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CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

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Page 1 of 28

IN THE COURT OF COMMON PLEAS SUMMIT COUNTY, OHIO

CONNECTICUT LABORERS

)

PENSION FUND,

)

435

Captain Thomas Boulevard

)

CASE NO.

West Haven, CT 06516

)

)

JUDGE:

 

Plaintiff,

)

 

)

 

v.

)

 

)

THE GOODYEAR TIRE &

)

RUBBER COMPANY,

)

c/o REGISTERED AGENT

)

CORPORATION SERVICE COMPANY

)

50 WEST BROAD STREET

)

SUITE 1330

)

COLUMBUS, OH 43215

)

)

PLEASE ALSO SERVE:

)

)

THE GOODYEAR TIRE & RUBBER

)

COMPANY

)

200

INNOVATION WAY

)

AKRON, OH 44316-0001

)

)

 

Defendant.

)

VERIFIED COMPLAINT PURSUANT TO 17 O.R.C. Ann. 1701.37(C)

NATURE OF THE ACTION

1. This is a complaint brought pursuant to 17 O.R.C. Ann. 1701.37(C) (“1701.37(C)”)

to enforce the statutory right of stockholder Connecticut Laborers Pension Fund (“Plaintiff”) to

inspect and make copies and extracts of certain books and records of The Goodyear Tire & Rubber

Comapny (“Goodyear” or the “Company”).

2. This matter arises from Goodyear’s improper refusal of Plaintiff’s February 19,

2019 demand to inspect certain books and records of the Company (the “Demand”) for the

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

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03/28/2019 15:20:43 PM

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purposes of, among other things, determining whether and to what extent there was wrongdoing

at the Company with respect to: (i) the Company’s design of the G159 tire, a tire manufactured by

the Company; (ii) the Company’s alleged failure to comply with federal regulations regarding

crash reporting to regulators of incidents involving the G159 tire; and (iii) the Company’s public

disclosures

to

stockholders

regarding the

Company’s

G159

tires

safety failures

and

the

concomitant risk exposure to the Company. A copy of the Demand is attached hereto as Exhibit

1. 1

3. The Company refuses to search for and produce certain of the books and records

requested by Plaintiff, incorrectly claiming that: (i) Plaintiff’s requests are improper because only

shareholders of record are permitted inspection rights under 1701.37(C); (ii) the request is not

“reasonable” and “proper”; (iii) any potential shareholder derivative suit following from these

events would fall outside the statute of limitations; and (iv) the request is “too broad”.

JURISDICTION AND VENUE

4. This court has original jurisdiction over the subject matter of this action.

5. Venue is proper in Summit County, Ohio, because some or all of the conduct

described herein took place in Summit County and because Goodyears headquarters and principal

place of business is in Summit County.

PARTIES

6. Plaintiff, Connecticut Laborers Pension Fund, currently owns shares of Goodyear

common stock and has committed to holding stock in Goodyear until the conclusion of all

proceedings contemplated in the Demand. Attached to Exhibit 1 and submitted to the Company

with Exhibit 1 is a record of Plaintiff’s transactions and holdings in Goodyear stock. CLPF is an

1 Exhibit 1 also includes an updated amended Declaration and Power of Attorney

2

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

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institutional investor with substantial assets under management and a beneficial owner of

Goodyear common stock.

7. Defendant Goodyear is an Ohio corporation with its principal place of business

located at 1144 E. Market St., Akron, Ohio.

UNDERLYING WRONGDOING AT GOODYEAR

8. Goodyear manufactured the G159 tires between 1996 and 2003. The G159 was

originally designed for regional delivery vehicles. The company made 160,683 G159 tires between

1996 and 2003. An estimated 40,000 were used not on regional delivery vehicles, but on

motorhomes. Lawsuit filings allege that the tire failed on as many as 1-in-10 motorhomes. This

astounding failure rate surpasses the infamous Firestone tires of the 1990s (a scandal which almost

brought down the entire Firestone brand).

9. Numerous sources of public information (including court filings, legal settlements,

news reports and reports of investigations by regulators) allege that senior Company executives

and directors have known of the G159 safety problems for years and failed to recall the tires or

rectify the problems, failed to provide the legally required information regarding these failures to

the appropriate government regulators and failed to inform stockholders of the problems with the

G159 tire and the potential impact on the Company (and its finances).

10. At best estimate, at least 41 lawsuits have been filed against Goodyear arising from

vehicle crashes involving the G159 tire. These lawsuits generally allege similar facts, namely that

the G159 was prone to heat-induced failure when used at highway speeds. The failure of the G159

tire is generally allegd to have begun occurring when Goodyear increased the G159's speed rating

from 65 to 75 mph in 1998. Following this increase in the speed rating, instances of failures appear

to have significantly increased.

