One of the most interesting things written about professional responsibility in 2014 is not a book or a law review article, but the report of an internal investigation. Anton Valukas, a former United States Attorney, now chair of the Chicago law firm Jenner & Block, was retained by the board of directors of General Motors to investigate the company’s inadequate response to reports of a serious defect in some of its cars. As extensively reported, a faulty ignition switch used in several G.M. cars, including the Chevrolet Cobalt and Saturn Ion, would sometimes fail in a way that both shut off the engine and disabled the car’s airbags.1 The switch departed from its intended design in a crucial respect – the torque was less than specified, so that if a driver inadvertently bumped into it, or if the keys hanging from the ignition switch were too heavy, the electrical system might change from “run” to “accessory” mode. As early as 2005, G.M. started to receive reports of crashes in which the car’s airbags failed to deploy. At first they did not suspect a problem, as there were other factors that might have caused the airbags to fail to deploy. It was also hard to track down the problem because the engineer who had approved the original, faulty switch also approved a change to the switch design that solved the problem, but did so in a way that obscured the original problem.2 But by about 2007, it was becoming clear that there might be a defect in the electrical system of certain car lines. Finally, in early 2014, G.M. publicly disclosed the defect, began recalling as many as 2.6 cars, and established a compensation fund for the victims of switch-related accidents.
What happened between 2007 and 2014? The long and short of it is, evidence of a possible defect was fed into the machinery of a cumbersome, bureaucratic process that churned on and on without moving toward a resolution. G.M. did not set about to cover up the problem. It has a byzantine structure of review programs, tracking systems, and cross-disciplinary committees that exists precisely to detect and rectify issues like the ignition switch defect.3 Customer satisfaction issues, which comes to the attention of G.M. personnel involved in marketing, are supposed to get directed to engineers for improvement, coded for whether the problems are a mere annoyance or a possible safety concern.4 Managers from divisions of products, systems, and safety engineering periodically met with business managers to work on solutions to safety problems and overcome roadblocks.5 Additional committees dealt with problems manifesting themselves in the field, and had contact with representatives from engineering, marketing, business, and legal teams.6 Reading the description of these procedures and protocols, one comes away with the impression of a company that takes its obligations to customers quite seriously, but in reality the redundancy and ambiguity inherent in the structure sapped the energy from the company’s response. With multiple committees dealing with various aspects of the same problem, no person or centralized team had responsibility for making sure something got done. CEO Mary Barra memorably testified before Congress about the “G.M. nod,” when everyone in the room agrees with a proposed plan of action, but no one does anything to make it happen, and the “G.M. salute,” which consists of crossed arms with fingers pointing toward others, to whom responsibility is being punted.7 The human cost of this dithering can be measured in the injuries and deaths that would have been prevented if prompt corrective action had been taken.
Revelations of corporate wrongdoing are inevitably followed by the question, memorably asked by a federal judge surveying the wreckage of the savings and loan industry in the late 1980’s, “where were the lawyers?” Judge Stanley Sporkin demanded to know, “[w]here were these professionals . . . when these clearly improper transactions were being consummated?”8 Although the nature of G.M.’s wrongdoing was negligence and inaction, as opposed to willful frauds, Judge Sporkin’s question is still the right one to ask. The answer turns out to be that lawyers were involved in the process of responding to reports of defects in the ignition switch, but they didn’t do enough. The really remarkable thing about the G.M. recall case is that, after the dust settled, a bunch of lawyers had been fired for not doing enough.9 It therefore becomes an urgent practical as well as theoretical matter for lawyers to consider the Valukas Report and determine what the lawyers for G.M. did wrong.
