Appendix — Consumers Union of United States, Inc. v. Suzuki Motor Corp.

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APPENDIX A — AMENDED OPINION OF THE

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT FILED MAY 19, 2003

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 00-56043

330 F.3d 1127; 2003 U.S. App. LEXIS 9559

February 12, 2002, Argued and Submitted,

Pasadena, California

May 19, 2003, Filed

SUZUKI MOTOR CORPORATION AND AMERICAN

SUZUKI MOTOR CORPORATION,

Plaintiff-Appellant,

v.

CONSUMERS UNION OF UNITED STATES, INC.,

a non-profit New York Corporation,

Defendant-Appellee.

JUDGES: Before: Warren J. Ferguson, A. Wallace Tashima,

and Susan P. Graber, Circuit Judges. Opinion by Judge

Tashima; Concurrence by Judge Graber; Dissent by Judge

Ferguson.

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OPINION:

AMENDED OPINION

TASHIMA, Circuit Judge:

In 1988, Appellee Consumers Union of United States,

Inc. (CU), published a story in its magazine Consumer

Reports, in which it rated the Suzuki Samurai “Not

Acceptable” based on its propensity to roll over during

accident avoidance tests. Since that time, CU has publicly

referred to the negative Samurai rating in various fora, most

prominently in the 60th Anniversary issue of Consumer

Reports, published in 1996. Appellant Suzuki Motor

Corporation (Suzuki), the manufacturer of the Samurai, has

challenged the validity of CU’s Samurai test and, on the heels

of the 60th Anniversary issue, brought this action against

CU alleging product disparagement. CU’s motion for

summary judgment was granted by the district court, which

held that a reasonable jury-could not conclude by clear and

convincing evidence that CU had acted with actual malice.

We have jurisdiction under 28 U.S.C. § 1291, and we reverse

and remand for further proceedings.

I. BACKGROUND

CU is a nonprofit corporation that engages in

comparative testing and evaluation of consumer products and

services, the results of which are published in the magazine

Consumer Reports. In order to provide buying and safety

advice to automobile purchasers, CU’s Automotive Testing

Division (ATD) tests approximately 40 cars and other

vehicles each year.

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CU tested the Samurai in 1988.' The Samurai, a sport

utility vehicle (SUV) manufactured by Suzuki, was

introducea in the United States in 1985. By 1988,

approximately 150,000 Samurais had been sold. Although it

had received some favorable reviews from the automotive

press, the Samurai had also been the subject of news stories

that highlighted its instability and propensity to tip over. In

February 1988, the Center for Auto Safety filed a petition

with the National Highway Traffic Safety Administration

(NHTSA) to open an investigation into an alleged safety

defect of the Samurai. The petition was denied, although the

NHTSA emphasized that the denial was not an endorsement

of the safety performance of a vehicle.

A. April 20, 1988: Long-Course Testing

On April 20, 1988, the ATD tested the Samurai, along

with the Jeep Cherokee, Isuzu Trooper II, and Jeep Wrangler,

on its standard long course, a double lane-change avoidance

maneuver test course that CU had used since 1973.” The long

1. As Suzuki points out, around this time CU made a significant

financial outlay in order to secure a new headquarters building in

Yonkers, New York. This outlay of approximately $ 30 million placed

CU in what the district court termed a “financially overextended”

position.

2. The long-course maneuvers followed preliminary testing on

the Samurai. CU notes that during the evaluation and break-in process,

Alan Hanks, the Facilities Manager of the ATD, rolled the Samurai

on a snow-covered gravel road at 15 miles per hour. During the formal

test ride on April 7, 1988, CU driver Kevin Sheehan reported that

the Samurai was “by far the worst ride in my 20+ years at CU.”

(Cont’d)

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course was designed to replicate an emergency situation in

which a driver suddenly steers a vehicle left into the opposing

lane, to avoid an obstacle, and quickly back into the original

lane to avoid oncoming traffic. Several CU personnel were

in attendance during the April 20 testing, including Robert

Knoll, the head of the ATD, Dr. R. David Pittle, CU’s

Technical Director and Senior Vice-President, and Irwin

Landau, the Editorial Director of Consumer Reports, who

had been assigned as the initial writer and editor of the

Samurai article. Pittle had invited Landau to attend the testing

because he thought that they might witness a tip-up of the

Samurai.

CU driver Kevin Sheehan drove the Samurai first, putting

it through the long course 16 times at speeds reaching over

50 miles per hour. The Samurai that Sheehan drove was

equipped with outriggers, which essentially act as training

wheels to prevent the car from tipping over completely.’

During Sheehan’s runs, the Samurai did not tip over,

prompting Sheehan to make the following evaluation of the

car: “rubbery, slow response, rocks a bit, but never felt like

it would tip over.” In the Avoidance Maneuver Data

Summary, Sheehan rated the Samurai as highly as or better

than other vehicles tested that day.

(Cont'd)

Sheehan also took the Samurai on a one-day trip test on April 11,

1988, after which he noted that the Samurai should be raied

“Not Acceptable.” In addition, as Suzuki notes, preliminary research

had been conducted for the Samurai story prior to the initiation of

long-course testing.

3. Suzuki contends that the outriggers allowed CU to achieve

dramatic results during the tests without risking a real rollover.

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After Sheehan had completed his testing, CU removed

the outriggers. CU driver Rick Small then drove the Samurai

through the long course 21 times at speeds similar to those

achieved by Sheehan. Again, there were no tip-ups. In his

driver log, Small stated: “steering is slow, but it works—

responds well and corrects quickly, leans normally, snaps

back. Confidence fairly high. No real problem.” On the basis

of his test drives, Small rated the Samurai higher than the

other three vehicles tested that day.

According to testimony by former CU employee Ron

Denison, at some point during the long-course testing, which

had not demonstrated any tip-ups of the Samurai, Landau

told Sheehan: “If you can’t find someone to roll this Car,

I will.”

After Sheehan and Small had completed their test runs,

Pittle, who was not a test driver, began to drive the Samurai

through the long course. According to Pittle, he did so

because he had never driven a small SUV and wanted to get

a feel for how it handled through the course. Pittle took the

car though the course 10 times, achieving a top speed of 49

miles per hour. On Pittle’s tenth run, the Samurai tipped up

on two wheels. Pittle stated that he did not purposefully cause

the Samurai to tip up and that it was a Startling and

unexpected occurrence. When Pittle tipped the car, one

onlooker yelled, “‘yeah!,” while another shouted, “I think I

got that, I think I got that.”

B. April 26, 1988: Short-Course Testing

After the long-course testing, Knoll redesigned CU’s

avoidance course to replicate the situation that caused the

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Pittle tip-up. This new modified short course had a reduced

distance for the first lane change, and the obstacle to be

avoided was moved three feet to the left.

Sheehan, who was afraid to drive the Samurai through

the short course, was replaced by CU driver Fred Wood.

Wood, who drove the vehicle with outriggers, made 15 runs

through the course. On the fifteenth run, the Samurai tipped

up onto the outriggers. After this last run, Knoll is heard on

the test videotape saying: “That’s it. That looked pretty good.”

Knoll later acknowledged that he was “relieved” that the

Samurai tipped up during short-course testing.

Small then drove the car through the short course. On

his second run, the Samurai tipped up onto the outriggers at

a speed of 40 miles per hour. After the tip-up occurred, CU

technician Joseph Nappi can be heard on the test videotape

saying, “[a]ll right Ricky baby.’* That same day, CU also

put the Jeep Wrangler and Isuzu Trooper II through the short

course with no tip-ups reported.

4. Suzuki emphasizes CU’s submission of what it characterizes

as a “false” affidavit in connection with Nappi’s statement.

CU employees Hanks, Sheehan, Wood, Nappi, and Knoll submitted

an affidavit stating that it was Denison, not Nappi, who could be

heard on the videotape saying “All right, Ricky baby” after Small

tipped the Samurai on April 26, 1988. Nappi later admitted, however,

that he in fact made the statement. Suzuki suggests that the affidavit

was submitted in an effort to discredit Denison, who had testified

that Landau threatened to find someone to roll the Samurai after the

April 20, 1988, long-course testing. CU proffers a benign explanation

for Nappi’s changing his story. Resolution of this dispute, however,

is not critical to our decision.

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C. May 12, 1988: Additional Short-Course Testing

Further testing was scheduled on the short course for

May 12, 1988. The parties offer conflicting justifications for

why this set of tests was necessary. Suzuki suggests that the

additional testing was scheduled for the purpose of shooting

video footage of the Samurai for a subsequent press

conference, at which it had already been decided that CU

would rate the Samurai “Not Acceptable.” CU contends that

the testing was held to evaluate the performance of the newly

released 1988 Samurai, which included suspension

modifications that distinguished it from the 1988 version

tested previously.

Small was the first to drive the Samurai through the short

course on this day, tipping over onto the outriggers on his

fifth run. Following Small, Wood tipped the Samurai on his

second run. Pittle was watching the test runs and, prior to

witnessing a tip up, stated: “Can’t you just see it, we get no

lift off the ground. Oh God.” CU also put a Jeep Wrangler,

Jeep Cherokee, and Ford Festiva sedan through the short

course on May 12. None of these vehicles tipped up.

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D. June 2, 1988: Press Conference

CU held a press conference on June 2, 1988, at which it

announced that the Samurai had shown a propensity to roll

over in CU’s tests and that it would be rated “Not Acceptable”

in an article to appear in the July 1988 issue of Consumer

Reports. During the press conference, Pittle stated that, based

on CU’s testing, the Samurai had an “unusually high

propensity to roll over while performing an accident

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avoidance maneuver that could be demanded suddenly of

any driver during routine driving.” Pittle further described

the short course as “benign,” involving only “very limited

steering inputs,” a characterization he later conceded was

“not accurate.” Pittle also stated that the other tested

vehicles had made it through the short course with a “yawn,”

a statement that Suzuki contends is at odds with the fact that

the Isuzu Trooper II failed the course in three out of four

runs by hitting cones.°

E. July 1988: Article Publication

CU’s negative rating of the Samurai was detailed in an

article entitled, ““Warning: The Suzuki rolls over too easily,”

published in the July 1988 issue of Consumer Reports. The

article was initially written by Landau, although drafts were

reviewed by Pittle, Knoll, the ATD staff, CU’s President

Rhoda Karpatkin, CU’s Technical Department and Library,

and legal counsel.

The article described the steps CU took to test the

Samurai, Jeep Wrangler, Isuzu Trooper II, and Jeep Cherokee.

It began by recounting the incident in which an ATD staff

member rolled the Samurai over on its side during the

evaluation and break-in process. After detailing other

evidence of the Samurai’s safety problems, the article then

described the long-course testing, noting that Pittle, “a staff

member who does not normally drive the course,” tipped the

5. Suzuki also argues that CU deliberately excised footage of

the Isuzu Trooper II’s runs from the videotape screened at the press

conference to downplay the fact that the Trooper also had trouble

making it through the course.

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Samurai at 45 miles per hour after making “a slight steering

misjudgment” that should not have “put daylight under the

tires of any car.” The article continued by highlighting the

results of both short-course tests, concluding that “that Suzuki

Samurai is so likely to roll over during a maneuver that could

be demanded of any car at any time that it is unfit for its

intended use. We therefore judge it Not Acceptable.”

On June 2, 1988, CU submitted to NHTSA a copy of the

article, the videotape from the press conference, and a

diagram of its short course in support of a petition to establish

a minimum stability standard to protect against unreasonable

risk of rollover.

F. NHTSA Report

On September 8, 1988, NHTSA issued a decision

denying the motor vehicle defect petition filed earlier by the

Center for Auto Safety. In its analysis, the NHTSA stated

that “the rollover crash involvement of the Samurai appears

to be within the range of most other light utility vehicles.”

Denial of Motor Vehicle Defect Petitions, 53 Fed. Reg.

34,866 (Sept. 8, 1988). It concluded that the Ford Bronco II

“was found to have more than 3 times the first event rollover

... Involvement as the Samurai” and that “the Samurai had

a first event rollover involvement corresponding to the

[Chevrolet] S-10 Blazer.” Jd.

NHTSA’s opinion also criticized CU’s testing protocols,

stating as follows: “The existing test procedures for assessing

6. On September 25, 1996, NHTSA denied a second Samurai

defect petition on similar grounds. Denial of Motor Vehicle Defect

Petition, 61 Fed. Reg. 50,372 (Sept. 25, 1996).

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the rollover propensity of vehicles are unsatisfactory because

they do not provide for repeatable, reproducible results, and

there are no accepted performance criteria. The testing

appears to rely on the skill and influence of the driver and

the presumption that the vehicle suspension, tire, and road

surface characteristics will remain constant throughout the

testing.” 53 Fed. Reg. at 34,867. NHTSA concluded by stating

that, although the CU testing results were “cause for some

concern,” “the test procedures do not have a scientific basis

and cannot be linked to real-world crash avoidance needs,

or actual crash data. Using the same procedures, probably

any light utility vehicle could be made to roll over under the

right conditions and driver input.”’ Jd. CU issued a

subsequent article in Consumer Reports criticizing the

NHTSA decision.

G. 1988-1996: CU’s Republications of the Samurai

Report and Further Rollover Claims

Between 1988 and 1996, CU republished references to

the 1988 Samurai rating on at least 24 separate occasions in

Consumer Reports, CU’s annual buying guide, and other

editions of CU’s car books. During this time, CU states,

several events bolstered its belief in the correctness of its

“Not Acceptable” rating: a 1988 England-based Consumers’

Association article that buttressed the Samurai rollover claim;

7. In its summary of the test results on multipurpose vehicles,

Britain’s Department of Transport similarly concluded that the

“results from the modified Consumer Union tests were unpredictable”

and that “[d]river influence is greatest in the modified Consumer

Union manoeuvre.” Dep’t of Transp., Stability of Multi-Purpose

4-Wheel Drive Vehicles (Dec. 16, 1988).

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a 1988 lawsuit filed by seven state Attorneys General

charging Suzuki with false and misleading advertising

regarding the Samurai’s rollover potential (the case settled);

the decision in Malautea v. Suzuki Motor Corp., 148 F.R.D.

362, 375 (S.D. Ga. 1991), in which the court suggested that

Suzuki knew of the Samurai’s rollover propensity and did

nothing to correct it; two separate multimillion dollar verdicts

in the case of Rodriguez v. Suzuki Motor Co., where juries

determined that the Samurai was unreasonably dangerous due

to its rollover propensity (both verdicts were reversed and

the case settled); the disclosure of documents from the

Malautea and Rodriguez cases suggesting that Suzuki knew

of the Samurai’s rollover propensity; and eight years of

further SUV testing by CU during which time only the

Samurai in 1988 and Isuzu Trooper in 1996 tipped up.

H. January 1996: 60th Anniversary Issue of

Consumer Reports

In its 60th Anniversary issue of Consumer Reports,

published in January 1996, CU set forth a chronology that

contained a picture uf the Samurai tilted on two wheels, with

the following caption:

1986 CU buys its own auto test track in rural

Connecticut. Two years later, based on tests

conducted there, CONSUMER REPORTS

discovers the Suzuki Samurai easily rolls over in

turns and rates it Not Acceptable. Sales of the

Samurai dwindle away. Since 1936, dozens of

products, from chemistry sets and toasters to

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power mowers and child safety seats, have been

identified as safety hazards and rated Not

Acceptable.

The same January 1996 issue also contained a section entitled

“Memo to Members,” in which CU’s President stated that

“we still find products that are unsafe: From kerosene heaters

to the Suzuki Samurai to child safety seats, CONSUMER

REPORTS has called them out—and our work goes on.””*

I. April 1996: Suzuki Files This Action

On April 11, 1996, Suzuki filed the instant action alleging

that CU’s ongoing publication of the negative Samurai

rating constituted produci disparagement.’ After discovery,

CU moved for summary judgment, challenging the

sufficiency of Suzuki’s evidence that CU had acted with

actual malice in its reporting on the Samurai. The district

court granted CU’s motion and entered judgment in its favor.

Suzuki timely appealed.

8. In November 1995, CU published a car buyers guide on CD-

Rom that also reiterated the “Not Acceptable” rating from its July

1988 Consumer Reports article.

9. After the action was filed, CU continued publicly to refer to

the Samurai test, citing the “Not Acceptable” rating in a June 1996

Consumer Reports article on SUVs; sending out contribution

solicitation cards in August and October 1996 with a photograph

showing the Samurai tipped up on two wheels; and referring to the

Samurai in a 1996 press conference and article about the Isuzu

Trooper.

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Il. STANDARD OF REVIEW

A grant of summary judgment is reviewed de novo.

Devereaux v. Abbey, 263 F.3d 1070, 1074 (9th Cir. 2001)

(en banc). This court’s review is governed by the same

standard used by the trial court under Federal Rule of Civil

Procedure 56(c). Adcock v. Chrysler Corp., 166 F.3d 1290,

1292 (9th Cir. 1999). We must therefore determine, viewing

the evidence in the light most favorable to the nonmoving

party, whether there are any genuine issues of material fact

and whether the district court correctly applied the relevant

substantive law. Devereaux, 263 F.3d at 1074.

Because this case implicates the First Amendment

protections of a media defendant in the context of product

disparagement, “[t]he appropriate summary judgment

question is whether a reasonable jury could find, by clear

and convincing evidence, that [the plaintiff] has shown actual

malice.” Kaelin v. Globe Communications Corp., 162 F.3d

1036, 1039 (9th Cir. 1998). In answering this question, we

“must draw all justifiable inferences in favor of the

nonmoving party, including questions of credibility and of

the weight to be accorded particular evidence.” Masson v.

New Yorker Magazine, Inc., 501 U.S. 496, 520, 115 L. Ed.

2d 447, 111 S. Ct. 2419 (1991). “[T]he plaintiff, to survive

the defendant’s motion, need only present evidence from

which a jury might return a verdict in [its] favor. If [the

plaintiff] does so, there is a genuine issue of fact that requires

a trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257,

91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).

