Wednesday, November 26, 2003
C.A., Citing U.S. High Court Ruling, Makes Huge Cut In Punitive Damages in Ford Rollover Case
By a MetNews Staff Writer
The Fifth District Court of Appeal yesterday overturned a $290 million punitive damage award, giving the plaintiffs their choice of a reduction to $23.7 million or a new trial limited to that issue.
The court, which had previously upheld the award, said the remittitur was required by the U.S. Supreme Court’s ruling in State Farm Mutual Automobile Ins. Co. v. Campbell (2003) 123 S. Ct. 1513. The high court last May vacated the Fresno-based panel’s previous ruling and sent the case back for reconsideration in light of State Farm, which had been decided a month earlier.
Justice Anthony Kennedy, writing for the court in State Farm, concluded that while the Constitution does not “impose a bright-line ratio which a punitive damages award cannot exceed,” there would be few situations in which “awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.”
In the case ruled on yesterday, a Stanislaus Superior Court jury had awarded the punitive damages, along with $5 million in compensatory damages, to the surviving members of the Romo family after three family members were killed and two injured a rollover of a 1978 Ford Bronco near Ceres. It was the largest punitive damage award in a products liability case in the United States up to the time of the 1999 verdict.
The trial judge granted Ford’s motion for a new trial, saying there had been juror misconduct. But the Fifth District panel, in its original opinion, said there was no basis to overturn the verdict and that the punitive award was justified in light of Ford’s “despicable conduct” in “putting on the market a motor vehicle with a known propensity to roll over and, while giving the vehicle the appearance of sturdiness, consciously deciding not to provide adequate crush protection to properly belted passengers.”
The California Supreme Court voted 4 to 3 not to review the decision.
Writing for the Fifth District yesterday, Justice Steven Vartabedian said that while the case falls on “the higher end of the reprehensibility scale,” a punitive damage award of three times compensatory damages for each of the surviving plaintiffs, for a total of $13.7 million, plus $5 million to the estate of each of the two deceased victims, would satisfy “the state’s legitimate objectives” in permitting punitive damages.
Attorneys for both sides said the decision makes major changes in California’s punitive damages jurisprudence.
Professor Erwin Chemerinsky of USC Law School, who helped argue the case for the plaintiffs, said the court “got it wrong” and that the plaintiffs might want to take the case to the California Supreme Court with a view toward returning to the U.S. high court for clarification of State Farm.
“State Farm explicity says...there will be a few cases in which more than single digit multipliers will be allowed,” Chemerinsky told the MetNews. Review “could give the [U.S. Supreme] court the opportunity to clarify...the deterrent effect of punitives.”
Joseph Carcione, the Redwood City attorney who argued the case with Chemerinsky, was blunt in his denunciation of the ruling.
“To me it is one of the saddest days in the history of American jurisprudence,” he said. “We’ve decided that rich corporations can do whatever they want...including murder.”
Saying the award represents less than a day’s income for Ford, Carcione pronounced it “the equivalent of you and me getting a parking ticket.”
Theodore Boutros Jr., the Gibson, Dunn & Crutcher partner who argued the case for Ford, said that while he had argued that a 1 to 1 ratio between compensatory and punitive damages was adequate under the facts of the case, “we are pleased that the court has recognized that State Farm fundamentally altered the standards governing punitive damages and that the court has significantly altered this award.”
The case is Romo v. Ford Motor Company, 03 S.O.S. 5990.
Copyright 2003, Metropolitan News Company