Court Again Rules Consumer Reports Must Face Trial on Suzuki's Charges of Rigged TestingBREA, Calif.--May 19, 2003--Suzuki Motor Corp. today announced that the U.S. Court of Appeals in California has reaffirmed its earlier ruling in favor of Suzuki in its product-disparagement lawsuit against Consumers Union ("CU") and its magazine, Consumers Reports.
Rejecting a request by CU for rehearing of the court's June 25, 2002, ruling in Suzuki's favor, the Court of Appeals held that Suzuki had presented enough evidence to warrant a jury trial on its charges that CU published knowing falsehoods when it claimed, in 1988 and several times thereafter, that CU's tests had shown the Suzuki Samurai "easily rolls over in turns" and was therefore "Not Acceptable."
In the majority opinion by Judge Wallace A. Tashima, the Court of Appeals concluded that that the district court "did not give adequate credit to ... evidence of test-rigging" presented by Suzuki, and that "(a) reasonable jury could find by clear and convincing evidence that CU sought to produce a predetermined result in the Samurai test."
Among other things, the court relied upon a statement attributed to CU's editorial director, after CU's test drivers had failed to make the Samurai roll over, that "If you can't find someone to roll this car, I will."
Based on the evidence, according to the concurring opinion of Judge Susan P. Graber, a reasonable jury could find that CU, rather than discovering that the Samurai "easily rolls over in turns," actually learned that the vehicle "did not roll over easily in turns, but had to be coaxed."
Judge Tashima's opinion for the court also emphasized that, at the time CU initially criticized the Samurai, CU had just purchased a new building and therefore "needed to boost its revenues to complete its capital campaign."
The court further concluded that this "evidence of financial motive dovetails with the evidence of test-rigging." Based on this and other evidence, the Court of Appeals sent the case back to the U.S. District Court in Santa Ana, Calif., for a jury trial.
Suzuki's managing counsel, George Ball, stated that "the company is pleased it will now be able to present its evidence of test-rigging to a jury." Ball also noted that Suzuki has already obtained and developed a great deal of evidence on an important issue raised by one of the dissenting judges: whether CU treated the Samurai differently from other sport-utility vehicles involved in its testing.
According to Ball, "The evidence will clearly show that, rather than driving all the vehicles the same, CU singled out the Suzuki Samurai and, through stunt-like steering, intentionally made it tip up -- all to support CU's pre-determined story line." CU did this, moreover, "only after the Samurai received the best possible rating on the test CU had used for the past 15 years."
Suzuki's lawsuit asserts claims for product disparagement based on statements by CU since April 1994. Those statements repeated CU's earlier allegations, dating to 1988, that the Suzuki Samurai is "Not Acceptable" because, according to CU, it is "likely to roll over during a maneuver that could be demanded of any car at any time."
Suzuki further alleges that these statements created substantial harm, not only to sales of the Samurai, but also to sales of other Suzuki automobiles. The court's ruling will allow Suzuki to seek damages for its lost sales of Samurais and other vehicles to the extent it can prove that those losses were caused by disparaging statements made by CU after April 1994.
According to Ball, Suzuki was represented on appeal principally by Robert Fiske of Davis Polk & Wardwell and Gene Schaerr of Sidley Austin Brown & Wood.
Additional information can be obtained at www.media.suzuki.com/auto.