The dissent contends that, by applying the well-

established summary judgment rules to the actual malice issue

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‘

on summary judgment, we offend the “independent

examination” standard of New York Times Co. v. Sullivan,

376 U.S. 254, 11 L. Ed. 2d 686, 84 S. Ct. 710 (1964). This

argument, however, conflates the summary judgment

standard of review with application of the New York Times

standard and, as a result, impermissibly weighs the evidence

at the summary judgment stage. Under the independent

examination rule, we “exercise our independent judgment”

in evaluating the lower court’s opinion, rather than granting

it any deference. See Bose Corp. v. Consumers Union of

United States, Inc., 466 U.S. 485, 514, 80 L. Ed. 2d 502, 104

S. Ct. 1949 (1984). In other words, we review the district

court’s decision de novo. See Hoffman v. Capital Cities/ABC,

Inc., 255 F.3d 1180, 1186 (9th Cir. 2001) (“We review the

district court’s finding of actual malice de novo.”); Eastwood

v. Nat’l Enquirer, Inc., 123 F.3d 1249, 1252 (9th Cir. 1997)

(“First Amendment questions of ‘constitutional fact’ compel

us to conduct a de novo review.” (internal quotation marks

and brackets omitted) (quoting Bose, 466 U.S. at 508 n.27)).

This does not mean, however, contrary to the dissent’s

suggestion, that in the process of exercising our independent

judgment, we jettison the procedural rules governing

summary judgment when reviewing the grant of summary

judgment in First Amendment cases. While it is true that we

must independently examine the record when reviewing the

grant of summary judgment, starting with Anderson v. Liberty

Lobby, the Court has been clear that we apply the

well-established summary judgment rules to review of the

actual malice issue:

Consequently, where the New York Times “clear

and convincing” evidence requirement applies, the

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trial judge’s summary judgment inquiry as to

whether a genuine issue exists will be whether

the evidence presented is such that a jury applying

that evidentiary standard could reasonably find for

either the plaintiff or the defendant. Thus, where

the factual dispute concerns actual malice, clearly

a material issue in a New York Times case, the

appropriate summary judgment question will be

. whether the evidence in the record could support

a reasonable jury finding either that the plaintiff

has shown actual malice by clear and convincing

evidence or that the plaintiff has not.

Anderson, 477 U.S. at 255-56. See also Masson, 501 U.S. at

520 (“On summary judgment, we must draw all justifiable

inferences in favor of the nonmoving party, including

questions of credibility and of the weight to be accorded

particular evidence.”). And, as we have noted above, our case

law also recognizes the application of the normal summary

judgment standards to the actual malice issue. See Solano v.

Playgirl, Inc., 292 F.3d 1078, 1082, 1087 (9th Cir.), cert.

denied, 154 L. Ed. 2d 443, 123 S. Ct. 557 (2002); Kaelin,

162 F.3d at 1039. Thus, contrary to the dissent’s suggestion,

the independent examination rule of New York Times is

consistent with our well-established procedural rules

governing review of summary judgment motions on the actual

malice issue and does not require us to discard the procedural

rules designed to preclude the resolution of disputed factual

issues at the summary judgment stage.’

10. The cases cited by the dissent do not require otherwise.

See Andersen v. McCotter, 100 F.3d 723, 725 (10th Cir. 1996)

(Cont'd)

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Thus, although the dissent provides a plausible view of

the evidence—that CU acted in good faith as a skeptical

consumer watchdog should—t is not our role, at this stage,

to take sides in this way. As we discuss below, there is also

another plausible view of the summary judgment record—

that CU “rigged” a test to achieve a predetermined result in

order to serve its own pecuniary interests. Because a jury

would be entitled to believe the latter view of the evidence,

Suzuki’s case survives summary judgment, even applying

the independent examination standard.

(Cont'd)

(affirming that “[s]ummary judgment is appropriate when there is no

genuine issue as to any material fact”); Secrist v. Harkin, 874 F.2d

1244, 1251 (8th Cir. 1989) (“To withstand a motion for summary

judgment, a public official or public figure must present evidence to

support a jury finding that he or she has shown with convincing clarity

that a defendant acted with actual malice.”); Liberty Lobby, Inc. v.

Dow Jones & Co., 267 U.S. App. D.C. 337, 838 F.2d 1287, 1293

(D.C. Cir. 1988) (“The question for the court is ‘whether the evidence

presented is such that a reasonable jury might find that actual malice

had been shown with convincing clarity.’” (quoting Anderson, 477

U.S. at 257)); Herbert v. Lando, 781 F.2d 298, 305 (2d Cir. 1986)

(affirming summary judgment standards).

Similarly, CU also misstates the applicable standard of review,

contending that the normal summary judgment standard does not

apply. The cases on which it relies, however, all involve the review

of a judgment rendered after trial. See Bose, 466 U.S. at 510-11;

Newton v. Nat'l Broad. Co., 930 F.2d 662, 669 (9th Cir. 1991);

Eastwood, 123 F.3d at 1252. Thus, these cases do not, as CU suggests,

require that we aLandon the established standard of review in the

summary judgment context.

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Ill. ANALYSIS

The parties do not dispute that for Suzuki to recover in

this case, it must, as a public-figure plaintiff, prove by clear

and convincing evidence that CU published disparaging

statements about the Samurai with actual malice.'!

See Unelko Corp. y. Rooney, 912 F.2d 1049, 1057-58

(9th Cir. 1990) (stating that claims for product disparagement

“are subject to the same first amendment requirements that

govern actions for defamation”): see also Isuzu Motors Ltd.

v. Consumers Union of United States, Inc., 66 F. Supp. 2d

1117, 1124 (C.D. Cal. 1999); Melaleuca, Inc. vy. Clark, 66

Cal. App. 4th 1344, 78 Cal.Rptr.2d 627, 637 (Ct. App. 1998);

cf. Bose, 466 U.S. at 513 (assuming without deciding that

proof of actual malice is required in a product disparagement

action brought by a public-figure plaintiff against a media

defendant). Actual malice requires a showing that the

defendant made a false statement “with knowledge that the

statement was false or with reckless disregard as to whether

or not it was true.” Hustler Magazine, Inc. v. Falwell,

485 U.S. 46, 56, 99 L. Ed. 2d 41, 108 S. Ct. 876 (1988);

11. Suzuki accepts the actual malice formulation of the product

disparagement standard for the purposes of this appeal, although it

Suggests that the Supreme Court has left this issue open, see Bose,

466 U.S. at 513, and reserves the right to challenge the standard on

further review. Amicus Washington Legal Foundation devotes a

substantial portion of its brief to arguing that the First Amendment

does not demand a Showing of actual malice for product

disparagement claims. We decline, however, to address an issue raised

only by an amicus. See Russian River Watershed Prot. Comm. v. C ity

oj Santa Rosa, 142 F.3d 1136, 1141 n.1 (9th Cir. 1998) (“Generally,

we will not consider on appeal an issue raised only by an amicus.”).

CO

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accord Harte-Hanks Communications, Inc. v. Connaughton,

491 U.S. 657, 667, 105 L. Ed. 2d 562, 109 S. Ct. 2678 (1989).

This Court has interpreted Harte-Hanks as providing two

different tests for proving reckless disregard. Masson v. New

Yorker Magazine, Inc., 960 F.2d 896, 900 (9th Cir. 1992)

(Masson II):

Where the jury has proof that a publisher “actually

had a high degree of awareness of probable

falsity,” that alone will establish that it “in fact

entertained serious doubts as to the truth of [its] -

publication.” Where such direct proof is missing,

the jury may nevertheless infer that the publisher

was aware of the falsity if it finds that there were

“obvious reasons to doubt” the accuracy of the

story, and that the defendant did not act reasonably

in dispelling those doubts .... As Harte-Hanks

points out, “[a]lthough failure to investigate will

not alone support a finding of actual malice, the

purposeful avoidance of the truth is in a different

category.”

Id. (quoting Harte-Hanks, 491 U.S. at 688, 692) (brackets in

the original).

Suzuki argues that the district court erred in concluding

that a reasonable jury could not find that CU’s statements

regarding the Samurai met the actual malice standard.

It contends that the evidence is sufficient to sustain a jury

verdict under either test articulated in Masson II for proving

CU’s reckless disregard of the truth.

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A. Awareness of Probable Falsity

Suzuki first contends that a reasonable jury could find

by clear and convincing evidence that CU had a high degree

of awareness of the probable falsity of its statements about

the Samurai. It argues that there is a sufficient evidentiary

basis showing that CU knew that the Samurai did not tip up

more easily than other SUVs and essentially rigged its testing

to produce a predetermined result.

At the outset, CU raises a general challenge to Suzuki’s

argument, suggesting that the overwhelming weight of the

evidence demonstrates the skill and dedication of CU in

researching and publishing the Samurai Story, and therefore

militates against any finding of actual malice. CU assails

Suzuki for taking ‘“‘a few facts out of context, which it pieces

together in a contrived and inherently implausible fashion

without any supporting evidence.” It argues that this court

Should reject Suzuki’s arguments as conjectural and places

great weight on its own assertions that it absolutely believed

in the truth of its statements.

In the summary judgment context, this argument is

unconvincing. It is true that CU has offered evidence of its

accuracy in reporting the Samurai story—or, at least, in its

subjective belief that it accurately reported the Story. But its

characterization of its own evidence as overwhelming and

its disparagement of Suzuki’s evidence as out of context begs

the question that we must resolve. The fact that CU employees

believed in the truth of their negative statements about

the Samurai cannot, by itself, defeat summary judgment.

See St. Amant y. Thompson, 390 U.S. 727, 732, 20 L. Ed. 2d

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262, 88 S. Ct. 1323 (1968) (“The defendant in a defamation

action... cannot. . . automatically insure a favorable verdict

by testifying that he published with a belief that the statements

were true.”); Solano, 292 F.3d at 1087 (“we have yet to see a

defendant who admits entertaining serious doubt about the

authenticity of an article it published’’). Rather, the issue is

whether there is adequate evidence to support the contrary

view—namely, that behind the veneer of accuracy, CU was

disseminating the Samurai story with knowledge, or reckless

disregard, of its falsity. While it may be true that CU’s

evidence of meticulous reporting ultimately has more weight

than Suzuki’s evidence of actual malice, that is not a question

to be resolved here. See Anderson, 477 US. at 249.

Turning to the evidentiary basis for Suzuki’s claims,

Suzuki contends that there is sufficient evidence that CU

“rigged” the tests to produce the rollover result,

demonstrating its awareness of the probable falsity of the

negative Samurai rating. In support of this argument, Suzuki

highlights the testimony of Denison, who stated that Landau,

after witnessing Sheehan and Small’s clean runs through the

long course, said: “If you can’t find someone to roll this car,

I will.” After this comment was allegedly made (and after

Sheehan and Small had taken the Samurai through 37 long-

course runs without incident), Suzuki notes that Pittle, who

was not a CU test driver, decided to drive the Samurai, tipping

the vehicle after 10 runs to a cheer from a CU onlooker.'"

Suzuki also points to the fact that CU modified the long

12. The record does not indicate whether 10 runs was

predetermined by the testing protocol or whether Pittle simply stopped

making further runs after achieving a tip-up.

2la

Appendix A

course, which it had used since 1973, to replicate the Pittle

situation and then resumed its testing of the Samurai until it

tipped up—again eliciting statements that can be construed

as expressions of satisfaction (“That’s it. That looked pretty

good.” “All right Ricky baby.”).

This evidence is adequate to preclude summary

judgment. A reasonable jury. could find by clear and

convincing evidence that CU sought to produce a

predetermined result in the Samurai test. The timing of the

course modification, the fact that the Suzuki was tested

repeatedly until it tipped, and the reactions of CU employees

all support such an inference. A permissible inference of

reckless disregard follows from this evidence of “rigged”

testing—if CU modified the course in order to cause a

rollover, a reasonable jury could find that the truthfulness of

any subsequent reports was Vitiated. |

Although it Suggests that the facts have been taken out

of context, CU does not seriously challenge Suzuki’s

argument of rigging. CU does question Suzuki’s reliance on

the Denison testimony, arguing that he had a high regard for

Denison did testify, however, that while he believed CU was

honest 99.9 percent of the time, the 0.1 percent that he was

excluding was the 1988 test of the Samurai. Moreover,

_although CU has its own interpretation of why it modified

the long course and retested the Samurai, we, of course,

cannot credit that interpretation over Suzuki’s at the summary

judgment Stage. The district court did not give adequate credit

to this evidence of test-rigging.

22a

Appendix A

Suzuki also contends that evidence of CU’s avaricious

motives supports an inference of actual malice. It suggests

that the evidence reveals that CU was financially

overextended due to capital investments in the period leading

up to the Samurai report and needed a blockbuster story to

raise CU’s profile and increase fundraising revenues. It is

not disputed that, at the time of the Samurai story, CU had

incurred substantial debt for a new headquarters and that CU

has used the Samurai story in its fundraising solicitations.

CU characterizes Suzuki’s financial motive argument as

an “unsupported accusation” and states that, instead of

increasing revenues, CU’s pre-publication press conference

about the Samurai test actually decreased its sales of

Consumer Reports. CU further contends that evidence of

financial motive does not support a finding of actual

malice under the relevani case law. See Harte-Hanks,

491 U.S. at 667 (“Nor can the fact that the defendant

published the defamatory material in order to increase its

profits suffice to prove actual malice.”). The district court

adopted this argument in granting summary judgment.

We agree with Suzuki, however, that the district court

erred in this regard. There is sufficient circumstantial

evidence of a financial motive to support the ultimate

conclusion of actual malice. While CU is correct that

financial motive cannot, by itself, prove actual malice, it

nonetheless is a relevant factor bearing on the actual malice

inquiry. See Harte-Hanks, 491 U.S. at 668; Kaelin, 162 F.3d

at 1042. The evidence of financial motive dovetails with the

evidence of test-rigging described above. The fact that CU

needed to boost its revenues to complete its capital campaign

23a

Appendix A

lends credence to Suzuki’s contention that CU rigged the

Samurai testing to produce the predetermined rollover result,

We conclude that the evidence of motive and test-rigging,

in combination, is sufficient to preclude Summary judgment

and therefore requires reversal!

B. Purposeful Avoidance

Suzuki also argues that there was sufficient evidence for

a jury to have concluded under Masson /T that, in the face of

obvious reasons to doubt the accuracy of its Samurai story,

CU did not act reasonably in dispelling those doubts, thereby

raising the inference that CU knew of the story's falsity.

Under this approach, “[i]t is not ... the failure to act

reasonably in itself that establishes malice; that failure is only

a link in the chain of inferences that could (but need not)

lead a jury to conclude that the publisher failed to conduct

an investigation because it was already pretty much aware

and CU’s concealment of evidence contrary to its claim that the

Samurai “rolls over too easily.” Because the analysis set forth above

is dispositive of the first prong of the Harte-Hanks test (“a high degree

of awareness of probable falsity”), we need not reach Suzuki’s

remaining arguments in Support of reversal based on Harte-Hanks’

first prong.

24a

Appendix A

of the falsity.” Masson 11, 960 F.2d at 900. The central inquiry

is whether the evidence discloses that a defendant

purposefully avoided the truth. /d.

First, Suzuki claims that CU had reason to doubt its

assertion that the Samurai’s rollover propensity warranted a

“Not Acceptable” rating. In particular, Suzuki points to the

NHTSA decision issued in September 1988 indicating that

the Ford Bronco II had a three times greater rollover record

than the Samurai, which had a rollover record corresponding

to the Chevrolet S-10 Blazer. Additionally, CU learned in

1989 that the Samurai’s rollover rate was less than the

rollover rate of the Nissan Pathfinder, Toyota 4 Runner, Jeep

CJ-7, and Ford Bronco II. Further, in 1992, the Insurance

Institute for Highway Safety produced a report showing

that the Samurai had a rollover rate lower than that of many

other SUVs.

Second, Suzuki contends that CU had sufficient reasons

to doubt the validity of the testing procedures it used to

determine the negative Samurai rating. Here Suzuki again

relies on the NHTSA study criticizing CU’s testing

procedures for failing to provide a basis for repeatable results

and being overly dependent on driver influence. Suzuki also

emphasizes the British Department of Transport study

echoing these conclusions, as well as statements by Knoll

and Sheehan suggesting that at least some CU personnel

acknowledged that its testing procedures were overly driver-

influenced. Suzuki asserts that, despite these indications that

the Samurai rating rested on questionable data and suspect

methodological premises, CU took no steps to engage in

further investigation, thereby reinforcing the inference of

25a

Appendix A

purposeful avoidance. Suzuki faults CU for failing to

incorporate instruments into its testing that would record how

the driver was steering the vehicle and for never evaluating

its test results against real-world crash data. It suggests that

CU’s failure to do so violated accepted journalistic

standards" and raises the inference that CU ignored contrary

evidence that would confirm the falsity of its claims about

| the Samurai. The district court rejected much of this evidence,

stating particularly that the NHTSA study was not entitled

to greater weight than any other study or opinion regarding

testing methods and therefore could not Support a claim of

actual malice.

In response to the NHTSA report, CU published an article

in the November 1988 issue of Consumer Reports that

addressed the NHTSA’s critique of CU’s negative Samurai

rating. With respect to the issue of the Samurai’s rollover

rate, CU stated:

: According to NHTSA’s own Crash Avoidance

Research Data file, however, the Suzuki Samurai’s

rate of rollover in single-vehicle accidents is more

Stee

14. Relying on expert witness testimony, Suzuki asserts that

CU violated accepted journalistic standards in failing to engage in

further investigation of contradictory evidence. CU responds that

the expert testimony is irrelevant because it is not probative of CU’s

subjective state of mind. See, e.g., Harris v. Quadracci, 856 F. Supp.

513, 519 (E.D. Wis. 1994). Although expert testimony regarding CU’s

departure from accepted professional standards is not sufficient by

itself to establish actual malice, see Harte-Hanks, 491 U.S. at 669,

it does shed light on the propriety of CU’s response to contrary

rollover evidence and, thus, is entitled to be given appropriate weight.

26a

Appendix A

than double the average for all sport-utility

vehicles. In 1986, the most recent year for which

there are figures, the Suzuki rolled over in 64

percent of all single-vehicle Suzuki accidents

reported in this data base. The only vehicle that

came close to the Samurai in rollover involvement

is the now-discontinued Jeep CJ-5 (49 percent).

By contrast, the rollover rate for full-sized sedans

was only 8 percent.

NHTSA appears to have relied not on its

statistics on rollover rates for single-vehicle

accidents but on a different data base, one that

includes only rollovers involving a fatality.

Elsewhere, ... [the NHTSA] notes that the

Samurai was involved in six fatal rollovers per

100,000 vehicles on the road, a record the agency

compares favorably with that of the Ford Bronco

JJ]—19 fatal rollovers per 100,000 vehicles on the

road.