3

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

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11. Upon information and belief Goodyear made a concerted effort to keep the potential

safety defect of the G159 out of the public domain. Settlements of vehicle accidents involving the

G159 tire were routinely not disclosed and were subject to confidentiality agreements. However,

documents filed with the U.S. District Court for the District of Arizona in Haeger v. Goodyear et

al., Case No. 2:05-cv-02046-GMS (the “Haeger lawsuit”) and that were produced by Goodyear in

discovery establish the true nature of the alleged defects of the G159 tire. Importantly, the Haeger

lawsuit provides clear allegations which tie senior executives and directors at Goodyear to direct

knowledge of the safety issues with the G159 tire and the settlement(s) of at least some lawsuits

against Goodyear. For example, Haeger filings state that Goodyear’s attorney prepared a

settlement memo that said the Company’s internal tests in August 1996 showed the G159 could

be speed-rated at 65 mph, “but would not have satisfied Goodyear’s standard for qualifying the

tire at 75.” The Haegar lawsuit further claims that following the speed rating increase in 1998,

G159 failure claims increased rapidly. Goodyear disclosed in court filings that the Company had

received more than 700 hundred property damage claims related to G159 failure claims, along

with 98 injury and death claims. No recall has ever been issued, and the Company has continued

to publicly deny any safety issues with the G159.

12. During the Haegar lawsuit, Goodyear’s court experts testified that a tire like the

G159, when properly pressurized and operating at 75 mph or more, should generate an internal

temperature of 140-150 degrees Fahrenheit. “Once a tire exceeds a temperature at 200 degrees F,

most commercial medium truck tires will begin to experience degradation of material properties

that can lead to tread separation,” Jim Gardner, one of the experts in G195 cases, said. However,

according to other documents produced during the Haegar case, Goodyear’s tests in August 1996

found the G159 would develop temperatures well in excess of 200 degrees when traveling at 75

4

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

CMCO

Page 5 of 28

mph, according to court records. Moreover, the filing claims that as various states began to increase

their speed limit to 75 mph, Goodyear increased the G159's speed rating to match the limit, even

though it knew “the tire would generate temperatures well beyond the design capacity of the tire,

producing predictable tread separations, with resultant death and injury”.

13. Settlement memos filed in the Haegar lawsuit were filed confidentially under seal

along with a publicly available brief. The Haegar plaintiff’s attorney, David Kurtz (“Kurtz”),

drafted and sent a 29-page letter to federal regulators at the U.S. National Highway Traffic Safety

Administration (“NHTSA”) purportedly detailing the issues with the G159 tire. This information

comes from articles written by an automobile-enthusiast news organization Jalopnik (which stated

they reviewed the letter from Kurtz to NHTSA). Jalopnik reported that Goodyear’s former General

Counsel Tom Harvie and its current general counsel, David Bialoski, were “specifically” told

about the G159 failures in settlement requests. Kurtz purportedly also added in the letter that he

has “evidence that Goodyear’s CEO, Richard Kramer, was personally familiar with failures

regarding the G159.” Kurtz also claimed that a Goodyear attorney made a presentation to the

Goodyear Board of Directors, including Mr. Kramer, in 2010 regarding G159 cases.

14. These events and Goodyear’s actions were only made public because Mr. Kurtz

made a motion to make all records in the Haegar lawsuit public. Following a court denial of the

motion to seal, Jalopnik published various news articles detailing these events, including Mr.

Kurtz’ communications with federal officials.

15. Kurtz’ letter to NHTSA has spurred government regulators to act.

16. A letter dated April 3, 2018 from NHTSA to Goodyear’s Manager of Global

Regulations, Standards and Compliance was made public on NHTSA’s website. This letter

informs Goodyear that NHTSA has recently opened a Preliminary Evaluation to “investigat[e]

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Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

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allegations of tire failures on Class A motorhomes and to request certain information about the

field performance, design and construction of these tires”. The letter further states that “[t]he Office

of Defects investigation has received 10 consumer complaints alleging failures of Goodyear G159

tires on motor homes. Two of these complaints allege a crash occurred as a result of the tire

failures. Goodyear separately reported 9 claims under 49 CFR Part 579 alleging 1 death and 13

injuries.”

17. NHTSA letter states that the alleged defect in the G159 that NHTSA is investigating

is the following:

Tire failure caused by an abrupt loss of air, whether confirmed or alleged, including but not limited to, (1) air loss resulting in inability of the tire to support the wheel load; (2) blow-out; (3) tire rupture; (4) rapid deflation; (5) tread separation/detachment; (6) belt separation/detachment; (7) liner failure; (8) sidewall cracking; and the like.

18. Along with NHTSA’s defect probe, the Department of Transportation’s office of

inspector general has a separate ongoing probe of its own that could lead to criminal charges

against Goodyear and certain of its senior executives if they are found to have withheld incident

data regarding the G159 tire from regulators.

