US Supreme Court ruling allows auto industry to be sued for seatbelt design

Article by Christian Andrei, on February 25, 2011

A ruling from the U.S. Supreme Court exposes the auto industry to new lawsuits related to seatbelt design after it concluded that Mazda Motor Corp. has to defend against claims raised by the family of a woman killed while riding in an MPV minivan.

In a unanimous decision, the justice said that compliance with a 1989 federal seatbelt regulation doesn't insulate a company from claims that it should have installed a safer type of belt. Justice Stephen Breyer wrote that regulators meant to set only a minimum standard. 

The ruling directly covers cars made before 2007, signifying a change in the law encompassing much of the country. All the lower courts that considered the issue concluded that the federal rules preempted suits by accident victims over seatbelt design. Following the ruling, automakers’ shares declined. 

Ford Motor Co. shares dropped by as much as 4.38% to $14.44, the lowest price since Nov. 3. Ford fell 43 cents, or 2.8%, to $14.80 at 10:27 a.m. in New York Stock Exchange composite trading. Meanwhile, General Motors Co. declined by 48 cents, or 1.3%, to $35.30.

The ruling scales back a 2000 decision that said federal law shields carmakers from claims under state product- liability law that they should have acted more quickly to install air bags. In a concurring opinion, Justice Sonia Sotomayor said that lower courts had read too much into that opinion. [via autonews - sub. required]

Topics: united states

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