Amicus Curiae Brief — Ford Motor Co. v. Estate of Smith

A) | —Semnooea oe:

No. 02-1096 ¢ FILED

APR 2 28

In The

Supreme Court of the Gnited Stated === _

,

Vv

FORD MOTOR COMPANY

Petitioner,

V.

ESTATE OF TOMMY SMITH, ET AL.,

Respondents.

,

Vv

On Petition For A Writ Of Certiorari

To The Supreme Court Of The

Commonwealth Of Kentucky

2

v

BRIEF OF AMICI CURIAE

ALLIANCE OF AUTOMOBILE

MANUFACTURERS, INC. AND

ASSOCIATION OF INTERNATIONAL

AUTOMOBILE MANUFACTURERS, INC.

IN SUPPORT OF PETITIONER

,

wv

JOHN WHATLEY LESLIE G. LANDAU

ALLIANCE OF AUTOMOBILE Counsel of Record

MANUFACTURERS ROBERT A. BRUNDAGE

1401 H Street, N.W. CLAUDIA Y. SANCHEZ

Suite 900 BINGHAM McCCUTCHEN LLP

Washington, D.C. 20005 Three Embarcadero Center

(202) 326-5500 San Francisco, California 94111

(415) 393-2000

CHARLES H. LOCKwWooD

ASSOCIATION OF INTERNATIONAL

AUTOMOBILE MANUFACTURERS

1001 19th Street, Suite 1200

Arlington, Virginia 22209

(703) 525-7788

Attorneys for Amici Curiae Alliance of Automobile

Manufacturers and Association of International

Automobile Manufacturers, Inc.

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

\4 \

TABLE OF CONTENTS —-

Page

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TABLE OF AUTHORITIES... cccccccccccescesesseeseces il

INTEREST OF AMICI CURIAE.....:......ccccccccccccececee 1

SUMMARY OF ARGUMENT. 1.00... ooo ceecccccccssecccceceeeees 3

TE seineiaeis erp ees 4

I. UNPREDICTABLE, CONFLICTING PUNI-

TIVE DAMAGES AWARDS .............cccccceeeeeeees 6

II. ENORMOUS AWARDS THAT EVISCERATE

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TABLE OF AUTHORITIES

CASES

American Motors Co. v. Ellis, 403 So.2d 459 (Fla.

PD. EDGED as sssescesiccenaidvcnsaaunsocee ee 11

Ammel v. Nissan Motor Co., Ltd., San Diego County

(Calif.) Superior Court No. 577345 (Feb. 20,

BPO ED. 0ivuuisionensvinus seuss demesoepseaeiaeaietaaiea aaa 8

Anderson v. General Motors Corp., Los Angeles

County (Calif.) Superior Court No. BC 116926,

notice of appeal filed, No. B135147 (Cal. Ct. App.

mG, ©, BO ie iesiisnierictriumnne eee eee 13, 14

BMW of North America v. Gore, 517 U.S. 559

A A PIPPD: csnsosetce eclosion ea uaa &, 6, 12, 13

Bonanno v. Jordan, United States District Court

for the District of Vermont No. 2:92-CV-333 (Aug.

MEAD oc viincasseiensbiocsannoaccieetamdieeenen en 9

Clark v. Chrysler Corp., 310 F.3d 461 (6th Cir.

Pht kosidesinsinniciisiscniccecmcaneia a aa 8,9, 10, 14

Cooper Indust., Inc. v. Leatherman Tool Group, Inc.,

Ge TD. GG CIID) oogcosccisnsvccvsnecsoaaceemaenveceesnccncn. 4,12,13

Ford Motor Co. v. Bartholomew, 297 S.E.2d 276

Wel, Ree hie ee hneabiouele 7

Gallo v. Nissan Motor Corp., Los Angeles County

(Calif.) Superior Court No. SEC63128 (Apr. 19,

NE ee ticiveh niciatiauiccinen cana Preaek 9

General Motors Corp. v. Johnston, 592 So.2d 1054

| EIEN RE SRMRM Niae eT... | 10

General Motors Corp. v. Sanchez, 997 S.W.2d 584

Fa Ib cacisscissentiedissiekectuliuackiniaaee dumecciclaance) ae 7

ill

TABLE OF AUTHORITIES — Continued

Page

Nissan Motor Co., Ltd. v. Armstrong, 32 S.W.3d 701

(Tex. App. 2000), pet. for review filed (Tex. Feb.

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ta hs lh reichassciventoshinssnvsinpeannasanesvievontzonssusverinasonerees 4

Rinck v. Nissan Motor Co., Hamilton County

(Tenn.) Circuit Court No. N-33587 (July 30,

NHN ienididd ch sehadhernaeaei sce sokdhusensiserdnéovisaassaariesivedcccs.cos.. ones 8

Robertson v. Nissan Motors Corp. in U.S.A., Los

Angeles County (Calif.) Superior Court No.

C666570 (Aug. 13, 1991)... cesccscccscccosccccecceccceccccee. 8

Silverman v. Swenson, Orange County (Calif.)

