REI appeals Monika's case

Big Steve,

I think you have done a fine job of illustrating some of the major issues regarding the way insurance operates, why they do what they do and how we have all played a part in it.

You suggest attacking all facets of the problem, and in that I agree.

However the problem is that society as a whole, and us as individuals have little power against powerful lobbies.

Insurance companies respond to $$$. If insurance companies lost money because of the way they operate then they might change. But I have no doubt that they have rigged and will continue to rig the markets in their favor.

However, REI is a purchaser of insurance. It too should fight the good fight. If it insurance companies are placing it between a rock and a hard place then it should seek a solution.

If REI sought to offer the highest quality under its own brand (those items which place it in line for such liability claims) then its liabilities should be relatively low. Maybe it should seek to be self-insured for those instances so that it has control as to how it will satisfy customer/member product issues. I am assuming that a company the size of REI could handle a typical yearly rate of claims. This creates three positives for a company like REI. 1) it probably saves them tons of money. 2) it puts pressure on them to offer only the highest quality in their products and demands it from their suppliers to their own brand. 3) they settle claims fairly and under the spirit of a "cooperative". That is good for business. They should pay to be insured for only that which is catastrophic, such as buildings, and maybe class action law suits, etc. What I propose is akin to raising their deductible (for us little guys), that way in small individual cases such as this their insurance company never hears about it.

If REI could give this insurer the boot, i.e. the insurer loses business, do you think that is one way to fight the problem? Conversely, does insurance allow businesses to operate poorly? Do they feed off of one another. If an insurance company knows that it will never suffer a payout because it has the best lawyers, it can then be highly competitive in offering insurance to lousy companies who operate callously.

What I propose in self insurance is not pie in the sky. I know that some clinics (essentially doctor cooperatives, etc.) that have given the boot to insurance and now self insure. Typically doctors as individuals cannot sustain the risk so must go to insurers who offer the advantage of the pool. But clearly it does not take that many members to form a pool which can be self sustaining. So if doctors can do this, which have to be among the most sued businesses an highest level of risk per income than any group, why can't a company like REI, which probably easily exceeds revenues and profits of any clinic do this?

What we as customers of REI can do is all that you propose, BUT not just accept that REI has no culpability and throw our hands up. A war is won with many small fights and battles and REI must be put on the hot seat, so that if they are also suffering an injustice at the hands of insurance, then they also fight the good fight. We as customers can more easily pressure REI than we can the other groups and we can do it very fast. You propose one long drawn out fight, but here we may be able to win this one small battle that will also potentially move the broader battle into their field of play.

REI's entire response to an email:
[Someone on CC reposts getting the exact same text, apparently it is their form reply]

<quote>
Thank you for your email. Monika Johnson was highly regarded in the outdoor community, a member of the REI community, and a dear friend of many REI employees. Please know that we have expressed our condolences to Monika's family and extend them to you, as well.

The issues addressed in any lawsuit are often complex and sometimes, as is the case here, have broad impacts beyond just the parties. REI's appeal is not about the amount of money Monika's estate should receive through either a trial or a settlement. Instead, it is about the degree to which responsibility should be shared between a private label seller, like REI, and the manufacturer who designed and made the bike component.

The right to have a court or jury consider this question is important to all companies, big or small, that sell products under private labels. REI would have preferred to resolve Ms. Johnson’s case early on, but circumstances beyond our control made this impossible. 

As we have since REI was founded in 1938, we stand behind our products, and we are committed to acting in accordance with the co-op’s values. We have kept those values front and center throughout the defense of this case, and we will continue to do so through final resolution.

Sincerely,

Libby Catalinich
Director, REI Corporate Communications

<end quote>

REI's entire response to an email:
[Someone on CC reposts getting the exact same text, apparently it is their form reply]

Same as I got. Forwarded it to the Seattle PI and Times.

Pretty much as expected from what Big Steve had to say.

"The right to have a court or jury consider this question is important to all companies, big or small, that sell products under private labels. REI would have preferred to resolve Ms. Johnson’s case early on, but circumstances beyond our control made this impossible."

Would seem to be a conflicting statement except for the explanations that we have had. In this case it would appear the company most intent on exercising this right is the insurance company.

When a product fails under warranty almost all companies will rectify the situation immediately without protest. Many companies will also do so if a product is out of warranty but clearly defective. But if such a product somehow causes damage, then the admission seems to go away.... Clearly money is everything here.

As simplistic & naîve as it sounds:

REI's product liability representation exists at the behest of REI, not the other way around. They can choose to do the right thing at any point, just as a patient in a medical situation can decide to go against medical advice.

This is an REI/Novara brand equipment malfunction, not a Trek or Cannondale merely purchased through REI.

If REI is to reap the rewards of selling their own house branded Novara products, they must also own up to the liability of such products.

The onus of due diligence should be on REI in making sure (sub)contracting manufacturer(s) is competent.

As independent citizens, we have only two legal means of recourse. For the lawmakers, write them about you displeasure and always vote for the incumbent ( I do) until such time as you are satisfied that they are representing you and not their capitalist pimps. Probably when hell freezes over but so be it. Nothing wrong at all with capitalism but as it is by nature amoral, it needs to be overseen.

For the profit makers, do not buy from them. A publicized boycott at least gets a public response. Given their inability to monitor the quality of their suppliers, I would not purchase any REI branded product that I had to trust my safety with. I've been a sales rep for Asian manufacturers selling to US sporting good companies and I know how it works and the pit falls.

You CAN make a difference.