19. The damages to Goodyear itself could range into the hundreds of millions of

dollars. These damages include legal settlements to those injured in vehicle accidents involving

the G159 already paid out and legal expenses incurred in defending dozens of lawsuits. The

amounts of these settlements, which have been paid with Company money, have yet to be made

public by the Company. Plaintiff’s Demand seeks information related to these issues in order to

determine whether or not current/former senior Company executives and/or members of the Board

of Directors breached their fiduciary duties to Goodyear.

6

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

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Page 7 of 28

PLAINTIFF’S ACTIONS ON BEHALF OF THE COMPANY

Plaintiff’s Books and Records Request

20. As a stockholder of Goodyear, Plaintiff is entitled to inspect and make copies and

extracts of the books and records of Goodyear pursuant to 17 O.R.C. Ann 1701.37(C).

21. On February 19, 2019, Plaintiff made its books and records request pursuant to 17

O.R.C. Ann 1701.37(C), seeking review of a variety of documents concerning the Company’s

handling of issues related to the G159 tire, as well as to investigate potential corporate wrongdoing.

Plaintiff complied with all of the provisions of 17 O.R.C. Ann 1701.37(C) relating to the form and

manner of making its demand to inspect and make copies and extracts of the books and records of

Goodyear. Plaintiff made the books and records demand for the reasonable and proper purposes

of:

(a) investigating corporate waste, mismanagement or wrongdoing, and breach

of fiduciary duties of loyalty and good faith on the part of Goodyear’s officers and directors

with respect to the above-described matters;

(b) determining whether the current directors are fit to continue serving on the

Board of Directors; and

(c) taking appropriate action

(including the preparation

and

filing of

a

shareholder derivative lawsuit, if appropriate) in the event the members of the Company’s

management and Board of Directors did not properly discharge their fiduciary duties.

22.

Plaintiff

requested

several

categories

of

documents

that

were

focused

on

Goodyear’s Board of Directors’ knowledge of G159 tire safety issues and risk to the Company,

the directors and officers’ actions with respect to G159 tires, and their knowledge of and

participation with regulators’ inquiries and investigations of G159 tires.

7

Sandra Kurt, Summit County Clerk of Courts

See Exhibit 1, pp. 5-7.

CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

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Page 8 of 28

As is permitted by Section 1701.37(C), Plaintiff also sought documents that are relevant to the

independence (or lack thereof) of the directors. Id.

23. In a letter dated March 15, 2019, Goodyear wrongfully rejected the Demand. Its

grounds for refusal are either inapplicable, incorrect, or both. Plaintiff has established its standing

to exercise its shareholder rights to make the Demand and set forth sufficient credible evidence to

indicate that the Board and its committees received information regarding the Company’s

improper handling of G159 tire problems, failure to follow proper reporting procedures to federal

regulators of G159 tire problems, and failure to inform stockholders of G159 tire problems and

associated costs therefrom.

The Demand further sets forth credible evidence of Goodyear’s

concealment of the issues affecting the G159 including possible misconduct during the Haeger

lawsuit by the Company’s legal department and senior executives.

24. The Company has refused to produce any documents to Plaintiff in contravention

of Ohio law. The discrete set of documents sought will assist Plaintiff in making the assessment

of whether Goodyear’s senior officers and/or directors breached their fiduciary duties to the

Company; and permit Plaintiff to evaluate what steps might be needed to improve the Company’s

corporate governance or redress the wrongs inflicted on Goodyear by its directors and officers.

REQUEST FOR RELIEF

WHEREFORE, Plaintiff demands judgment as follows:

(A) An order compelling Goodyear, its directors, officers, employees, and/or agents to

immediately permit Plaintiff, its attorneys, and/or agents to inspect and make copies and extracts

of the books and records of Goodyear identified in Exhibit 1;

(B) An order requiring Goodyear to pay Plaintiff’s costs and expenses, including

reasonable attorneys’ fees, incurred in the prosecution of this action; and

8

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

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(C) Granting such other and further relief as the Court deems just and proper.

