|
|
|
September 18, 2000
Attorney General Bill Lockyer
Department of Justice
Office of the Attorney General
1300 I Street, Suite 1740
P.O. Box 944255
Sacramento, CA 94244-2550
Dear Attorney General Lockyer,
Consumers Union requests that you investigate
whether Bridgestone/Firestone and Ford, and their managers, including
officers and executives, have violated the California Corporate
Criminal Liability Act (Penal Code §387). The apparent failure
to alert state officials of the dangerous defects associated with the
6.5 million Firestone tires that are now subject to a national
recall, as well as the apparent failure to alert state officials of
the 1.4 million additional Firestone tires for which the National
Highway Traffic Safety Administration (NHTSA) issued a "consumer
advisory," may violate Penal Code §387.
The California Corporate Criminal Liability Act
was inspired by the need for greater accountability from businesses
and individual managers to prevent the concealment of dangers in
products or workplace settings that could put consumers or workers at
risk of death or injury. The Act was needed to assure that
individual managers would not make decisions that could cause death
or great harm to consumers based on a cost-benefit type analysis of a
company's interests. The Ford Pinto was a major impetus behind the
passage of the Act; the legislative history of Penal Code §387
contains references to stopping the kind of decision making by
corporate executives in that case.
The statute, in pertinent part, reads:
Any corporation, limited liability company, or person who is a manager with respect to a product, facility, equipment, process, place of employment, or business practice, is guilty of a public offense punishable by imprisonment…or by a fine…or by both that fine and imprisonment… if that corporation, limited liability company, or person does all of the following: 1) Has actual knowledge of a serious concealed danger that is subject to the regulatory authority of an appropriate agency and is associated with that product or a component of that product or business practice. 2) Knowingly fails during the period ending 15 days after the actual knowledge is acquired, or if there is imminent risk of great bodily harm or death, immediately, to do both of the following: a) Inform the Division of Occupational Safety and Health in the Department of Industrial Relations in writing…b) Warn its affected employees in writing…(Penal Code §387).
At the September 12th U.S. Senate Commerce
Committee hearing to examine the August 9th recall of 6.5 million
Firestone ATX, ATX II and Wilderness AT Tires, which are used on Ford
trucks and SUVs, particularly the popular Ford Explorer, Senator John
McCain stated that he had serious questions about when Ford and
Firestone knew of a pattern of tire defects. "The mounting evidence
is making it increasingly difficult to credibly believe that neither
of these companies knew anything of this problem before this summer,"
McCain said (Associated Press, "Documents Show Ford Officials
Concerned About Tire Pressure," September 12, 2000).
Ford's 1999 recalls of Firestone tires on Ford
Explorers sold in 16 countries abroad (similar to the tires sold on
Ford Explorers in the U.S.) were not reported to NHTSA. While
companies may not be legally bound to notify NHTSA regarding oversees
recalls of defective products under federal law, these facts may
require disclosure under Penal Code §387. If Firestone and/or
Ford personnel had actual knowledge of a serious concealed danger in
the tires, or in their use, and failed to give the notice required by
Penal Code §387, they may have violated the California Corporate
Criminal Liability Act. If that is true, prosecutions should be
brought to hold the responsible individuals accountable to the
law--and to community standards of moral behavior.
Consumers Union was instrumental in creating
the California Corporate Criminal Liability statute, signed into law
by then-Governor George Deukmejian in 1990, as an appropriate law
enforcement tool aimed at preventing socially unacceptable acts by
the people who run businesses. A victim is not required in order to
prosecute under Penal Code § 387; proof of knowledge of a
concealed danger (as defined by the statute) and failure to report it
are the necessary elements. California is the only state with a law
that requires individuals within businesses, which could include
Chief Executive Officers, to report known, hidden dangers in the
products or workplaces under their management. Failure to notify the
appropriate state agency could be a felonious act under the statute.
Since its inception, the statute has been used
to prosecute only the most egregious cases of corporate negligence
and misconduct. Consumers Union recently reviewed the use and
implementation of Penal Code §387. Our most recent research
shows that, to date, there have been six cases prosecuted under the
statute. Despite the measured use of this law, there have been three
business-sponsored attempts to repeal the law (one in 1995 and two in
1998), all of which Consumers Union and numerous District Attorneys
have successfully fought. Three reports published on the Corporate
Criminal Liability Act are attached for your information.
The Bridgestone/Firestone/Ford case once again
reminds us of the need for greater accountability, both by
corporations and by the people who run them, when they knowingly sell
dangerous, defective products to consumers. Over the last decade,
there have been 50-100 lawsuits related to the Bridgestone/Firestone
tires subject to the recent recall. Many of those lawsuits were
settled with protective orders in place, keeping that critical safety
information from the public. However, Bridgestone/Firestone officials
had knowledge of the lawsuits and settlements. If these officials
had reported the tire defects to Cal-OSHA pursuant to Penal Code
§ 387, that would have triggered the statutory requirement for
Cal-OSHA to report the defect to NHTSA. See Penal Code § 387
(a) (2) (A).
The California Corporate Criminal Liability Act
was intended to be applied to the actions of businesses, as well as
the individual managers of those businesses, whose failure to act
subjects consumers to the risk of death or great bodily injury. On
September 7, a bill was introduced in Congress by Senator Arlen
Specter that would impose criminal penalties on the employees of any
corporation who knowingly and recklessly introduce a defective
product into interstate commerce. Federal officials are seeking to
enact the very criminal liability that the California Corporate
Criminal Liability Act has already provided for nearly a decade.
We urge you to investigate whether there have
been violations of the California Corporate Criminal Liability Act in
the Firestone/Ford matter, and if so, to prosecute on behalf of
California consumers.
Sincerely,
Elizabeth Imholz, Director
Consumers
Union, West Coast Regional Office
