Carrera GT Crash Settled for $4.5 Million

The attorney points out that the typical SCM subscriber, a car enthusiast who holds fast cars and racetracks dear, will never make it onto this jury

Last summer, “Legal Files” reported about a lawsuit resulting from the fatal crash of a Porsche Carrera GT at a club track day at the California Speedway (June 2006, p. 30). The lawsuit was recently settled for a reported total of approximately $4.5 million. The contributions to the settlement were about 49% from the estate of the driver, 41% from the track owners and the event organizers, 8% from Porsche, and 2% from the driver of the Ferrari that was claimed to have triggered the crash.

“Legal Files” received numerous comments from SCM readers, all of which were critical of the lawsuit, plaintiff, and attorney. No doubt, many readers may have the same reaction to the settlement. But let’s take a closer look at the facts.

To refresh our memory, Tracy Rudl filed the lawsuit alleging the wrongful death of her husband, Corey Rudl, who was a passenger in the CGT owned and driven by Ben Keaton at the Ferrari Owners Club track day. Rudl was represented by attorney Craig McClellan, a former racer and a successful plaintiffs’ attorney from San Diego. As the CGT was traveling at about 130 mph on the straightaway, a Ferrari entered the track at a relatively slow speed. Keaton swerved to avoid it and the Porsche skidded into a concrete barrier wall, killing both men.

The wall had been placed closer to the track than its original position, in order to enlarge the area behind it for use as a children’s play area during an earlier NASCAR race.

Discovery creates clearer picture

Extensive investigation, interviewing of witnesses, and other forms of legal discovery brought out more facts. Here is the bigger picture, according to McClellan.

The Track. The track suffered from two major design defects-the pit-out (exit onto the track) design and the concrete wall along the straightaway that was moved to accommodate the NASCAR race. The problem with the pit-out design was that it brought the drivers onto the track in the middle of the straightaway and the pit-out driver’s view of the straightaway was completely blocked by a guardrail, so the driver had to rely entirely on the flagger when entering.

The aerial view of the track shows how the concrete wall that normally ran parallel to the track was moved to enlarge the area behind it. A second photo shows the Carrera GT crashed in the worst possible place-right where the wall protruded. It looks as the CGT would normally have hit the wall and bounced back toward the track. Whatever happened then would have been better than a 130-mile near head-on crash.

The Organizers. The Ferrari Owners Club requires that all cars pass a technical inspection by an approved repair facility. At a previous event, the FOC President and organizer had been warned by one of their vehicle certifiers that he believed that something was wrong with the handling of Keaton’s car and it should not be allowed to run. They let it into that event anyway, and it spun out three to four times-one time the event organizer was even on board and became nauseous. But he didn’t tell anyone about the warnings and did not exclude Keaton from that event. (As you will see below, it appears the concerns the mechanic had were related to the oversteer inherent in the design of the car, not to any particular mechanical defect.)

Keaton did not have the CGT inspected before this event, but was allowed to sign his own tech inspection form stating that the car was fine. Investigation revealed the FOC had never denied a participant access to a track day on account of a failure to pass tech.

The organizers also failed to enforce the track safety rule about cars entering the track. Pit-out was in the middle of the straightaway, with entry on the left side. But cars on the straightaway tended to stay to the left to set up for the right-hander at the end. To avoid collisions, cars entering the track were required to move to the right side as soon as possible. However, at this event, cars were entering the track and staying on the left side.

The Driver. Keaton was warned about the handling problems with the CGT, ignored his mechanic’s advice, and invited Rudl for a ride without mentioning the problems. And, when the Ferrari came onto the track slowly, he overreacted and spun.

The Ferrari Driver. The Ferrari driver and the flagger blamed each other for what happened, but it was concluded that the Ferrari entered the track too slowly, forcing Keaton to evade him.

Porsche. The sole claim against Porsche was that the CGT was defective because it was designed without electronic stability control, which Porsche calls PSM. McClellan deposed two German engineers on the subject, and their answers were inconsistent. One testified that Porsche did not think that its PSM system would work on the CGT because the car’s frame structure and suspension mountings would create strong vibrations that would interfere with its operation. The other engineer testified that PSM was not offered because the customers didn’t want it.

