Honda ATV Litigation in Retrospect

by Ralph B. Wegis

In a Torrance, California, shop in 1970, engineer Joe Minton uncrated the first all-terrain vehicle (ATV) shipped to the United States from Japan. Minton's job was to test and evaluate a product that his employer, Honda, hoped would take this country by storm. The giant Japanese automotive firm wanted the new product to induce a buying frenzy similar to popular response to hula hoops in the 1950s.

Honda knew that many Americans put as much effort and planning into their leisure time as they did into their working hours. . . that they were crazy about the outdoors. . . and, above all that Americans loved almost anything with a motor.

Minton was to evaluate a product that had been only a year in planning. It had started out as Honda's answer to the snowmobile. But it had been transformed into a cute, tame-looking machine that could be used year-round, even in bad weather and on steep or irregular terrain.

This product was not to be marketed as a motorcycle because motorcycles were perceived as being dangerous and ridden by unsavory people. Honda was after the family market. The result was the all-terrain vehicle that emerged from Minton's crate - a cross between an astronaut's moon buggy and the world's biggest tricycle.

Minton, who is now a technical writer, says he was eager to drive the three-wheeler. He took it out and promptly flipped it over - the first in what has now - become a long and predictable line of accidents. Fortunately, he was not hurt, but after subsequent testing he became alarmed at what he perceived as the vehicle's dangerous design limitations. He suggested that Honda make two basic changes before going ahead with the project: Honda told Minton that it was too expensive to put on a differential3 and too late to change the seat length.4 Minton then recommended that if the vehicle's design was going to encourage passengers, at least the company ought to make the foot pegs longer so riders would have somewhere to put their feet. Honda agreed to this suggestion.5

What has followed over the subsequent 22 years has been at once a business success for Honda and a human disaster for many of the Americans who snapped up the ATVs.

Honda developed a marketing campaign that promoted the machines as safe family fun. According to the ads, anyone between the ages of 7 and 70 could drive one of these lovable-looking machines with the fat mushy tires and comfortable seat.6 ATVs are a "Great Way to Play in the Snow," Honda said in its advertising campaigns.7 "Families Can Come Out and Play." An ATV "Gets You Where You Want to be."8

Mothers were a significant target of Honda's efforts. Mothers who considered dirt bikes too dangerous for their children were convinced that ATVs were safe because of their fat wheels, big seats, and tricycle-like appearance.

Between 1980 and 1985, Honda spent millions of dollars driving these themes home to the U.S. public. The company was not unrewarded. Industry sales soared from 1980 to 1985.9 Honda still dominates the market and has sold in excess of 2 million ATVs. An insight into how all this could come about is captured by a quote from Soichiro Honda, the company's founder: "We do not make something because the demand, the market, is there. With our technology, we can create the demand, we can create the market."10

Dangerous Design

Americans soon found out that ATVs could take them to places they did not want to be - hospitals and morgues. Reports filtered back to consumers that the vehicles were dangerous. As Minton had discovered from personal experience, they tended to roll over. Rollovers occurred going uphill or downhill or on flat terrain. The vehicle's center of gravity was too high."

Later litigation revealed that the steering was inaccurate and unresponsive. When drivers needed accurate turning the most, they had to do more than simply turn the handlebars. To avoid an obstacle or make a turn, drivers had to get their weight off of one wheel and lift it off the ground. Because Honda insisted on the fixed axle, the company was forced to produce a vehicle with a high center of gravity, dependent on the right rider movements at the right time to maintain stability in the turn.

Another problem was the foot peg. In mud, snow, or slush and over irregular terrain, the rider's feet tended to slip off the pegs. When they did, there was no foot guard to keep them from coming into contact with the rear wheel. Honda had designed foot guards into its first models but stopped providing them and failed to put them on later models. 12

A further problem was passengers. As Minton had predicted in the early tests, the vehicle's design - the fat seat and long foot pegs - encouraged riders to take passengers. Honda waited seven years before putting a small sticker on the product and a notice in the owner's manual advising against more than one rider.

