that they considered to be vague or overly broad or any that
would subject Cosco to oppression, harassment, and undue
burden and expense.20
In response to the governments request
for information about the fate of the recalled toddler beds,
Coscos lawyers complained that the answer would expose
the company to undue burden and expense.21 Furthermore,
they claimed the question was irrelevant to the suit and would
not lead to the discovery of admissible evidence. Winik and
Vu offered only that some headboards and footboards of the recalled
beds had been destroyed, others had been reworked,
and the mattress platforms had been salvaged.22
A week later, Zoffer voiced his annoyance with
Coscos evasive responses. In a letter to Winik and Vu,
he argued that the companys handling of the recalled toddler
beds was relevant to the case, as it bore heavily on Coscos
credibility, a point central to the suit.23 Coscos lawyers
had also put off Zoffers request for the names of customer
service employees who had fielded toddler bed and guardrail
complaints, saying only that they would provide the names upon
request and with reasonable notice.
Zoffer also took issue with the companys
failure to provide the names of those involved in Coscos
product safety committees. Zoffer needed the names, Coscos
lawyers knew, to draw up a list of Cosco employees who would
be asked to give depositions. By withholding this information,
Cosco was unnecessarily delaying the discovery process.
Over the next month, both sides met to try to
resolve the discovery disputes. Cosco attorney Winik agreed
to supplement some of the companys original answers. But
by the first week of June, Cosco had provided no new information.
These matters have been dragging for some time,
Zoffer wrote to Winik, requesting his supplemental answers by
the close of business the next day.24
Cosco responded immediately, but once again produced
only a fraction of the information Zoffer had requested. According
to Winiks response, the recalled toddler beds had been
processed through the Returned Goods Department,
but no one at Cosco could remember who exactly had handled them.25
Nor, apparently, could any executives recall what they had done
upon learning of the bed and guardrail hazards. The company
did, however, furnish a list of executives on its Product Review
Committee and Product Safety Task Force, but no one could tell
Zoffer what was discussed in these meetings. Why? According
to Cosco, no minutes were kept.26
In the Justice Departments next letter
to Coscos attorneys, Gergits expressed his displeasure
with continuing shortcomings in Coscos responses
to . . . interrogatories and document requests.27 Among
the most egregious omissions was Coscos obstinate refusal
to disclose what had happened to the recalled toddler beds.
For the first time, the Justice Department revealed
the source of its continued interest in the issue: The department
had documents that suggested the company had diverted the beds
to Mexico, where they had been sold, and that this had occurred
while the company was reporting to the CPSC that all nonconforming
beds were being destroyed.28 Gergits gave Cosco a week to come
up with a satisfactory answer. Otherwise, he would ask the judge
to order Cosco to respond.
Cosco lawyer Vu responded 10 days later, and
again failed to answer the question.
As it turned out, Cosco executives never had
to reveal what they had done with the recalled toddler beds.
Soon after the Department of Justice took its first deposition,
the case was settled out of court. Coscos stonewalling
had paid off: For $725,000, the company was able to put an end
to all the governments questions.29 By settling the case,
Cosco avoided the repercussions that were sure to ensue when
the companys executives answered pointed questions under
oath.
Cosco Vice President of Manufacturing Robert
Schwartzkopf never had to explain memos that said thousands
of recalled toddler beds had been reworked for Mexico.30
Quality Control/Product Standards Manager Bob Craig never had
to reveal why he had told CPSC Compliance Officer Terri Rogers
that he was aware of only two toddler bed entrapments, shortly
after being copied on a memo that put the count at 23.31 Nor
did Craig, who was identified as Coscos CPSC Representative,
have to explain why he had decided to fix the toddler
bed entrapment problem by adding a warning label to new units,
rather than taking the product off the market and notifying
customers of the beds hazards.32
Lacking the resources to fight Cosco indefinitely,
the Department of Justice and the CPSC were all too willing
to settle the case and move on to the next one. The result:
Consumers continued to remain in the dark about Coscos
dismal track record on infant safety and the highly suspect
actions of its executives.
Confidential settlements
In March 1989, the car 16-month-old Michael Bancroft
was riding in was struck head-on by another car. The crash killed
the oncoming cars driver. Michael broke his neck, was
permanently paralyzed from the waist down, and retained only
partial use of his arms and hands. He had been strapped into
a Kolcraft booster-style car seat.33
Michaels family sued Kolcraft. During discovery,
the familys lawyers learned that other manufacturers of
booster car seats recommended the product for children over
30 pounds. The National Highway Traffic Safety Administration
had a more stringent weight limit: over 40 pounds. Kolcraft,
however, claimed its seat was safe for children between 20 and
40 pounds. Michael weighed 22 poundswithin Kolcrafts
generous weight recommendation, but not within NHTSAs
or those of most other manufacturers.