Superior Court No. 522924 (Nov. 5, 1991)..................... 8

Southwestern Tel. & Tel. Co. v. Danaher, 238 U.S.

er aaiecsehtictsrvanetcesussercsinsndosesncsionasieneeoceeccsey.c... 12

Wangen v. Ford Motor Co., 294 N.W.2d 437 (Wis.

MN Gap PncR se Uist sescseetksctcediausvabssasessedenceesaaseenevceessesccccg, 11

STATUTES

MO UBC. § DOUG) coon cosccscisessessesssseceesesoecesocsosses.,.... 7, 8, 10

RULES

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REGULATIONS

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INTEREST OF AMICI CURIAE

The Alliance of Automobile Manufacturers, Inc.

(Alliance) is a nonprofit trade association composed of 10

car and light truck manufacturers: BMW Group, Daimler-

Chrysler Corporation, Ford Motor Company, General

Motors Corporation, Mazda North American Operations,

Mitsubishi Motors North America, Inc., Nissan North

America, Inc., Porsche Cars North America, Inc., Toyota

Motor North America, Inc., and Volkswagen of America,

Inc. Alliance members account for more than 90 percent of

U.S. vehicle sales.

The Association of International Automobile Manufac-

turers, Inc. (AIAM) is a trade organization whose members

include American Honda Motor Co., American Suzuki

Motor Corp., Aston Martin Lagonda of North America,

Inc., Ferrari North America, Inc., Hyundai Motor America,

Isuzu Motors America, Inc., Kia Motors America, Maserati

North America, Inc., Mitsubishi Motors North America,

Nissan North America, Peugeot Motors of America, Saab

Cars USA, Renault, SA, Subaru of America, and Toyota

Motor Sales, U.S.A. AIAM also représents original equip-

ment suppliers and other automotive-related trade asso-

ciations.’

The members of the Alliance and AIAM — automotive

manufacturers and suppliers — may be the most affected

by the punitive damages laws of this country. The products

‘ Pursuant to Supreme Court Rule 37.3, letters from the parties

consenting to the filing of this brief have been filed with the Clerk of

the Court. This brief was funded entirely by the Alliance and AIAM and

was written entirely by their counsel.

2

they make — automobiles — move fast and crash, and

severe injuries can occur in them in all kinds of ways even

when they are perfectly designed. And under principles of

both law and engineering, the designs manufacturers

choose must reflect judgment calls about risks and bene-

fits, which by definition make risks to some more likely if

risks to others are to be avoided. Members of the Alliance

and AIAM are frequently sued by injured people who seek,

based on their particular injuries, to have their cars

deemed defective by lay juries — often advocating as

alternatives the very designs attacked by others. And

plaintiffs often ask the jury, based on the isolated facts of

their case, to punish the manufacturer for design decisions

made years (sometimes decades) before.

This scenario is played out again and again, in court

after court, state after state, design after design. And the

results are, truly, random. Designs deemed non-defective

in one case are found defective and punishable in another.

And the punitive amounts — although spiraling ever upward

— bear no relationship to anything except jury whim.

This Court’s cases have sought to clarify the Constitu-

tion’s limits on the availability and size of punitive dam-

ages and the territorial scope of a state’s power to impose

them. But at least in the field of automotive product

liability, those limits have not prevented arbitrary imposi-

tion of punitive damages. The members of the Alliance and

AIAM accordingly have a strong interest in the Court’s

consideration of Ford Motor Co. v. Smith, No. 02-1096, and

3

Ford Motor Co. v. Romo, No. 02-1097’ (as well as Clark v.

Chrysler Corp., 310 F.3d 461 (6th Cir. 2002), in which a

petition for a writ of certiorari:is soon to be filed), as they

provide an opportunity to resolve the constitutional issues

concerning punitive damages in product liability cases.

-

=

SUMMARY OF ARGUMENT

The Smith and Romo petitions give the Court an

opportunity to provide badly needed guidance to end what

is now a rule of essentially random imposition of punitive

damages, in randomly large amounts, against product

manufacturers. The automotive industry has been build-

ing ever safer cars, but facing ever greater punishment.

The verdicts are arbitrary: designs that meet federal

safety standards promulgated by the National Highway

Traffic Safety Administration (NHTSA) are deemed

dangerous and punishable; designs exonerated by one jury

are deemed grounds for punishment by another. And the

amounts awarded are untethered to any rational basis — a

design found to have caused death may trigger punish-

ment of $3 million to over $1 billion. Such irrational

results and random punishment do not, and by their

nature cannot, accomplish the legitimate purposes of

punitive damages, and indeed, occasion the arbitrary

deprivation of property that the Constitution condemns.

This Court’s guidance is badly needed.

+

* Given the similarity of issues in Smith and Romo, the Alliance

and AIAM are filing similar briefs supporting petitioner in each case.

