Simmons Ford, Inc. v. Consumers Union of US

• Court: U.S. District Court — Southern District of New York
• Writing for the Court: EDWARD WEINFELD
• Citation: Simmons Ford, Inc. v. Consumers Union of US, 516 F. Supp. 742 (S.D. N.Y. 1981)
• Decision Date: 23 June 1981
• Docket Number: No. 80 Civ. 1901.,80 Civ. 1901.
• Parties: SIMMONS FORD, INC. and Sebring-Vanguard, Inc., Plaintiffs, v. CONSUMERS UNION OF the UNITED STATES, INC., Defendant.

516 F. Supp. 742

SIMMONS FORD, INC. and Sebring-Vanguard, Inc., Plaintiffs, v. CONSUMERS UNION OF the UNITED STATES, INC., Defendant.

No. 80 Civ. 1901.

United States District Court, S. D. New York.

June 23, 1981.

Eugene T. Field, P. C., Kalamazoo, Mich., Cormac McEnery, Brooklyn, N. Y., for plaintiffs; Samuel T. Field, Kalamazoo, Mich., of counsel.

Karpatkin, Pollet, Delibert & Beil, New York City, for defendant; Michael N. Pollet, Steven Delibert, New York City, of counsel.

OPINION

EDWARD WEINFELD, District Judge.

Plaintiff Sebring-Vanguard, Inc., now bankrupt,¹ manufactured the "CitiCar," one of the two electrically powered automobiles generally available in the United States in 1975. Plaintiff Simmons Ford, Inc. was a retailer of the CitiCar. The CitiCar was introduced into the market after extensive advertising as an alternative to the internal combustion engine that could reduce exhaust emissions and save fossil fuels. Public interest in this alternative means of conveyance had been triggered by the 1973 Arab oil embargo.

Plaintiffs commenced this action against Consumers Union of the United States, Inc., publisher of the well-known monthly magazine Consumer Reports, which has a circulation of approximately two million and reports the results of defendant's not-for-profit consumer testing organization on the quality, characteristics and price of various consumer products.² The defendant, based upon allegations in plaintiffs' complaint, refers to plaintiffs' claim as an action for defamation controlled by the principles of New York Times v. Sullivan³ and its progeny. Plaintiffs insist their action is one for disparagement of product. However, in end result, whatever label is applied does not affect the outcome of defendant's instant motion since plaintiffs concede that an essential element of a claim for disparagement of a product is that defendant published the article in question with actual malice, that is, with knowledge of its falsity or with reckless disregard for its truth.⁴

Plaintiffs' claim is based on an article in the October 1975 issue of Consumer Reports entitled "Two Electric Cars," which was highly critical of the CitiCar and the other electric car on the market, the "Elcar." Defendant moves for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. At oral argument, upon questioning by the Court, plaintiffs declined an offered opportunity for discovery pending disposition of this motion and asserted that the motion was ripe for disposition on the affidavits and the statements filed pursuant to Local Rule 3(g). Because plaintiffs have failed to establish the existence of a genuine issue for trial as to whether the article was published with actual malice, defendant's motion must be granted. Plaintiffs' conclusory allegations are insufficient to raise a triable issue and to put the defendant to the burden and expense of a trial.

THE ARTICLE

The article "Two Electric Cars" detailed at length a variety of safety problems plaguing the CitiCar and Elcar, notably their flimsy construction and low maximum speed, both of which rendered the cars, in the opinion of the article's writers, unsafe for use on public highways also traveled by faster and heavier automobiles. The article in relevant part was based on a battery of tests conducted at defendant's Auto Test Division in Orange, Connecticut and performed on a CitiCar purchased at random through one of Sebring-Vanguard's distributors. Testing by defendant's automobile safety engineers included routine, day-to-day driving over local roads and formal testing at the Test Division to measure objectively such characteristics as speed, acceleration, braking, handling and similar matters. Defendant concluded the testing demonstrated that the CitiCar suffered from poor acceleration, low top speed, poor braking, poor handling, poor ride, poor comfort and generally negative performance. On the basis of the foregoing, Robert D. Knoll, Chief of the Division, with nearly thirty years' experience in automotive engineering, was of the opinion that the CitiCar was "an extremely dangerous and unsafe vehicle, wholly unsuited for transportation on the public highway, and raising a genuine threat of serious injury or death to any person foolhardy enough to drive one."⁵ Accordingly, he urged that the car be rated "Not Acceptable."