CU has learned that the overall rollover rate

for the Bronco II is high—about the same as that

for the Jeep C/-5—but not nearly as high as the

Suzuki’s. The higher number of fatalities in

Bronco II rollovers could come about for a number

of reasons. The Suzuki rolled over at a relatively

low speed in our accident-avoidance tests;

if Bronco II rollovers occurred at higher speeds,

one would expect more fatalities per rollover.

‘One would also expect more fatalities if the

Bronco II were driven more miles, on average,

than the Suzuki.

27a

Appendix A

Protocols, the article went on to state:

NHTSA did no independent testing of the

Suzuki’s rollover Propensity. Rather, it uncritically

accepted Suzuki’s data, Saying Suzuki

“demonstrated that the Samurai Satisfactorily

completed industry accepted . . . tests which mi ght

be used to assess a vehicle’s rollover propensity.”

But there are no industry-accepted tests for

rollover propensity—a point NHTSA itself makes

elsewhere in its letter . . -

[One] test performed for Suzukj looks

superficially like an avoidance maneuver, since

the car was run through a slalom course. But in a

realistic avoidance maneuver, a car is steered first

to the left and then back to the right immediately.

In the Suzuki test, the car was Steered to the left,

then straightened and allowed to recover before

returning to the right lane. That is a simple

lane-changing maneuver, not an accident-

avoidance maneuver.

NHTSA also adopted as its own another of

Suzuki’s arguments: Using the accident-avoidance

maneuver developed by CU, the agency stated,

“probably any light utility vehicle could be made

to roll over.” But NHTSA offered no evidence or

independent test results to Support such

28a

Appendix A

speculation. In fact, no vehicle other than the

Suzuki has rolled over in the 10 years we’ve tested

for accident avoidance.

The critical inquiry under Masson II] is whether CU failed

to act reasonably in investigating and responding to contrary

studies in a manner that suggested it was attempting

purposefully to avoid discovering the truth of the matter. In

general, the analysis conducted and published by CU in

response to the NHTSA study is not indicative of purposeful

avoidance. To the contrary, in the November 1988 article,

CU challenged the NHTSA report head on, stating its

disagreement in detail and supporting its alternative

conclusions with substantive justifications. To the extent that

there were contrary rollover statistics, CU analyzed them and

explained why they did not warrant a conclusion at odds with

its initial assessment of the Samurai. In response to the

-NHTSA’s critique of CU’s testing, CU argued that the Suzuki

tests upon which the NHTSA relied were flawed. While

Suzuki may disagree with CU’s discussion of the rollover

statistics or its criticisms of Suzuki’s own accident avoidance

tests, such disagreement does not demonstrate CU’s

purposeful avoidance of critical facts.

While we agree with CU, however, that much of Suzuki’s

purposeful-avoidance argument boils down to its disapproval

of CU’s conclusions, there is one issue that nevertheless

precludes summary judgment here. In particular, CU has done

nothing to respond to the criticism of its testing procedures

as overly influenced by driver input. This evidence formed

the basis for the district court’s decision in Jsuzu Motors, in

which the court relied heavily on the NHTSA report to deny

29a

Appendix A

CU’s summary judgment motion, stating that “CU was aware

that its tests were si gnificantly reliant upon driver input and

skill.” Jsuzy Motors, 66 F. Supp. 2d at 1125. Suzuki has

pointed to further evidence that some CU personnel shared

this assessment. The issue is whether CU, armed with the

point, CU’s failure to address this deficiency with its testing

Procedure could lead a jury to conclude that it was aware

that doing so would disclose the falsity of its negative

Therefore, we conclude that Suzuki has also raised a

genuine issue of materia] fact as to whether CU purposefully

avoided information that would have undermined its

assessment of the Samurai’s rollover propensity.

IV. CONCLUSION

For the foregoing reasons, the district court’s grant of

summary judgment is reversed and the case remanded for

further Proceedings.

REVERSED and REMANDED.

etsy _

15. We, of course, intimate no view of the ultimate outcome on

the merits.

30a

Appendix A

CONCUR BY: Susan P. Graber (In Part)

CONCUR: GRABER, J., concurring in part:

I agree with the majority opinion’s theoretical discussion

but agree only in part with its application of our standard of

review.

A. Standard of Review

The majority opinion employs the proper standard of

review. Although the independent examination rule applies

at the summary judgment stage, it does not require us to

abandon all the usual summary judgment procedures. Instead,

we are required to examine independently the entire record

in determining whether the nonmoving party has presented

evidence sufficient to allow a reasonable jury to conclude,

by clear and convincing evidence, that a public figure has

proven actual malice. Anderson vy. Liberty Lobby, Inc.,

477 U.S. 242, 255-56, 91 L. Ed. 2d 202, 106 S. Ct. 2505

(1986); Kaelin v. Globe Communications Corp., 162 F.3d

1036, 1039 (9th Cir. 1998).

At the summary judgment stage, the independent

examination rule does not allow us to end our analysis by

noting that there is “some” or “any” evidence in the record

giving rise to a genuine issue of material fact, as we would

be permitted to do in a run-of-the-mill civil action. The First

Amendment requires us to graft the more demanding “clear

and convincing” standard onto our traditional summary

judgment analysis and requires us to consider independently

whether the non-moving party has presented sufficient

3la

Appendix A

the nhonmoving party, and we are prohibited from deciding

questions such as Credibility, which remain reserved

exclusively for the factfinder. Anderson, 477 U.S. at 255.

the judgment constitutes “a forbidden intrusion on the field

of free expression.” VY Times Co. y, Sullivan, 376 U.S. 254,

285, 11 L. Ed. 24 686, 84 S. Ct. 710 (1964). The dissent

argues incorrectly that we ignore this directive in our

application of the summary judgment Standard.

See Anderson, 477 U.S. at 255 (“The evidence of the non-

Movant is to be believed, and all justifiable inferences are to

32a

Appendix A

be drawn in his favor.”); Masson v. New Yorker Magazine,

Inc., 501 U.S. 496, 520, 115 L. Ed. 2d 447, 111 S. Ct. 2419

(1991) (“On summary judgment, we must draw all justifiable

inferences in favor of the nonmoving party, including

questions of credibility and of the weight to be accorded

particular evidence.”); see also Kaelin, 162 F.3d at 1039,

1041 (holding that the court “must draw all justifiable

inferences in favor of [the nonmoving party], including

questions of credibility and of the weight to be accorded

particular evidence,” and that the court is required to

“Ivjiew[] the facts in the light most favorable to

[the nonmoving party]” (internal quotation marks omitted)).

Thus, it is clear that “at the summary judgment stage the

judge’s function is not himself to weigh the evidence and

determine the truth of the matter but to determine whether

there is a genuine issue for trial.” Anderson, 477 U.S. at 249.

There are good reasons why courts must apply the

independent examination rule differently in the summary

judgment context than when reviewing a judgment entered

after a full trial. The evidence presented at trial often differs

markedly from that which is offered in a party’s summary

judgment papers. The propositions claimed in affidavits may

or may not be proved at trial. Some witnesses turn out to be

credible; some do not.' Some inferences that seemed tenuous

1. In this case, the credibility of a number of CU’s employees

is of paramount importance to the “actual malice” inquiry. Further,

were the jury at trial to disbelieve those employees’ explanations of

statements made during the testing process, this court could not

question the jury’s finding. See Eastwood v. Nat'l Enquirer, Inc.,

123 F.3d 1249, 1252 (9th Cir. 1997) (noting that the independent

(Cont’d)

33a

Appendix A

Our holding that the clear-and-convincing

standard of proof should be taken into account in

determinations, the Weighing of the evidence, and

the drawing of legitimate inferences from the facts

are jury functions, not those of a judge, whether

he is ruling on a motion for summary judgment

or for a directed verdict. The evidence of the non-

movant is to be believed, and all] justifiable

inferences are io be drawn in his favor.

34a

Appendix A

rule differently than we would if we were reviewing an actual-

malice finding made after a full trial.

B. Actionable Statements

I must part company with the majority opinion, however,

on the question of which statements are actionable. There

are dozens of allegedly actionable statements in this case.

Both the majority and the dissent analyze these statements

as a whole, using an all-or-nothing approach. I believe that

each statement must be considered separately against the

standard outlined above.

Under this analysis,” only two of the statements withstand

CU’s motion for summary judgment.

1. The first of these appeared in an August 20, 1996,

CU Background Paper: “In 1988, we developed the “short

course” because we discovered that the Suzuki Samurai, then

undergoing testing, showed a propensity to roll over during

our long course AM maneuver.” (Emphasis added.)

The evidence detailed in the majority opinion is sufficient to

allow a rational jury to find, by clear and convincing

evidence, that CU developed the short course before

discovering a rollover “propensity” and in order to create a

rollover propensity, not because of it.

2. The second potentially actionable statement appeared

in CU’s January 1996 anniversary issue: “1986 CU buys its

2. Suzuki’s claims are untimely with respect to many statements.

Others fail to meet the exacting summary judgment standard used in

a First Amendment case.

35a

Appendix A

For the reasons explained here and in the majority’s

opinion, Suzuki has Presented sufficient evidence to allow a

reasonable jury to conclude, by clear and convincing

evidence, that CU made those two Statements with actual

malice. Summary Judgment with respect to those statements

36a

Appendix A

DISSENT BY: Warren J. Ferguson

DISSENT: FERGUSON, Circuit Judge, dissenting:

I respectfully dissent. By failing to apply the full

procedural protections afforded by the First Amendment, the

majority and concurrence intrude on the field of free

expression in two of its most important contexts: consumer

protection and public safety.

In New York Times v. Sullivan, 376 U.S. 254, 11 L.-Ed.

2d 686, 84S. Ct. 710 (1964), the Supreme Court held that

specific constitutional protections of speech limit the state’s

power to award damages in libel actions brought by public

officials. /d. at 283. One method of protecting speech is the

actual malice standard, which is set forth by the majority

opinion. Majority Op. at 6498-99; see also New York Times,

376 U.S. at 285-86. Another method is the independent

examination rule, which requires an appellate court to

independently review the whole record, “so as to assure

[itself] that the judgment does not constitute a forbidden

intrusion on the field of free expression.” New York Times,

376 U.S. at 285 (citation omitted). In adopting the actual

malice standard and independent examination rule, the

Supreme Court noted the importance of protecting “the

principle that debate on public issues should be uninhibited,

robust, and wide-open ....” Jd. at 270. The Court also

recognized that an “erroneous statement is inevitable in free

debate, and that it must be protected if the freedoms of

expression are to have the breathing space they need [] to

survive.” Jd. at 271-72 (internal quotation marks and

citation omitted).

|

37a

Appendix A ~-———

The majority and concurrence undermine these

procedural protections by erring in their application of both

the actual malice standard and the independent examination

rule.

1. Independent Examination

The majority and concurrence misunderstand the

argument of Consumers Union of United States, Inc.

(“Consumers Union”) that we must conduct an independent

examination of the record under New York Times. Majority

Op. at 6495 & n.10. While purportedly applying the

“independent examination rule,” both the majority and

concurrence fail to grasp how the additional procedural

protection of the independent examination functions and,

thus, are unable to apply the rule properly in this case.

Moreover, both Judge Tashima and J udge Graber overlook

the ongoing debate among courts and legal scholars regarding

the applicability of the “independent examination” rule to

appeals from summary judgment motions, commentary which

clarifies the significance of the independent examination rule

in our analysis at the summary judgment stage.' Because the

majority and concurrence have demonstrated a limited

understanding of the independent examination rule, I provide

a brief overview below.

1. See, e.g., Eugene Volokh & Brett McDonnell, Freedom of

Speech and Independent Judgment Review in Copyright Cases, 107

Yale L.J. 2431, 2432, 2442-45 (1998); Scott Matheson, Jr., Procedure

in Public Person Defamation Cases: The Impact of the First

Amendment, 66 Tex. L. Rev. 21 5, 289-97 (1987); Lee Levine, Judge

and Jury in the Law of Defamation: Putting the Horse Behind the

Cart, 35 Am. U.L. Rev. 3, 50-91 (1985). The debate among the

circuits is discussed further below.

38a

Appendix A

From the outset, it is worth noting that prior to our

decision in Crane v. Arizona Republic, 972 F.2d 1511 (9th

Cir. 1992), it was an open question within our circuit whether -

the independent examination rule applied to appeals from

summary judgment. Even after Crane, the Supreme Court

has recognized that the scope of procedural protections in

First Amendment cases remains unclear. Waters v. Churchill,

511 U.S. 661, 671, 128 L. Ed. 2d 686, 114 S. Ct. 1878 (1994)

(recognizing that, although “some procedural requirements

are mandated by the First Amendment, and some are not[,]”

the Court has not “discovered a general principle to determine

where the line is to be drawn.”).

However, the application of the independent review rule

to a summary judgment determination is the most logical

method to address the concerns regarding the chilling of

speech expressed in New York Times. See 376 U.S. at 278

(“Whether or not a newspaper can survive a succession of

such judgments, the pall of fear and timidity imposed upon

those who would give voice to public criticism is an

atmosphere in which the First Amendment freedoms cannot

survive.”). As a practical matter, the threat and actual cost of

litigation, including attorneys fees, inhibit speech. See id. at

278-79; see also Steaks Unlimited, Inc. v. Deaner, 623 F.2d

264, 280 n.76 (3d Cir. 1980) (“The cost of litigating a libel

action, burdensome on even the largest news organizations,

often can cripple smaller news operations.”). At times, the

costs of a successful defense can be the same or greater than

what the damage awards would have been. See Lee Levine,

Judge and Jury in the Law of Defamation: Putting the Horse

Behind the Cart, 35 Am. U. L. Rev. 3, 38 (1985). Moreover,

the defense costs prior to trial can be extraordinarily high.

See id. at 91.

oO

39a

Appendix A

Because of these costs and their effects on speech, the

procedural protection of the independent examination rule

is necessary not only for appellate review of post-trial

decisions, but also for appellate review of summary judgment

decisions.* The independent examination rule provides an

additional level of protection of the media’s First Amendment

rights. Moreover, it addresses concerns regarding the chilling

effects on speech of successive, costly litigation. See Steaks

Unlimited, Inc., 623 F.2d at 280 (“Regardless whether

particular statements made by consumer reporters are

precisely accurate, it is necessary to insulate them from the

vicissitudes of ordinary civil litigation in order to foster

[the goals of] the First Amendment . . . is

Unfortunately, Crane notwithstanding, the applicability

of the independent review rule to appeals from summary

judgment remains uncertain within our circuit. See, e.g.,

Kaelin v. Globe Communications Corp., 162 F.3d 1036, 1039

(9th Cir. 1998) (failing to discuss the applicability of the

independent review rule). While in the instant case the

majority and concurrence grudgingly concede that the

independent examination rule applies, this concession is

2. In her partial concurrence, Judge Graber contends that

“[t]here are good reasons why courts must apply the independent

examination rule differently in the summary judgment context than

when reviewing a judgment entered after a full trial.” Concurrence

at 6510. However, Judge Graber’s analysis fails to consider the

purpose and intent of a summary judgment motion, particularly in a

First Amendment case. In First Amendment Cases, we must be aware

of the dangers associated with the cost of litigation which can stifle

expression, particularly by those whose interests are in warning of

danger to the public safety.

40a

Appendix A

empty. Their analysis differs in no meaningful respect from

an ordinary summary judgment appeal, thereby stripping the

independent examination rule of its intended purpose and

meaning. I would find that a correct application of the

independent examination rule to the facts before us reveals

that the plaintiff’s case must fail on summary judgment. There

is simply insufficient evidence in the record as a whole that

could support a reasonable jury finding that the plaintiff has

shown actual malice on the part of Consumers Union by clear

and convincing evidence. See Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 255-56, 91 L. Ed. 2d 202, 106 S. Ct. 2505

(1986).

2. Applying the Procedural Protections Mandated by

New York Times

The majority and concurrence incorrectly apply the actual

malice standard and undermine the importance of

independent review. By doing so, Judges Tashima and Graber

permit a forbidden and dangerous intrusion on the field of

free speech.

Both Judges Tashima and Graber fail to contextualize

Consumers Union’s testing of the Samurai within the purpose

and mission of the organization. The District Court

recognized the importance of doing so when it stated: “The

trier of fact could not be expected to disregard the nature of

defendant’s business—testing and reporting on consumer

products—nor would plaintiff so urge, and it would be error

for a court to so instruct. Thus, it is clear that, based on the

information CU had gathered, it was concerned about the

safety of the Suzuki Samurai.” Viewed in this context, the

4la

Appendix A

potentially actionable. With respect to the first Statement,?

Judge Graber notes that “[t}he evidence detailed in the

majority opinion is sufficient to allow a rational jury to find,

made by Consumers Union employees during the testing.

This evidence is insufficient to support a finding of actual

malice, let alone by clear and convincing evidence. At most,

42a

Appendix A

the comments of Consumers Union’s employees give rise to

an inference of bias against the Samurai.‘ Bias alone,

however, cannot support a finding of actual malice. Shoen v.

Shoen, 48 F.3d 412, 417 (9th Cir. 1995).

Moreover, the fact that Consumers Union altered the

course cannot supply the “something more” that is required

by the exacting actual malice standard. Not only is it

undisputed that Consumers Union disclosed the alteration

in the article, it is also undisputed that the Samurai tipped

over prior to Consumers Union developing the short course.

Consumers Union’s proffered reasons for developing the

short course are completely consistent with the benign

explanation that they were simply seeking confirmation of

the existing accusations of rollover propensity against the

Samurai, which it had exhibited in the early stages of testing.’

This is not a case in which Consumers Union contrived

to make the Samurai roll over. Suzuki admits that there had

been four independent lawsuits in which the vehicle rolled

over, including one lawsuit by the Attorneys General of seven

states. Certainly, when choosing to republish references to

the rating, numerous rollover instances such as these

reaffirmed Consumers Union’s opinion that the vehicle was

4. The statements identified by Judge Tashima are as follows:

(1) “If you can’t find someone to roll this car, I will.” (2) “That’s it.

That looked pretty good.” (3) “All right Ricky baby.” Majority Op.

at 6501.

5. It is undisputed that the Samurai tipped during the break-in

period, as well on the long course when it was driven by an

inexperienced driver.

43a

Appendix A

The second Statement that Judge Graber identifies as

potentially actionable is as follows: “1986 CU buys its own

leaving the reader free to draw his own conclusions, those

Statements are generally protected by the First Amendment.”).