The resulting carnage was heartbreaking and devastating. ATVs were rolling over and landing on people. Drivers' feet were slipping off the foot peg getting chewed up by the back wheels. Passengers were being flipped off when the ATVs they were riding hit minor terrain irregularities.

To date ATV accidents have caused more than 1,900 deaths, and there been 539,300 injuries just in the last eight years.13 Many of these injuries were to the riders' legs and feet, and about 25 percent of these resulted in amputation of the affected part. 14

Children are being maimed and killed by the vehicles at an alarming rate. Experts estimate that 40 percent of ATV accidents and deaths have involved children under 16.15

Contrary to the "safe family fun" image created by the ad campaign, ATVs are actually more dangerous than motorcycles. And when accidents occur, the riders' injuries are more likely to be serious.

New Model

In 1984, Honda began making four-wheelers in response to complaints about three-wheeler safety and competition from other manufacturers' four-wheel models. Some of these competitors were marketing their four-wheelers as safer than the three-wheel design. In 1988, Honda discontinued marketing the three-wheelers in the United States altogether.

Although the fourth wheel seemed to offer greater safety, this was not borne out in actual practice. Even Honda agrees that its four-wheel design is not safer than its three-wheeler; just different.16 Enthusiasts continue to flip ATVs over at record rates. Sixty-eight percent of the accidents have occurred when the vehicles hit uneven terrain. Forty-two percent involved rollovers. Even more alarming, especially in terms of child safety, the fact that 53 percent involved ATVs traveling under 15 mph.17 Children generally ride at lower speeds, using lower gears.

Honda's response to the increasing number of accidents and subsequent lawsuits was to hunker down and blame the U.S. public. Company representatives said that 80 percent of automobile accidents are due to driver error; and the same percentage applies for ATVs. 18 The company said that if people wore helmets and other safety gear, did not drink, and drove the vehicles at a lower speed, the accident rate would be negligible. Simple, isn't it? To Honda, accidents are always the fault of the rider - never the machine.

Honda argued that the riders had assumed the risk. The company insisted that consumers knew what they were getting into. What could Honda have done instead of blaming the victims? Since no design or testing was done on the rollover protection, logic suggests that the idea was scrapped because it would have increased cost to the manufacturers and sent the wrong message to consumers. A roll bar would indicate that these vehicles roll over - that they are not safe. That was not the message Honda wanted to send to parents who were considering buying all-terrain vehicles for their children. But again, Honda didn't bother. The company's position has been that the vehicles are fine just the way they are.

Documents Summarizing conversations between the designers and Honda's attorney's and experts reveal that from the product's inception, the company' expected accidents to occur during usage. In Honda's view, 20 years of deaths and injuries associated with the vehicles were quite simply "consistent with our experience and expectations."21

Cost to Society

What have ATVs cost society? The average value of the product defect claims settled by Honda for accidents between 1978 and 1988 is $859,003 per claim.22 The Consumer Product Safety Commission (CPSC) estimated that deaths and injuries associated with all ATVs between 1981 and 1988 alone number 419,234.23 Honda's market share from 1970 to 1980 was 100 percent; from 1980 to 1985, 73.09 percent. We will use a conservative figure of 70 percent for Honda's market share. If this figure is multiplied by Honda's average value for a product defect settlement and the CPSC's estimated number of injuries and deaths, the total cost of these injuries and deaths is .70 x 5859,003 x 419,234 = $252,086,284,591.

The total of the injury' costs paid for by Honda insurance is $84,182,36 - The difference between those figures is the total cost of Honda ATV accidents borne by other members of society - $252,002,102,227.