Respectfully submitted,

KORHMAN JACKSON & KRANTZ LLP

/s/ Brett S. Krantz

BRETT S. KRANTZ (0069238) SEAN P. MALONE (0076353) One Cleveland Center, 29th Floor 1375 East Ninth Street Cleveland, OH 44114-1793 Telephone: (216) 696-8700 Facsimile: (212) 621-6536 Email: bk@kjk.com; spm@kjk.com

COHEN MILSTEIN SELLERS

& TOLL, PLLC

Christopher Lometti Richard A. Speirs 88 Pine Street, 14 th Floor New York, NY 10005 Telephone: (212) 838-7797 Facsimile: (212) 838-7745 Email: clometti@cohemilstein.com rspeirs@cohemilstein.com

COHEN MILSTEIN SELLERS

& TOLL, PLLC

Christina D. Saler Three Logan Square, 1717 Arch Street

Suite 3610 Philadelphia, PA 19103 Telephone: (267) 479-5707 Facsimile: (267) 479-5701 Email: csaler@cohenmilstein.com

THE SHUMAN LAW FIRM Kip B. Shuman Post-Montgomery Ctr. One Montgomery Street, Ste. 1800 San Francisco, CA 94104 Telephone: (303) 861-3003 Email: kip@shumanlawfirm.com

9

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

CMCO

THE SHUMAN LAW FIRM Rusty E. Glenn 600 17th Street, Suite 2800 South Denver, CO 80202 Telephone: (303) 861-3003 Email: rusty@shumanlawfirm.com

10

Sandra Kurt, Summit County Clerk of Courts

Page 10 of 28

CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

CMCO

Page 11 of 28

IN THE COURT OF COMMON PLEAS SUMMIT COUNTY, OHIO

CONNECTICUT LABORERS'

)

PENSION FUND,

)

435

Captain Thomas Boulevard

)

West Haven, CT 06516

)

)

 

Plaintiff,

)

 

)

 

v.

)

 

)

THE GOODYEAR TIRE &

)

RUBBER COMPANY,

)

c/o The Goodyear Tire & Rubber

)

Company

)

200

Innovation Way

)

Akron, 0 H 44316-0001

)

)

 

Defendant.

)

VERIFICATION

STATE OF CONNECTICUT

)

)

SS:

COUNTY

)

I, Diane Klobukowski, Executive Director, Connecticut Laborers' Fund, first being duly

sworn, states that the foregoing Verified Complaint Pursuant to 17 O.R.C. Ann. 1701.3 7(C) is true

and accurate to the best of my knowledge.

Subscribed and sworn before me thisJr day of

ELIZABETH G. GIBSON

NOl >11?Y runt.u:

MY cqMMISSION EXPIRES FEB 28, 2023

LC

EXECUTIVE DIRECTOR

i. 'i

VV\wv 0 , 2(}1-8.

£[

Notary Public

{K0700435.1}

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

COHE N"llLSTEIN

CMCO

Page 12 of 28

Richard A. Speirs

(212) 220-2912

rspeirs@cohenmilstein.com

February 19, 2019

VIA USPS PRIORITY OVERNIGHT MAIL

Board of Directors The Goodyear Tire & Rubber Co. 1144 E. Market St. Akron, OH 44316 Attention: David L. Bialosky, General Counsel and Secretary

Re:

Demand/or Shareholder Inspection of Books and Records Pursuant to 17 O.R.C. Ann. 1701.37(c)

Dear Mr. Bialosky:

I write on behalf of the Connecticut Laborers Pension Fund ("CT Laborers" or the "Fund") the owner of common stock of The Goodyear Tire & Rubber Co., an Ohio corporation ("Goodyear" or the "Company"), 1 to demand inspection of certain Goodyear books and records and to make extracts or copies thereof pursuant to 17 O.R.C. Ann. l 701.37(c) (the "Record Demand").

I. The IBEW Is a Current Shareholder of Goodyear

CT Laborers, a current holder of Goodyear common stock, has the right to inspect the books and records requested herein. As evidence of the CT Laborers' beneficial ownership of Goodyear common stock, we have enclosed with this letter as Exhibit A the sworn Declaration and Power of Attorney of Diane Klobukowski (the "Declaration"), attesting to CT Laborers'

ownership of Goodyear common stock as of

to continue to hold shares at least through the conclusion of the proceedings contemplated in this demand. The Declaration is accompanied by documentary evidence of CT Laborers' beneficial

ownership of stock that the signatory verifies to be accurate.

the date of the Declaration and CT Laborers' intention

2 See Exhibit B. The Declaration also

As used herein, the terms "Goodyear" and the "Company" include all Goodyear employees and directors, as well as all affiliates, joint ventures, and subsidiaries.

2 The Company and its agents must agree that the financial records provided documenting the Fund's Goodyear stock ownership are to be kept strictly confidential as they contain sensitive financial information. CT Laborers and/or its counsel must provide written permission before they may be disclosed.

COHEN MILSTEIN SELLERS & TOLL PLLC

T

212.838.7797

88 Pine Street • 14th Floor•

cohenmilstein.com

Sandra Kurt, Summit County Clerk of Courts

New York, NY 10005

CV-2019-03-1203

MCCARTY, ALISON E.

