In a closely watched case involving the Texas government standards defense, the Texas Supreme Court has remanded the case to a Dallas district court for a new trial. Kia Motors Corporation and Kia Motors America, Inc. v. Ruiz (No. 11-0709) arose from an automobile collision in which the driver’s side air-bag failed to deploy. The family of the deceased driver sued Kia, alleging that the air-bag was defectively designed, specifically that defective wiring connectors in the air-bag system created an open circuit that prevented deployment. The jury found that Kia was negligent in the design of the air-bag system, Kia’s negligence was a proximate cause of the plaintiff’s injury, and Kia was grossly negligent in failing to remedy the defective design. The trial court set aside the jury’s gross negligence finding and awarded actual damages of nearly $900,000 against Kia. The Dallas Court of Appeals affirmed (348 S.W.3d 465).
The Texas Supreme Court granted review and considered three issues on appeal: (1) whether §82.008, TCPRC, which establishes a rebuttable presumption that a manufacturer is not liable for a product design defect if the product complies with applicable federal safety standards, applied to the alleged design defect in this case; (2) whether legally sufficient evidence supported the jury’s finding of negligence; and (3) whether the trial court erred in admitting a spreadsheet summarizing warranty claims involving air bags in similarly designed vehicles from the same manufacturer. In summary, the Court ruled that: (1) §82.008 did not apply, (2) the evidence was legally sufficient to support the verdict, and (3) the trial judge erred in admitting the spreadsheet and that the error was harmful. Consequently, the Court remanded for a new trial.
TCJL filed an amicus curiae brief arguing that the Dallas Court of Appeals erroneously determined that the government standards defense did not apply to the passive restraint system at issue in the case because federal regulations establish a “performance” standard for such systems rather than a “safety” standard. The plain language of §82.008(a) requires a manufacturer to establish that the product’s design, in this case the drivers-side frontal air bag, complied with mandatory safety standards that applied to the product and that governed the product risk that allegedly caused the harm. Nowhere does §82.008(a) carve out a “performance” standard and exempt it from the application of the statute, as Ruiz argued and the court of appeals apparently concurred. In order to become operative, the statute requires the existence of “mandatory safety standards or regulations,” not mandatory design standards. No one in the case disputed that Federal Motor Vehicle Safety Standards (FMVSS) 208 establishes mandatory safety standards to reduce the risk of injury and death from motor vehicle accidents. A motor vehicle manufacturer that fails to comply with FMVSS 208 may not market or sell a motor vehicle in this state or country. §82.008(a), therefore, unambiguously applies to the type of passive restraint system at issue in the case in this respect. TCJL argued further that the Dallas Court of Appeals use of legislative history to construe the statute was both unnecessary and erroneous because the statutory language is clear on its face.
The Supreme Court concurred with Kia’s and TCJL’s reading of §82.008. Writing for a unanimous court, Justice Lehrmann ruled that the statute requires a product’s design to comply with mandatory federal safety standards and that the Federal Motor Vehicle Safety Standards are by their terms safety standards. To read the statute as applying only to specific federal design standards, Justice Lehrmann wrote, “impermissibly adds language and alters the statute’s plan meaning. Moreover, such an interpretation would deter manufacturers from creating new and better designs to improve safety.” Justice Lehrmann footnoted TCJL’s amicus brief, as well as those submitted by the Association of Global Automakers, Alliance of Automobile Manufacturers, and Texas Association of Defense Counsel, for the proposition that §82.008 does not require compliance with a federal design standard.
Although the Court concluded that §82.008 does apply to products designed to meet mandatory federal safety standards, it held that those standards did not govern the product risk that allegedly caused the harm and, therefore, no presumption of non-liability arose under the statute. Citing a pair of U.S. Fifth Circuit Court of Appeals decisions, Justice Lehrmann ruled that §82.008 “requires that a safety regulation govern product risk, not a particular product defect.” The opinion goes on to state that “courts must distinguish between the alleged defect and the risk arising from that defect” in order to evaluate whether the manufacturer’s compliance with the regulation triggers the presumption of non-liability under §82.008. In this case, the regulation requires the manufacturer to test the frontal air bags and seat belts for the maximum force and acceleration the occupants may encounter in a frontal collision. As Justice Lehrmann put it: “The test thus measures how well the vehicle’s air bags and other restraint systems protect occupants. But the test presumes air bag deployment. It does not measure or apply to air-bag failure rates, and it is that risk–the risk of occupant injury due to the failure of the air bag to reliably activate and deploy–that arises from the alleged defect and is at issue in this case.” The opinion contrasts a federal regulation governing seat-belt assembly anchorages to “reduce their likelihood of failure” with the lack of any similar language in FMVSS 208, which governs air bags.
The Court’s decision raises questions about the scope of the government standards defense, certainly in crashworthiness cases and perhaps elsewhere. Whatever the reason the air bag did not deploy in this instance, there is no question that the automobile manufacturer manufactured a vehicle which complied in all respects with the FMVSS. The distinction that the Court draws between air bag and seat belt regulations might well be questioned, since one may reasonably presume that the air bag safety standards assume that air bags are designed to deploy and that their failure to do so is one of the risks governed by the regulation. In other words, it seems nonsensical for a regulation to require air bags to actually work but not to consider the risks that they won’t work. If they don’t work, the problem is not that the mandatory safety standards do not contemplate the risk, but that something went wrong. That’s why §82.008 establishes a rebuttable presumption to begin with, rather than a conclusive one. From TCJL’s perspective, the appropriate outcome in this case should not be determined on the basis of the non-applicability of the presumption, but on an evaluation of whether the plaintiff presented sufficient evidence to rebut the presumption.
Kia has filed a motion for rehearing with the Supreme Court. TCJL will continue to monitor this important case and its possible implications for the government standards defense in Texas.