Moreover, even if reasonable minds differ about whether the

Samurai tipping over four times on an altered course

constitutes “easy” rollover Propensity, this is evidence only

of a subjective word choice, not of actual malice as the

Judges Tashima and Graber also misconstrue my

argument, contending that | apply the independent

44a

Appendix A

examination rule in a manner that swallows the summary

judgment standard, and thus engage in a forbidden intrusion

on the province of the fact finder. Majority Op. at 6595-97;

Concurrence at 6509-10. Their accusations reveal their lack

of understanding of the way the rule interacts with the

summary judgment standard, and the analysis that the rule

requires that we apply in First Amendment cases. Were we

to apply both standards correctly, we would determine

whether there is a genuine issue of material fact as to actual

malice under the summary judgment standard. However, in

doing so, we would conduct an independent review of the

entire record “to be sure that the speech in question actually

falls within the unprotected category and to confine the

perimeters of any unprotected category within acceptably

narrow limits in an effort to ensure that protected expression

will not be inhibited.” Bose, 466 U.S. at 505; see also Secrist,

874 F.2d at 1251 (stating that a court must “make [its] own

independent review of the record to ensure the principles of

actual malice are constitutionally applied.”). Because the

independent examination rule allows us to view all of the

evidence, and not just that which favors the plaintiff, we give

maximum protection to the First Amendment. Far from

discarding traditional summary judgment rules, my analysis

is consistent with the way the independent examination rule

has been applied at the summary judgment stage by

other circuits. See, e.g., Secrist, 874 F.2d at 1251; Herbert,

781 F.2d at 305, 308. Like in Secrist and Herbert, upon an

independent review, the evidence of actual malice in the case

before us is paltry and unable to survive a summary judgment

motion.

45a

Appendix A

On a broader level, the majority’s decision has troubling

implications. If taken to its logical end, the majority’s

Was acting with actual] malice.°®

The law is certain that in Order to hold Consumers Union

is not protected by the First Amendment, there must be clear

or not a reasonable jury could find by clear and convincing

evidence that Suzuki proved actual malice on the part of

majority, however, chooses to give the NHTSA Study greater weight

and, thus, discourages the non-governmental voices in the fields of

©onsumer protection and vehicle safety, Majority Op. at 6507,

46a

Appendix A

Consumers Union. Here, no reasonable jury could find

clear and convincing evidence of actual malice. See Kaelin, ©

162 F.3d at 1039. After an independent review of the record,

it is unquestionable that the District Court constitutionally

applied the principles of actual malice. The grant of summary

judgment was necessary both to avoid the inhibition of free

speech by the media and to protect public safety and health.

For these reasons, I would affirm the District Court’s

decision.

47a

APPENDIX B — ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

DENYING PETITION FOR REHEARING

FILED MAY 19, 2003

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 00-56043

330 F.3d 1110; 2003 U.s. App. LEXIS 9565; 2003 Cal.

Daily Op. Service 4131; 2003 Daily Journal DAR 5336

May 19, 2003, Filed

SUZUKI MOTOR CORPORATION, Plaintiff-Appellant,

v. CONSUMERS UNION OF UNITED STATES, INC., a

non-profit New York Corporation, -

48a

- Appendix B

OPINION:

ORDER

The opinion and dissenting opinion, filed June 25, 2002,

slip op. at 9009, 292 F.3d 1192, are withdrawn and replaced

by the amended opinion, concurring opinion, and dissenting

opinion filed concurrently with this order. With these

amendments, the panel has voted to deny the petition for

rehearing en banc, with Judge Ferguson recommending that

the petition be granted.

The full court was advised of the petition for rehearing

en banc. A judge of the court called for a vote on whether to

rehear the matter en banc. On such vote, a majority of the

nonrecused active judges failed to vote in favor of en banc

rehearing.*

The petition for rehearing en banc is denied.

DISSENT:

KOZINSKI, Circuit Judge, with whom PREGERSON,

REINHARDT, T.G. NELSON, HAWKINS, THOMAS,

McKEOWN, WARDLAW, W. FLETCHER, FISHER and

BERZON, Circuit Judges, join, dissenting from denial of

rehearing en banc:

For over half a century, Consumers Union has been

testing and rating consumer products and publishing the

* Judge Rawlinson was recused.

49a

Appendix B

Over too easily,” starting with an incident during the vehicle’s

break-in period where the Samurai “flopped over on its side”

far worse than its competitors.

50a

Appendix B

access to independent information about the safety and

usefulness of products they buy with their hard-earned

dollars. The majority sets a dangerous precedent, and the full

court errs grievously by failing to take the case en banc to

correct the error.

1. The majority’s analysis is tainted throughout by its

failure to articulate, much less apply, a coherent theory of

the “independent examination” rule, a key element of the

New York Times regime. When a public figure sues his critics

for defamation, we “must ‘make an independent examination

of the whole record,’ so as to assure ourselves that the

judgment does not constitute a forbidden intrusion on the

field of free expression.” Jd. at 285 (citation omitted).

This rule “assigns to judges a constitutional responsibility

that cannot be delegated to the trier of fact, whether the

factfinding function be performed in the particular case by a

jury or by a trial judge.” Bose Corp. v. Consumers Union of

U.S., Inc., 466 U.S. 485, 501, 80 L. Ed. 2d 502, 104 S. Ct.

1949 (1984). It is “a rule of federal constitutional law” that

“reflects a deeply held conviction that judges ... must

exercise such review in order to preserve the precious liberties

established and ordained by the Constitution.” Jd. at 5 10-11.

_ We have heretofore sensibly assumed that the

independent examination rule calls for us to do something

more than we would normally do. After all, it hardly

“preserve[S] the precious liberties established and ordained

~ by the Constitution” to treat a First Amendment case the same

as a slip-and-fall. When we review a jury verdict under

New York Times, We don’t “independently examine” the

record merely by considering all the evidence—we already

|

Sla

Appendix B

do that in every case anyway. See Reeves v. Sanderson

Plumbing Prods., Inc., 530 U.S. 133, 150, 147 L. Ed. 2d

105, 120 S. Ct. 2097 (2000) (“[I]n entertaining a motion for

judgment as a matter of law, the court should review all of

the evidence in the record.”). Nor do we merely review de

novo the trial judge’s determination whether a jury question

exists—again, we already do that in every case. See Janes v.

Wal-Mart Stores Inc., 279 F.3d 883, 886 (9th Cir. 2002)

(“We review a district court’s denial of a motion for judgment

as a matter of law de novo .. . .”). First Amendment

independent examination is an additional protection that the

Constitution affords publishers.

Where there are genuine evidentiary disputes over

Particular factual predicates of actual malice—such as

questions about a witness’s credibility—the issue is for the

jury. The judge does not weigh the evidence to find those

historical facts, but instead makes a routine sufficiency

determination. See Masson v. New Yorker Magazine, Inc.,

501 U.S. 496, 520, 115 L. Ed. 24 447,111 S.Ct. 2419 (1991);

91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). After resolving

the predicate factual disputes in the plaintiff’s favor, however,

the judge must take the further step of independently

“determin[ing] whether the record establishes actual malice

with convincing clarity.” Bose, 466 U.S. at § 14; see Eastwood

V. Nat'l Enquirer, Inc., 123 F.3d 1249, 1252 (9th Cir. 1997).!

And that process is not a routine sufficiency determination,

—_——__

1. Independent examination is, of course, a one-way street:

If the jury rejects a plaintiff’s claim, a judge may not invoke the rule

to resurrect it.

52a

Appendix B

because it does involve weighing the evidence. If it did not,

the independent examination rule would be meaningless.

The majority ignores these principles and instead treats

the rule as nothing more than de novo review of the trial

judge’s sufficiency ruling. On this theory, independent

examination is exactly what we do whenever we consider a

trial judge’s determination that a case does not present a

triable issue. Of course, de novo review in this sense actually

hurts CU because the district court sided with it below.

The majority relies on Bose and Hoffman v. Capital

Cities/ABC, Inc., 255 F.3d 1180, 1186 (9th Cir. 2001),

for the point that independent examination means the same

thing as de novo review. But those cases involved a very

different use of the term: not de novo review of the lower

court’s sufficiency-of-the-- sidence determination, but de

novo review of the underly,ng question whether the defendant

acted with actual malice. The former type of review is what

we do in every case where a party appeals a grant of summary

judgment or a denial of judgment as a matter of law. It’s the

latter type—weighing the evidence on the ultimate question

of actual malice—that constitutes independent examination.’

2. The majority’s confusion may stem from the fact that Bose

and Hoffman were appeals from bench trials. Where the district court

is the fact-finder, de novo review of its opinion is also de novo review

in the New York Times sense because it’s effectively de novo review

of the underlying question of actual malice. But where the district

court merely makes a sufficiency determination—whether on

summary judgment or post-verdict—de novo review of its opinion is

not de novo review in the New York Times sense. We always review

sufficiency determinations de novo; independent examination means

doing something more.

53a

Appendix -B

The majority seems willing to concede that independent

examination has some bite after the verdict. But it refuses to

“conflate[]” this post-verdict standard with the summary

judgment one. Am. op. at 6495. By decoupling the two

standards, the majority conflicts directly with Supreme Court

precedent. As the Court explained in Anderson, “[T]here is

no issue for trial unless there is sufficient evidence favoring

the nonmoving party for a jury to return a verdict for that

party.” 477 U.S. at 249. Because the court must ultimately

review a plaintiff’s verdict under the independent

examination rule, it necessarily follows that it must apply

that same standard at summary judgment.

The practical effect of the panel’s decision is that our

review for sufficiency at summary judgment is now governed

by one standard, while our review after a jury verdict is

governed by another. Cases will now often proceed to trial,

even though the court can tell ahead of time that the plaintiff’s

evidence will not support a jury verdict under New York

Times. What possible purpose is served by conducting such

mock trials? Are they held just in case new evidence

materializes mid-way through trial? Or merely to give the

lawyers trial experience? I know of no other context where

we allow a plaintiff to get to trial with a factual record that

will not support a verdict in his favor.’

3. Judge Graber is of course correct that “(t]he evidence

presented at trial often differs markedly from that which is offered

in a party’s summary judgment papers.” Concurrence at 6510. That

a plaintiff defeats a summary judgment motion doesn’t guarantee

that the evidence at trial will support a verdict in his favor. What’s

novel about the majority’s approach is that it reverses the rule: It lets

a plaintiff defeat summary judgment with a record inadequate to

support a verdict, on the mere speculation that some evidence at

trial—as yet unknown—will materialize to support his case.

S4a

Appendix B

The omnipresent danger in defamation suits is that

“would-be critics ... may be deterred from voicing their

criticism, even though it is believed to be true and even

though it is in fact true, because of doubt whether it can be

proved in court or fear of the expense of having to do so.”

New York Times, 376 U.S. at 279. That a plaintiff’s suit

ultimately fails after trial is little solace to a defendant crushed

by the sheer expense of litigation. For example, in thts suit

and a similar one filed by Isuzu, see Isuzu Motors Ltd. v.

Consumers Union of U.S., Inc., 66 F. Supp. 2d 1117 (C.D.

Cal. 1999), Consumers Union had by September 1999

reportedly spent more than $10 million defending its ratings,

while its two adversaries had spent more than $25 million.

See John O’ Dell, Bruising Tests Await Consumer Reports in

Court, L.A. Times, Sept. 19, 1999, at Al. And these are just

two of the many lawsuits CU has had to contend with—about

a dozen published cases (and who knows how many

unpublished ones) involving disgruntled CU reviewees

seeking revenge through the courts. Good for lawyers, but

not so good for free expression.

It’s no answer to let the chips fall and assume that

insurance will cover the tab. Insurance makes costs more

predictable, but it doesn’t decrease the amount publishers

must pay to do business in the long term. If publishers present

a greater liability risk, insurers will charge higher rates.

The burden on free speech is no less intolerable.

Even when First Amendment values do not hang in the

balance, “[s]ummary judgment procedure is properly

regarded not as a disfavored procedural shortcut, but rather

as an integral part of the Federal Rules as a whole, which are

55a

Appendix B

designed ‘to secure the just, speedy and inexpensive

determination of every action.’” Celotex Corp. v. Catrett,

477 U.S. 317, 327, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986)

(quoting Fed. R. Civ. P. 1). That principle is all the more

vital where a slow and expensive determination will result

in self-censorship.

Where a plaintiff’s evidence is strong enough to support

a verdict, the publisher must stand trial. But there is no

sensible reason to impose such onerous costs on a publisher

i - where the plaintiff is doomed to fail. Allowing a plaintiff to

get to trial on a record that will not support a verdict under

New York Times does not make sense, and if some of the

= Court’s precedents can be read to suggest this result, the Court

a would do us all a great favor by explaining that it intended

B no such absurdity.

2. Had the majority applied the constitutionally

& required standard, it could not have reached the result it did.4

Suzuki’s case is easily summarized. Its first theory is that

. CU knew it was probably lying because its employees tried

to make the Samurai tip and were happy when they ;

succeeded. The second is that CU purposely avoided the truth

by failing to address a potential source of experimental error.

Neither of these theories withstands serious scrutiny.

As to the first, the majority relies heavily on the fact

that CU switched to the short course after the long course

failed to cause any tips. The initial problem with this theory

4. I use the term “majority” loosely because Judge Graber never

tells us which parts of Judge Tashima’s opinion she relies on to find

actual malice.

56a

Appendix B

is that CU fully disclosed this in its article. Just so we’re

clear what we’re talking about, here’s what CU told the

public:

Our regular test program includes a maneuver

designed to see how controllable a car remains

when a driver is forced to steer sharply—to avoid,

say, a child who unexpectedly darted into the road.

To simulate that kind of sudden emergency, our

drivers run each car through a lane-changing

course marked off by traffic cones. The drivers

begin their left turn out of the lane 60 feet before E:

the obstacle. They then must steer sharply enough

to get back into the lane no more than 60 feet

beyond the obstacle.

Under the experienced touch of our drivers,

all four utility vehicles got through the course at F

52 mph or better. The Suzuki Samurai was actually &

more maneuverable than the others, since it’s so

much smaller and lighter.

With concern about a potential rollover

somewhat allayed, a staff member who does not

normally drive the course tried to steer the Suzuki

around the obstacle. All went well for several runs

at moderate speed. Then, on arun at 45 mph, the 3

driver made a slight steering misjudgment: q

He turned wider than necessary to clear the

obstacle, something many ordinary drivers might

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Appendix B

do in an emergency turn. That forced him to turn

back a bit more sharply than our regular testers

had. As he turned the steering wheel to the right

to get back into lane, the Suzuki teetered to the

left. The two right-side tires lifted about a foot

off the pavement before the driver was able to

bring the vehicle back under control.

Would the other utility vehicles show similar

instability if steered the way the Suzuki had been

steered?

To find out, we put all the vehicles through a

slightly different maneuver. We realigned the

cones so that our test drivers had to start the turn

50 feet from the obstacle instead of 60 feet from

it. That meant they needed to steer around the

obstacle and back into lane in a total! of 110 feet

rather than the usual 120 feet. We also moved the

obstacle three feet farther to the left.

In this more demanding test, the Jsuzu

Trooper, the Jeep Wrangler, and the Jeep

Cherokee began knocking over cones at about

40 mph. But they remained stable. We also tried

the Jeep Wrangler without the outriggers. Still

stable.

58a

Appendix B

The Suzuki Samurai, by contrast, toppled onto

the outriggers when turned through the course at

about 40 mph. Without the outriggers, it would

have rolled over.

During the period we were testing these

vehicles, Suzuki introduced a modified version

of the Samurai, a “1988 1/2” model with a

softened suspension. We acquired the latest

version and ran it through the same accident-

avoidance maneuver. It proved even less stable

than the Samurai we originally tested. The front

right wheel lifted in turns at low speed. And the

vehicle rolled onto the outriggers at 38 mph.°

CU thus thoroughly explained both its track design and

its testing procedure. It acknowledged that the Samurai did

well on the standaid course and alerted the reader that CU

designed a new course specifically to force a maneuver it

had reason to believe the Samurai would fail. Even assuming

CU wanted to make the Samurai tip and designed its short

course to achieve that result, so what? The fact remains that

the Samurai did tip—several times—while every other

vehicle run through the same course did not tip even once.

This is certainly something consumers would want to know

before deciding which of these vehicles to put their

families in.

By exposing CU to liability for basing its negative

opinion of the Samurai on a fully disclosed testing procedure,

5. The introductory explanation to the article is reprinted in

full in the appendix.

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the majority runs head-first into a settled First Amendment

principle: “‘Where a publication sets forth the facts

underlying its statement of opinion ... and those facts are

true, the Constitution protects that opinion from liability for

defamation.’” Standing Camm. v. Yagman, 55 F.3d 1430,

1440 (9th Cir. 1995) (quoting Lewis v. Time, Inc., 710 F.2d

549, 556 (9th Cir. 1983)); see also Partington v. Bugliosi,

56 F.3d 1147, 1156 (9th Cir. 1995) (“[W]hen a speaker

outlines the factual basis for his conclusion, his statement is

protected by the First Amendment.”). The logic behind the

rule is straightforward and unassailable: When a publisher

prints an opinion but doesn’t state the basis for it, the reader

may infer a factual basis that doesn’t exist. See Milkovich v.

Lorain Journal Co., 497 U.S. 1, 20-21, 111 L. Ed. 2d 1, 110

S. Ct. 2695 (1990). But when a publisher accurately discloses

the facts on which he bases his opinion, the reader can gauge

for himself whether the factual basis adequately supports the

opinion.

This is not a case where a defendant fabricates results

and then purports to rely on them—like when NBC secretly

strapped rockets to GM trucks with side-mounted fuel tanks

to make them explode in collisions. See Jane Hall, Chief of

NBC News Quits in Wake of Rigged Crash, L.A. Times, Mar.

3, 1993, at Al. There’s not a shred of evidence that the short

course was clandestinely altered to make it more forgiving

when the other vehicles went through, or that CU’s drivers

intentionally soft-pedaled the runs with the other vehicles to

make the Samurai look worse by comparison. The majority’s

gripe here is not with CU’s reporting of its tests, but with its

experimental design, and that is entirely the wrong focus.

If CU had found the Samurai “Not Acceptable” based on

60a

Appendix B

tests performed with a Ouija board, most consumers would

dismiss its rating as worthless. But, so long as CU disclosed

its method, the report would be protected by the First

Amendment.