The Goodyear Tire & Rubber Co. February 19, 2019 Page 2

03/28/2019 15:20:43 PM

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Page 13 of 28

includes a power of attorney granting Cohen Milstein Sellers & Toll PLLC and The Shuman Law Firm the authority to initiate, pursue, and act on CT Laborers' behalf in its demand for books and records. 3

II. CT Laborers Has a Proper Purpose and Credible Basis for Making This Demand - Investigating the Evidence of Illegal Misconduct and Breaches of Fiduciary Duty at Goodyear

CT Laborers makes this demand to investigate the credible evidence that Goodyear's top management, including its senior officers and directors, breached their fiduciary duties to the Company by, among other things, covering up and concealing from regulators and shareholders, known serious defects and safety issues involving its G159 tire. Among other things, Goodyear's senior officers and directors misrepresented the Company's business, operations, and compliance with regulatory guidelines in violation of state and federal law. As detailed below, Goodyear failed to properly report defects in the G159 and an abnormal rate of accidents to federal regulators (and shareholders) that occurred as a result of those defects. There are also credible allegations and a judicial finding that senior Goodyear executives, including the Company's CEO and General Counsel, were aware of these defects, briefed the Company's Board of Directors on the safety issues of the G 159 but acted to conceal these problems from the public. By failing to acknowledge, warn of and correct these defects, Company executives and directors have placed the Company at risk.

A. The G159 Tire and a History of Safety Failures

Goodyear manufactured G159 tires between 1996 and 2003. Originally designed for regional delivery vehicles, Goodyear later sold them for use on motorhomes. The Company made a total of 160,683 G159s of which an estimated 40,000 were used on motorhomes. As a result of numerous accidents and failures, at least 41 lawsuits have been filed against Goodyear arising from vehicle crashes involving the G159 tire. Those actions generally allege similar facts, namely that the G 159 was prone to heat-induced failure when used at highway speeds, and that Goodyear had improperly increased the speed rating from 65 to 75 mph in 1998 which led to failures in as many as one-in-10 motorhomes. This astounding failure rate surpasses the defect rate of the infamous Firestone tires of the 1990s (a scandal which almost brought down the entire Firestone brand).

3 I hereby incorporate the Declaration and Power of Attorney of Diane Klobukowski by reference, attached hereto.

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

The Goodyear Tire & Rubber Co. February 19, 2019 Page 3

03/28/2019 15:20:43 PM

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CT Laborers seeks all information provided to or known to the Company's senior executives and the Board of Directors (the "Board")" about the G 159, including safety data, related litigation and governmental inquiries. CT Laborers has reviewed substantial public information (including court filings, legal settlements, news reports and reports of investigations by regulators) that senior Company executives and directors have known of the G 159 safety problems for years and failed to rectify the problems, provide the legally required information regarding these failures to the appropriate regulators and failed to inform shareholders of the issue and the potential impact on the Company (and its finances). In addition, Goodyear now faces increased scrutiny from federal regulators for having concealed these defects.

It appears that Goodyear made a concerted effort to keep the potential safety defect of the G 159 out of the public domain. Settlements of vehicle accidents involving the G 159 tire were routinely kept confidential. Recently, however, documents filed with the U.S. District Court for the District of Arizona in Haeger v. Goodyear et al., Case No. 2:05-cv-02046-GMS (the "Haeger lawsuit") have revealed a trove of information documenting the alleged problems with the G 159 tire. Importantly, this lawsuit also provides clear allegations which tie senior executives and directors at Goodyear to direct knowledge of the safety issues with the G 159 tire and the settlement(s) of at least some lawsuits against Goodyear. For example, Haeger filings state that Goodyear's attorney prepared a settlement memo that said the Company's internal tests in August 1996 showed the G159 could be speed-rated at 65 mph, "but would not have satisfied Goodyear's standard for qualifying the tire at 75." The Haegar lawsuit further claims that following Goodyear's speed rating increase to 75 mph in 1998, G159 failure claims increased rapidly. Goodyear disclosed in court filings that the Company had received more than 700 hundred property damage claims related to G 159 failure claims, along with 98 injury and death claims. Despite all this, no recall has ever been issued, and the Company has continued to publicly deny any safety issues with the Gl59.

During the Haegar lawsuit, Goodyear's court experts testified that a tire like the Gl59, when properly pressurized and operating at 75 mph or more, should generate an internal temperature of 140-150 degrees Fahrenheit. "Once a tire exceeds a temperature at 200 degrees F, most commercial medium truck tires will begin to experience degradation of material properties that can lead to tread separation," according to Jim Gardner, one of the experts in G 195 cases. Other documents produced during the Haegar case reveal that Goodyear's tests in August 1996 found the G159 would develop temperatures well in excess of 200 degrees when traveling at 75 mph. Moreover, as various states began to increase their speed limit to 75 mph, Goodyear increased the G l 59's speed rating to match the limit, even though it knew "the tire would generate

4 Goodyear's current Board members are: Richard J. Kram er, James A. Firestone, Werner Geissler, Peter S. Hellman, Laurette T. Koellner, W. Alan McCollough, John E. McGlade, Maichael J. Morell, Roderick A. Palmore, Stephanie A. Streeter, Thomas H. Weidemeyer, and Michael R. Wessel.

