The LA Times article on the California court of appeals decision in Romo v. Ford Motor Co. (see Nov. 26 and links therein) shows how far the media has tilted in coverage of tort reform: there are lots of unchallenged complaints from the plaintiffs’ attorneys and their interest groups that a $29 million total award won’t be enough to deter wrongful behavior and will allow companies “to avoid liability and responsibility.” This is mathematically nonsensical: if 1 in 10,000 Ford Broncos were subject to such an award over the course of their lifetime, it would wipe out Ford’s profits and then some. And if fewer autos than that cause damage, then perhaps Ford’s behavior isn’t so “reprehensible”, notwithstanding the characterization of the appeals court? (Indeed, three of the twelve jurors refused to join the Romo verdict.) No one is quoted questioning whether $29 million is too much to award against an auto company for a 1978 Ford Bronco that had 200,000 miles on it at the time of the accident and which exceeded federal safety standards put in place years after the 1993 accident. (Lisa Girion and Myron Levin, “Appellate Court Cuts Huge Crash Case Award”, LA Times, Nov. 26). The good news is that the California Court of Appeal recognized that the size of the corporation is not grounds on which to award punitive damages: though the court does not say so, to base punitive damages on such a metric effectively punishes corporations for being big than for a particular course of conduct. (Washington Legal Foundation amicus brief before U.S. Supreme Court).
Relatively uncommented on: the same day the same California Court of Appeal reversed a $10 million punitive damages award against Ford in Johnson v. Ford, where a couple bought a used car and had to replace the transmission twice. The couple will still walk away with over $170,000 from Ford and the dealer for their trouble. Anyone think that a $170,000 hit on the sale of a used Taurus isn’t enough to deter selling used cars with problems? Update Feb. 15: case settles.
Disclosure: I represent Ford Motor Co. in other litigation.
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