Even aside from the fact that CU fully disclosed its

change in course, there is simply nothing improper about

what it did. When CU first tested the Samurai on the long

course, it didn’t tip—a result consistent with the theory that

it is safe, but also consistent with the theory that the long

course is not challenging enough to detect the Samurai’s

design flaw. CU did what any conscientious researcher would

do and redesigned its experiment to focus on the conditions

that seemed more likely to detect a flaw. See, e.g., Karl R.

Popper, The Logic of Scientific Discovery 45 (Hutchinson

rev. ed. 1968) (1934) (noting that a scientist, after first

detecting a condition, “might try to rearrange his experiments

so as to make the effect reproducible’). It then ran the

Samurai and several other vehicles through the course and

found that the Samurai had a dramatically higher propensity

to roll over—it tipped on several occasions while no other

vehicle tipped once.

The opinion makes much of the fact that CU had used

its long course for testing since 1973, but cites no evidence

it was using the course for rollover testing during that time.

In fact, the evidence in the record suggests the contrary: None

of the 500 vehicles CU had previously tested had rolled over,

and it did not even use safety outriggers to protect its drivers

from rollovers until the tests in question. Clearly, CU had

not previously focused on this particular risk, no doubt

because the original test course was designed before SUVs

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and similar vehicles with high centers of gravity had come

into vogue. But after news stories and a NHTSA filing

highlighted the Samurai’s rollover propensity, after the

vehicle rolled over once during break-in, and after it tip»ed

again following formal testing on the long course, CU had

good reason to change focus. Adjusting test procedures to

better detect a risk arising from new consumer preferences

is hardly reprehensible. It is precisely what one would expect

from researchers seriously interested in consumer safety.

Consider an analogy: Assume CU has been testing

clothes dryers using a standard load since 1973. It learns that

a particular brand of dryer occasionally causes fires. CU dries

several standard loads but experiences no adverse results, so

it tries a few loads with more flammable materials—say,

acetate bed-linens. This is not part of its existing testing

protocol, but the materials are ones that consumers have

begun to use more often in recent years. If the materials catch

fire in the one dryer but not the others, is CU’s test a fraud

because it changed its procedure to focus on the new risk?

The relevant question in either case is not whether the

new procedure is different from the old, but whether it

accurately reflects conditions consumers might occasionally

face. And the majority points to no evidence at all on that

score. The short course was not some extraordinary challenge

that no consumer vehicle could be expected to pass—after

all, every other tested vehicle did pass it. CU’s previous use

of the long course has no bearing on whether its short course

results were fraudulent.

62a

Appendix B

By equating CU’s switch to a short course with

knowledge of probable falsity, the majority ignores the

realities of experimental design. Scientific inquiry would

grind to a halt if researchers couldn’t tinker with their

methods as they learned new information about the object of

their study. CU’s switch is not even bad science, let alone

bad journalism, and certainly not journalism so awful that it

loses First Amendment protection. To be probative of actual

malice, evidence must have at least some tendency to exclude

obvious innocuous explanations for the defendant’s conduct.

CU’s switch from a long course to a short course does not.°

That leaves the majority with no direct evidence that

CU’s methods were flawed, and only four contemporaneous

statements of CU employees—” If you can’t find someone to

roll this car, 1 will,” an unspecified cheer, “That’s it.

That looked pretty good,” and “All right Ricky baby”—that,

to the majority, show an unfair bias against the Samurai.

If CU had a negative view of the Samurai going into the

tests, the reasons are not hard to imagine—the Samurai had

already been slammed in the press for its rollover propensity,

had been the target of a safety complaint filed with NHTSA

and had rolled over on its side while a CU employee drove it

at only 15 mph. But even if CU’s preconception were entirely

6. The majority also relies on the fact that the driver who made

the Samurai tip the first time was not one of CU’s regulars. This fact

was also disclosed in CU’s article, see p. 6466 supra, and, in any

case, it’s hard to see why it matters. Presumably, consumers driving

the Samurai are typically not accredited test drivers either. Moreover,

it’s undisputed that the actual short course test runs, in which the

Samurai tipped several times and the other vehicles didn’t tip once,

were all performed by CU test drivers.

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Appendix B

arbitrary, these fleeting remarks—three of which are no more

than inane schadenfreude—would still be insufficient to

support a finding of actual malice.

Actual malice is not bias. “[I]Il will toward the plaintiff,

or bad motives, are not elements of the New York Times

standard.” Nat'l Ass'n of Letter Carriers v. Austin, 418 U.S.

264, 281, 41 L. Ed. 2d 745, 94S. Ct. 2770 (1974) (internal

quotation marks omitted). Speech that is “malicious” only

in the sense that the speaker is biased against his target is

fully protected; the First Amendment extends beyond

“reasoned [and] evenhanded” commentary to the “slashing

and one-sided.” Hustler Magazine v. Falwell, 485 U.S. 46,

54, 99 L. Ed. 2d 41, 108 S. Ct. 876 (1988).

Bias may support a showing of actual malice; if you bad-

mouth someone, the fact that you also don’t like him makes

it marginally more likely you’re lying. But bias evidence is

not sufficient by itself to support a claim: “[A]ctual malice

may not be inferred alone from evidence of personal spite,

ill will or intention to injure on the part of the writer.” Harte-

Hanks Communications, Inc. v. Connaughton, 491 U.S. 657,

666 n.7, 105 L. Ed. 2d 562, 109 S. Ct. 2678 (1989) (internal

quotation marks omitted); see also, e.g., Church of

Scientology Int'l v. Behar, 238 F.3d 168, 174 (2d Cir. 2001);

Shoen v. Shoen, 48 F.3d 412, 417 (9th Cir. 1995). If a tabloid

sends an investigator to dig up dirt on a celebrity, the fact

that it deliberately attempts to find damaging information

and is pleased when it succeeds hardly proves it’s lying.

Forcing CU to stand trial for statements that show nothing

more than bias ignores these settled First Amendment

principles.

64a

Appendix B

We don’t hold participants in public debate to Article II]

standards of impartiality. Nor do we second-guess their

investigations as if we were reviewing administrative action

under the APA. So long as they don’t lie or recklessly

disregard the truth, they can be as unfair and one-sided as

they want. The majority’s clear and convincing evidence

that CU strayed beyond this wide field is shockingly thin.

The Second Circuit requires a plaintiff to show that bias was

coupled with “an extreme departure from standard

~ investigative techniques.” Behar, 238 F.3d at 174 (emphasis

added). For the majority, any departure from past technique

will apparently suffice, even one entirely consistent with

standard experimental methodology.

What ultimately dooms Suzuki’s case is that, no matter

what CU’s motives for choosing the short course, it is

undisputed that the Samurai tipped multiple times on that

course while the other vehicles tested didn’t tip even once.

If the majority has its way, evidence like this—which may

make a life-or-death difference to consumers—will be

suppressed for fear of precisely this type of lawsuit, waged

with gale-force intensity by corporate plaintiffs with

bottomless litigation budgets.

3. The majority’s second ground for reversal is weaker

still. After CU published its initial report, NHTSA criticized

certain aspects of its methodology. CU responded, and the

majority finds its response for the most part satisfactory.

It concludes, though, that CU fell short by failing to address _

NHTSA’s critique of its reliance on driver input.

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Appendix B

The majority’s analysis suffers from familiar flaws.

Even if CU’s reliance on human drivers made its tests less

reliable, it disclosed the relevant facts in its report.

CU explained in detail its use of human test drivers and the

precise maneuvers they performed—right down to the

distance between traffic cones. See pp. 6466-67 supra. Surely

these disclosures provide adequate information for readers

to make a reasonable assessment of CU’s testing. At the very

least, they provide readers familiar with safety testing

mechanics—such as NHTSA and Suzuki engineers—the

information they need to assess CU’s testing and come up

with a public response. CU should not stand trial over a

potential source of experimental error that it fully disclosed.

The majority’s holding is flawed for deeper reasons as

well. It faults CU for failing to “investigate” and ‘“taddress”

a perceived deficiency in its testing procedure. Am. op. at

6508. But what was CU supposed to do? Using human drivers

obviously introduces a potential source of experimental error.

But it also replicates actual driving conditions and thus

captures nuances that might be missed if the experiment were

performed by entirely mechanical means. If CU had built

some stationary rollover machine instead, Suzuki would have

complained that its failure to recreate actual driving

conditions made its results unreliable. If CU had built a car-

driving robot, Suzuki would have complained that the test

didn’t reflect the reactions of a human driver. All experiments

have potential sources of error, and many reputable

experiments rely on human input. That an experiment can

be criticized on these grounds doesn’t make it reckless to

rely on the results, even if the criticisms have some validity.

66a

Appendix B

Failure to explain away or eliminate all potential sources of

error in an experiment cannot be a basis for liability.

What the majority calls “actual malice” is really just one

side of a long-running debate over how to test rollover

propensity most effectively. CU favors “dynamic” tests using

actual drivers, while NHTSA has long preferred “static” tests

based on measurements of a vehicle’s geometry. While the

majority thinks NHTSA has the better of this scientific

debate, Congress was not so sure: In 2000, it passed a

statute requiring NHTSA to develop a dynamic rollover

testing program. Transportation Recall Enhancement,

Accountability, and Documentation (TREAD) Act, Pub. L.

No. 106-414, § 12, 114 Stat. 1800, 1806 (2000) (codified at

49 U.S.C. § 30117(c)); see Consumer Information

Regulations; Federal Motor Vehicle Safety Standards;

Rollover Resistance, 66 Fed. Reg. 35,179, 35,180-81 (request

for comments July 3, 2001) (explaining the statute’s history).

The TREAD Act followed on the heels of CU’s criticism

that NHTSA’s static testing methods, although a “useful

predictor of tripped rollover, ... should be used in

conjunction with a dynamic stability test using vehicle

maneuvers to better predict the risk of untripped rollovers.”

-66 Fed. Reg. at 35,180-81. And as NHTSA concedes, the

Act “reflects CU’s concern.” /d. at 35,181.

As if that weren’t vindication enough, when NHTSA

acted on Congress’s directive, one of the dynamic rollover

tests it initially proposed using was the “CU double lane

change,” id. at 35,183, the very test the majority now finds

so heretical that reliance on it amounts to actual malice.

NHTSA identified both the advantages of CU’s test

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67a

Appendix B

(“face validity”; “probably a good representation of what the

public expects of a personal vehicle”; “better represents the

dynamics that may result in an untripped rollover”;

“maximum speed through the maneuver can be used as part

of the vehicle score”; “display[s] the operation of electronic

stability control systems’’) and its disadvantages (“‘any vehicle

will pass such a test if equipped with tires of sufficiently

low traction”; “driving style can strongly influence the test

results”; “course layout may cause the steering reversal and

roll momentum effect to be more critical for some vehicles

than for others”; “a course tuned to one vehicle may not be

the worst case for another vehicle to which it is compared”’).

Although NHTSA ultimately opted for a different set of

dynamic rollover tests, those it selected still relied on human

drivers and merely involved a lower number of steering inputs

(one or two, as opposed to four in CU’s test). See Consumer

Information Regulations; Federal Motor Vehicle Safety

Standards; Rollover Resistance (Part II), 67 Fed. Reg. 62,528,

62,537-38 (proposed Oct. 7, 2002). NHTSA thus reduced,

but did not eliminate, this potential source of error.

Surely these legislative and regulatory developments bear

heavily on the disputed issues in the case. Strangely, however,

the majority does not even mention them. That Congress

specifically repudiated NHTSA’s exclusive preference for

static rollover testing shows we cannot blindly accept

NHTSA’s criticism of dynamic testing as evidence of actual

malice. That NHTSA thought CU’s test was an option worth

considering twelve years later shows that it is not so off-the-

scientific-map that reliance on it is tantamount to purposeful

avoidance of the truth. That NHTSA ultimately chose tests

that involve the same source of error, just to a lesser degree,

68a

Appendix B

shows that the issue is not nearly so black-and-white as the

majority paints it. On a more fundamental level, these

developments show that courts have no business wading into

this scientific feud over the best way to test rollover

propensity. Which method gives the optimal mix of

advantages and disadvantages is a point of disagreement

among Congress, NHTSA, CU and others. It should be

resolved by scientists, policymakers and consumers, not

crushing libel verdicts.

The appropriate response to a poorly designed

experiment is to conduct a better one and then convince

people that your method is more accurate—not to sue the

other guy into silence. The point is poignantly made by the

facts of this case. For all its kvetching, NHTSA apparently

never even performed its own tests on the Samurai—it relied

entirely on data from Suzuki. See Am. op. ai 6506. Suzuki’s

test procedures no doubt had plenty of defects of their own

(the most obvious being “company conducting test has

financial stake in outcome”). Can we really say the world is

better off if the only source of Samurai rollover data is the

manufacturer? If consumers are purchasing an SUV they will

trust with their lives, aren’t they entitled to know that the

Samurai tipped repeatedly in human-driven tests while the

other SUVs didn’t tip once?

Rs Bas a Dr Sete s

Groups like CU perform a valuable function in our

consumer society, but they suffer from a constant threat of

litigation. It’s easy for a jury to second-guess experimental

design, and every suit carries the prospect of a massive

damages award because the very purpose of a negative review

is to convince the reader that the plaintiff’s product is not

bil Soe eM i

69a

Appendix B

worth buying. It’s hardly surprising, then, that CU attracts

lawsuits like moths to a lantern. See, e.g., Bose Corp. v.

Consumers Union of U.S., Inc., 466 U.S. 485, 80 L. Ed. 2d

502, 104S. Ct. 1949 (1984) (truly silly dispute over whether

sound from plaintiff’s speakers wandered “about the room”

rather than merely “along the wall” litigated all the way to

the Supreme Court). If Suzuki can get to trial on evidence

this flimsy, no consumer group in the country will be safe

from assault by hordes of handsomely paid lawyers deploying

scorched-earth litigation tactics.

The majority’s decision reaches far beyond consumer

organizations to virtually any research group that criticizes

corporate interests. Many public interest groups are thinly

funded, and their experiments are necessarily full of

imperfections. Their targets can now stuff unflattering results

into a scientific oubliette just by pointing out sources of

experimental error and then threatening to sue if the groups

don’t “investigate” and “address” them. Today it’s Consumers

z Union panning the Samurai; tomorrow it could be Greenpeace

# claiming that some oil refinery is killing fish. The First

Amendment doesn’t allow companies to squelch their

‘scientific detractors on evidence as thin as Suzuki’s.

The majority’s legal regime cannot coexist with our tradition

of robust scientific debate on matters of public concern.

SAS ERR

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4. Judge Graber focuses on two particular statements,

but succeeds only in highlighting how deficient Suzuki’s case

is. She first faults CU for reporting that it developed the short

course “because [it] discovered” the Samurai’s rollover

propensity, when in fact it developed it “in order to create”

that propensity. Concurrence at 6512 (emphasis omitted).

70a

Appendix B

I don’t understand how CU could have “create[d]” the

Samurai’s rollover propensity. A propensity is something

innate to the object. Is Judge Graber suggesting that CU

somehow modified the vehicle to make it more likely to tip?

There is no evidence of that whatsoever. What CU did was

put the Samurai through a test that demonstrated its innate

tendency to tip, a propensity it had as a result of the way it

was built. CU designed a course to develop evidence of the

vehicle’s propensity to roll over. It could not and did not

create the propensity itself.

That problem aside, there is simply nothing false about

CU’s statement. There’s no dispute why CU built the short

course: As it thoroughly explained in its article, it was trying

to replicate the conditions that caused the Samurai to tip when

a CU employee turned too sharply on the long course. Suzuki

doesn’t dispute this. CU switched to the short course “because

[it] discovered” a propensity to roll over during that particular

maneuver, a maneuver none of the drivers had previously

performed because they had all driven the long course as

designed. CU’s statement is an entirely accurate description

of its reason for developing the short course.’ ;

7. Even if Judge Graber were right and CU somehow misled

the public about its reasons for building the short course, I can’t see

how it could possibly matter. Whether CU built the short course for

the reasons it gave or because little green men from Mars told it to

do so, the fact remains that it built the course and the Samurai flunked

it while every other vehicle passed. CU’s motives simply are not

germane to Suzuki’s theory of recovery because they do not in any

way defame the Samurai or contribute to any damage it may have

suffered. It’s as if CU claimed it conducted the tests on a Wednesday

when it actually conducted them on a Friday.

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Appendix B

Judge Graber also complains that CU said tne Samurai

rolls over “easily” when, in fact, it had to be “coaxed.”

Concurrence at 6512. She apparently fears that readers might

assume the Samurai rolled over with no “coaxing” at all.

But no one could be so misled. Even tremendously unsafe

vehicles roll over only in extreme maneuvers. No one reading

that the Samurai rolls over “easily” would infer it routinely

flops over with no human intervention.

Saying a consumer vehicle rolls over “easily” is like

saying a particular NBA player is “terrible.” The adjective is

inherently relative because the reference group is already

extreme. A “terrible” professional athlete is one who’s terrible

relative to his peers, not relative to the population at large or

a class of third-graders. Likewise, the mental image conjured

up when one hears the Samurai rolls over “easily” is not of

some oopsy-daisy clown car, but a vehicle that rolls over

easily relative to other vehicles in its class. And, since all

vehicles require some coaxing to roll over, Judge Graber’s

fear—that readers might be duped into thinking they’1] come

out of the supermarket to find that their Samurai had flopped

itself over in the middle of the parking lot—is a specter of

her own creation. Even ignoring the rollover during break-

in and the tip on the long course—not to mention the NHTSA

complaint and the media coverage—CU was plainly justified

in concluding that, given the alternatives, the Samurai’s

rollover propensity was more than what safety-conscious

consumers should be willing to bear. And that’s exactly what

any reader would understand it to have said.

Moreover, the word “easily” cannot be plucked out of

context. It must be read in light of CU’s article (to which the

72a

Appendix B

anniversary issue obviously referred). CU explained exactly

how “easily” the Samurai tipped over, and what CU did to

reach its conclusion. It did not secretly put lead weights in

the roof to raise the center of gravity; it did not use narrow

tires to cause instability; it did not jimmy the suspension.

It did exactly what it said it did—it put the Samurai through

the same course as the other vehicles, and the Samurai tipped

while the others did not. CU did not ask consumers to accept

its claim at face value; it gave them the data on which it

based its conclusion so they could decide for themselves

whether or not the Samurai tipped over too easily.