Therefore, if Honda gave the right formation on the average value of product defect claims, and if the CPSC accurately estimated the deaths and injuries associated with ATVs as of 1988, those deaths and injuries have cost about $252 billion and Honda has compensated products liability claimants of $84 million. Americans, individually and collectively, have paid the balance. In the strictest business sense, Honda' has paid a small price for producing ATVs and earned considerable profits.25

Trial Challenges

Bringing ATV cases to trial is extremely challenging. Plaintiffs' attorneys are up against battalions of lawyers and experts working for Honda. The cases require years of preparation and are expensive to try. Trials alone can last two to six months.26 Records indicate that Honda's ATV litigation expenses are double the cost of its settlements and verdicts. This means that if the injured are paying out one-third of their recoveries for attorney fees and costs, Honda is outspending its opponents by a factor of six.27

Honda was sophisticated in marketing its product to a vulnerable population and it is just as effective in marketing its defense to jurors. Plaintiffs' attorneys should expect Honda to conduct market research on how best to sell local jurors on the Honda defense regarding the specific facts of their cases.

The power of such marketing has been cynically summarized by Dentsu, the largest Japanese advertising agency: "Manipulate those around you. In the end, the manipulative rise way above the manipulated."28

These cases can be tough to sell to juries. Invariably, Honda falls back on the usual driver error argument - if riders didn't make mistakes, there wouldn't a problem.

Riders will continue to be maimed and killed, and cases will continue to be tried. There are an estimated 2.5 million ATVs still out there - time bombs lying in wait for the U.S. consumers who were sold on Honda's idea of safe family fun. In the seven-year life expectancy of the machines - and many last much longer - experts predict that one in three will cause serious injury or death.29

ATV Investigation Checklist


Successful ATV cases are based on careful preparation. This checklist can help ensure a thorough preliminary investigation.
1. Review client interview and file materials.
2. Meet with principal lawyer and put together a blueprint for the investigation. Discuss theories, defendants, and anticipated problem areas.
3. Locate and fully identify the ATV and all attendant parts and accessories, including damaged and replaced parts. Purchase the vehicle if it is not owned by the injured riders. Store the machine and parts in a safe and secure place.
4. Photograph the ATV, including all warning labels and identification plates.
5. Locate, identify, and secure the rider's helmet and other safety gear and all safety gear product documents.
6. Obtain and secure all product documents-advertising materials, labels, instructions or warnings, bill of sale, warranties, and operator's manual.
7. Trace the vehicle's maintenance and repair history and obtain copies of all invoices.
8. Document all pre- and post-accident modifications to the ATV.
9. Obtain product documents on all optional equipment added to the vehicle before and after the injury.
10. Inspect and photograph any other vehicle involved in the accident.
11. Inspect and photograph the accident scene (in the presence of the plaintiff or a key witness if possible). Take detailed measurements. Obtain aerial photographs if possible.
12. Identify and photograph all warnings and posted markers at the scene.
13. Decide whether to have the scene surveyed.
14. Map the scene.
15. Obtain contour and topographic maps if available.
16. Determine whether the accident site is frequented by ATV riders. If so, videotape others traversing the same terrain.
17. Consider videotaping a reconstruction of the accident at the exact accident site.
18. Consider canvassing the area for potential witnesses.
19. Obtain copies of all reports from all entities that investigated the accident. (These may include but are not limited to law enforcement agencies, insurance companies, landowners, the U.S. Forest Service, the manufacturer; the CPSC, and the coroner.)
20. Get complete statements from all investigators.
21. Get copies of all statements and photographs taken in the course of the above investigations.
22. Get statements and "trip reports" from emergency vehicle medical personnel.
23. Check with emergency, medical personnel, law enforcement agencies, and newspapers for photographs of the accident.
25. Get a copy of the plaintiff's driving history from the appropriate state agency.
26. Get relevant records of the plaintiff's criminal history, if any.
27. Get relevant records regarding any prior claims or lawsuits in which the plaintiff has been involved.
28.If towing was involved, get statements from the person who towed the ATV from the accident site.
29. Get statements from all others injured in this occurrence, all eyewitnesses, and any other people who may have pertinent information on this accident.
30. Get statements from everyone involved in instructing the plaintiff how to operate the MW and any other people the plaintiff has taught to operate ATVs.
31. Attempt to get a statement from the salesperson who sold the ATV.
32. Consult your expert to determine if any repairs or maintenance could have been a factor in the accident. Decide whether to get statements from individuals who have performed service or maintenance work on this vehicle.
33. Consider obtaining and photographing promotional materials from the dealer.
34. Consider investigation to deter-mine dealer sales techniques, availability of rider training, manufacturer's position regarding hazards, claims made in advertising copy, etc.
35. Obtain copies of any instructional materials to which the plaintiff was exposed, including but not limited to tapes from the Specialty Vehicle Institute of America, an industry body that is headquartered in Irvine, California.


