Musnuff v. Haeger: Large Companies Hiding Evidence

By Michael GrossmanOctober 14, 2016Reading Time: 8 minutes

One of the less discussed cases on the 2016 Supreme Court docket is Musnuff v. Haeger. The case is fascinating on a couple of levels. First, it is more confirmation that in civil litigation, large defendants and their attorneys will often go to great lengths to hide and obscure vital, potentially damaging evidence. Secondly, the case raises serious questions about the inherent powers of the court, those power which are necessary to the proper and efficient functioning of our courts.

Both issues are quite important to understanding how our civil justice system works and its potential shortcomings. Each deserves a thorough examination in their own right. In this article, we'll examine the first issue, the destruction of evidence in civil cases, and look at the more technical issues of the power of courts in a future article.

Who Really Abuses the Court System? Legal Appearance Versus Legal Reality

For those disgusted by lawsuits, the common portrayal of a lawsuit is that a large powerful law firm spots a minor infraction of the law, solicits someone who may have been injured, and then uses the resources of the law firm to force a powerless small business owner into paying what essentially amounts to a protection fee in order to avoid the expense of litigation.

The problem with this picture is that it doesn't at all comport with how lawsuits operate in the real world. Large law firms are generally large because they represent even larger companies in various legal disputes. The typical attorney only makes a bit over $133,000 in a year. In fact, 25% of attorneys make $75,000 a year or less. Certainly, such compensation is the envy of many hard-working Americans, but the fact is that the vast majority of attorneys do not have to resources to engage in legal protection rackets and frivolous lawsuits, even if they were inclined to do so. Those that do have those kinds of resources are busy litigating cases for large corporate clients.

Another allegation is that big bad plaintiffs' attorneys hold hostage, tiny little family outfits like Goodyear Tire and Rubber Company, with its paltry $16 billion a year in sales. According to critics, these defenseless companies have to spend millions of dollars every year on frivolous lawsuits that cost American workers jobs.

Supposedly, people "who can't work for a living" take advantage of our litigious legal culture in order to "strike it rich" by going after these companies for trivial matters.

I realize I may sound a bit sarcastic in my characterization of lawsuit opponents, tort reformers, and their ilk, but these stereotypes don't hold up to the scrutiny of real world cases. The fact of the matter is that the typical lawsuit plaintiff suffered a very real injury at the hands of a company who is much bigger and more powerful than they are. All these injured victims are asking for is the opportunity to make their case that the responsible party should be held accountable for their actions and pay for the damages that their negligence has caused. One such family was the Haegar family.

Haeger v. Goodyear Tire and Rubber Co. Round I

In 2003, the Haeger family was driving in their recreational vehicle when a tire failure caused them to lose control of their vehicle and led to injuries. The tires equipped on the vehicle were Goodyear G159s, which were marketed by Goodyear for use on RVs throughout the 1990s and early 2000s. These tires were originally developed for work vehicles in an urban environment and as such were engineered to be safe at speeds up to 65 mph.

Somewhere along the way, someone tipped off the Haeger family that the tire separation they experienced is not just one of the risks we assume when we decided to pilot several tons of steel and carbon-fiber at high speeds, but the result of a manufacturing defect. Tire separation usually leads to a complete loss of control and in extreme instances vehicle rollovers.

Having been injured and knowing that tires aren't supposed to suffer spontaneous blowouts like the one on their RV did, the Haegers retained an attorney. They apparently made the right call in their attorney, because their legal representation immediately identified the likely culprit as a tire failure due to excessive heat. Based upon the evidence of the accident and the failed tire, they filed suit against Goodyear.

During the initial litigation, they filed papers with the court asking for certain specific tests, as well as all relevant testing. Goodyear's attorneys turned over some tests to the Haeger's attorneys, but they argued that "all relevant testing" was too broad a term. While Goodyear's attorneys claimed that the matter was never adjudicated, since the theory of liability was built upon the tire failing at high temperatures, common sense would dictate that heat tests would be included in the relevant testing.

It's important to note that those who want legal reform are often quick to point out that many novel theories of liability that victim's attorneys present before the court are based on legal "technicalities." In other words, in order to get compensation victim's attorneys will stretch the original meaning of the law to get their case to fit into it. What they fail to mention is that defendants will almost always hide behind whatever "technicalities" they can muster, no matter how ridiculous.

The fact of the matter is that "technicalities" is a loaded term, just like "loopholes" in our tax code. Many times personal injury law is quite technical by its very nature. Experienced attorneys, regardless of what side of the case they are on, have a fiduciary duty to their clients to exhaust whatever legal means can further their clients' interests. In short, "technicalities" are always a convenient straw-man argument, because even the vast majority of highly-educated people are unaware of those specific parts of the law.

For whatever reason (most likely because it would have sunk their defense), attorneys for Goodyear did not hand over heat-stress tests for G159 tires. By failing to hand over relevant speed tests in the case, the attorneys for Goodyear didn't just massage "technicalities", they acted in bad faith, which is sanctionable legal misconduct.

The heat-stress tests weren't just any other piece of evidence, they were what the plaintiffs were looking for. They suspected that when G159 tires got hot enough, they were prone to dangerous failures. Goodyear's own tests proved that this was the case. Rather than do the right thing and face a potentially large amount of liability, Goodyear and their attorneys decided to hide the evidence.