Even if CU’s reporting were somehow inaccurate or

misleading, there are any number of legal doctrines that

protect it. (“Rhetorical hyperbole” comes to mind, see Letter

Carriers, 418 U.S. at 285-86.) But it’s not. CU had adequate

grounds to conclude that the Samurai rolled over easily

compared to similar vehicles, and that’s all it said.

Judge Graber doubtless perused the record with great

care in search of something to support Suzuki’s case. That

she could come up with nothing better than these two

statements speaks volumes about the overall accuracy and

candor of CU’s reporting.

* * *

I have read CU’s review of the Samurai and Suzuki’s

criticism of its methodology. After all that, I can only say I

would long hesitate before letting anyone | care about drive

or ride in one of these vehicles. If Suzuki wanted me to

disregard CU’s conclusions, it should have taken the money

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73a

Appendix B

it spent on this lawsuit and hired an independent agency to

run tests showing that CU’s criticisms are unfounded. It could

also have tried to improve its product to moot criticism in

the future. But, until today, I had thought the one option not

available to a company in Suzuki’s position was to use its

vast financial resources to drag its critics through the gauntlet

of our immensely expensive litigation machine. I continue

to hope I’m right, or this wili be a sad day indeed for

consumer organizations and those who rely on them for

information vital to their health and safety.

[SEE APPENDIX IN ORIGINAL]

74a

APPENDIX C — SUMMARY JUDGMENT OF THE

UNITED STATES DISTRICT COURT FOR THE

CENTRAL DISTRICT OF CALIFORNIA, SOUTHERN

DIVISION DATED AND DECIDED MAY 24, 2000

UNITED STATES DISTRICT COURT FOR THE

CENTRAL DISTRICT OF CALIFORNIA,

SOUTHERN DIVISION

SA CV 96-340 AHS (ANx)

SUZUKI MOTOR CORPORATION,

Plaintiff,

V.

CONSUMERS UNION OF UNITED STATES, INC.,

Defendant. _

May 24, 2000, Decided

JUDGES: ALICEMARIE H. STOTLER, UNITED STATES

DISTRICT JUDGE.

OPINION BY: ALICEMARIE H. STOTLER

OPINION

ORDER GRANTING DEFENDANT’S MOTION FOR

SUMMARY JUDGMENT (APPENDICES AND RELATED

ORDERS OMITTED)

75a

Appendix C

I.

PROCEDURAL BACKGROUND

The Court heard oral argument on defendant’s motion

for summary judgment on June 28, 1999. After complete

review of all declarations and exhibits, as hereinafter

described, review of the Reporter’s Transcript of counsels’

oral arguments, and additional independent research, the

Court, by this Order, grants defendant’s motion.

Consumers Union of United States, Inc. (“CU”’) filed a

Motion for Summary Judgment on May 3, 1999. In support

of its motion, CU filed a number of declarations,' as well as

a Request for Judicial Notice, an Appendix of Extrajudicial

Authorities, the Statement of Uncontroverted Facts and

Conclusions of Law, and a proposed Judgment. Plaintiff

Suzuki Motor Corporation (“Suzuki’’) filed its opposition

on May 24, 1999. In addition to its Memorandum of Points

and Authorities, Suzuki filed opposition to CU’s Request for

Judicial Notice, opposition to CU’s documentary exhibits

attached to the declarations of Baird and Williams, its

Statement of Genuine Issues (“GI’’), as required by Local

Rule 7.14.2, objections to CU’s declarations, and a number

of declarations in support of its opposition.” CU filed its reply

1. The declarations of Karpatkin, Pittle, Knoll, Landau,

Sheehan, Wood, Small, Conkling, Allen, Nappi, Baird (attached to

which are Volumes I through VI containing exhibits 1-148), and

Williams (attached to which are Exhibits 149-182).

2. The declarations of Reichert, McCarthy, Cooperrider,

Yarborough, Edwards, Guthman, Bottomley, Riley, Rudd, Rogers,

(Cont’d)

76a

Appendix C

on June 7, 1999. CU submitted exhibits 393-400 as

attachments to the Supplemental Declaration of Williams.

In addition, CU filed Objections to Suzuki’s declarations, a

Response to Suzuki’s Statement of Genuine Issues, a

Response to Suzuki’s objections to CU’s Request for Judicial

Notice, a Response to Suzuki’s Objections to documentary

exhibits attached to the declarations of Baird and Williams,

and a Response to Suzuki’s objections to declarations. With

leave of Court, Suzuki filed responses to CU’s evidentiary

objections on June 23, 1999.

On July 1, 1999, the parties were requested, via minute

order, to prepare, serve, and lodge proposed orders regarding

their evidentiary objections. The parties then lodged proposed

orders on July 19, 1999. Having read and considered the

parties’ arguments in support of or against admis»: ility, the

Court separately files today those orders which now contain

the Court’s rulings on the evidentiary objections. Generally

speaking, most of the plaintiff’s hearsay objections are

overruled because many statements and documents are not

offered for the truth of the matter stated but as circumstantial

evidence bearing on the issue in controversy. On the other

hand, many of the defendant’s objections to plaintiff’s

declarations are sustained because the witnesses are not

qualified to opir on defendant’s state of mind; to the extent

that the declarants state factual matter, however, their

testimony is accepted.

(Cont'd)

Rasmussen, Murray, Schwartz, Goldie, Gomez, Heywood, Jacobs,

Lundquist, McCloskey, Ouellette, Singley, Smith, Theis, Beasiey, Garcia,

O’Neal, Seidle, Strauss, Tagland, in addition to exhibits 183-392.

77a

Appendix C

In addition, the Court this date separately files, as

Appendix A to Order Granting Defendant’s Motion for

Summary Judgment, a list of all exhibits submitted by

defendant CU in support of its motion as well as its reply.

The Court also separately files, as Appendix B to Order

Granting Defendant’s Motion for Summary Judgment, a list

of all exhibits submitted on behalf of plaintiff Suzuki, all of

which, whether text, photo, or video, have been reviewed by

the Court. The Court has also received, read, and considered

plaintiff’s Notice of Recent Additional Authority Re

Summary Judgment, filed September 23, 1999, and

defendant’s response thereto filed September 24, 1999.

Having considered the parties’ arguments in support of and

against judicial notice, the Court denies Defendant’s Request

for Judicial Notice. Certain court decisions contained in the

Request for Judicial Notice are otherwise admitted in

connection with declarations of witnesses for limited

purposes, as ruled upon in the aforementioned orders on

evidentiary objections. The Court sustains Suzuki’s

objections to CU’s Objections to Evidence Set Forth in

Suzuki’s Statement of Genuine Issues and grants Suzuki’s

request that those objections be disregarded.

Il.

FACTUAL OVERVIEW

This action stems from an article that originally appeared

in the July 1988 issue of Consumer Reports (“CR”), a

monthly magazine published by defendant CU. In the article

(Ex. 105), CU opined that the Suzuki Samurai (““Samurai”’)

was “Not Acceptable” because CU’s tests showed a tendency

78a

Appendix C

for the car to roll over during an accident avoidance

maneuver. Plaintiff Suzuki Motor Corp. Japan is the

manufacturer of the Samurai, a sports-utility vehicle.

American Suzuki Motor Corp., the American distributor of

the Samurai, was, originally a plaintiff but was dismissed in

the order granting defendant’s Motion to Dismiss on February

3, 1997.

In this action, Suzuki asserts that statements referring to

the Samurai’s rollover tendency, which initially appeared in

the 1988 CR article and which have been repeated in various

CU and other publications, are false, disparaged the Samurai,

and caused Suzuki to suffer damages. While the original

complaint and the supplemental complaint contained

22 claims, including defamation and libel claims, the First

Amended Complaint contains only three claims, two product-

disparagement claims and one claim under California

Business & Professions Code § 17200. The Court denied

Suzuki’s Motion for Leave to File a Second Amended

Complaint on April 13, 1999.

In this motion, CU challenges the sufficiency of

plaintiff’s evidence supporting one essential factual element

of its case: whether CU acted with actual malice in reporting

on the Samurai on the basis of its 1988 testing. Suzuki points

to a number of facts, culled from a voluminous record

compiled by both parties, that it contends support a finding

of malice. Suzuki highlights the following:

1. After more than three dozen runs in the Samurai on

CU’s established avoidance maneuver, CU’s professional

drivers rated it highest of all the vehicles, and expressly stated

COE ee ee ethie’

79a

Appendix C

“no tendency to tip up” and “no real problem” in the written

evaluations. See Plaintiff’s Statement of Genuine Issues

(“GI”), PP 440-41;

2. After the Samurai completed the standard testing

without incident, CU’s editor-in-chief, Irwin Landau,

remarked that “If you can’t find someone to roll this car,

I will.” Motion at 23-25; GI P 445;

3. CU’s technical director, R. David Pittle, then asked

to drive the Samurai. After nine more runs and after departing

from the established track, the Samurai tipped up. Motion-at

24-25; GI PP 452-54; ;

4. After the tip-up, Pittle directed the chief of CU’s auto

test division, Robert Knoll, to prepare a new “modified

emergency avoidance maneuver’ and replicate Pittle’s path.

GI PP465-67;

5. When driver Richard Small was able to tip up the

Samurai on the new course after multiple successful runs by

another driver, the test course video and audio tape recorded

CU employees cheering, and someone said “All right Ricky

baby!” Motion at 22; GI PP 478-83;

6. Landau drafted the article reviewing the Samurai as

“Not Acceptable” before the auto test division prepared its

usual report on the testing and before the runs on the modified

course had been completed by the other vehicles, including

one vehicle whose performance was lauded by Landau in

the draft. GI PP 521-26;

80a

Appendix C

7. On the last day of testing, after Landau completed _

the draft and Pittle signed off on it, and CU had begun to

prepare for a press conference to announce the findings, Pittle

saw that the drivers were unable to tip the Samurai and

exclaimed “Can’t you just see it, we get no lift off the ground,

Oh God!” Motion at 22; GI P 487;

8. CU refused to reconsider the validity of its testing

despite the federal government’s conclusion, in September

1988, that CU’s “test procedures . . . do not have a scientific

basis and cannot be linked to real-world crash avoidance

needs, or actual crash data” and similar findings by other

governments. GI P 588;

9. By 1995, CU knew that one of its former test drivers,

Lee Baldrick, purchased a Samurai for his own personal use.

GI PP 636-44;

10. At the time of CU’s testing in 1988, CU was

financially overextended due to capital investments. Motion

at 20-22; GI PP 732-35.

Suzuki maintains that the totality of evidence that it has

presented, and especially the foregoing excerpts, satisfies the

requirements of the malice standard and justifies trial

proceedings.

SBE LIES IIR BR eI iy 04

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Appendix C

ITI.

DISCUSSION

A. Standard of Review

To avoid an adverse grant of summary judgment, Suzuki

must “set forth specific facts showing that there is a genuine

issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 250, 91 L. Ed. 2d 202, 212-213, 106 S. Ct. 2505, 2511

(1986) (quoting Fed. R. Civ. P. 56(e)). The plain language of

Rule 56(c) mandates the entry of summary judgment against

a party who fails to make a showing sufficient to establish

the existence of an element essential to that party’s case and

on which that party will bear the burden of proof at trial.

Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d

265, 106 S. Ct. 2548 (1986). The inquiry involved in a ruling

on a motion for summary judgment necessarily implicates

the substantive evidentiary standard of proof that would apply

at the trial on the merits, 1.e., the “actual quantum and quality

of proof necessary to support liability” at trial. Liberty Lobby,

477 U.S. at 252, 254. The mere existence of a scintilla of

evidence in support of the plaintiff’s position will be

insufficient; there must be evidence on which the jury could

reasonably find for the plaintiff. See id.

There is no disagreement that plaintiff must prove actual

malice by “clear and convincing evidence.” See Plaintiff’s

Opposition to Motion for Summary Judgment on Issue of

Actual Malice at 6. In other words, the Court must determine

whether a reasonable fact-finder could conclude that the

plaintiff has shown actual malice with convincing clarity.

82a

Appendix C

Liberty Lobby, 477 U.S. at 252. Actual malice is a term of

art denoting deliberate or reckless falsification. See Masson

v. New Yorker, 501 U.S. 496, 499, 115 L. Ed. 2d 447, 111 S.

Ct. 2419, 2424 (1991). Malice entails a showing that the

defendant made a false statement “‘with knowledge that the

statement was false or with reckless disregard as to whether

or not it was true.’ Harte-Hanks Communications, Inc. v.

Connaughton, 491 U.S. 657, 667, 105 L. Ed. 2d 562, 109

S. Ct. 2678, 2685 (1989) (quoting Hustler Magazine Inc. v.

Falwell, 485 U.S. 46, 56, 99 L. Ed. 2d 41, 108 S. Ct. 876

(1988)). Put another way, defendant must have made the

decision to publish the relevant information with a “‘high

degree of awareness of .. . probable falsity,’” or defendant

must have entertained “‘serious doubts as to the truth of [the]

publication.’ Harte-Hanks Communications, 491 U.S. at 667

(quoting Garrison v. Louisiana, 379 U.S. 64, 74, 13 L. Ed.

2d 125, 85 S. Ct. 209 (1964) and St. Amant v. Thompson,

390 U.S. 727, 731, 20 L. Ed. 2d 262, 88 S. Ct. 1323 (1968)).

Whether a plaintiff has shown actual malice is

determined on a case-by-case basis, and the courts have a

constitutional duty to “exercise independent judgment and

determine whether the record establishes actual malice with

convincing clarity.” Bose Corp. v. Consumers Union of

United States, Inc., 466 U.S. 485, 514, 80 L. Ed. 2d 502, 104

S. Ct. 1949, 1967 (1984).

B. Application

The merits of CU’s motion for summary judgment do

not turn on the stability of the Samurai or even the soundness

of CU’s testing methodology. Rather, the issue is whether

83a

Appendix C

plaintiff has satisfied its evidentiary burden of showing with

convincing clarity that CU reported on the Samurai

with actual malice. Having viewed all the evidence in the

light most favorable to plaintiff, in making a “case-by-case”

assessment by looking to all of plaintiff’s evidence, and,

compressing cartloads of evidence into a legal conclusion,

the Court holds that plaintiff has not shown malice by clear

and convincing evidence.

First, the trier of fact must necessarily view the context

of CU’s testing of the Samurai. The trier of fact could not be

expected to disregard the nature of defendant’s business —

testing and reporting on consumer products — nor would

plaintiff so urge, and it would be error for a court to so

instruct. Thus, it is clear that, based on the information CU

had gathered, it was concerned about the safety of the Suzuki

Samurai. Defendant was confident that its tests would

disclose road-safety dangers, if there were any. This pre-

testing concern is not an impermissible mindset for a

publisher, particularly one which proclaims its mission as

protecting the consumer, and particularly given the

background information already known about the Samurai.

When the tip-up problem with the vehicle’s stability

appeared, defendant put the car through more rigorous tests.

Plaintiff emphasizes the redesigned test (the “short course”’)

in particular, as if defendant had irreversibly committed itself

to testing all products the same, irrespective of new design

or technology. All these facts, while relevant, do not evince

malice as a matter of law at the requisite legal standard.

Plaintiff’s reliance on CU’s overextended financial

status, supposedly due to its building program, is one example

84a

Appendix C

of plaintiff’s attempt to impute a financial motive to

defendant in causing distribution of its Samurai review.

While a motive in publishing material may bear on malice,

the Supreme Court has settled the issue by holding that a

goal of increasing one’s profits through publishing material

is not sufficient to prove actual malice. Harte-Hanks

Communications, 491 U.S. at 667 (“If profit motive could

somehow strip communications of the otherwise available

constitutional protection, our cases from New York Times to

Hustler Magazine would be little more than empty vessels.”).

Likewise, plaintiff does not explain why CU’s difference

of opinion with the National Highway Transportation and

Safety Administration (““NHTSA,” in the evidence)’ over the

acceptability of the driving test should compel the trier of

fact to conclude that defendant is for that reason intent upon

deliberate or reckless falsification. To the contrary, part of

the First Amendment’s protection has to do with disagreeing

with the government. See New York Times v. Sullivan, 376

U.S. 254, 270-71, 11 L. Ed. 2d 686, 84S. Ct. 710, 721 (1964)

(Debate on public issues ... may well include vehement,

caustic, and sometimes unpleasantly sharp attacks on

government and public officials.” citing Terminielle v.

Chicago, 337 U.S. 1, 4, 93 L. Ed. 1131, 69S. Ct. 894 (1949);

De Jonge v. Oregon, 299 U.S. 353, 365, 81 L. Ed. 278, 57

S. Ct. 255 (1937)). While the NHTSA evidence is admissible

in support of plaintiff’s theory of its case, it is not shown to

be evidence entitled to greater weight than any other study

or opinion regarding vehicle testing methods.

3. See 49 U.S.C. § 105(a) and 49 C.F.R. § 501.1, et seq.

See also Motor Vehicle Mfrs. Assoc. v. State Farm Mutual Ins. Co.,

463 US. 29, 33, 77 L. Ed. 2d 443, 103 S. Ct. 2856 (1983), discussing

origin and purpose of NHTSA.

85a

Appendix C

Viewing the evidence presented through the “piism of

the substantive evidentiary burden,” as stated in Liberty

Lobby, the Court concludes that a jury could not reasonably

find that plaintiff proves its case by the quality and quantity

of evidence required by governing law. Defendant is therefore

entitled to judgment as a matter of law.

IV.

CONCLUSION

Accordingly and for the foregoing reasons, the

defendant’s Motion for Summary Judgment is granted. The

Court has modified, signed, and filed defendant’s proposed

Statement of Uncontroverted Facts and Conclusions of Law

as well as defendant’s proposed Judgment.

The Clerk is instructed to file the following documents:

1. Order Granting Defendant’s Motion for Summary

Judgment;

2. Appendix A to Order Granting Defendant’s Motion

for Summary Judgment (List of Defendant’s Exhibits);

3. Appendix B to Order Granting Defendant’s Motion

for Summary Judgment (List of Plaintiff’s Exhibits);

4. Suzuki Motor Corporation’s Order on Evidentiary

Objections, lodged July 19, 1999;

86a

Appendix C

5. Order re Defendant Consumers Union’s Objections

to Declarations, lodged July 19, 1999;

6. Defendant’s proposed Statement of Uncontroverted

Facts and Conclusions of Law, as modified by the Court;

7. Judgment for defendant.

IT IS SO ORDERED.

IT IS FURTHER ORDERED that the Clerk shall serve a

copy of this Order on counsel for all parties in this action

and enter the Judgment.

