1. I want to express my appreciation to the reviewers and to the editor for their extremely helpful comments and criticisms. The paper is much stronger and clearer than it would have been otherwise.

2. Andrew Pollack, “$4.9 Billion Jury Verdict In GM Fuel Tank Case,” New York Times (10 July 1999), section A, p. 7; “Paper Trail Haunts GM After It Loses Injury Suit,” New York Times (12 July 1999), section A, p. 12; “GM Damages Cut By Over $3 Billion In Gas Tank Case,” New York Times (27 August 1999), section A, p. 19; “GM and the Law,” Economist (17 July 1999): 16; and Michael M. Weinstein, “The Ins and Outs of Putting a Price Tag on Product Safety,” New York Times (12 August 1999), section C, p. 2. The punitive damages were later reduced to around $1 billion.

3. Dan Lienert included the Pinto in his “The Worst Cars of All Times: A Look at Lemons Before the Automaking Revolution,” Forbes, online at www.forbes.com (27 January 2004). The author claimed that the current generation “has no real understanding of how truly awful a car can be.” The author quotes Clarence Ditlow, executive director of the Center for Auto Safety, who claims that the “Ford Pinto was a safety lemon.”

At a conference on tort law, at the Brookings Institution in 1990, Professor John Graham discussed the case. The resulting article appeared as “Does Liability Promote the Safety of Motor Vehicles?” in The Liability Maze: The Impact of Liability Rules on Innovation and Safety, ed. Peter W. Huber and Robert E. Litan (Washington D. C.: The Brookings Institute, 1991), 120–37. In April of 1991, Twentieth Century Fox released “Class Action,” a movie about a law suit that borrows freely from the Ford Pinto case.

4. Richard DeGeorge’s “The Ethical Responsibilities of Engineers in Large Organizations: The Ford Pinto Case” appeared in the first issue of the Business and Professional Ethics Journal (1[1]) (1981): 1–14, and was reprinted in Ethical Issues in Engineering, ed. Deborah Johnson (Englewood Cliffs, N.J.: Prentice Hall, 1991). “The Ford Pinto,” by W. Michael Hoffman, was included in the first edition of Business Ethics, ed. W. Michael Hoffman and Jennifer Mills Moore (New York: McGraw-Hill, 1984), 412–20. Hoffman’s treatment of the case raises some of the questions about the difficulty of determining relevant standards that will be raised later in this paper.

5. Gary Schwartz, “The Myth of the Ford Pinto Case,” Rutgers Law Review 43 (1991), 1013–68.

6. In this section I rely extensively upon Schwartz, “The Myth of the Ford Pinto Case,” 1015–25.

7. More precisely, two acts were passed, the National Traffic and Motor Vehicle Safety Act of 1966 and the Highway Safety Act of 1966, creating the National Highway Safety Bureau. With the passage of the Highway Safety Act of 1970, the name of the bureau was changed to the National Highway Traffic Safety Administration. To avoid confusion, I will refer only the NHTSA.

8. 5 USC § 500 et seq. (2004), Cornell Legal Info. Inst., available at http://www4.law.cornell.edu/uscode/5/500.html. Section 553 establishes the requirements for notice and comment. An overview of the act is available from any administrative law or business law textbook. The Office of Management and Budget (OMB) provides a useful quick summary of the historical background on its website. Through executive orders, both Presidents Reagan and Clinton insured involvement of the OMB at the very early stages of administrative rule making (www.ombwatch.org/article/articleview/176/1/67/1).

9. In the aftermath of federal standards there was something of a “consumer revolt” against them, especially the regulations requiring seatbelts, and the proposals to require airbags. See David Vogel, “When Consumers Oppose Consumer Protection: The Politics of Regulatory Backlash,” in Kindred Strangers: The Uneasy Relationship Between Politics and Business in America (Princeton, N.J.: Princeton University Press, 1996), 215–36.

