Yesterday's New York Times has an article discussing the Senate hearing during which a National Highway Traffic Safety Administration official testified regarding the agency's knowledge of, and failure to take action on, GM cars' defects. The story is a good illustration of the limitations of the policy argument in favor the defense based on preemption in products liability cases.
It is now known that the NHTSA knew of the defeats in GM cars for some time but did not take action. As a result, the cars continued to be on the market and caused the deaths of a number of people. It wasn't until a plaintiff's lawyer brought a lawsuit that the defect was exposed and GM felt the need to recall millions of vehicles.
This controversy is important for tort law in general because tort reformers and those who favor the defense of preemption typically argue that we should leave regulation of products to the government agencies that are charged with overseeing the particular industry. According to this view, it is inefficient and unfair to allow courts to consider arguments related to product safety when there are governmental agencies with more expertise to handle those issues.
The argument makes sense, but only in the abstract. When you consider reality, it is the argument that proves to be inadequate and inefficient. The NHTSA budget, including the budget to investigate defects, has fallen since 2002, and it is currently less than GM's CEO's compensation. Also, deregulation efforts by the Bush administration allow companies to withhold more information from government regulators.
When those government agencies that are supposed to be regulating the industry, or watching out for our safety, are under staffed, under funded, ill equipped to do their job, or are simply not doing their job, it is the tort law system itself that has to come in to do the job. It is unfortunate that some people had to die and that someone had to file a lawsuit to get GM to take action, but if it hadn't been for that, it is likely more deaths would have occurred.
One of the most important goals of the tort law system is to provide incentives for deterrence of dangerous conduct and to encourage more safety. When it comes to products, hopefully this would mean that products will be safer and that consumers will face fewer risks when using them. Tort reformers' efforts to rely on those who create the risks or those who have proven incapable of providing adequate regulation or control only leads to a system that provides less safety while protecting the wrongdoers' profits.
An adequate safety system must be based on a combination of things that includes a tort law system that can help expose problems when other agencies can't or won't.
This was the third time in recent years that an NHTSA official testified alongside an auto Iindustry executive to answer for Americans’ deaths. Given the current system, unfortunately, it is not likely it will be the last.