Dated: May 24th, 2000.

ALICEMARIE H. STOTLER

UNITED STATES DISTRICT JUDGE

87a

APPENDIX D — ORDER OF THE UNITED STATES

DISTRICT COURT FOR THE CENTRAL DISTRICT

OF CALIFORNIA, SOUTHERN DIVISION

FILED MAY 24, 2000 AND

ENTERED MAY 25, 2000

JOSEPH W. COTCHETT (SBN 36324)

FRANK M. PITRE (SBN 100062)

STEVEN N. WILLIAMS (SBN 175489)

ELIZABETH M. O’CALLAHAN (SBN 190082)

COTCHETT, PITRE & SIMON

840 Malcolm Road, Suite 200

Burlingame, CA 94010

(650) 697-6000 — telephone

(650) 697-0577 — facsimile

BARRY G. WEST (SBN 55365)

COREY E. KLEIN (SBN 130070)

GAIMS, WEIL, WEST & EPSTEIN, LLP

1875 Century Park East, 12th Floor

Los Angeles, CA 90067

(310) 553-6666 — telephone

(310) 277-2133 — facsimile

MICHAEL N. POLLET

POLLET & FELLEMAN, LLP

1700 Broadway, 42nd Floor

New York, New York 10019

(212) 489-8888 — telephone

(212) 489-7975 — facsimile

88a

Appendix D

PATRICK A. DAWSON

DAWSON & HUDDLESTON

328 Alexander Street, Suite 10

Marietta, GA 30060

(770) 919-7554 — telephone

(770) 499-0502 — facsimile

Attorneys for Defendant

Consumers Union of United States, Inc.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

[SOUTHERN DIVISION]

SUZUKI MOTOR CORPORATION JAPAN,

a Japanese corporation,

Plaintiffs,

V.

CONSUMERS UNION OF THE UNITED STATES, INC.,

a non-profit New York corporation,

Defendant.

Case No. SA CV 96-340 AHS (Anx)

DEFENDANT CONSUMERS UNION’S STATEMENT OF

UNCONTROVERTED FACTS AND CONCLUSIONS OF

LAW IN SUPPORT OF ITS MOTION FOR

SUMMARY JUDGMENT

89a

Appendix D

Date: June 28, 1999

Time: 10:00 a.m.

Dept: Courtroom Of The Honorable Alicemarie Stotler

After consideration of the papers in support of and in

opposition to Defendant Consumers Union of United States,

Inc.’s (“CU”) Motion for Summary Judgment and the oral

argument of counsel, the Court determines that there is no

genuine issue as to the following facts. Certain assertions

are deleted, not because they are untrue, but because they

are not relevant to this motion.

UNCONTROVERTED FACTS"

BACKGROUND OF CONSUMERS UNION OF

UNITED STATES, INC.

Uncontroverted Fact Supporting Evidence _

1. CU was founded in 1936 1. Karpatkin Dec., 4 12, 13.

as a New York not-for-

profit organization.

bo

. The mission statement 2. Karpatkin Dec., § 11.

of CU is TEST, INFORM,

PROTECT.

1. These facts are conceded by Defendant Consumers Union

solely for the purposes of its Motion for Summary Judgment.

90a

Appendix D

BACKGROUND OF KEY CU EMPLOYEES

Uncontroverted Fact Supporting Evidence

12. Rhoda Karpatkin isthe 12. Karpatkin Dec., {§ 1-6;

13.

President of CU. Exh.112, Exh. 113.

Karpatkin graduated from

Yale Law School with an

L.L.B. in 1953 and

represented CU as one of

its attorneys from 1958 to

1974 until becoming

Executive Director/President

of CU. In addition to her

work for CU, Karpatkin has

devoted her entire working life

to public service as a lawyer,

a member of a variety of

consumer commissions, and

as a teacher and writer.

Dr. R. David Pittle is the 13. Pittle Dec., 2-11; Exh 1.

Technical Director and Vice

President of CU. Pittle holds

a PhD. in Electrical Engineering

from the University of Wisconsin.

From 1969 to 1973, Pittle was

an Assistant Professor in the

College of Engineering at

Carnegie-Mellon University.

In 1973, Pittle was appointed

as one of the five original

91a

Appendix D

Uncontroverted Fact Supporting Evidence

(Cont’d)

Commissioners of the

United States Produce

Safety Commission. Pittle

served on the Commission

until 1982, when he joined CU.

Pittle is a member of a number

of engineering and consumer

organizations. Fittle has authored

a number of publications and

made numerous presentations

and lectures regarding the

testing of consumer products

and consumer product safety.

14. Robert Knoll was the 14. Knoll Dec., {9 2-6.

head of the Automotive

Testing Division of CU from

1965 until his retirement in

1997. Knoll holds a Masters

: Degree in Automotive

: Engineering and worked for

3 Chrysler engineering for

11 years until 1965, when he

joined CU. In 1973, Knoll

was appointed to the National

Motor Vehicle Safety Advisory

by the U.S. Secretary of

Transportation, and served for

two terms until 1978. In 1990,

RED sins Ce Linah + ke eR ETA

92a

Appendix D

Uncontroverted Fact Supporting Evidence

(Cont'd)

15.

16.

Knoll was appointed by the

U.S. Secretary of Transportation

to the Motor Vehicle Safety

Research Advisory Committee,

where he served until 1995.

Knoll’s entire professional career

has been devoted to testing

and evaluating automotive products.

Kevin Sheehan holds a 15. Sheehan Dec., J 2-6.

Bachelor of Science degree

in Mechanical Engineering.

He has worked as a engineer

for CU for 33 years. During

his time at CU, Sheehan has

test driven over 1200 cars

and other vehicles.

Richard Small holds a 16. Small Dec., {J 2-3.

Bachelor of Science degree

in Engineering. Small has i

worked for CU for 26 years,

and has held the positions of

Technician, Assistant Engineer,

Project Engineer and Senior

- Project Engineer.

93a

Appendix D

Uncontroverted Fact Supporting Evidence

17. Frederick E. Wood ho!ds 17. Wood Dec., 44 2-3.

a Bachelor of Mechanical

Engineering degree from

Yale College. Wood worked

for CU from 1952 until 1991,

and held the position of test

engineer from 1959 to 1991.

18. Irwin Landau is the 18. Landau Dec., 44 2-9.

retired Editorial Director

of Consumer Reports.

Since his retirement from

CU in 1994, Landau has

acted as an editorial

consultant for Consumer

Reports. Landau holds a

Masters Degree in

Journalism from Columbia

University. Landau joined

CU in 1966, and held the

: positions of Assistant

‘ Managing Editor, Managing

: Editor, and Editor and

Editorial Director. During

Landau’s tenure at CU,

Consumer Reports won a

number of national magazine

awards. In 1992, Landau

received an Award for

Distinguished Achievement

from the Columbia Graduate

School of Journalism.

94a

Appendix D

Uncontroverted Fact Supporting Evidence

19. Winifred Conkling holds 19. Conkling Dec., 4 3.

a Bachelors degree in

Journalism from the

Medill School of

Journalism at Northwestern

University. Conkling worked

in the Editorial Department

at CU from 1984 until 1990.

=

PRIMARY WORK OF CU

20. The primary work of CU 20. Karpatkin Dec., 4 11.

is comparative testing of

consumer products,

comparative evaluation of

consumer services, and

research and analysis of

issues affecting consumers.

21. Each year, CU puts 21. Karpatkin Dec., 4 11.

thousands of products

through lengthy and stringent

comparative testing.

De ne ee oe

22. The results of CU’s 22. Karpatkin Dec., § 11.

testing and research are

published in Consumer

Reports magazine.

2 wes at

ip GA ELEM LIPO IO 50

Uncontroverted Fact

23.

25.

26.

27.

28.

95a

Appendix D

Supporting Evidence

The results of CU’s 23. Karpatkin Dec., 4 11.

testing and research are

published on CU’s radio

program.

. The results of CU’s 24. Karpatkin Dec., 4 11.

testing and research are

published in CU’s

newspaper column.

The results of CU’s 25. Karpatkin Dec., { 11.

testing and research are

published on CU’s CD-ROMs.

The results of CU’s 26. Karpatkin Dec., 411.

testing and research

are published in

outside media.

The goal of publishing 27. Karpatkin Dec., {] 11.

the results of CU’s testing

and research is, among

other things, to inform

and protect the public.

THE AUTO TEST PROGRAM

Vehicles are among the 28. Karpatkin Dec., § 11;

thousands of products Knoll Dec., 5.

tested each year by CU.

96a

Appendix D

Uncontroverted Fact Supporting Evidence

29. The vehicle testing is 29. Knoll Dec., § 3;

performed by the

30.

31.

aa

33.

Automobile Testing Division

(“Auto Test Division’) of CU.

The Auto Test Division 30. Knoll Dec., 4 5;

tests approximately 40 Karpatkin Dec., {] 11.

cars and other vehicles

each year.

Sport utility vehicles are 31. Knoll Dec., { 5.

among the vehicles tested

each year by the Auto

Test Division.

GOALS OF THE AUTO TEST PROGRAM

One goal of the Auto Test 32. Knoll Dec., 4 7.

Division is to give expert

buying and safety advice

to the readers of

Consumer Reports.

In order to provide its 33. Knoll Dec., ¥ 7.

best advice to consumers,

CU tests and evaluates all

aspects of car ownership

and car performance.

chek RA REG CEE

eee epee era tiie ab Fe Sx eDERERKO Se: mat

97a

Appendix D

Uncontroverted Fact Supporting Evidence

34. The tests used by the 34. Knoll Dec., § 7.

Auto Test Division are

designed to compare

vehicles with one another.

35. The tests used by the 35. Knoll Dec., 4 7.

Auto Test Division are

designed with an absolute

scale of acceptable

performance.

36. The testing program at 36. Knoll Dec., { 8.

the Auto Test Division

adapts test methods and

techniques used by

manufacturers to suit

its goals.

37. The Auto Test Division 37. Knoll Dec., { 8.

develops its own tests

when they believe they will

be more relevant to the

experience of consumers.

38. In order to achieve a high 38. Knoll Dec., § 9.

level of reliability in its

auto testing, CU requires

all of its test drivers to be

fully qualified and trained

engineers.

98a

Appendix D

Uncontroverted Fact Supporting Evidence

39. After a vehicle arrives at 39. Knoll Dec., ¥ 10.

the Auto Test Division,

CU drivers routinely drive

the vehicle a minimum of

2,000 miles to break it in.

40. After the vehicle has 40. Knoll Dec., § 10.

been broken in, the formal

testing process begins.

41. A portion of the testing 41. Knoll Dec., ¥ 11.

is the “‘one day trip,”

a 150 mile drive through

the Connecticut countryside.

42. At the test track, CU 42. Knoll Dec., § 12.

engineers perform acceleration,

breaking and handling tests.

CU’S HANDLING TESTS

Spas ie Socket ee .

43. The handling tests 43. Knoll Dec., § 13.

conducted by CU test

normal vehicle handling

and emergency vehicle

handling.

45.

46.

99a

Appendix D

EMERGENCY HANDLING TESTS

Uncontroverted Fact Supporting Evidence

44. CU’s emergency handling 44. Knoll Dec.,-§ 14.

evaluation consists of a series

of tests performed at its test

facility. The tests are: closed

circuit comering evaluations on

a one-mile course with both high

and low speed corners; a maximum

lateral acceleration test performed

on a skid pad; and an avoidance

maneuver performed on the track

straightaway with cone spacing

to allow speeds in the 45 to

55 mph range.

CU subjects all sport utility 45. Knoll Dec., { 14.

vehicles and certain pick up

trucks and certain minivans

to a modified avoidance maneuver

in the speed range of 30 io 45 mph.

THE AVOIDANCE MANEUVER

In 1973, CU added the 46. Knoll Dec., 19.

avoidance maneuver test to

its testing program.

=

Uncontroverted Fact

47.

48.

49.

50.

100a

Appendix D

The avoidance maneuver is

a double lane change maneuver

that replicates an emergency

situation where a driver suddenly

steers a vehicle out of its traffic

lane in the opposing lane to

avoid an obstacle and then

steers quickly back into the

original lane to avoid

oncoming traffic.

The avoidance maneuver

was added to the CU testing

program at the suggestion of

Carl Thelin, an engineer hired

by CU in 1972.

Thelin was experienced

in vehicle handling and safety

through his work at General

Motors and Calspan

Corporation.

Thelin participated in a

series of tests by GM to

evaluate the applicability

and reproducibility of task

performance tests to

determine vehicle handling.

48.

49.

50.

Supporting Evidence

47. Knoll Dec., 31.

Knoll Dec., J 19;

Exh. 171 (Thelin

Deposition, 44:5-20).

Knoll Dec., § 19; .

Exh. 171 (Thelin :

Deposition 8:1-21; ‘

24:25-26:4). :

2

Knoll Dec., J 19; ;

Exh 36 (CU013689- :

CU013718 General

Motors Report #A-

2561, Development

of Task Performance

Handling Tests, March

10, 1969).

Ag yl AAA RNR

” caine

PRE i AEE A

Ee I Sa

Uncontroverted Fact

10la

1ppendix D

Supporting Evidence

52. CU has used the avoidance 52. Knoll Dec., § 30.

53.

54.

55.

maneuver, known as the

“long course,” from 1973

to the present.

NEGATIVE MEDIA REPORTS REGARDING

THE SAMURAI, 1986-1987

On November 21, 1986, 53. Exh. 18; Exh. 155.

The Washington Post

reported that its reporter

nearly experienced a rollover

while testing the Samurai.

On December 26, 1986, 54. Exh. 18; Exh. 157.

the Philadelphia Daily News

reported on the Samurai:

“Make a sudden, abrupt

maneuver at speed and you’re

courting Highway Hari-Kari.

A disclaimer sticker on the

driver’s door warns you too,

in case you didn’t know.”

On February 1, 1987, 55. Exh. 18; Exh. 156.

The New York Times

reported in reviewing the

Samurai that the “one thing

you notice more than any

other is a feeling of instability

at speed an in the curves” and

stated the vehicle was

“fairly tipsy.”

102a

Appendix D

Uncontroverted Fact Supporting Evidence

56.

+

58.

On August 27, 1987, the 56. Exh. 121; Exh. 163.

St. Petersburg Times

reported on Samurai

insurance problems and

cited a rollover problem

with the Samurai.

CU’S 1988 TEST PROGRAM

Robert Knoll proposed 57. Knoll Dec., | 46;

the full schedule for the Exh. 42

1988 automobile test (CU006419-CU006420).

program in a memorandum

dated July 21, 1987.

The planned program

included a group of sport

utility vehicles including

the Isuzu Trooper II, the

Jeep Cherokee, the Nissan

Pathfinder, the Mitsubishi

Montero, and the

Suzuki Samurai.

On August 4, 1987, 58. Knoll Dec., | 46;

Knoll circulated a 1988 Exh. 43

car test program planning (CU00642 1-CU006423).

memo that included the

Suzuki Samurai.

103a

Appendix D

Uncontroverted Fact Supporting Evidence

59. The memo was 59. Knoll Dec., § 46;

subsequently revised, Exh. 44

such that the Jeep (CU006424-CU006426);

Wrangler was added as Exh. 45

60.

61.

a vehicle to be tested, and (CU006436- CU006437);

the Nissan Pathfinder and Exh. 46.

Mitsubishi Montero were

eliminated from the program.

The final group of vehicles

to be tested were the Jeep

Cherokee, the Isuzu Trooper II,

the Jeep Wrangler and the

Suzuki Samurai.

PRELIMINARY SAMURAI TESTING

On November 23, 1987, 60. Knoll Dec., § 48;

CU purchased a new 1988 Exh. 47

Suzuki Samurai hardtop (CU006438-CU006455);

for testing. The vehicle was —__ Exh. 48

checked and the engine, front (CU006457-CU006463).

end and tires were set to the

manufacturer’s specifications.

The Samurai did not have

power steering.

As a part of CU’s 61. Knoll Dec., 4 49.

evaluation and break in

process of its test vehicles,

CU Auto Test Division staff

members drive the vehicles

for a period of several months.

104a

Appendix D

Uncontroverted Fact Supporting Evidence

62. During the evaluation and 62. Knoll Dec., | 49;

break in process, the CU Exh. 49

staff members keep detailed (CU006467-CU006492).

logs of their driving of the

test vehicles.

SUZUKI SAMURAI ROLLOVER DURING ROUTINE

DRIVING BY CU FACILITIES MANAGER

63. On February 8, 1988, 63. Exh 49

Alan Hanks, the Facilities (CU006467-CU006492);

Manager of the Auto Test Exh. 170

Division, was engaged in (Hanks Deposition,

routine driving of 124:10-12; 137:17-

the Samurai. 138:12).

64. Hanks reported that 64. Exh 49

while he was driving in (CU006467- CU006492);

4WD high range along a Exh. 170

snow covered gravel road (Hanks Deposition,

at 15 mph, the Samurai 137:17-138:12).

rolled over onto its side.

65. Asaresult of rolling 65. Exh. 49

over on its side, the outside (CU006467-CU006492);

mirror was broken, the Exh. 50

driver’s window glass was (CU006494- CU006501);

broken, and the left side of Exh. 170

the vehicle was dented, fuel (Hanks Deposition,

leaked from the carburetor, 137:17-138:12).

2 SRR GENIE Satan Seis ” ‘

et MLAS Hed Ada hha Salis. ape Roce

105a

Appendix D

Uncontroverted Fact

(Cont’d)

66.

67.

68.

brake fluid leaked from the

master cylinder, and acid

leaked from the battery,

and the steering wheel was

off by 90 degrees.

Hanks took photographs

of the accident.

Hanks received

assistance returning the

vehicle to its wheels and

drove it to the Auto Test

Division.

Hanks reported the

accident to Robert Knoll,

head of the Auto Test

Division. Hanks was a

long time employee of

CU and Knoll had no

reason to doubt Hanks’

report of the incident.

Supporting Evidence

66. Exh. 50,

67.

68.

(CU006494-CU006501);

Exh. 170

(Hanks Deposition,

147:20 -149:2; 153:2-

154:11).

Knoll Dec., 4 50;

Exh. 170

(Hanks Deposition,

125:22-126:7).

Knoll Dec., J 51;

Exh. 51 (CU006464);

Exh. 170

(Hanks Deposition

142:21-143:3;

147:20-25).