10. See, 49 C. F. R. § 571.301 (2004), available at http://cfr.law.cornell.edu/cfr/cfr.php?title=49&type=part&value=571. On November 13, 2000, NHTSA announced that it was strengthening Standard No. 301 and issued its new final rule for fuel integrity, essentially raising the impact test to 50 mph from 30. It had given official notice of its intent to do so in 1995 and several more studies of fire-related fatalities were conducted. A good description of the 1977 standards is included as “Background” in the final rule, 49 C.F. R. § 571 Docket No. NHTSA-03-16523, RIN 2127–AF36, available at http://www.nhtsa.dot.gov/cars/rules/rulings/301NPRM/Final_Rule/index.html#Table.

11. 119 Cal. App. 3d 757. Cal Potr. 348 (1981).

12. Mother Jones 18 (September/October 1977). Based on information given to it by lawyers preparing cases against Ford, the Center for Auto Safety petitioned NHTSA in the mid-1970s to investigate the Pinto’s rear-end design. According to material presented on the Center’s website, Dowie’s article is based on that information, made available to him by the Center (www.autosafety.org). “Pinto Madness” is still available on the Mother Jones website along with a video clip showing a Pinto catching fire after being rear-ended. In an interview with Schwartz, Copp asserted that he was also a major source of the information for the Mother Jones story, Schwartz, “The Myth of the Ford Pinto Case,” 1027, n.53.

13. Ford responded with a news release (attributed to Herbert T. Misch, vice president of Environmental and Safety Engineering), countering with quite different statistics, based upon data from NHTSA. Ford news release (September 9, 1977): 1–3.

14. A description of other tort action can be found in Lee Strobel, Reckless Homicide? (South Bend, Ind.: And Books, 1980).

15. “Auto Maker Shuns Safer Gas Tank.” Washington Post (30 December 1976), section B, p. 7, quoted in Schwartz, “The Myth of the Ford Pinto Case,” 1029, n. 64.

16. 60 Minutes: Is Your Car Safe? (CBS television broadcast, 11 June 1978), quoted in Schwartz, “The Myth of the Ford Pinto Case,” 1029, n. 65. Ford’s decision for a voluntary recall occurred just before this program was broadcast.

17. NHTSA’s Office of Defect Investigations opened an investigation into the question of whether the Pinto’s rear-end was defective on August 15, 1977, and closed its investigation less than a month later, September 13, 1977 (NHTSA Action # EA7N076). NHTSA’s notification of its intent to recall was issued on June 15, 1978 (Campaign ID No. 78V143000). For a good discussion of NHTSA and the politics of recall, see Graham, “Does Liability Promote the Safety of Motor Vehicles?”; and Jerry L. Mashaw and David L. Harfst, The Struggle for Auto Safety (Cambridge, Mass.: Harvard University Press, 1990), 149–56 and 164–65. Mashaw and Harfst are extremely critical of NHTSA’s propensity to attempt to regulate by relying upon findings of “defects” and recall rather than by standard-setting. They also note that this period of time was a “heyday” for recalls, with the courts being extremely hesitant to overrule the agency.

18. Hat sections were added to the Pinto in 1973, Schwartz, “The Myth of the Ford Pinto Case,” 1016, n. 7. The filler pipe did not break in the Grimshaw accident and was not, therefore, relevant to that case. Schwartz, 1016, n. 8.

19. NHTSA is allowed to make a final decision to recall “only after giving the manufacturer an opportunity to present information, views and arguments to show that there is no defect” (49 USC § 301 30118, b, available at http://www4.law.cornell.edu/uscode/49/stVIpAch301schII.html).

20. In 2001, Bridgestone/Firestone considered this strategy when NHTSA announced that it was initiating a recall proceeding on certain Firestone tires that were standard equipment on most Ford Explorers. Bridgestone/Firestone originally announced its intention to fight the determination that the tires were defective in the recall proceedings but quickly reached the conclusion that the hearings would do more damage to their reputation than a voluntary recall. This would have been only the tenth time since 1966 that NHTSA had conducted formal hearings. See, for example, Matthew Wald, “US May Act to Order Forced Recall of Some Firestone Tires,” NewYork Times (20 July 2001), section C, p.4; and Robert Manor, “Bridgestone/Firestone Defies Government, Refuses to Recall More Tires,” ChicagoTribune (24 July 2001), available at http://www.tireaccidents.com/Firestone/firestone_charts_a_risky_course.htm.

