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A lawyer’s battle to puncture secrecy and legal misconduct by Goodyear

in Investigations

Ted Rohrlich
FairWarning

When Arizona lawyer David Kurtz signed on to represent accident victims in a lawsuit against Goodyear Tire & Rubber Co., he had no idea what he was getting into. Had he known, he said, he would never have taken the plunge.

Thirteen years after that plunge, a seemingly routine lawsuit has morphed into a million-document monster that has called into question the integrity of America’s largest tire maker. It also has illustrated how secret settlements can keep the public in the dark about potentially deadly hazards, and has consumed Kurtz’s career.

Kurtz’s clients were four adult members of the same family who were traveling in a motor home in 2003 when the Goodyear tire on their right front wheel suddenly lost its tread, leading to a high-speed, single-vehicle crash in which they were seriously injured. It turned out that their lawsuit would be one of several dozen to be filed for people injured or killed in wrecks involving a specialty Goodyear tire.

It was a tire designed for stop-and-go urban delivery trucks. But it also fit large motor homes and Goodyear sold between 40,000 and 50,000 of the tires for that purpose.

Goodyear decided motor homes were a suitable market — despite results of its own lab tests showing that the tire could overheat so badly during extended highway travel that it might lose its tread. After Goodyear was sued, its lawyers didn’t share those results with Kurtz, even though court rules and professional ethics required them to.

By concealing the tests, a federal district judge and an appeals panel found, Goodyear cheated Kurtz’s clients out of their opportunity for a fair trial, and the company escaped with a secret low-ball settlement that likely saved Goodyear millions of dollars. A year after that 2010 settlement, Kurtz learned by happenstance the truth of Goodyear’s deception.

The aftermarth of the 2003 crash that led Leroy Haeger and three other members of his family to sue Goodyear Tire & Rubber Co. Haeger is visible trapped inside.

Goodyear declined a request to tell its side of the story in depth and would not agree to allow its tire experts or attorneys to be interviewed. But it issued a statement that it still believes the tire, known as the G159, is defect-free and safe for use on motor homes.

“Nothing is more important to Goodyear than the safety and quality of our products and the people who use them,” the statement said.

Kurtz, for his part, has made calling Goodyear to account his personal calling.

He abandoned the rest of his law practice so that he could focus all of his energy on trying to prove that Goodyear harmed his clients and scores of others by irresponsibly allowing a tire it knew could be dangerous to remain on the road.

He returned to the courtroom where his clients had been cheated and persuaded the judge to impose a jaw-dropping, albeit still unpaid, $2.7 million in sanctions on Goodyear and its attorneys. The judge agreed that deliberate corporate decisions were made to violate court rules and legal ethics by hiding evidence.

Kurtz then used those findings to launch a spinoff of his clients’ original lawsuit, this time accusing Goodyear and its lawyers of fraud. That lawsuit was settled last year on secret terms.

Meanwhile, Kurtz won court permission to use sealed documents from 13 of the 41 known lawsuits over injuries and deaths attributed to the tire’s failures on motor homes to spark an ongoing investigation by the National Highway Traffic Safety Administration, which regulates the safety of vehicles and tires.

He is now trying to interest federal prosecutors in pursuing criminal charges against the company and its attorneys. “Goodyear’s misconduct is so egregious in my mind that the need for punishment is obvious,” he said.

In its statement, Goodyear said it has a “robust process for identifying potential safety-related defects… When potential issues or trends are identified, they are raised to the appropriate individuals and action is taken as necessary.”

Arizona lawyer David Kurtz gave up the rest of his legal practice to focus on litigation against Goodyear Tire & Rubber Co.

Statistics that Goodyear produced recently under court order, however, can be interpreted quite differently. They appear to show that the G159, when used on motor homes, is the most failure-prone tire in recent history, linked to at least 10 deaths, 88 injuries, hundreds of property damage claims and thousands of warranty adjustments.

Goodyear stopped producing the tire for motor homes 15 years ago and it is unknown how many may remain in service. The tire was intended to last 100,000 miles and, if re-grooved, 300,000.

But Kurtz dismisses arguments that his pursuit of Goodyear is so dated that it has lost relevance.

Not for his clients, he says.

Some of them still wake up every day in chronic pain.