106a

Appendix D

Uncontroverted Fact Supporting Evidence

69. Hanks recorded the 69. Knoll Dec., 951; Exh. 49,

details of the accident in (CU006467-CY 006492);

contemporaneous log Exh. 170

book entries. (Hanks Deposition,

70.

71.

4b

15:11-14; 17:15-18).

After the accident, the 70. Knoll Dec., 4 50; Exh. 49

Samurai was then repaired (CU006467-CU006492);

to its original specifications Exh. 51(CU006464);

at a local repair shop. Exh. 170

(Hanks Deposition,

92:25-93:25).

The Samurai was 71. Knoll Dec., 4 51; Exh. 49

returned to the Auto Tests (CU006486-CU006487;

Division and carefully Exh. 51 (CU006464).

checked.

KNOWLEDGE OF THE CENTER FOR AUTO

SAFETY DEFECT PETITION

On February 23, 1988, 72. Exhibit 52

the Center for Auto (CU006913-CU0069 19).

Safety filed a petition for

defect investigation with

the National Highway Traffic

Safety Administration that

alleged that the Suzuki Samurai

had a rollover defect and

requesting a recall of

1986-1988 Samurais.

Bachsece akin 1S Sita: Sarena Aaah se

107a

Appendix D

Uncontroverted Fact Supporting Evidence

73. Robert Knoll, the head 73. Knoll Dec., 4 53; Exh. 52

of CU’s Automotive (CU006913-CU006919).

Testing Division, received

a copy of the CFAS petition

on February 29, 1988.

AWARENESS OF THE NBC REPORT ABOUT THE

DANGERS OF THE SAMURAI

74. On February 29, March 1 74. Knoll Dec., 4] 54; Baird

and 2, 1988, NBC Dec., Exh 53 (CU22896).

Television broadcasted a

three part series of news

stories regarding the safety

of the Samurai and its

propensity for rollovers

(“the NBC Report’).

75. The NBC Report 75. Knoll Dec., 4 54; Baird

included video clips of Dec., Exh 53 (CU22896).

testing of the Samurai by

Billy Peterson of the

Automotive Safety

Testing Facility.

LOL LE PORE TE RE LEE IS eS

76. The testing showninthe 76. Knoll Dec., 454; Baird

NBC Report vividly Dec., Exh 53 (CU22896).

depicted the Samurai

tipping up during test

maneuvers.

108a

Appendix D

Uncontroverted Fact Supporting Evidence

77. The NBC Report showed 77. Knoll Dec., 455; Baird

that outriggers were used Dec., Exh 53 (CU22896).

during Mr. Peterson’s testing

of the Samurai to prevent

the vehicle from rolling over.

78. Outriggers are devices 78. Knoll Dec., 4 55; Pittle

placed on the side of a Dec., J 19.

vehicle to prevent it from

rolling over in the event

of a tip up.

79. Inthe NBC Report 79. Knoll Dec., 4 55; Baird

Mr. Peterson states that Dec., Exh 53 (CU22896).

the addition of outriggers

lowers the center of gravity

of the vehicle and should

improve handling.

80. The NBC Report included 80. Knoll Dec. 4 55; Baird

an interview with Brian Dec., Exh 53 (CU22896).

O’ Neill, President of the

Insurance Institute for

Highway Safety, a non-profit

organization.

81. The NBC Report 81. Knoll Dec. 4 55; Baird

included an interview Dec., Exh 53 (CU22896).

with Ben Kelley.

109a

Appendix D

Uncontroverted Fact Supporting Evidence

82.

83.

84.

85.

86.

87.

Robert Knoll saw the 82. Knoll Dec., 55.

NBC Report when it

was aired.

Knoll sent a videotaped 83. Knoll Dec., 4 55.

copy of the NBC Report

to R. David Pittle, CU’s

Technical Director.

Pittle saw the 84. Pittle Dec., § 19.

NBC Report.

To the best of CU’s 85. Pittle Dec., § 42.

knowledge, Suzuki never

sued NBC over the NBC

Report on the Samurai.

PRECAUTIONS TAKEN IN LIGHT OF

INFORMATION KNOWN BY CU

After viewing the NBC 86. Pittle Dec., 919; Knoll

Report, both Knoll and Dec., 4] 56.

Pittle were concerned

about the safety of CU

drivers while testing

the Samurai.

Pittle told Knoll to obtain 87. Pittle Dec., 419; Kaoli

safety outriggers for the Dec., | 56.

Samurai before testing it.

110a

Appendix D

Uncontroverted Fact Supporting Evidence

88. Pittle told Knoll to obtain 88. Pittle Dec., | 19.

the outriggers for the

Samurai testing because of

his concern to keep CU’s

drivers safe.

89. Knoll called Billy 89. Knoll Dec., | 56.

Peterson and arranged to

use the outriggers Peterson

had used in the tests for the

NBC Report.

90. Knoll believed and 90. Knoll Dec., 4 57.

continues to believe that

attaching outriggers to the

vehicle would lower the center

of gravity and make it more

difficult for a rollover to occur..

APRIL 20, 1988 AVOIDANCE MANEUVER

TESTING OF FOUR SUVS

91. On April 20, 1988, CU 91. Knoll Dec., 4 65. ‘

began performing the

Avoidance Maneuver tests

on the SUVs scheduled

for the July 1988 issue.

The vehicles tested were

the 1988 models of the

Jeep Cherokee, the Isuzu

Trooper II, the Jeep Wrangler,

and the Suzuki Samurai.

11]

a

Appendix D

Uncontroverted Fact

92.

93.

94.

97.

The test crew included

Fred Wood, the data taker

and test director, Kevin

Sheehan and Richard

Small, the test drivers,

Ron Denison, the camera

operator, and Robert Knoll,

David Pittle and Irwin

Landau as observers.

No still photographer

was present.

Sheehan and Small had

viewed the NBC Report

prior to the testing.

As of April 20, 1988,

CU tested vehicles on one

avoidance maneuver, the

“long course.”

. Before the first test runs,

CU installed the NBC

outriggers on the Samurai.

Sheehan was the first

driver who drove the

Samurai through the

long course.

Supporting Evidence

92.

93.

94.

95.

97.

Knoll Dec., 4] 65; Wood

Dec. § 12; Small Dec.,

4] 4; Sheehan Dec., § 17;

Pittle Dec., 4 17;

Landau Dec., § 10.

Sheehan Dec., § 16; Small

Dec., { 4.

Knoll Dec., 4 66.

Knoll Dec., 4] 67.

Sheehan Dec., 4 17; Small

Dec., § 5; Knoll Dec.,

q 67.

112a

Appendix D

Uncontroverted Fact Supporting Evidence

98. Sheehan drove through 98. Sheehan Dec., 4 17;

the long course with the Knoll Dec., § 67; Pittle

outriggers installed on Dec., § 20; Small Dec.,

the Samurai. q 5.

99. Sheehan did not 99. Sheehan Dec., J¥ 17, 18;

experience any tip ups Pittle Dec., § 20; Knoll

during his sequence of Dec., 467; Small Dec., 5;

runs through the long course. Wood Dec., { 13.

Sheehan reached up to

53 mph during his runs.

100. At no time did Sheehan 100. Sheehan Dec., § 17,

feel as though the Samurai Exh. 66 (CU006711).

would tip over, a fact he

noted in the test log.

101. After seeing that 101. Small Dec., § 6; Knoll

Sheehan experienced no Dec., | 68; Sheehan Dec.,

tip ups while driving the 4] 18; Pittle Dec., | 20;

Samurai, fears about a tip Wood Dec., § 15.

up were allayed. Small and

Knoll agreed that Small

would drive through the

long course without the

use of outriggers.

113a

Appendix D

Uncontroverted Fact

102.

103.

104.

105.

107.

Knoll approved the

removal of the outriggers,

and Small drove the long

course without outriggers

attached to the Samurai.

Small completed his

sequence of runs without

any two wheel tip ups.

His fastest speed was

55 mph.

Small noted in his

contemporaneous log

book that the steering

was slow, but that the

Samurai responded well

and recovered quickly.

After Small completed

his sequence of test runs,

Pittle asked Knoll if he

could drive the Wrangler

and the Samurai through

the long course.

Pittle is an ordinary

driver and not a trained

professional. He would

not consider testing a

vehicle he thought

might rollover.

Supporting Evidence

102. Knoll Dec., 4 68; Small

Dec., § 6; Sheehan Dec.,

{| 18; Wood Dec., § 15;

Pittle Dec., 4 20.

103. Small Dec., 7; Knoll

Dec., 468; Sheehan Dec.,

{ 18; Pittle Dec., 4 20;

Wood Dec., § 13.

104. Small Dec., 7, Exh. 67

(CU006712).

105. Pittle Dec., 9 21; Knoll

Dec., 4 69.

107. Pittle Dec., 23.

ll4a

Appendix D

Uncontroverted Fact

108. On the tenth run in

Pittle’s sequence of runs

through the long course

at 46.5 mph, the Samurai

lifted its two nght wheels

off the road and tipped up.

110. The tip up was a startling

and unexpected occurrence.

Pittle states that he did

not purposefully cause

the Samurai to tip up.

There is no evidence to

the contrary.

111.

Persons cheered when

Pittle came down safely

without injury. They also

cheered earlier when

Pittle made it through

the course without

knocking over any cones.

112.

BBD.

Pittle stopped driving the

Samurai and did not drive

the Wrangler.

Supporting Evidence

108. Pittle Dec., 4 24; Knoll

Dec., § 70; Sheehan Dec.,

§{ 19; Small Dec. 8;

Wood Dec., J 16;

Exh. 68.

110. Pittle Dec., 4 24; Knoll

Dec., 4 70; Sheehan Dec.,

4 19; Small Dec., { 8;

Wood Dec., § 14.

Pittle Dec., § 23; Exhs.

168, 169 (Denison

Deposition. pp. 147, 148,

232).

111.

¥

112. Knoll Dec., { 70;

Sheehan Dec., § 20;

~ mall Dec., 4 9; Wood

Dec., § 15; Exh. 68.

113. Pittle Dec., ¥ 24.

llSa

Appendix D

Uncontroverted Fact Supporting Evidence

114. Had Knoll believed the 114. Knoll Dec., ¥ 70.

Samurai would tip up, he

would not have allowed

Small or Pittle to drive

the Samurai without outriggers.

115. All of the other vehicles 115. Knoll Dec., § 71.

tested by CU that day

completed the long course \

without incident.

DEVELOPMENT OF THE SHORT COURSE

116. Knoll determined that 116. Knoll Dec., 4 73; Pittle

Pittle’s tip up resulted Dec., ¥ 25.

when Pittle started the

first turn a split second

late, thereby effectively

extending the entry lane,

necessitating a sharper

right turn around the

obstacle cone.

i117. Pittle asked Knoll to 117. Pittle Dec., § 26.

design a test program. |

118. Knoll and other CU 118. Knoll Dec., §] 73; Pittle

engineers reasoned that Dec., | 26; Sheehan Dec.,

if they modified the course 4 21; Small Dec., ¥ 10;

by shortening the entry Wood Dec., 4 16. A

distance to the obstacle

cone and moving the cone

(so as to replicate the path

1l6a

Appendix D

Uncontroverted Fact Supporting Evidence

(Cont'd)

driven by Pittle) they could

determine if the results were

an aberration or if the Samurai

and all or some of the other

SUVs tested would

experience rollovers.

119. The modification was 119. Knoll Dec., § 73; Pittle

made to the course to Dec., § 26; Sheehan Dec.,

determine how all of the 4] 21; Small Dec., { 10;

sport utility vehicles, not Wood Dec., | 16.

Just the Samurai, would

react to this maneuver.

120. The modified course 120. Knoll Dec., § 73; Pittle

became known as the Dec., | 26; Sheehan Dec.,

“short course.” 21; Small Dec., { 10;

Wood Dec., ¥ 16.

121. There is no evidence that 121. Landau Dec., 4 56; Knoll

anyone instructed Pittle, Dec., J 111; Pittle Dec.,

Small or Wood to 4 27; Sheehan Dec., J 23;

deliberately tip up the Small Dec., 4 18; Wood

Samurai on the day of the Dec., J 36.

April 20, 1988 testing.

117a

Appendix D

UNCONTROVERTED TESTIMONY OF RON DENISON

Uncontroverted Fact Supporting Evidence

123. Ron Denison, a former 123. Exhs. 168, 169 (Denison

CU employee who was Deposition, 143:16-

present at the April 20, 144:5; 148:2-6; 232:10-

1999 testing, testified that 12).

he knew and respected

Pittle and considered him

a brilliant man, a man of

integrity and professionalism.

Denison does not believe

Pittle would deliberately

tip up the Samurai.

124. Denison testified thathe 124. Exhs. 168, 169 (Denison

had an especially high Deposition, 144:6-12;

regard for Knoll, and 146:19-147:25; 232:8-9).

believed him to be a man

of integrity, honesty,

professionalism, and who

would never rig a test.

Denison does not believe

Knoll rigged the Samurai

testing nor participate in

knowingly put out false

test results.

125. Denison testified that 125. Exhs. 168, 169 (Denison

Sheehan is a very honest Deposition, 143:9-15;

person, a professional, Boe. 1):

and a man of integrity.

118a

Appendix D

Uncontroverted Fact Supporting Evidence

126.

127.

128.

129.

Denison testified that 126. Exhs. 168, 169 (Denison

Wood is a man of Deposition, 232:24-25;

integrity and an honest 313:24-314:12).

man. Denison does not

believe Wood intentionally

tipped up the Samurai.

Denison testified that 127. Exhs. 168, 169 (Denison

Small is a man of integrity. Deposition, 232:13-14;

Denison does not believe 314:13-17).

that Small was intentionally

trying to tip up the Samurai.

When asked whetherhe 128. Exhs. 168, 169 (Denison

thought CU did something Deposition 221:14-

dishonest, Denison testified 222:9).

he didn’t think CU

was dishonest.

APRIL 26, 1988 TESTING

The next day of testing 129. Knoll Dec., § 74; Nappi

the vehicles was April 26, Dec., | 3; Sheehan Dec.,

1988. Present at the 4 22; Small Dec., { 11;

testing on that day were Wood Dec., J 17.

Joe Nappi, data taker,

Fred Wood and Rick Small,

test drivers, Ron Denison,

camera operator, and Kevin

Sheehan, Alan Hanks, and

Robert Knoll as observers.

119a

Appendix D

Uncontroverted Fact Supporting Evidence

130. Sheehan asked Knoll 130. Sheehan Dec., § 22;

to excuse him from Wood Dec., § 17.

131.

ide.

driving the Samurai

through the short course

because he was afraid to

drive the vehicle. Sheehan

was replaced by Wood.

Since then, from 1989 to

1999, Sheehan has driven

many vehicles through

the short course.

Wood was the first test 131. Wood Dec., 4 18; Knoll

engineer to drive the Dec., { 75.

Samurai through the short

course with outriggers

attached on April 26, 1988.

Wood’s fastest successful

speed was 42.4 mph.

On a Wood run at 132. Wood Dec., 4 18; Knoll

42.2 mph, both of the Dec., 975; Small Dec.,

right side tires of the 4 12; Nappi Dec., 4 4.

~ Samurai lifted off the

pavement, but the Samurai

did not tip up all the way

on to the outriggers.

120a

Appendix D

Uncontroverted Fact Supporting Evidence

133. On a Wood run through 133. Wood Dec., 4 18; Knoll

the course, at 41.3 mph, Dec., | 75; Small Dec.,

the Samurai suddenly { 12; Nappi Dec., § 4.

134.

135.

136.

tipped up onto the outriggers.

Small was the second 134. Smali Dec., 4 13; Knoll

test engineer to drive the Dec., §76; Wood Dec.,

Samurai through the { 21; Nappi Dec., § 5.

short course. Small also

drove with outriggers

attached to the Samurai.

Ona Small run through 135. Smal! Dec., ¥ 13; Knoll

the short course, Small Dec., 76; Wood Dec.,

experienced a sudden and 421; Nappi Dec., 4 5.

full tip up onto the

outriggers at 40.2 mph.

After Small’s tip up in 136. Knoll Dec., 4 76; Small

the Samurai, Knoll Dec., J 13.

concluded that it was

not necessary to make

any more test runs of

the Samurai because the

1988 Samurai had

demonstrated a dangerous

rollover propensity, and

Knoll did not want to put

anyone needlessly at risk.

l2la

Appendix D

Uncontroverted Fact Supporting Evidence

137.

138.

139.

140.

CU next ran the Jeep 137. Knoll Dec., 4 78; Wood

Wrangler with outriggers Dec., { 23.

attached through the

short course and no tip

ups occurred.

CU next ran the Isuzu 138. Knoll Dec., § 78.

Trooper II through the

short course without

any tip up.

At no time during tests 139. Knoll Dec., § 78;

of the Jeep Wrangler, Exh. 71

the Jeep Cherokee or the (CU006748-CU006757).

Isuzu Trooper II was there

any tip up.

MAY 12, 1988 TESTING

In late January or early 140.Knoll Dec., § 80.

February of 1988,

A. Liska at Rogers &

Associates, Suzuki's

public relations firm,

wrote to Knoll regarding

CU’s purchase of the

1988 Samurai for evaluation.

122a

Appendix D

Uncontroverted Fact Supporting Evidence

141.

142.

143.

Liska’s letter to Knoll 141. Knoil Dec., § 80.

stated that the 1988”

model year Samurai had

suspension modifications

that Suzuki claimed would

improve its ride.

CU believed the 142. Knoll Dec., 4 80

suspension modifications

on the 1988 % Samurai

could affect handling and

therefore on May 6, 1988,

CU purchased a new 1988%

Samurai for evaluation

of its handling.

Testing of the sport 143. Knoll Dec. 4§ 81 84;

utility vehicles continued Pittle Dec., {¥ 31, 33.

on May 12, 1988.

The vehicles tested

were the 1988”

Samurai and the Jeep

Cherokee. Comparative

testing was performed

with the Jeep Wrangler

and Ford Festiva.

123a

Appendix D

Uncontroverted Fact Supporting Evidence

144.

145.

146.

Present at the May 12, i44. Knoll Dec., 4 81 Pittle

1988 testing were Nappi, Dec., § 31; Small Dec.,

data taker, Wood and 4] 14; Wood Dec., § 24.

Small, test drivers, a

camera operator, and

Sheehan, Knoll, Pittle,

Joyce Newman, David

Berliner, and Alan Hanks,

as observers.

CU employees believed 145. Pittle Dec., § 32; Knoll

they had

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