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

The Goodyear Tire & Rubber Co. February 19, 2019 Page 4

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temperatures well beyond the design capacity of the tire, producing predictable tread separations, with resultant death and injury".

The Haegar settlement memos were filed under seal along with a publicly available brief. The Haegar plaintiffs attorney, David Kurtz ("Kurtz") drafted and sent a 29-page letter to federal regulators at the U.S. National Highway Traffic Safety Administration ("NHTSA") purportedly detailing the issues with the G 159 tire. This information comes from articles written by an automobile-enthusiast news organization Jalopnik (which stated they reviewed the letter from Kurtz to the NHTSA). Jalopnik reported that Goodyear's former General Counsel Tom Harvie and its current general counsel and secretary, David Bialoski, were "specifically" told about the G159 failures in settlement requests. Kurtz purportedly also added in the letter that he has "evidence that Goodyear's CEO, Richard Kramer, was personally familiar with failures regarding the G159." Kurtz also claimed that a Goodyear attorney made a presentation to the Goodyear Board of Directors, including Mr. Kramer, in 2010 regarding G159 cases.

These events and Goodyear's actions were only made public after the Court in Haegar unsealed the records. The Court in Haeger found that Goodyear's representatives provided false testimony and that Goodyear was "operating in bad faith." In assessing sanctions against Goodyear, the Court found that the Company "participated directly in the fraud" and its "involvement extended well into its corporate offices."

Kurtz' letter to the NHTSA appears to have spurred government regulators to act. A letter dated April 3, 2018 from the NHTSA to Goodyear's Manager of Global Regulations, Standards and Compliance was made public on the NHTSA's website. This letter informs Goodyear that the NHTSA has opened a Preliminary Evaluation to "investigat[e] allegations of tire failures on Class A motorhomes and to request certain information about the field performance, design and construction of these tires. The letter further states that "[t]he Office of Defects investigation has received 10 consumer complaints alleging failures of Goodyear G 159 tires on motor homes. Two of these complaints allege a crash occurred as a result of the tire failures. Goodyear separately reported 9 claims under 49 CFR Part 579 alleging 1 death and 13 injuries."

The NHTSA letter states that the alleged defect in the G 159 that the NHTSA is investigating is the following:

Tire failure caused by an abrupt loss of air, whether confirmed or alleged, including but not limited to, (1) air loss resulting in inability of the tire to support the wheel load; (2) blow-out; (3) tire rupture; (4) rapid defl ation; (5) tread separation/detachment; (6) belt separation/detachment; (7) liner failure; (8) sidewall cracking; and the like.

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

The Goodyear Tire & Rubber Co. February 19, 2019 Page 5

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Along with NHTSA's defect probe, the Department of Transportation's office of inspector general has a separate ongoing probe of its own that could lead to criminal charges against Goodyear and certain of its senior executives if they are found to have withheld incident data regarding the G159 tire from regulators. The damages to Goodyear itself could range into the hundreds of millions of dollars. These damages are in excess of the tens of millions of dollars already paid out in legal settlements to those injured in vehicle accidents involving the G159.

B. Proper purposes

Based on the foregoing, the CT Laborers makes this Document Demand for the proper purposes of:

(a)

investigating corporate waste, mismanagement or wrongdoing, and breach of fiduciary duties of loyalty and good faith on the part of Goodyear's officers and directors with respect to the above-described matters;

(b)

investigating the disinterestedness and ability of the Board to consider a demand to initiate and maintain litigation related to any breaches of fiduciary duty detailed herein;

(c)

determining whether the current directors are fit to continue serving on the Board of Directors; and

(d)

taking appropriate action (including, but not limited to, the preparation and filing of a shareholder derivative lawsuit, if appropriate) in the event the members of the Company's management and Board of Directors did not properly discharge their fiduciary duties.

This demand to inspect Goodyear's books and records is undertaken in good faith and pertains to CT Laborers' interest in reviewing the manner in which Goodyear is being managed. The Ohio courts have consistently found similar shareholders' demands to inspect a corporation's books and records for reasons such as this one to be proper. See, e.g., No-Burn, Inc. v. Murati, 201 l-Ohio-5635, ,r 13 (Ct. App.); Grossman v. Cleveland Cartage Co., 8 Ohio Op. 2d 492 (Cuy. Cty. Ct. of Com. Pls., 1959). The below demands are necessary and essential to effectuate the Fund's purpose.