Fueling Kurtz’s persistence

What has fueled Kurtz’s extraordinary persistence is difficult to say.

He may be especially empathic about the difficulties of people in chronic pain. His wife worked as his paralegal and office manager until the year before he filed the original Goodyear lawsuit, when a drunken motorbike rider collided with her while she was on foot. She broke her back in three places and has been in pain since. He said the decision to stick with the Goodyear case was actually made by both him and his wife

He also made it clear that he takes his professional responsibility as an officer of the court seriously and was dismayed to learn that Goodyear’s lawyers apparently did not.

Kurtz was the third of six children of a Phoenix surgeon. One visit to an operating room as a teenager, observing a quadruple bypass, made it clear to him that he did not want to follow in his father’s footsteps. But a chance encounter with a neighbor who was an attorney set him on a different professional course. Kurtz remembers “being a long-haired kid shooting hoops,” when the neighbor called out that he should get a haircut.

“You don’t look like my dad,” Kurtz recalled shooting back, a retort that caused the neighbor to observe, “’with a mouth like that, you should be a lawyer.’”

“When I got my license to practice law,” he said. “I thought of it as an honor. A lawyer’s first job is to be an officer of the court … and if everybody does that job, the system works.”

The clients

Kurtz’s clients were Leroy Haeger, a 70-year-old retired electrician; Haeger’s wife, Donna, 69; their son, Barry, 45; and his wife, Suzanne, 42. All four were riding in Haeger’s four-year-old Gulf Stream Coach motor home.

They were on their way to a medical conference in New Mexico, where they hoped to learn more about a rare disease afflicting another family member, when their lives were upended on a highway just outside the small city of Truth or Consequences.

The right front tire, original equipment on Haeger’s 38-foot-long motor home, suddenly lost its tread.

Haeger quickly lost control of the 15-ton vehicle, which veered sharply to the right, off the highway and onto a patch of desert, where it overturned and skidded to a stop on its side.

Haeger was pinned in the driver’s seat, his lower leg so badly mangled that it would require 17 surgeries. His son, riding beside him, managed to extricate himself from the crumpled vehicle. But Haeger’s wife and daughter-in-law, who were riding in the rear, were trapped, buried under debris. As was the case with Haeger, rescue workers had to cut through wreckage to free them.

Haeger and his wife were airlifted to a hospital. Haeger’s wife had a broken jaw, teeth, wrist, foot, ribs and toes. Her Achilles tendon was also severed and she is said to suffer from chronic pain. The Haegers’ daughter-in-law had a crushed arm and also remains in chronic pain.

Nothing if not meticulous

When he took their case, Kurtz was 49 and had broad experience in civil litigation. He said he had spent 18 years at one of Arizona’s largest firms, mainly defending corporations and insurance companies. Then he went into business for himself as a plaintiff’s lawyer, working for contingency fees. He would get an agreed upon share of whatever his clients collected, which worked out to about $700 per hour. At his law practice’s peak, he said he employed 10 attorneys.

But they are now gone—casualties of his decision seven years ago to devote his entire law practice to the Goodyear case.

Kurtz said that decision has cost him millions.

One day this summer, the now 62-year-old Kurtz surveyed his deserted law offices in the sweltering Phoenix suburb of Scottsdale. Dressed in sockless loafers and jeans—the long pants, he said, a concession to a rare visitor—Kurtz talked for hours about his experiences with Goodyear and its attorneys, taking breaks now and then to step outside and smoke a cigarette in the 110-degree heat.

To ground a visitor in the passage of time, Kurtz pointed to a framed photo of one of his sons taken when the boy was finishing elementary school and Kurtz was starting this case. That boy is now a lawyer.

The Goodyear case was Kurtz’s first involving a tire. He set out to educate himself on tire safety by reading a two-volume set of technical reports written by tire experts, including some from Goodyear. The reports were published by NHTSA, the regulatory agency.

Kurtz was nothing if not meticulous. He recalled figuring out in college that if he read an assignment 13 times, he could be sure of getting an A. So that’s what he did.

One observation seemed to jump from the pages as he read the technical reports. There seemed to be a consensus among experts that, as one of them put it, “Heat is the great enemy of tires.”

This intrigued Kurtz. Goodyear had designed the tire in question for urban delivery trucks, which tended to travel short distances at moderate speeds, conditions not expected to generate much heat. No significant problems had been reported with this use.

