While the Ninth Circuit Court of Appeals in California is receiving much attention for its “Pledge of Allegiance” decision this week, little attention has been paid to another decision by another three-judge panel of the court that could have far reaching implications for the consumer movement and the First Amendment. The case involves a lawsuit filed in 1996 by Suzuki Motor Corporation against Consumers Union (CU) and its magazine, Consumer Reports. On June 25th, the court overruled a previous ruling by a federal district court which had refused to allow Suzuki’s product-disparagement suit to go before a jury.
This story dates back to 1988, when Consumer Reports reported that its tests had proven that the Suzuki Samurai, a sports utility vehicle (SUV), “rolls over easily” and had to be given a rare “Not Acceptable” rating. This was disputed by the National Highway Transportation Safety Administration (NHTSA), which said that its tests showed that the Consumer Reports charges were invalid. But the damage was done, and the popular magazine’s report resulted in U.S. sales of the Samurai dropping from 81,349 in 1987 to just 5,041 in two years. It had sold 150,000 in its first three years on the market.
What is shocking is the extent of the evidence that shows the lengths to which Consumer Reports went to fabricate their charges against Suzuki. For example, when the Suzuki Samurai was first tested in 1988 by CU, it was tested 37 times on the same course that they had been testing cars on since 1973, and it performed better in accident avoidance than any other SUV tested at that time. Of the two test drivers who drove it that day, one reported that it “never felt like it would tip over,” and the other gave it the highest possible rating and wrote in his notes, “responds well…corrects quickly…leans normally…no real problem.”
But apparently CU’s editorial director, Irwin Landau, wasn’t satisfied. David Pittle, CU’s technical director, tried nine times to roll the car over without success, but finally succeeded in getting it to tip up by turning the car so sharply that it went off the test course. A video shows onlookers cheering and yelling. This time they finally got the car to tip on the course, but it was difficult. Landau ordered a new course to be designed to help achieve the outcome he was seeking. A tape shows an employee crying out, “All right, Ricky baby,” when test driver Rick Small finally succeeded in getting two wheels off the ground on the new course.
One of the key witnesses against CU was Ron Denison, a former lab technician at CU’s testing facility. He quoted Landau as telling him, “If you can’t find someone to roll this car, I will.” Then, according to Suzuki, CU created a false affidavit to discredit Denison. But instead of discrediting Denison and his evidence, CU was forced to admit that the affidavit was false in almost every detail.
So why would this great guardian of the consumer engage in such sleazy actions? Apparently out of plain and simple greed, perhaps with some pseudo-environmental rationalization as a cover. CU had apparently over-extended itself by purchasing a new headquarters for $30 million and it was looking for a big story to boost sales. They used the story repeatedly in fundraising solicitations over many years, even after evidence emerged that the results of their tests were rigged to damage the reputation of Suzuki. Another beneficiary was another liberal interest group, the trial lawyers, who feast on this type of opportunity. Nearly 200 lawsuits were filed against Suzuki charging that the design of the Samurai was responsible for injuries and deaths.
Accuracy in Media had submitted an amicus brief supporting Suzuki’s appeal, charging that CU acted with “actual malice.” The case was on par with Dateline NBC’s rigging of a test to show that GM pickup trucks with fuel tanks on the side were “fire bombs waiting to explode.” We argued that the First Amendment is not absolute, and that CU had crossed the line if either they were “purposely avoiding the truth” or “actually knew its statements were false.” We argued that both propositions in this case were true.
Two of the three judges on the Ninth Circuit panel agreed, saying that the district court “did not give adequate credit to…evidence of test-rigging.” The dissenting judge argued that the majority denied CU the full procedural protection afforded by the First Amendment.