How much should General Motors Corp. spend to keep people from burning to death in fiery crashes? In a memo nearly 30 years ago, a young GM engineer, Edward C. Ivey, suggested that the answer was: Not much.
With a couple of simple calculations, Ivey estimated that these fiery deaths were costing GM only about $2 per vehicle--the implication being that it was not enough to justify the expense of changing the vehicles' design.
Ivey didn't know it at the time, but he was planting a legal time bomb.
In the years that followed, a platoon of GM lawyers fought successfully to exclude the Ivey memo from scores of vehicle-fire lawsuits. They did it by convincing judges the document was merely the idle musings of a novice engineer. There was contradictory evidence, but they kept it locked tight.
Now the memo and GM's stealth tactics have been revealed in court, and from the furious response of judges and juries, GM may have brought more grief on itself by not producing it in the first place. A Georgia judge berated GM for scheming "to defraud and mislead several courts, to thwart and obstruct justice and to enjoy the ill-gotten gains of likely perjury." And in a Los Angeles case that drew heavily on the Ivey affair, GM in 1999 suffered a then-record verdict of $4.9 billion (later reduced and now on appeal).
GM says it has behaved properly at all times. "I don't believe anybody has ever misled a court or even misled opposing counsel," said Richard W. Shapiro of Snell & Wilmer, one of the firms representing GM.
In the world of civil litigation, the Ivey memo has attained the status of a "smoking gun" due as much to GM's unceasing efforts to suppress it as for what it actually says.
The Ivey saga illustrates the extraordinary lengths to which big companies may go to keep damaging documents away from juries and the public, behavior which also has been seen in litigation involving cigarette makers, drug manufacturers and defense contractors. But the strategy can backfire if the documents and the companies' deceptions eventually come to light.
The Ivey story also reflects the potential conflict between a lawyer's most basic obligations: to win for the client, and to avoid using deceptive means to mislead judges and legal adversaries.
In seeking to avoid giving opponents valuable ammunition, many attorneys, including from the most prominent firms, increasingly seem to resort to tactics that "might once have been seen as absolutely forbidden," said Stephen Gillers, a New York University law professor. If there is even a feeble excuse for withholding information, "we're going to do it and take that risk," the thinking goes, because "that's what clients expect."
Legal warfare over the Ivey memo has all but overshadowed some of the most emotionally wrenching of all personal injury cases--involving people who were maimed or burned alive in crashes they might have survived, or even walked away from, but for fires fed by leaking gasoline. For auto makers, the danger of such cases is extreme, because juries that put the blame on unsafe designs are quick to send a message.
"The American public says it's worse to die from being burned to death than being crushed to death," said Brian O'Neill, president of the Insurance Institute for Highway Safety. If a person burns to death in an otherwise survivable crash, "that's a prescription for a very large award."
Ivey Said Price Can't Be Placed on a Life
Ed Ivey, 54, who declined to be interviewed, is GM's director of chassis engineering. He signed on after high school, training first at the General Motors Institute and going on to the University of Michigan. In 1972, two years after earning his master's in engineering, Ivey was assigned to the advance design group at GM's Oldsmobile division, which took the lead on fuel system design.
For one of his assignments, Ivey prowled through a junkyard, examining wrecked cars to see which fuel systems held up best. And in June 1973, he wrote his combustible memo.
Dominating the dry, page-and-a-half analysis were two calculations leading to the same bottom line: The financial rewards of designing safer fuel systems would be minimal for GM. In the first computation, Ivey estimated that burn fatalities were costing GM about $2.40 per car. In the second, he found that avoiding future deaths would be worth $2.20 to GM for each new model.
In his computations, Ivey used $200,000 for the value of a human life--a figure that easily could anger jurors, but that actually came from a government study.
The memo offered no recommendations. And it closed by acknowledging the crassness of the exercise. "It is really impossible to put a value on human life," Ivey wrote. "This analysis tried to do so in an objective manner but a human fatality is really beyond value, subjectively."