III. Demand for Inspection

For the period from January 1, 1994 to the present, CT Laborers requests the following books and records be made available for inspection by its attorneys, Cohen Milstein Sellers & Toll PLLC and The Shuman Law Firm:

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

The Goodyear Tire & Rubber Co. February 19, 2019 Page 6

03/28/2019 15:20:43 PM

CMCO

Page 17 of 28

1. All minutes or Board books, reports, presentations, handouts, emails, and other materials provided or sent to the members of Goodyear's Board of Directors, or any subcommittees thereof, concerning the following:

a. the 0159 tire;

b. internal corporate audits concerning the G159 tire;

c. lawsuits against Goodyear which involved the 0159 tire;

d. the Company's compliance or purported compliance with NHTSA regulations, and/or other federal laws, regulations or guidelines, with respect to reporting of accidents involving the G 159 tire to government regulators, and any documents or reports that the Company violated or may have violated any NHTSA regulation;

e. the requirements and channels for reporting potential NHTSA violations to management, including the Board of Directors, at the Company; and

f. remediation actions recommended, considered and/or taken to remedy any problems with safety of the G 159 tire, including all documents which discuss the costs and impacts thereof.

2. All communications between Goodyear's compliance officers and Goodyear's CEO, and/or Board members, related to the G 159 tire, including regarding safety testing, speed testing and/or other testing of the 0159 ire.

3. All safety testing (including speed rating testing) performed on the 0159 tire.

4. All documents provided by the Company in response to the NHTSA Preliminary Investigation letter referenced above and dated April 3, 2018, or any similar investigation by a government regulator concerning the G 159 tire.

5. All communications, including electronic communications, between any director, regarding problems with safety of the 0159 tire.

6. Any internal reports, including reports from "whistleblowers" regarding the G 159 tire and/or safety issues with the G159 tire.

7. All Board minutes or books, reports, handouts, and other materials provided to the members of Goodyear's Board of Directors, or any subcommittees thereof, concerning any investigations undertaken by the Company and/or its Board of Directors regarding the issues raised in any investigation of the G 159 tire by any regulatory body, including but not limited to the NHTSA, referenced herein, or any other investigation regarding allegations that the Company may have violated, or did violate, U.S. laws and/or regulations;

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

The Goodyear Tire & Rubber Co. February 19, 2019 Page 7

03/28/2019 15:20:43 PM

CMCO

Page 18 of 28

8.

All Company manuals or policies distributed to employees, officers, and/or directors to ensure compliance with NHTSA regulations.

9.

All documents produced in response to any subpoenas or requests for production of documents issued by the DOJ, NHTSA, or any other U.S. government agency or regulator, concerning the misconduct described herein.

10.

All communications between the Company or its employees and any U.S. governmental agency, including, but not limited to, the DOJ, NHTSA, or any agency, employee, or representative thereof, concerning the investigations referenced herein.

1 1 .

Documents sufficient to identify all Goodyear employees who made direct reports to Goodyear's Board of Directors, or any subcommittee thereof, as well as the positions held by any such employees.

12.

For the Goodyear employees identified in the preceding demand, all reports, draft reports, emails, communications, or other documents concerning the Company's 0159 tire.

13.

All documents which have any bearing on the independence and disinterestedness, or lack thereof for purposes of legal futility of demand under Ohio law for any current member of the Board of Directors.

14.

All documents produced in the Haeger v. Goodyear et al., Case No. 2:05-cv-02046- GMS, (D.Ariz.)

IV.

Conclusion

CT Laborers hereby demands that: (a) originals or attested copies of the foregoing documents and records be made available for inspection and copying by Cohen Milstein Sellers & Toll PLLC and its attorneys and agents, during usual business hours until the inspection is completed; or (b) the Company deliver copies of such records, within five (5) business days after receipt of this letter, to the attention of Richard Speirs at Cohen Milstein Sellers & Toll PLLC, 88 Pine Street, 14th Floor, New York, NY 10005; Tel. (212) 838-7797; or via secure email to rspeirs@cohenmilstein.com. We will reimburse the Company the reasonable copy costs if the documents are sent in hardcopy to Cohen Milstein Sellers & Toll PLLC. We will agree to enter into a reasonable Confidentiality Agreement.

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

The Goodyear Tire & Rubber Co. February 19, 2019 Page 8

03/28/2019 15:20:43 PM

CMCO

Page 19 of 28

Please advise as soon as possible and, in any event, on or prior to the expiration of five business days after the date this demand is received by the Company, when and where the items demanded above will be made available or, in lieu thereof, when copies of such items will be delivered.

