Taser hopes new products will reduce legal costs

August 3, 2009
Phoenix Business Journal - by Mike Sunnucks

Taser International Inc. is rolling out new technology and weapons that executives hope will reduce the company’s legal bills by as much as 50 percent and decrease Taser-related litigation against its police customers.

On July 27, Taser CEO Rick Smith and Chairman Tom Smith unveiled the Axon tactical computer system, which features a “headcam” the size of a Bluetooth earphone. The device can be worn by police officers and operates much like the cameras mounted on police cars.

The Axon system, which will be field-tested and rolled out later this year, includes audio and video recording technology and links to a new data- and evidence-management system, Evidence.com, which Taser also is launching.

The Smith brothers said the systems allow police to track Taser use better and will give an accurate view of incidents, taking away the “he said, she said” scenarios that accompany wrongful-death and police-abuse lawsuits.

Tom Smith said the Scottsdale stun-gun manufacturer could see its litigation discovery costs cut in half because police will have video and audio of incidents. Taser would not disclose how much it pays in legal fees each year.

“The more data we can supply about what actually happened, the better off we will be,” Rick Smith said. “The new audio-video records should dismiss many of the false allegations right up front. For those that go to trial, the costs of discovery will be greatly diminished as there will be an indisputable record of events, rather than conflicting testimony.”

Taser and police have faced numerous lawsuits related to Taser use, including wrongful-death suits brought by families of those who have died after being tased. The company was the subject of 42 lawsuits during the first quarter, according to U.S. Securities and Exchange Commission filings.

More than 330 people have died after being tased by police in the U.S. since June 2001, according to Amnesty International.

Terry Cushing, a litigation attorney with Jennings Strouss & Salmon PLC, agreed that video evidence reduces discovery costs and can help avoid trials and unnecessary lawsuits. However, he said video and audio evidence will cut both ways for Taser if lawsuits go to trial.

“This type of reliable evidence may work both for and against Taser. A video, for example, may tap into the jurors’ raw emotions and may give the appearance that the use of a Taser is either dangerous or an exertion of force that is too great for the given circumstances,” Cushing said. “Alternatively, a video may reveal the very reason why law enforcement’s use of a Taser adhered to protocol or was appropriate under the circumstances. ... These powerful images may quickly sway jurors in one direction or another.”

Rick Smith said that while the company sells its products to more than 14,000 police departments and agencies, fewer than 150 have been sued over Taser use.

“We get the lawsuits dismissed because the science is on our side. That’s the short answer,” he said. “We don’t settle cases, either. We believe in standing up for what is right, and the strategy is working.”

During a second-quarter earnings call, Rick Smith said 91 cases against Taser have been dismissed.

Taser has been largely successful in having lawsuits against it dismissed, but in 2008 a California jury sided with the family of a man who died after being tased by police. The jury originally awarded his family $5.2 million in punitive damages plus $1.7 million in attorney fees and other damages. Taser is appealing that decision, and the $5.2 million punitive award has been tossed out.

Taser also has been in legal battles against competitors and other companies, including patent cases against rival Stinger Systems Inc. Officials at Tampa, Fla.-based Stinger did not respond to a request for comment.

The Smith brothers also showed off Taser’s new X3 stun gun at the company’s annual conference this week in Fountain Hills. The X3 allows police to take three shots without reloading and carries less of an electrical charge than its predecessor, the X26 single-shot model.

The X3 emits 63 micro-coulombs — a measure of electrical current — compared with 110 micro-coulombs from the X26. The X3 also emits a more intimidating warning charge that those about to be tased can see.

The Smiths said the warning charge should result in police having to use stun guns less often.