21. Ford agreed to install a longer filler pipe, use a new seal on the gas cap, and to place a polyethylene shield on the front of the tank to prevent the bolts from the differential from puncturing the tank. NHTSA estimated that the recall would involve 1.4 million vehicles. This number includes the subcompact Mercury Bobcat, introduced in the mid-1970s with essentially the same design (NHTSA, Campaign ID No. 78V143000).

22. Today, failure to repair within sixty days is prima facie evidence of a failure to repair during a reasonable period. See, 49 USC § 301 30120, c. 2.

23. There is nothing unusual about a finding that something is defective while satisfying federal standards. In the recent case involving Ford Explorers and certain Firestone tires that came as standard equipment on the Explorers, the tires were found defective but satisfied NHTSA’s standards for testing and rating. NHTSA has an Office of Defect Investigation that is responsible for conducting investigations. NHTSA’s web site allows a search for ODI investigations dating back to 1971.

24. State of Indiana v. Ford Motor Co., Cause No. 11–431, 1980.

25. Although see Richard A. Epstein, “Is Pinto Criminal?” in Regulation (March–April 1980), 16–17.

26. Richard DeGeorge, “The Ethical Responsibilities of Engineers in Large Organizations.”

27. See, e.g., K. S. Shrader-Frechette in Risk and Rationality: Philosophical Foundations for Populist Reforms (Berkeley, Calif.: University of California Press, 1991), 55.

28. This list is taken from William K. Lowrance, Of Acceptable Risk: Science and the Determination of Safety (Los Altos, Calif.: William Kaufmann, Inc., 1976), chap. 3. Much of this discussion follows Lowrance’s general line of thought.

29. 49 USC § 301 30111 (2004), available at Cornell Legal Info. Inst. (http://www4.law.cornell.edu/uscode/49/30111.html).

30. See, e.g., Robert W. Hahn, “State and Federal Regulatory Reform: A Comparative Analysis,” in Cost-Benefit Analysis: Legal, Economic, and Philosophical Perspectives, ed. Matthew D. Adler and Eric A. Posner (Chicago: The University of Chicago Press, 2001), 37–76.

31. In Risk vs. Risk: Tradeoffs in Protecting Health and the Environment, ed. John D. Graham and Jonathan Baert Wiener (Cambridge, Mass.: Harvard University Press, 1995), the editors provide a two by two matrix as a means of attempting to better understand the different kinds of risk tradeoffs.

32. This case is described in Francis Cullen, William J. Maakestad, and G. Cavendar, Corporate Crime Under Attack: The Ford Pinto Case and Beyond (Cinncinati: Anderson Publishers, 1987).

33. In his defense of Ford, as reflected in the closing remarks to the jury, Neal is quite aware that the jurors might be confused about the narrow nature of the case, and might believe that the design of the Pinto itself was on trial. Consequently, Neal’s defense involved a broader defense of the Pinto, and not merely a defense of the recall process.

34. DeGeorge, “The Ethical Responsibilities of Engineers in Large Organizations.”

35. The following is based on Jules Coleman, Risks and Wrongs (Oxford: Oxford University Press, 1992), especially chapter 11.

36. Ibid., 219.

37. Privity of contract meant that if a consumer was harmed, the consumer must seek remedy from the entity with whom she had a contract, i.e., the merchant from whom she purchased the vehicle. If the merchant sought remedy, the merchant would need to sue the manufacturer.

38. A defendant could defeat a claim for damages if it was possible to demonstrate that the plaintiff contributed in some way to the harm.

39. See Coleman, Risks and Wrongs, who devotes chapter 20 to product liability. Coleman notes that recognizing this peculiar situation, a committee of the American Law Institute has recommended separating product liability from the body of tort law. This discussion of product liability is based upon Coleman.

40. 24 Cal. 2d 453, 150 P.2d 436 (1944).

41. I have great sympathy for the Cambridge school of economics, associated with Henry Sidgwick and running through Alfred Marshall. In Sidgwick’s mind there was a close relationship between the wealth of a country and welfare. In the “new” welfare economics, this connection is largely if not entirely severed. See Roger E. Backhouse, The Ordinary Business of Life: A History of Economics (Princeton, N.J.: Princeton University Press, 2002), 271–87.