Attachments

Sincerely, COHEN MILSTEIN SELLERS & TOLL PLLC
Sincerely,
COHEN MILSTEIN SELLERS & TOLL PLLC

Richard A. Speirs

THE SHUMAN LAW FIRM

SELLERS & TOLL PLLC Richard A. Speirs THE SHUMAN LAW FIRM Kip B. Shuman Sandra Kurt,

Kip B. Shuman

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

CMCO

Page 20 of 28

EXHIBIT [A]

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

CMCO

Page 21 of 28

SPECIAL POWER OF ATTORNEY AND DECLARATION

KNOW ALL PERSONS BY THESE PRESENTS, that the Connecticut Laborers Pension Fund ("CT Laborers" or the "Fund"), a stockholder of record in The Goodyear Tire & Rubber Co. ("Goodyear" or "the Company"); does hereby make, constitute and appoint Cohen Milstein Sellers & Toll PLLC, 88 Pine Street, 14th Floor, New York, NY 10005 and any person designated by them to act as true and lawful attorney in fact for it, in its name, place, and stead, in all matters regarding the inspection and examination of books and records of Goodyear, pursuant to Section 1701.37(c) of the Ohio Revised Code, giving and granting unto said attorney full power and authority to perform all and every act and thing whatsoever requisite, necessary and proper to be done in and without the premises, as fully, to all intents and purposes as they might or could do, with full power of substitution and revocation, hereby ratifying and confirming all that is attorney or the substitute shall lawfully do or cause to be done.

The Fund declares and affirms under the penalty of perjury, pursuant to the laws of the State of Ohio, that the purposes set forth in its demand on Goodyear constitute a true and accurate statement of the reasons the Fund desires to review the demanded books and records that such demand is made in good faith.

IN WITNE SS HEREOF, r have hereunto set my hand as of

2

-

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Diane Klobukowski, Executive Director Connecticut Laborers Pension Fund

J Lf

, 2019.

ACKNOWLEDGEMENT

.'· , a notary public, personally

appeared ,

evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalfof which the person acted, executed the instrument.

o e, . !°)L' and proved to me on the basis of satisfactory

On f-2!::>r

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WITNESS my hand and official seal.

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ELIZi\8ETH G. GIBSOf\J

N Ot-1f?Y l 'l/NUC

MY G OMIVilSSION EXPIRES FEB. 28. 20�3

Sandra Kurt, Summit County Clerk of Courts

CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

CMCO

Page 22 of 28

EXHIBIT [B]

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03/28/2019 15:20:43 PM

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Page 26 of 28

ASSET ALLOCATION· CT LABORERS PENSION· LSV MID-CAP· 4061100020

ALLOCATION· CT LABORERS PENSION· LSV MID-CAP· 4061100020 A l l H o l d i n

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As OfDate

02/15/2019

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CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

CMCO

Page 27 of 28

 

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GOODYEAR TIRE & RUBBER CO

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CV-2019-03-1203

MCCARTY, ALISON E.

03/28/2019 15:20:43 PM

CMCO

Page 28 of 28

AMENDED SPECIAL POWER OF ATTORNEY AND DECLARATION

KNOW ALL PERSONS BY THESE PRESENTS, that the Connecticut Laborers Benefit Funds ("CT Laborers" or the "Fund"), a beneficial stockholder in The Goodyear Tire & Rubber Co. ("Goodyear" or "the Company"), does hereby make, constitute and appoint Cohen Milstein Sellers & Toll PLLC, 88 Pine Street, 14th Floor, New York, NY 10005 and any person designated by them to act as true and lawful attorney in fact for it, in its name, place, and stead, in all matters regarding the inspection and examination of books and records of Goodyear, pursuant to Section 1701.37(C) of the Ohio Revised Code, giving and granting unto said attorney full power and authority to perform all and every act and thing whatsoever requisite, necessary and proper to be done in and without the premises, as fully, to all intents and purposes as they might or could do, with full power of substitution and revocation, hereby ratifying and confirming all that is attorney or the substitute shall lawfully do or cause to be done.

CT Laborers declares and affirms under the penalty of perjury, pursuant to the laws of the State of Ohio that the purposes set forth in its demand on Goodyear constitute a true and accurate statement of the reasons CT Laborers desires to review the demanded books and records that such demand is made in good faith.

+-A "'-L

----"

IN WITNESS HEREOF, I have hereunto set my hand as of

I

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,R

I

, 2019.

Diane Klobukowski, Executive Director Connecticut Laborers Benefit Funds

ACKNOWLEDGEMENT

, r(, a not ary pu bli c, persona ll y

appeared l h. P,.:?

evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

and proved to me on the basis of satisfactory

On VV\.tvit," 4'

t:::?;,l,

, 2019 , be f or e me.D ·\1uv1 k lobwca

WITNESS my hand and of ficial seal.

ELIZABETH G. GIBSON

NOtlll?Y l'l/UU C

MY G0 1v1MI SSI ON EXPIRES FEB. 28 . 20 2 3

Sandra Kurt, Summit County Clerk of Courts