A woman who was paralyzed after her Ford Explorer rolled over should receive $82.6 million in damages against Ford Motor Company, including $55 million in punitive damages, a California appellate court unanimously ruled last month. Ford had appealed the jury’s award, arguing that the punitive damage award was improper considering the Supreme Court’s ruling in Philip Morris USA v. Williams. The California 4th District Court of Appeal had previously reduced the award from $369 million to $82.6 million.
“Based on our review of the record, plaintiffs’ counsel was not asking the jury to punish Ford for harm done to third parties,” wrote Justice Gilbert Nares in his 108-page opinion. “Rather, counsel was discussing the repeated nature of Ford’s actions in arguing the reprehensibility of Ford’s conduct. That argument was entirely proper and did not create a ‘significant risk’ the jury would punish Ford for injuries to third parties.”
You would that these kinds of economic and public relations would motivate car companies to make their cars safer and not allow for compromises in design the way Ford did with the Bronco and the Explorer. But car-making is big business and while this verdict sends shock waves throughout the product defect lawyer community, it has little impact on Ford’s bottom line.
We are seeing a similar fact in the Yamaha Rhino ATV lawsuits being filed around the country. The company chalks up the Yamaha Rhino rollovers to the fact that ATVs are unsafe, as opposed to doing everything that is reasonable to make them as safe as possible. Implicit in Yamaha’s calculus is that the injuries sustained in Yamaha ATV cases will lead to less in litigation-related costs then they will make in sales of the Yamaha Rhino ATVs. This is why states like California, unlike Maryland for example, allow for punitive damages in these kinds of cases. Yamaha should not be surprised if they end up just like creates revenues sufficient to sustain the legal costs, settlements, and verdicts that Yamaha will undoubtedly endure. As the Ford Pinto cases told us years ago, companies with high selling and profitable products make these kinds of painful cost/benefit decisions all the time.