42. See NHTSA’s press release, “NHTSA Announces Initial Decision That Additional Firestone Wilderness AT Tires Have a Safety Defect; Firestone Agrees to Recall Those Tires,” NHTSA 51–01, 4 October, 2001. NHTSA’s “Engineering Analysis Report and Initial Decision Regarding EA00-023: Firestone and Wilderness AT Tires” explains in more detail the nature of the investigation. The complete document is available from NHTSA. Things are even more complicated than this. Firestone’s data are not actually failure rates but the rate of claims that users file when they discover a problem with a tire. There is reason to doubt whether claim rates correspond very well with actual failure rates. Many consumers may just buy a new tire.

43. Schwartz, “The Myth of the Ford Pinto Case,” 1030.

44. Schwartz, “The Myth of the Ford Pinto Case,” 1030–31; n.5; Motor Vehicle Fires in Traffic Crashes and the Effects of the Fuel System Integrity Standard. NHTSA Office of Program Evaluation, Glenn G. Parsons. DOT HS 807 675, 1990, available at http://www.nhtsa.dot.gov/cars/rules/rulings/301NPRM/Prelim/Index.html. Beginning in 1975, NHTSA instituted a Fatal Accident Reporting System (FARS). Jurisdictions are required to report information about serious accidents to NHTSA in reports that contain dozens of questions that are coded to provide a database for statistical analysis by NHTSA and others. FARS incorporates information that an occupant was injured or died in an accident involving a rear-end collision with fire, but does not distinguish between persons who died as the result of the fire or from some other cause.

45. An earlier 1983 evaluation by NHTSA had estimated the reduction in fatality rate to be 27 percent, but this is, of course, 27 percent of a relatively small number. Schwartz, “The Myth of the Ford Pinto Case,” 1031, n. 6. Evaluation of Federal Motor Vehicle Safety Standard 301–75, Fuel System Integrity: Passenger Cars. NHTSA Office of Program Evaluation, Glenn G. Parsons. DOT HS-806-335, 1983. This is no longer available online.

46. See Kirk Johnson and Jennifer Lee, “When Breathing Is Believing: Ground Zero and the EPA’s Credibility,” New York Times (30 November 2003), section A, p. 27.

47. Schwartz, “The Myth of the Ford Pinto Case,” 1027. NHTSA Office of Defects Investigation Report: Phase I C7-38.

48. Schwartz cites documents suggesting that Ford had originally intended to use the over-the-axle design until it realized the difficulties with the hatch-back. Confronting those problems, it decided to move the tank behind the axle as a means of standardizing production. Schwartz, “The Myth of the Ford Pinto Case,” 1032.

49. There is also a controversy over the bumper. The court of appeal opinion in Grimshaw claimed that this was the flimsiest bumper of any American car. But Schwartz points out that in the criminal case, Byron Bloch, a witness for the prosecution, under cross-examination, stated that the Pinto’s bumper was about the same as those of the Gremlin, Vega, and the Dodge Colt. He added “I would say they were all bad.” See Schwartz, “The Myth of the Ford Pinto Case,” 1015, n. 6.

50. The Chevy Vega passed rear-end collision crash-tests for fuel-integrity that the Pinto failed. That does not address the flammability issue, an empirical issue.

51. Schwartz cites “Small Cars May Save Fuel But Cost Lives, Safety Experts Think,” Wall Street Journal (27 April 1982), 1, in which it is claimed that by the late 1970s the fatality rate for subcompacts was two times that of full-sized cars.

52. These were not contested at trial and later confirmed by attorneys for the prosecution in the criminal trial, according to Schwartz, “The Myth of the Ford Pinto Case,” 1031, n. 73.

53. See Schwartz, “The Myth of the Ford Pinto Case,” n. 72. The exhibit showed the annual number of fatal accidents with fire for the Pinto as 7.0 per million cars in operation. The rate for all subcompacts and compacts was 7.3. The rate for the Pinto was the same as the Vega, and lower than the Volkswagen and Datsun, although higher than Toyota and the Dodge Colt. The average for the subcompact and compacts in fatal accidents with fire is only slightly higher than the average of 6.8 for the all-vehicle average.

