Friday, February 26, 2010

Krauthammer On Product Liability & Our Economy

You shall not act dishonestly in rendering judgment. Show neither partiality to the weak nor deference to the mighty, but judge your fellow man justly.

Leviticus 19:15

Charles Krauthammer today tackles one of the vexing questions of our modern era - the liability of companies for injuries relating to the goods they produce. The goal of products liability law is to hold companies liable for making an injured person whole if the comapny's products caused the injury or the product otherwise gave insufficient warning of a non-obvious danger. It places the economic costs of the loss where they should be.

Alternatively, if we make it too dificult to prove a company's liability, then the costs to treat and make whole people injured by products becomes the responsiblity of others, and possibly the state. The flip side of that is that if we set the bar too low, we unreasonably punish companies, driving up costs to society as a whole and perhaps forcing products from the market that are a net good to society (I for one still think that we should have lawn darts). In addition, if a lawyer can posit that a company's acts were sufficiently reckless, than in most venues they can ask for punitive damages to punish the company. Many question whether there should be punitive damages in products liability cases, but the Supreme Court has only made law around the edges of that question.

Krauthammer does a good job of articulating some of the very real philosophical and pragmatic issues with our system, beginning with a real problem that has been around since biblical times, the problems of favoritism. In our legal system, that usually comes with juries favoring horribly injured plaintiffs in what is often a visceral, emotional reaction. This from Krauthammer:

Amazingly, the congressional hearings on Toyota were relatively civilized. Apart from some inevitable theatrical hectoring, the questioning was generally respectful, the emotions controlled. This was all the more remarkable given the drama of some of the testimony, such as that offered by a tearful Rhonda Smith, who recounted how, in her runaway Lexus, she had called her husband because "I wanted to hear his voice one more time."

Such wrenching and compelling stories might impel you to want to string up the first Toyota executive you find. But the issue here is larger and highly complex.

Industrial society produces an astonishing array of mass-produced products -- cars, drugs, medical devices -- that are at once wondrous and potentially lethal.

The wondrousness sometimes eludes us. Even the lowliest wage earner has an automobile that conveys him with more luxury, more freedom, more comfort than any traveling king ever experienced in all the centuries before the 20th. And modern medicines -- why, vaccines alone -- have prevented more suffering, more debility and more death than anything ever conceived by man.

But these wonders can be lethal. And sorting out the endless complaints about these products is maddeningly difficult -- though sort you must, otherwise every complaint would require shutting down the factories, and we'd have no industrial society at all.

The question is: How do you distinguish the idiosyncratic failure from the systemic -- for example, the single lemon that came off the auto assembly line vs. an intrinsic problem inherent in that model's engineering? How do you separate one patient's physiology producing a drug side effect vs. an intrinsic problem with a drug that makes it unacceptably dangerous?

Consider the oddity of those drug commercials on television. Fifteen seconds of the purported therapeutic effort, followed by about 45 seconds of a rapidly muttered list of horrific possible side effects. When the ad is over, I can't remember a thing about what the pill is supposed to do, except perhaps cause nausea, liver damage, projectile vomiting, a nasty rash, a four-hour erection and sudden death. Sudden death is my favorite because there is something comical about its being a side effect. What exactly is the main effect in that case? Relief from abdominal bloating?

And how many sudden deaths does it take until we say: "Enough," and pull the drug off the market?

It's not an easy calculation. Six years ago, Vioxx, a powerful anti-inflammatory, was withdrawn by the manufacturer because it was found to increase the risk of heart attack and stroke from 0.75 percent per year to 1.5 percent. The company was pilloried for not having owned up to this earlier, but some rheumatologists were furious that the drug was forced off the market at all. They had patients with crippling arthritis who had achieved a functioning life with Vioxx, for which they were quite willing to risk a long-shot cardiac complication. The public furor denied them the choice.

And don't imagine that we do not coldly calculate the price of a human life. In 1974, the speed limit was lowered to 55 mph to conserve oil. That also led to a dramatic drop in traffic fatalities -- approximately 3,000 lives every year. This didn't stop us, after the oil crisis, from raising the speed limit back to 65 and beyond -- knowing that thousands of Americans would die as a result.

The calculation was never explicit but it was nevertheless real. We were quite prepared to trade away a finite number of human lives for speed, and for the efficiency and convenience that come with it.

This is not to let Toyota off the hook simply because all products carry risk. Toyota executives have already admitted that they had underplayed the reports of sticking accelerators. They seem finally to have made a very serious, almost frantic, effort to correct what can be corrected -- the floor-mat and sticky-accelerator problems -- while continuing to investigate the more elusive possibility (never proved, perhaps never provable) of some additional electronic glitch.

But it is no disrespect to the memory of those killed, and the sorrow of those left behind, to simply admit that even the highest technology produced by the world's finest companies can be fallible and fatal, and that the intelligent response is not rage and retribution but sober remediation and recognition of the very high price we pay -- willingly pay -- for modernity with all its wondrous, dangerous bounty.

1 comment:

OBloodyHell said...

> In 1974, the speed limit was lowered to 55 mph to conserve oil. That also led to a dramatic drop in traffic fatalities -- approximately 3,000 lives every year. This didn't stop us, after the oil crisis, from raising the speed limit back to 65 and beyond -- knowing that thousands of Americans would die as a result.

Ummm, that had a reductive effect at that time, but the reverse was no longer true, at least, not to anywhere near the inverse result.

The speed limit rule was repealed in 1995, but as the following link shows, there was no significant increase afterwards, and, in fact, fatalaties have been on an overall slight downtrend since, just in pure counts, despite a rising populace (a subset of the above linked data):


Nor have the more rational metrics been on the increase:

(1) == fatalities per 100 million miles driven
(2) == fatalities per 100k pop.

In short, while there were hysterical arguments about a "bloodbath" from the increase, none of them have turned out to be true. The effects of better cars, better road conditions, and, probably, more innate caution by the average person has resulted in the increase speed limit having an apparently negligible negative aspect.

Sometimes, things are simply counterintuitive.

For example -- the insurance companies have, time and again, attempted to prove that Radar Detectors increase fatalities by "encouraging" drivers to speed.

"It just makes sense", right?

Despite reams of statistical analyses, however, they have been utterly unable to produce any connection between increased accidents and use of radar detectors.

In fact, I believe some studies have shown an inverse correlation.

The best argument for why the counter-intuitive result is that the drivers who do use RDs are
a) more intelligent and thoughtful, which applies to their style of driving and their judgment of when it is "safe to speed".
b) more attentive to detail, therefore less likely to fail to see pertinent warning signs of a possible danger.
c) actually more cautious in general, since they are fore-thoughtful and more calculated in their risk-taking.

Driving stats are a lot like economics -- sometimes the rules are particularly counterintuitive.