But Goodyear had found an additional market for the tire on large motor homes like Haeger’s, which tended to cover long distances at highway speeds, conditions likely to generate much more heat.

A hypothesis and a roadblock

Kurtz developed a hypothesis that Haeger’s tire failed because it was exposed to too much heat — and he set out in pretrial discovery, when parties in a lawsuit exchange information, to test his hypothesis.

Goodyear claimed that heat had nothing to do with the failure of Haeger’s tire. It argued that the tire failed because it had been fatally weakened sometime earlier when Haeger had struck  road debris—an event Haeger testified never occurred.

Kurtz deposed Goodyear’s experts and asked them how hot this tire would have to get before its tread would be in danger of falling away. Their answer was more than 200 degrees.

Kurtz then asked Goodyear to produce results of any laboratory tests it had done that would show how hot the tire actually got at sustained highway speeds.

This is where he hit a roadblock.

Goodyear’s lawyers balked at handing over results of such tests and engaged in what an appeals court justice later described as sophistry to mislead the judge into believing they had already disclosed to Kurtz whatever relevant test results they had.

A researcher to the rescue

There was little Kurtz could do about this misrepresentation at the time. When he protested, U.S. District Court Judge Roslyn Silver made it clear that she trusted Goodyear’s local counsel, Graeme Hancock, a shareholder in what many considered Phoenix’s most prestigious law firm, Fennemore Craig, to behave honorably and disclose all relevant evidence. She grew exasperated at Kurtz’s unsubstantiated insinuations that Hancock was hiding something.

On the day in 2010 the lawsuit was finally set for trial, Kurtz still lacked the test results he had by then been requesting for five years. Rather than go to trial without enough evidence, Kurtz’s clients agreed to a secret settlement with Goodyear.

That is where this story likely would have ended were it not for the work of independent safety researcher Sean Kane, who had been tracking another G159 tire case in Florida and had decided to write about it on his website, safetyresearch.net.  An auto industry blog, jalopnik.com, also has reported extensively on the issue.

The Florida case was the only G159 lawsuit known to have gone to trial. The year after Kurtz’s case settled, a jury awarded the accident victims in the Florida case $5.6 million.

Following the verdict, the protective order sealing evidence in the Florida case lapsed. It was soon reinstated when the plaintiffs agreed to a secret settlement with Goodyear in return for Goodyear’s promise not to appeal the jury verdict. But during the lapse, Kane assembled a list of test results Goodyear had disclosed under court orders in that case.

Kurtz recalled being floored to read that Goodyear had produced in the Florida case the very tests that he had repeatedly requested in his own case, but that Goodyear had never turned over.

Returning to the courtroom

Kurtz returned to the courtroom of Judge Silver to ask her to sanction Goodyear and its attorneys for their deception.

Silver held a hearing at which she said she had been “under the impression that Goodyear had produced all test data relevant to Plaintiffs’ claims.”

She acknowledged that she had grown exasperated at Kurtz because his “repeated attempts to cast aspersions on Mr. Hancock appeared misguided. Of course, now that Goodyear has been forced to admit additional information does exist, that exasperation was misplaced.”

She said that if the case had not already been settled, she would punish Goodyear by entering a default judgment.

Instead, she ordered Goodyear, Hancock and his law firm, another Goodyear lawyer, Basil Musnuff, and Musnuff’s Akron, Ohio-based firm, Roetzel & Andress, to pay the Haegers $2.7 million in sanctions.

Musnuff and his firm had been hired by Goodyear to coordinate its responses to all of the G159 lawsuits. He reported to Goodyear’s assistant general counsel, Deborah Okey, who, according to court records, had final say on what information Goodyear’s lawyers disclosed.

Judge Silver blasted all three lawyers in a 66-page ruling that she began with a lecture. “Litigation is not a game,’’ she wrote. “It is the time-honored method of seeking the truth…. When a corporation and its counsel refuse to produce directly relevant information an opposing party is entitled to receive, they have abandoned these basic principles.”

Judge Silver concluded that Hancock, Musnuff and Goodyear made “repeated deliberate decisions to delay the production of relevant information, make misleading and false in-court statements, and conceal relevant documents.” Goodyear appealed the sanctions order, and U.S. Supreme Court has directed the lower court to recalculate the amount.