The Bancrofts attorneys had multiple experts
reconstruct the accident and filmed sled tests of
the car seat ejecting a test dummy the same size as Michael.
Our engineering team quickly came to the conclusion that
20 pounds was inappropriate, said Stephen Kiely, who led
the plaintiffs legal team.34
Three months after Michaels accident, Kolcraft
raised the recommended minimum weight for its booster car seats
to 30 pounds. The company claimed the change had nothing to
do with safety. Rather, it was purely a marketing decision made
to bring them into conformity with other manufacturers.35
Why did Kolcraft originally choose a car-seat
weight restriction that was far more lax than that of its competitors?
The answer to this question remains a mystery. The Bancroft
case never went to trial, and Kolcrafts defense lawyers
went to great lengths to ensure that no one would ever learn
what happened to Michael Bancroft.
In exchange for a settlement payment, Michaels
family and lawyers signed a confidentiality agreement that stipulated
they would never reveal Kolcrafts name to the public.
Kolcraft was identified as the car seats manufacturer
only after journalists tracked down the case through public
court records. The records revealed that Kolcraft had offered
the Bancroft family $4.25 million, plus scheduled payments for
Michaels ongoing care that could have brought the final
settlement to more than $10 million.36
The Bancroft familys dilemma is played
out in lawyers offices every day: Should a family push
a case to trial, or should they settle quietly and move on with
life? A trial can bring public attention to an unsafe product
and spotlight corporate wrongdoing. For this reason, many products
liability lawyers view the dissemination of product safety information
as an important part of their job.
A lawyer who discovers evidence that a
product is designed defectively or is inherently hazardous,
or who discovers repeated evidence of neglect causing injury,
has an overriding responsibility to see that the information
is disseminated as a means of avoiding further injuries,
wrote Kiely, the Bancrofts lawyer, a year before he settled
the Kolcraft car seat case.37
But sometimes when a lawyer wants to take a case
to trial, his or her clients feel otherwise. Parents who take
the witness stand face the likelihood of being blamed by the
manufacturers lawyers and their expert witnesses, repeatedly
and aggressively, for the injury or death of their child.
Despite Kielys statements about the importance
of disseminating public safety information, when Kolcraft offered
his clients millions of dollars to settle, he allowed them to
do so and sign a gag order. Why? Kiely said, In the end,
I agreed because my job is to secure proper care for my client.
And I deemed it inappropriate for the confidentiality agreement
to stand between my client and the settlement.38
When a child is not killed by a product but severely
injured like Michael Bancroft, the rewards of settling out of
court are ratcheted up another notch: The staggering costs of
medical care are often overwhelming. An offer of ongoing payments
over the rest of the childs life becomes too important
to pass up. Overburdened by the cost of Michaels medical
care, concern for a larger public interest was a
luxury the Bancroft family simply couldnt afford.
Confidential settlements have become the norm
in industries like juvenile products, where a companys
financial health rests heavily on its ability to project a nurturing,
caring, safety-conscious public image. This trend toward secrecy
has spawned an intense debate between plaintiff and defense
lawyers. Plaintiff lawyers, resentful of being forced to choose
between a clients immediate needs and the safety and welfare
of the general public, have been pushing for the past 10 years
for legislative solutions.
Since 1990, a handful of states have passed sunshine
laws that prohibit the courts from keeping secrets from the
public. Floridas 1990 Sunshine in Litigation Actone
of the most stringentprohibits any confidential settlement
that conceals information about public hazards.39 In 1993, Washington
passed the Public Right to Know bill, prevailing against the
strong opposition of Boeing Aircraft and other local manufacturers.
Louisiana passed a similar bill in 1995. But in many states,
including California, industry has used its clout to persuade
legislators to vote down sunshine laws. Sen. Herbert Kohl (D-Wis.)
has introduced right-to-know legislation at the federal level
with no luck yet.40
Professor Arthur Miller of Harvard Law School
is among the more vocal advocates of settlement secrecy. He
argues that courts should remain a place for private parties
bringing a private dispute, that plaintiffs have no right
to force a defendant to disclose information the company considers
to be confidential.41
But is it a companys right to determine
what information should remain confidential? Millers critics
argue that when a company markets a product that endangers public
safety, it loses the right to keep product information secret.
