Big Dig Criminal Indictment: Zealous Prosecution or Future Trend?
On August 8, 2007, a Massachusetts grand jury indicted Powers Fasteners, Inc., a family-owned company with 275 employees, on one count of involuntary manslaughter in connection with a 2006 tunnel ceiling panel collapse that killed a passenger in a car traveling through the tunnel. The National Transportation Safety Board (“NTSB”) determined that the collapse was caused by the inappropriate use of a fast-setting epoxy anchor adhesive, Power-Fast Fast Set, supplied by Powers Fasteners.
On September 5, 2007, the company’s attorney entered a not guilty plea on its behalf at an arraignment in Suffolk Superior Court. The court held a pretrial conference in the involuntary manslaughter case yesterday on October 16, 2007, and has set a tentative trial date of September 9, 2008. The indictment alleges that Powers Fasteners had knowledge that its Fast Set product was being used in the tunnel ceiling, but failed to notify project managers of the difference between its two products and of the danger of using the inappropriate epoxy in the ceiling construction. The indictment charges that Powers Fasteners’ conduct was wanton or reckless.
The criminal conviction of a corporation for involuntary manslaughter carries a maximum penalty of $1,000 under Massachusetts law. Although the penalty is relatively light, a criminal conviction could prove helpful to the state in its parallel civil action against Powers Fasteners, as well as to the victim’s family, which has a civil case against the Massachusetts Turnpike Authority and nine companies, including Powers Fasteners.
Many in the legal and business community are watching this case closely to see if the use of criminal indictments for products liability cases is an isolated case or a future trend. While we wait to see whether criminal prosecution of products liability cases becomes more common, there are some pieces of advice to avoid your company finding itself in a similar plight.
First, if possible avoid politically-charged customers. With vast budget overruns and major delays, the Big Dig tunnel project had raised the public’s ire long before the tragic incident took place. Powers supplied less than $1,300 worth of epoxy and was a small player in the overall project, but it appears to have been caught up in the larger political struggle. In a press release, Jeffrey Powers, president of Powers Fasteners, referring to reported settlement negotiations between the Massachusetts Attorney General and Bechtel, alleged that the “only reason that our company has been indicted is that unlike others implicated in this tragedy, we don’t have enough money to buy our way out.” Before the indictment, Powers Fasteners had reportedly offered to settle the case for up to $8 million. In contrast, Bechtel has reportedly offered to settle with the Massachusetts Attorney General for well over $300 million in exchange for immunity from prosecution.
Second, double-check your insurance coverage for punitive damages. If a company is found to be criminally negligent, which is a reckless or wanton standard, proving civil punitive damages will be easy in a civil case. Depending on the state, insurance companies may not extend coverage to punitive damage awards.
Third, be clear in your instructions on how to use – and not use – your product. Be sure that the instructions are placed on the product itself if possible, so if your product is passed through multiple hands, all of the people who use your product know how to properly use it.
Fourth, be sure to document and keep proper records of how you communicate about your product, especially when multiple parties are involved. The NTSB faulted six entities, in addition to Power Fasteners, for the inappropriate use of the epoxy and the subsequent collapse, including two government agencies. Of the companies cited in the NTSB report, only Powers Fasteners has been criminally indicted.
Finally, keep an eye on these type of legal developments in the products area. Historically the use of criminal legal action has been confined to the environmental context or knowing violations of health and safety standards that involve employees of a company, rather than the general public. One of the few cases analogous to this case occurred in 1999, when Florida prosecutors brought third-degree murder and manslaughter charges against SabreTech, which had loaded hazardous wasted onto a Value Jet plane that crashed, killing all 110 people on board. In 2001, the prosecutors dropped the murder and manslaughter charges against SabreTech in exchange for a no contest plea to the charge that the company illegally transported hazardous waste and a $500,000 donation to charity by SaberTech’s former parent company. Frost Brown Todd LLC intends to continue to monitor this case and analyze its potential impact on our clients.
For advice on your company’s specific products liability concerns, please feel free to contact your Frost Brown Todd LLC attorney.