Accident reports had mobilized the investigation and response process, but the Valukas Report faults the lawyers for not “impart[ing] a sense of urgency” to the investigation. (P. 154). They lawyers were not assisting in a cover-up. Attorneys familiar with products liability cases pending against G.M. asked why the company had not ordered a recall and were told that the engineering department was “acutely aware” of the issue and was doing everything they could. (P. 184). Yet CEO Barra said that the lawyers “didn’t take responsibility; didn’t act with any sense of urgency.”10 In particular, they dealt with the ignition switch problems as “business as usual,” without alerting G.M. general counsel. One might object that it is unfair to blame the lawyers for what is, after all, a not uncommon problem of organizational dysfunction. While not exonerating individual decision-makers, many after-the-fact reports on corporate wrongdoing focus on structural explanations such as diffusion of responsibility, groupthink, and pluralistic ignorance.11 Unlike the players in many of these cases, however, the lawyers for G.M. were not relatively powerless underlings, dependent for their professional survival on a “rabbi” or protector higher in the corporate chain of command.12 They were highly experienced, trusted by senior management, and in some cases in charge of the committees that made decisions about product recalls.
The practical upshot of the report seems to be that in-house lawyers must make sure not only to refer evidence of a problem to the right person, but also must follow up to make sure action has been taken. More interesting theoretical questions, which deserve careful exploration, are whether lawyers have subtly conflated the expectations and duties of two roles – litigation advocate and corporate counsel. The actions of many of the lawyers fired by G.M. can be explained by the advocate’s mindset. Client counseling is different, and the firing of these lawyers shows that some corporate clients expect something other than “zealous advocacy” from their lawyers.
- See Hilary Stout, After a G.M. Recall, a Fiery Crash and a Payout, New York Times (Sept. 25, 2014); Hilary Stout, et al., For a Decade, G.M. Response to a Fatal Flaw Was to Shrug, New York Times (June 5, 2014); Rebecca R. Ruiz, et al., 13 Deaths, Untold Heartache, From G.M. Defect, New York Times (May 26, 2014). [↩]
- See Valukas Report, at 53 (describing design release engineer Raymond DiGiorgio’s decision to approve the original switch), 98-101 (recounting DiGiorgio’s change to switch without making change to the part number, which G.M. CEO Mary Barra characterized as a violation of “Engineering 101” standards). [↩]
- See Valukas Report, Appx. B, at 282-91 (summarizing systems maintained in connection with G.M. engineering and product development process, internal investigation, and products liability claims). [↩]
- Id. at 283 (describing Product Resolution Tracking System). [↩]
- Id. at 286 (describing Vehicle and Process Integration Review). [↩]
- Id. at 289-90 (describing Field Performance Evaluation and Product Investigation processes). [↩]
- See Peter J. Henning, How G.M.’s Lawyers Failed in Their Duties, New York Times (June 9, 2014). Barra’s candid testimony about the dysfunctions within the G.M. organization is an ironic counterexample to Max Weber’s theory of bureaucratic organizations, which emphasizes their capacity for carrying out complex tasks with “[p]recision, speed, unambiguity, . . . continuity, discretion, unity, strict subordination, [and] reduction of friction and of material and personal costs.” See Max Weber, “Bureaucracy,” in H.H. Gerth and C. Wright Mills, ed. and trans., From Max Weber: Essays in Sociology (Oxford: Oxford University Press 1946), p. 214. [↩]
- Lincoln Saving & Loan Association v. Wall, 743 F. Supp. 901, 920 (D.D.C. 1990). [↩]
- Sue Reisinger, “GM In-house Lawyers ‘Removed’ in Ignition-Switch Purge,” Corporate Counsel (June 9, 2014). [↩]
- Reisinger, supra. [↩]
- See, e.g. Max H. Bazerman & Ann E. Tenbrunsel, Blind Spots: Why We Fail to Do What’s Right and What to Do About It (2011); Diana Vaughan, The Challenger Launch Decision: Risky Technology, Culture, and Deviance at NASA (1996). [↩]
- Compare the stories of ethical decision-making by middle managers in Robert Jackall, Moral Mazes: The World of Corporate Managers (1988). [↩]