Miller claims that prohibiting confidential settlements will
decrease the incentive for corporations to settle out of court
and further burden the already overloaded court system.
In fact, there is no empirical evidence that
this occurs. Settlement rates have not decreased in states with
strong sunshine laws.42 Why? Companies remain strongly motivated
to settle quietly out of court instead of facing public scrutiny
with a full-blown trial.
Consumer advocates insist that it is time for
the corporate game of Ive Got a Secret to
end. Secret settlements conceal safety information that can,
quite literally, kill a child. The time has come to enact
a federal antisecrecy law, argues commentator Andrew Miller.
Access to public court records like settlement agreements should
be limited only when a judge has determined that the records
do not conceal information about public hazards. Overall,
antisecrecy legislation will provide the public with access
to information that can be used to foster change and work to
safeguard the world in which we live.43
The unknown
Standing in the infant products aisle at Wal-Mart,
parents sizing up a Cosco baby swing or stroller may be able
to draw a few conclusions about the products manufacturer.
The sheer amount of Cosco goods on the shelves could lead them
to the correct conclusion that the company sells more car seats,
strollers, cribs, and play yards than just about any other company.44
Maybe their friends have Cosco products, or perhaps they were
enticed to the store by a Cosco ad while flipping through Childbirth
or American Baby magazines in the obstetricians
office.
It is quite likely, however, that the parents
will know next to nothing about Coscos safety track record.
They will have no idea that since 1990, the company has recalled
over 2.5 million product units that caused over 400 injuries
and at least three deaths. Parents will have no idea that the
U.S. Department of Justice fined the company for withholding
safety information from the CPSC. They will have no idea that
Cosco employees who were implicated in the safety information
cover-up also play a significant role in the voluntary standard-setting
process for infant products today.
Why? Because the U.S. regulatory and judiciary
systems allow Coscoand all other infant product manufacturersto
dupe trusting parents and caregivers into believing that their
baby products are safe.
Notes
1. See Robert S. Adler, From Model
Agency to Basket CaseCan the Consumer Product Safety
Commission Be Redeemed? 61 ADMIN. L. REV. 107 (1981).
2. Information Bank Abstracts, N.Y. TIMES, Nov.
26, 1970, at 46.
3. Information Bank Abstract, N.Y. TIMES, Nov.
18, 1971, at 94.
4. 15 U.S.C. §§2051-2084 (2000).
5. 5 U.S.C. §552 (2000).
6. S. REP. NO. 813, 89th Cong., 1st Sess. 3 (1965);
see also Note, The Impact of Restrictive Disclosure
Provisions on Freedom of Information Act Requests: An Analysis
of Section 6(b)(1) of the Consumer Product Safety Act, 64
MINN. L. REV. 1021, 1024 (1980).
7. See generally CONSUMER SAFETY AND INDUSTRY
COMPLIANCE WITH THE NEW REPORTING REQUIREMENTS OF THE CONSUMER
PRODUCT SAFETY COMMISSION: A BLUEPRINT FOR COOPERATION IN THE
90S (1992); Frances E. Zollers & David Barry, A
Regulation in Search of a Rationale: An Empirical Study of Consumer
Product Safety Act Section 6(b) and Its Effect on Information
Disclosure Under the Freedom of Information Act, U.S. ADMIN.
L. REV. 455 (1991).
8. Adler, supra note 1, at 107.
9. E-mail from Russ Rader, Public Affairs Officer,
U.S. Consumer Prod. Safety Commn, to Marla Felcher (Mar.
6, 2000) (on file with author).
10. DENISE FIELDS & ALAN FIELDS, BABY BARGAINS
247 (3d ed. 1999).
11. SANDY JONES, CONSUMER REPORTS GUIDE TO BABY
PRODUCTS 136 (6th ed. 1999).
12. Press Release, U.S. Consumer Prod. Safety
Commn, No. 00-098 (Apr. 13, 2000) (on file with author).
13. Press Release, U.S. Consumer Prod. Safety
Commn, No. 97-180 (Sept. 2, 1997) (on file with author);
Press Release, U.S. Consumer Prod. Safety Commn, No. 94-037
(Feb. 8, 1994) (on file with author); Press Release, U.S. Consumer
Prod. Safety Commn, No. 93-095 (July 22, 1993) (on file
with author); Press Release, U.S. Consumer Prod. Safety Commn,
No. 95-121 (May 16, 1995) (on file with author); Press Release,
U.S. Consumer Prod. Safety Commn, No. 97-110 (Apr. 24,
1997) (on file with author).