All three lawyers have moved on. Web searches show Hancock is now an attorney for Young Life International, a Christian ministry geared toward children. Okey became a motivational speaker. Musnuff appears to have retired. All three declined to comment.

Among the most important concealed documents were those that dealt with Goodyear’s test results, which showed that, at sustained highway speeds, the tire’s internal temperature exceeded the 200-degree mark at which Goodyear’s experts had said the tire might fail. 

Locking up secrets

In addition to hiding evidence from the lab tests, Goodyear apparently locked up secrets by abusing rules intended to let businesses that are being sued keep their proprietary information from being publicly disclosed.

In Kurtz’s case and in other lawsuits involving deaths and injuries related to the same type of tire, lawyers for Goodyear routinely persuaded judges to sign blanket protective orders that effectively gave Goodyear sole authority to decide what information was proprietary and therefore could not be disclosed, ever, to anyone who was not working directly on the case.

None of the judges who issued these orders conducted hearings to determine if protective orders were really necessary.

Goodyear then used the protective orders to keep attorneys in the dozens of cases involving the G159 from sharing information with one another. Thus, Goodyear could disclose information if ordered to do so in one case without fear that a lawyer in another case would also get it.

Goodyear also customarily settled lawsuits over the tire’s alleged failures with secret agreements before trials that would have risked exposing internal documents in open court.

Goodyear said its aim was to protect valuable trade secrets from competitors.

Judge Roslyn Silver ordered Goodyear and its lawyers to pay $2.7 million in sanctions. She said they made “repeated deliberate decisions to delay the production of relevant information, make misleading and false in-court statements, and conceal relevant documents.”

But Arizona Superior Court Judge John R. Hannah, who recently reviewed six banker’s boxes full of court records that Goodyear had stamped confidential, shot holes in this claim. He said he found no documents that contained trade secrets or other commercially sensitive information that Goodyear should have been allowed to protect.Hannah was openly skeptical about Goodyear’s claim that the lack of court findings that the tire was defective showed that it was safe. By negotiating secret settlements to avoid trials, the judge observed, “Goodyear has avoided exposure to a finding of public safety risk and spun the outcome as ‘there is no risk.’”

Behind the veil of secrecy, Goodyear had accomplished something else: keeping the regulators at NHTSA from knowing what was going on.  But last year, Hannah, took steps to change that.

Hannah took control of protective orders in 13 of the 41 known G159 lawsuits and allowed Kurtz to examine sealed documents so that he could provide a thorough report to the federal agency.

In response, NHTSA opened an investigation this year.

Kurtz still can’t believe he needed court permission to report a problem to a safety regulator. But otherwise Goodyear might have sued him for violating the protective order in his own case. Goodyear had already tried to get one attorney cited for contempt of court for breaching a protective order in another case.

Over Goodyear’s objections, Hannah also ruled that the nonprofit Center for Auto Safety, co-founded by consumer activist Ralph Nader, had standing to enter the case to represent the public’s interest. Hannah said that allowing the center to intervene would give the public confidence that NHTSA would do a thorough job.

NHTSA’s press office did not respond to a written request for comment.

Goodyear says it is cooperating fully with NHTSA’s probe. But it has appealed Hannah’s decisions to allow the center to intervene and to dissolve the protective orders. Hannah has delayed his orders from taking effect until Goodyear’s appeals are resolved.

The director of the Center for Auto Safety, Jason Levine, said that while only somewhat more than  40,000 of the tires were distributed for use on motor homes between 1996 and 2003, Goodyear has acknowledged that more than 3,000 had problems. Most were handled through warranty adjustments, but there were also hundreds of property damage claims and the 98 claims of injuries or deaths.

Failures reported at this high a rate, Levine said, appear to make this “the most dangerous or potentially most dangerous per unit tire that’s ever been on the road.”

“It continues to boggle the mind,” Levine said, “as to why they didn’t [issue a] recall.”

“What we know so far is scary as hell,” he said. “Goodyear has hidden information—potentially willfully—from the government and the public. This is an opportunity to force that information into the light.”

This story was produced by FairWarning (www.fairwarning.org), a nonprofit news organization based in Southern California that focuses on public health, consumer and environmental issues.

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