Without this crucial evidence, the Haegers were left with little choice but to accept an undisclosed, but reportedly paltry settlement right before the trial began. This pattern was repeated in dozens of cases across the country over a number of years.

Haeger v. Goodyear Tire and Rubber Co. (9th Cir. 2015) Round II

Shortly after Haeger concluded, there was another lawsuit in Florida where the defendant refused to accept a settlement and the court compelled Goodyear to hand over the formerly concealed heat-stress tests. These tests confirmed that at speeds greater than 65 mph, the tire had the potential to lose integrity from prolonged heat and ultimately blow out. Further it showed that rather issue a recall, Goodyear just changed their labels to say that the tired was rated for 75 mph. A Florida jury awarded the plaintiff in this case full compensation for their injuries.

By sheer coincidence, the attorneys for the Haeger family came across the trial when reading the news. If not for this fortunate turn, it is likely that Goodyear and their attorneys would have been able to get away with their ruse. Realizing that their clients had been duped, the attorneys for the Haeger family filed a complaint in federal district court. The judge heard the case and ruled that Goodyear had intentionally withheld evidence that it should have turned over. Goodyear and their attorneys were penalized for their misconduct by a compensatory sanctions award.

Due to some complex legal issues and possible mistakes on part of the the trial court, the exact amount of the sanctions, and the court's grounds for imposing them have become the center of the dispute in Musnuff v. Haeger, which the Supreme Court will decide in this session.

As best I can tell, the trial court, limited by the fact that the case had already been settled, but infuriated by the actions of Goodyear and their attorneys may have used a novel legal theory as the basis for their sanctions award. Sanctions for misconduct are the immune system of the courts, without them the contagion of misconduct would render our courtrooms absurdist theory, where the pursuit of justice is a mere legal pantomime.

Without getting bogged down in the weeds too much by those concerns (I'll delve into those weeds in a future article), the fact of the matter is that Goodyear withheld vital evidence that torpedoed and an injured family's case.

The lack of outrage is truly bothersome. While lawsuits over Starbucks iced coffee having too much ice grab headlines and promptly get tossed from courts, many businesses go quietly suppress evidence in civil cases with nary a peep from the media. If you do a search for the "Starbucks iced coffee lawsuit," you'll turn up literally hundreds of articles. If on the other hand you search "Goodyear conceals evidence," you literally get 7 articles that actually relate to Goodyear's deceptive practices.

Both practices are examples of abuse of our legal system. However, only one involves undermining the integrity of our justice system and that is the one where a company intentionally concealed damaging information.

Withholding Evidence In a Lawsuit Is a Serious Matter

Our legal system is premised on the idea that we all submit to the authority of the court to settle disputes. That means that each side has a duty to preserve evidence, even if that evidence hurts their case. Without this implicit understanding, the search for justice transforms into a race to destroy evidence. We see this time and time again, particularly in truck accidents. Given the amount of money at stake in a commercial truck accident case, there is a strong incentive for legal representatives to be on the scene as soon as they hear about an accident. These are invariably representatives of trucking companies and their insurers. Early access to the scene means that they can lead the investigators, get stories straight with the truck driver, and in extreme cases remove evidence.

When we tell folks about these stories, their first reaction is to suggest that these things don't really happen, we're exaggerating, or just making things up. The original Haeger v. Goodyear Tire and Rubber Co. case shows that even supposedly reputable organizations will go to great lengths to obscure the truth when a large amount of money is on the line.

One of the criticisms of personal injury lawsuits is that people don't take accountability for their own actions. This charge is generally only leveled at those seeking damages for injuries they have sustained. For whatever reason, the need for businesses and others to be held accountable for their actions is unfortunately overlooked.

It is said that Americans often have a bias towards the little guy, that in some way we're still the small force of citizen farmers who survived the winter at Valley Forge and overthrew the mightiest empire the world had known up to that point. One would think that this would lead to greater sympathy when individual citizens use our court systems and their constitutional rights to pursue redress for injuries they have sustained against much bigger and more powerful companies. Over the last 20 years, that has generally not been the case.

There are fewer clear cut examples than the Haeger case that some companies will intentionally subvert our court system and attempt to avoid the consequences of their actions if they feel it is in their best interest. While the recognition that these underhanded and deplorable practices take place, it is also important to temper that new-found understanding with the proper perspective. Thankfully, most companies do not comport themselves in the manner that Goodyear did in the Haeger and dozens of other similar cases. Like the majority of our citizens, they comport themselves with dignity, respect and a sense of fair-play.

While it may be tempting to smear "large corporations" and "big business," such smears do not help the victims of bad actors and threaten to undermine our faith in the fairness of our courts. However, when a company fails in its duties under our laws, like Goodyear has, it is important to expose their failure in public and hold it up as an example for other companies in similar situations of what not to do.

Reviewing the Haeger case I am struck by the fact that Goodyear not only wronged the Haegers by selling them a defective product, which most likely led to their injuries, but then piled on another wrong by not allowing them to have a fair and open hearing in court. Sadly, families like the Haegers are not alone.