54. See Schwartz’s discussion in “The Myth of the Ford Pinto Case,” 1032, n. 74.

55. Ibid., 1032.

56. Ibid., 1034–35. In that context, he discusses alternatives mentioned by plaintiffs, such as installing a bladder in the gas-tank, or a tank within a tank. There was conflicting testimony at trial concerning the feasibility of the bladder. The tank within a tank has never been employed.

57. See Schwartz’s discussion in “The Myth of the Ford Pinto Case,” at 1032–1033, including notes 76 and 77. In note 77, Schwartz refers to a different analysis by Ford that examined subcompact fatality rates for 1975–1980. The fatality rate for Pintos in rear-fire accidents was 2.74 annually per million miles in operation in contrast to the other compacts, with a rate of 2.24. Although this is based upon a much larger sample, Schwartz himself calls attention to the difficulties in drawing inferences from this analysis. For one thing, the numbers are distorted by the presence of the rear-engine VW Beetle that did not have a gas-tank in the back. On the other hand, the Pintos produced after 1977 would have had the modifications, and those would have been reflected in the final years in this sample.

58. This risk estimate has much higher reliability given the large numbers involved. Using information collected by NHTSA for the Fatality Analysis Reporting System (FARS) for 1975–1976, and vehicle registration sources, Schwartz himself took the trouble to calculate the overall fatality rates for subcompacts during this period (expressed in terms of million cars in operation). The resulting table, from Schwartz, “The Myth of the Ford Pinto Case,” 1029, n. 62, is as follows:

In 1975, two subcompacts have slightly lower overall fatality rates and both of them are produced domestically. The Datsun 510 has a slightly lower rate, but it is a compact. It should also be noted that those with higher overall fatality rates have substantially higher rates, especially the VW Beetle and the Datsun 1200/210. The average fatality rate for subcompacts is 327 in 1975 and 338 in 1976. Expressed in terms of relative percentages, the Pinto’s fatality rate is 8.7 percent below the average in 1975 and 4.7 percent below the average in 1976. The Pinto’s overall fatality rate is lower for both years than the average for all subcompacts. The Pinto’s fatality rate is comparable to a Datsun 510, which is a compact. The performance of the VW Beetle and the Datsun 1200/210 are both sufficiently poor to make one wonder why we have not read about “VW Madness” or “Datsun 1200/210 Madness.”

59. In addition to executive orders and other developments that require that consideration of costs and benefits must be taken into consideration by agencies in promulgating federal regulations, there has been a similar trend in product liability cases in state courts. Schwartz notes that “only two weeks before the Grimshaw case went to jury, the California Supreme Court issued its opinion in Baker v. Lull Engineering Co., clarifying the standards of liability in products liability design cases.” The first standard not only tolerates risk benefit analysis but “actually encourages manufacturers to consider such trade-offs,” on the grounds that society benefits by manufacturers choosing the “right balance between advantages and disadvantages.” Schwartz believes that many companies are hesitant to do so because juries continue to believe that these considerations are unconscionable (“The Myth of the Ford Pinto Case,” 1035–1047). The upshot is a tension within the legal system and a conundrum for business enterprises. Whether the shift toward cost benefit analysis with these areas of law is morally defensible, of course, is quite contentious. See, for example, Cost-Benefit Analysis: Legal, Economic and Philosophical Perspectives, ed. Matthew D. Adler and Eric A. Posner (Chicago: University of Chicago Press, 2001). This paper merely notes that arguments such as the one advanced by Schwartz invite discussions of costs and benefits in moral discourse.

There is a growing body of literature investigating perceptions and judgments of juries and judges with respect to cost benefit analyses. See, for example, W. Kip Viscusi, “Jurors, Judges and the Mistreatment of Risk by the Courts,” Discussion Paper No. 291, which contains a substantial bibliography of recent work. This can be downloaded from www.law.harvard.edu/programs/olin_center/.