In accordance with the usual Consumers Union practice for Auto Test Division projects, Knoll prepared a draft report, or "Report to Editorial," incorporating the Test Division's findings, which was submitted to defendant's editorial offices for revision and rewriting by a staff writer into the final article as published. Although the article detailed extensive faults with the CitiCar, some of which are enumerated above, the sole passage now challenged by plaintiffs as false is the following:

Conventional passenger cars must conform to certain Federal safety standards. But to spur the development of low-emission vehicles, the Government has granted temporary exemptions from some of those standards to manufacturers of electric cars — with unfortunate results.

Conventional cars must provide life-saving protection to occupants in a 30-mph barrier crash, a 30-mph rollover, and a 20-mph side impact from another car. We believe any such crash would imperil the lives of persons inside these tiny, fragile, plastic-bodied vehicles.⁶

Plaintiffs challenge the article to the extent it states that the CitiCar was unsafe for the particular reason that it failed to meet assertedly mandatory federal regulations requiring life-saving protection to occupants in a 30-mph barrier crash, a 30-mph rollover and a 20-mph side impact. While plaintiffs do not specifically claim that their vehicle could meet these tests,⁷ they contend that the statement is false because the occupant crash protection mandatory requirements described in the article were not in existence as the article stated and consequently conventional cars were not required to comply with them. Furthermore, they contend that the statement is false insofar as it asserts that electric cars were temporarily exempted from this allegedly nonexistent mandatory regulation. Plaintiffs allege these falsehoods were made by defendant with actual malice.

This segment of the article, which is the core of plaintiffs' claim, indeed is not entirely accurate. The "certain Federal safety standards" mentioned in the article refer to a portion of Standard 208 of the Federal Motor Vehicle Safety Standards promulgated by the National Highway Traffic Safety Administration pursuant to 15 U.S.C. § 1391 et seq. Standard 208 specifies performance requirements for the protection of vehicle occupants in crashes. The occupant crash protection requirements enumerated in the article — protection in a 30-mph barrier crash, a 30-mph rollover and a 20-mph side impact — are the performance standards that must be met by a passive restraint system to be acceptable under this Standard. A passive restraint system, such as "airbags" that self-inflate on impact, protects occupants without any action on their part unlike, for example, seat belts, which require fastening by the occupant to be effective. Installation of a passive restraint system meeting these standards, however, is only one of several options for satisfying the performance requirements of Standard 208.⁸ This Standard provides two alternative methods for satisfying its terms, both of which involve the installation of seat belts. While seat belts must meet specified performance standards of their own, they are not required to meet the three standards outlined in the article, which apply only to the passive restraint system option under Standard 208. Substantially all conventional automobiles at the time satisfied Standard 208, not by meeting the standards outlined in the article, but by installing seat belts. The falsehood contained in the article, therefore, is the implication that the standards outlined were mandatory requirements of Standard 208 when in fact they were requirements of only one option for satisfying the Standard.

The remainder of these two paragraphs, however, is accurate. Sebring-Vanguard had applied for and received an exemption from Standard 208 from January 1974 to January 1975 because it was "uncertain whether the CitiCar's frame could withstand the forces required by Standard No. 208 for upper torso restraints," an element of the seat belt requirements.⁹ Although there is some dispute over whether the Citi-Car tested by defendant was manufactured during this exemption period, or after its expiration, plaintiffs do not dispute the defendant's statement that the car tested by it contained nonconforming seat belts which could not meet federal safety standards because they did not incorporate the automatic retractors required by regulation.

Defendant admits the inaccuracy of its report of the precise federal safety standard requirement from which the CitiCar was exempted. It argues, however, that the mistake was reasonable on two grounds. First, defendant notes that Standard 208 is highly confusing, being replete with cross-references and other such statutory twists. Second, defendant points out that many automobiles in effect substantially met the passive restraint requirements of Standard 208 in order to pass the fuel system integrity requirements of Standard 301-75. Standard 301-75 requires automobiles to be constructed so that no more than extremely limited fuel is discharged upon various types of impact. Because these types of impact are substantially similar to those described in the passive restraint tests of Standard 208, defendant claims it mistakenly confused or "telescoped" the two standards.¹⁰ The CitiCar obviously was not subject to the fuel system integrity requirement because it was electrically powered and carried no fuel. Plaintiffs do not dispute that the fuel system integrity requirement has much...