Car Makers Down on Supreme Court Ruling

Wednesday morning, Ford , General Motors and other car companies are down 1 to 2 percent on a surprising US Supreme Court ruling, which said that car companies who complied with federal standards on seat belts are not barred from being sued by owners.

This was a unanimous ruling, which held that a California suit against Mazda could proceed. In 2002, a passenger sitting in a rear seat who was wearing a lap-only seat belt was killed.

The family sued Mazda, arguing that the minivan was defective. Mazda said it had complied with federal safety regulations in effect at the time; an appellate court in California agreed.

But the Supreme Court overturned the ruling, stating that federal safety regulations don't pre-empt state suits that claim car manufacturers should have installed lap-and-shoulder belts.

What is surprising is the unanimous decision of the court. Seems like federal safety standards mean very little.

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