Notes

1 Deposition of Joe Minton taken Aug. 3, 1991, at 51-53, in Phillips V. Honda Motor Co., No. 202673 (Cal., Kern County Super. Ct. filed April 8, 1988).
2 Id. at 47A9.
3 Id. at 53-54.
4 Id. at 49.
5 Id. at 45.
6 See e.g., Honda commercials such as "Cabin Fever Rev." and "Goin' Three Wheelin' Rev. 2," Honda Tape, U.S. Consumer Prod. Safety' Comm'n, June 29, 1984.
7 MICHAEL B. MAZIS, U.S. CONSUMER PROD. SAFE'I'Y COMM'N, AN ANALYSIS OF ALL-TERRAIN VEHICLE ADVERTISING 1980-1987, 16 (1988).
8 Id. at 17-18.
9 "During the mid-198Os, the popularity of three-wheeled and four-wheeled ATVs soared, showing more than a twenty-fold increase (2000 percent) in units in use according to both industry and Consumer Product Safety Commission estimates." ATV shipments grew from 136,000 in 1980 to 2,368,000 by 1985. ATLA Summary Update on Injuries and Fatalities from All-Terrain Vehicles, July 1991 (hereafter ATLA Summary Update).
10 SOL SANDERS, HONDA: THE MAN AND HIS MACHINES 139 (1975).
11 Deposition of Joe Minton at 96, Phillips, No. , 202673; see also Boy Deppa, ATV Industry Stalls Rollover Standard, TRIAL, Dec.1990, at 66.
12 Trial testimony of Osamu Takeuchi on Apr. 10, 1991, Ferris v. Honda Motor Co., Ltd., No. C 672437 (Cal., Los Angeles County Super. Ct. filed Dec.30, 1987).
13 Memo from Deborah Fulcher to Robert Frye, "Update on ATV Deaths and Injuries," CPSC, dated Feb.28, 1992.
14 E. C. Gilbreath, ATV Litigation: Lawsuit Statistics and Information (self-published paper), May 21, 1990 (on file with author).
15 ATLA Summary Update, supra note 9.
16 Letter from Michael Brown, Honda counsel, to Carol G. Dawson, CPSC representative (Feb.21, 1986).
17 Id.
18 Deposition of Roger McCarthy at 101, Spear v. Honda Motor Co., No. 89-CI-15159 (Tex., Bexar County Dist. Ct. filed Sept. 1989).
19 Notes from meeting of American Honda engineers and Honda expert witness Robert Piziali in Torrance, Cal., Apr. 8, 1991; Exhibit 16 to deposition of Robert Piziali, Spear, No. 89-CI-l5159 (hereafter Honda-Piziali Notes).
20 Deposition of Roger Mccarthy taken July 17, 1989, at 148-49 in Hughes v. Honda Motor Co., Ltd., No. 87~36,787-A (Tex., Victoria County Dist. Ct. filed Apr.22, 1987).
21 Honda-Piziali Notes, supra note 19.
22 Honda Claims 1978-88, American Honda Motor Co., Inc. (insurance claims printout) (on file with author).
22 ATLA Summary Update, supra note 9.
24 Honda Claims, supra note 22.
25 Id.
26 ATLA members interested in the ATV Litigation Group can contact its chair; Joseph Moch of Grand Rapids, Mich., tel. (616) 456 1449, orThe ATLA Exchange, tel. (800) 344-3023.
27 Honda Claims 1978-88, supra note 22.
28 Janice Fuhrman, Dentsu: Advertisinq King - and Kingmaker, S.F. EXAM1NER, Aug. 5, 1990, at D4.
29 U.S. CONSUMER PROD. SAFETY COMM'N, ATV Safety Alert, May 1987.



[TRIAL NOVEMBER 1992]