McClellan suspects it was a marketing decision, as the CGT was marketed as a “race car for the streets,” and race cars don’t have electronic stability control. He notes that during its development, the CGT had exhibited a tendency to oversteer during high lateral acceleration. Porsche made some adjustments, but did not fully correct the problem, which explained why the mechanic who drove Keaton’s car reported “handling problems.” PSM would have corrected the “tail happy” oversteer response to Keaton’s steering input to avoid the Ferrari.

What about the releases?

One of the primary matters addressed in the settlement negotiations was the release signed by Rudl. As all of us who have participated in a track day know, the release contained language that waived any claims against the organizers and participants, with Rudl assuming full risk of injury or death. Many SCM readers pointed out that the release should end the matter.

While the settlement was being negotiated, the California Supreme Court was considering a broadly similar case. The Court of Appeal had ruled that releases were effective as to negligence claims, but not as to claims of gross negligence. There was uncertainty about the outcome because this case was the first time this issue had been addressed by a California court. McClellan insisted that the Supreme Court would agree with the Court of Appeal, and that he could prove gross negligence against the various defendants. He also insisted that the release would not be effective against the driver, as Keaton had been warned about the car’s handling problems before the event and did not disclose them. Either way, the release had nothing to do with the claim against Porsche, as it was not a participant at the track day.

The Supreme Court’s opinion was issued shortly after the settlement and was what McClellan predicted. The case involved a release given by the parents of a developmentally disabled girl who participated in a City of Santa Barbara summer camp and drowned while swimming. With no prior California precedent, the Court looked to decisions from other states. Quite a number had addressed the issue, and the majority ruled that properly written releases would be effective against claims of ordinary negligence, but that public policy made them void as to claims of gross negligence. The Court noted that most of the handful of decisions that enforced releases in cases of gross negligence involved auto accidents, but also noted that several states had ruled that releases are ineffective against claims for ordinary negligence, even in auto racing situations.

Interestingly, the Court received amicus curiae briefs from a number of organizations, including NASCAR and the California Speedway Association, predicting the demise of spectator racing and numerous types of recreational activities if the Court adopted this rule. The Court brushed them off, pointing out that NASCAR holds three races each year in Virginia and New York, both of which have laws that bar releases even in cases of ordinary negligence.

Was anything accomplished?

A lot of money changed hands in this settlement, but did anything of lasting societal value get accomplished here? McClellan thinks a lot of good may have been accomplished. He points out that the California Speedway is now safer. The guardrail blocking the view from pit-out has been moved, and the track may move pit-out to the end of the straightaway. He is confident that the Ferrari Owners Club will institute better safety procedures at track days, and he is hopeful that Porsche and other manufacturers will never again build a supercar without electronic stability control.

McClellan thinks that the manufacturers’ greatest exposure in this regard may not be crashes on racetracks, but what might happen on the street. Imagine a CGT driver who gets in over his head on a public road, the rear end comes around, and he spins into an oncoming car, killing its occupant. Faced with expert testimony that electronic stability control could have prevented the spin, what will the jury think?

McClellan points out that the typical SCM subscriber, a car enthusiast who holds fast cars and racetracks dear, will never make it onto this jury. The jurors will be more ordinary citizens. “Most people, especially those with children on the streets and highways, would fear a vehicle like the Carrera GT, with its tricky handling characteristics, 600-plus horsepower, and unskilled, unqualified drivers. When a ‘race car for the streets’ is sold to anyone with enough money, regardless of his ability to drive it, and it doesn’t even incorporate modern electronic safety devices that correct driver errors, then maybe the manufacturer should accept some responsibility for the foreseeable deaths that will result.”

Tracy Rudl also believes that the lawsuit will benefit others. “My loving husband was an innocent passenger in an expensive sports car that inexplicably failed to incorporate a modern, life-saving safety feature. He was a passenger on a racetrack that was dangerously designed. While driving on racetracks always involves risks, the result of this case and the redesign of the track will help eliminate unnecessary risks and make the sport of high speed driving safer.”