14. NATL INJ. INFO. CLEARINGHOUSE, U. S.
CONSUMER PROD. SAFETY COMMN, INFANT SWINGS (2000).
15. Letter from Todd Stevenson, Freedom of Information Act Officer,
U.S. Consumer Prod. Safety Commn, to Marla Felcher (Dec.
15, 1999) (on file with author).
16. See Paula Mergenhagen, Product
Liability: Who Sues? AM. DEMOGRAPHICS, June 1995, at 48.
17. RALPH NADER & WESLEY J. SMITH, NO CONTEST:
CORPORATE LAWYERS AND THE PERVERSION OF JUSTICE IN AMERICA 60
(1996).
18. Plaintiffs First Set of Interrogatories
and First Request for Production of Documents, United States
v. Cosco, Inc., No. IP95-1648-c-H/G (S.D. Ind. Feb. 7, 1996).
19. Letter to William Zoffer, Attorney, U.S.
Department of Justice, from Peter L. Winik, Attorney, Latham
& Watkins (Mar. 5, 1996) (on file with author).
20. Defendants Response to Plaintiffs
First Set of Interrogatories and First Requests for Production
of Documents at 2, United States v. Cosco, Inc., No. IP95-1648-c-H/G
(S.D. Ind. Apr. 10, 1996).
21. Id. at 6.
22. Id. at 7.
23. Letter to Peter L. Winik and Minh N. Vu,
Attorneys, Latham & Watkins, from William Zoffer, Attorney,
U.S. Department of Justice (Apr. 19, 1996) (on file with author).
24. Letter to Peter L. Winik and Minh N. Vu,
Attorneys, Latham & Watkins, from William Zoffer, Attorney,
U.S. Department of Justice (June 3, 1996) (on file with author).
25. Defendants Supplemental Response to
Plaintiffs First Set of Interrogatories and First Request
for Production of Documents at 2, United States v. Cosco, Inc.,
No. IP95-1648-c-H/G (S.D. Ind. June 3, 1996).
26. Id. at 8.
27. Letter to Minh N. Vu, Attorney, Latham &
Watkins, from Joseph C. Gergits, Attorney, U. S. Department
of Justice (June 20, 1996) (on file with author).
28. Id.
29. Settlement Agreement, U. S. Department of
Justice and U.S. Consumer Product Safety Commission and Cosco,
Inc. (Aug. 30, 1996) (on file with author).
30. Memorandum from Don Dillman, Cosco, Inc.,
to Roy Schwartzkopf, Vice President of Manufacturing, Cosco,
Inc. (May 7, 1992) (on file with author). Other company employees
copied on the memo were Ray Hall, Cosco, Inc.; Bob Craig, Quality
Control/Products Standards Manager, Cosco, Inc.; and Brenda
Smith, Customer Service Manager, Cosco, Inc.
31. Memorandum from Terry Emerson, Cosco, Inc.,
to Distribution List with following initials: DZ, JR, RS, BS,
RH, RK, BC, TF, BS, JF (Dec. 11, 1991) (on file with author).
32. Id.
33. Dick Dahl, Strictly Confidential,
MASS. LAW. WKLY., Jan. 11, 1993, at 37.
34. Id. at 45.
35. Id.
36. Id. at 37.
37. Stephen J. Kiely, Public Access to Private
Lawsuits, MASS. LAW. WKLY., Feb. 19, 1992, at 18.
38. Dahl, supra note 34, at 37.
39. Richard A. Zitrin, Legal Ethics: The Case
Against Secret Settlements (Or, What You Dont Know Can
Hurt You), 115 J. INST. STUDY LEGAL ETHICS 1 (1999).
40. Interview with Anonymous Source, U.S. Consumer
Prod. Safety Commn (July 19, 1999) (on file with author).
41. Zitrin, supra note 40.
42. Id.
43. Andrew D. Miller, Comment, Federal Antisecrecy
Legislation: A Model Act to Safeguard the Public from Court-Sanctioned
Hidden Hazards, 20 B.C. ENVTL. AFF. L. REV. 371, 413 (1993).
44. Alison Golub, Industry Insight, SMALL
WORLD, Oct. 1999, at 60.
E. Marla Felcher, a freelance writer, lives
in Cambridge, Massachusetts. This article is excerpted with
permission from her book Its No Accident: How Corporations
Sell Dangerous Baby Products. © 2001, Common Courage Press.