4

ARGUMENT

The twin cases before the Court — Smith and Romo —

are not aberrations. The automotive industry has been

subjected to random imposition of punitive damages, in

huge amounts, with respect to designs that meet industry

standards, that exceed federal safety standards, that

NHTSA itself has investigated and not found defective,

and that have been found safe by other juries. A punitive

damages system that allows such “arbitrary deprivation of

property” and punishment by definition does not meet due

process. Honda Motor Co. v. Oberg, 512 U.S. 415, 432

(1994). Punitive damages law is broken. These cases

provide the Court with an opportunity to fix it.

The sole purposes of punitive damages are to punish

past, and deter future, wrongdoing. Cooper Indust., Inc. v.

Leatherman Tool Group, Inc., 532 U.S. 424, 432 (2001);

Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 21-22

(1991). Both purposes depend on reasonable notice of what

conduct will trigger punishment. A manufacturer cannot

be deterred from one design choice and encouraged to

adopt another unless it can foresee which choice will

trigger, and which will avert, punishment. Indeed, it is

simply unfair to punish a manufacturer for conduct that

was, or reasonably appeared, lawful when and where it

occurred. Yet, in a product design setting, where designs

and legal tests for defect are based on engineering trade-

offs and judgment calls, notice of what is and is not a

proper design is, in the best of circumstances, elusive.

Punitive damages in product cases — especially the

massive awards in cases like Smith and Romo — reflect the

problem. As the Court cautioned in another automotive

case, “Punitive damages pose an acute danger of arbitrary

5

deprivation of property” and juries may “use their verdicts

to express biases against big businesses, particularly those

without strong local presences.” Oberg, 512 U.S. at 432.

Automobile manufacturers are large companies. Some are

foreign manufacturers to boot. These companies’ wealth,

and distance from individual juries, put them at risk for

unwarranted punishment, especially where plaintiffs are

sympathetic and injuries are severe.

The Court in BMW of North America v. Gore, 517 U.S.

559 (1996), articulated minimum Due Process require-

ments designed to assure that punitive damages fairly

served their purposes without arbitrary, unfair punish-

ment. “Elementary notions of fairness,” the Court held,

entitle a defendant to “fair notice not only of the conduct

that will subject [it] to punishment, but also of the severity

of the penalty that a State may impose.” 517 U.S. at 574.

The Court laid down three guideposts for measuring

punitive damages under the Due Process Clause. 517 U.S.

at 574-85.

The Gore standards, however, developed in a case

involving economic loss, have not controlled runaway

verdicts in personal injury product liability litigation.

Juries continue to impose — and courts continue to affirm —

unpredictable, even conflicting, punishments, often for

good-faith conduct, apparently lawful at the time. The

result is arbitrary punishment, without reasonable notice

of what conduct will be punished, or how much, or how to

avoid punishment in the future.’

* It is no answer to say that manufacturers have notice they should

avoid defective designs. The test for defect involves judgment calls

(Continued on following page)

The Alliance and AIAM file this brief to alert the

Court to what is really happening to the automotive

industry without meaningful punitive damages controls,

so the Court can understand why the Smith and Romo

cases represent both a real and pervasive problem in the

lower courts, and an opportunity for this Court to correct

that problem.

I. UNPREDICTABLE, CONFLICTING PUNI-

TIVE DAMAGES AWARDS

As this Court observed in Gore, “[eJlementary notions

of fairness enshrined in our constitutional jurisprudence

dictate that a person receive fair notice not only of the

conduct that will subject him to punishment, but also of

the severity of the penalty that a State may impose.” 517

U.S. at 574. In actual practice, however, the current

constitutional standards permit irrational and even

contradictory results, especially in product liability cases

where manufacturers cannot avoid design tradeoffs. Such

random punishment does not — and by definition cannot —

accomplish any legitimate purpose.

For example, in Smith, the Kentucky Supreme Court

reinstated a $15 million punitive damages award based on

a transmission design susceptible to shifting from Park to

Reverse. This misshift risk cannot be eliminated from an

automatic transmission; as a matter of physics, there is a

about safety, utility and cost that are subject to debate. A manufacturer

choosing a design cannot predict whether a jury in some future case

will deem that judgment call reasonable or punishable. In practice,

juries do both.

Se

midpoint between Park and Reverse. At least 15 juries had

found Ford’s transmission not defective at all and the

federal safety agency, the National Highway Traffic Safety

Agency (INHTSA), had specifically investigated and not

found any defect. (See Smith Petition at 6-7) In addition,

the Virginia Supreme Court had held punitive damages

unavailable as a matter of law in a similar misshift claim

against Ford, even as it affirmed compensatory liability.

Ford Motor Co. v. Bartholomew, 297 S.E.2d 276, 683-84

(Va. 1982); cf. General Motors Corp. v. Sanchez, 997 S.W.2d

584, 595-98 (Tex. 1999) (affirming compensatory liability

but holding punitive damages unavailable as a matter of

law in misshift claim against General Motors). Thus,

different juries and courts have variously found misshift

susceptibility not to be a defect at all; defective but not

punishable; and punishable.

And in Romo, the California Court of Appeal rein-

stated a $290 million punitive damages verdict for a roof

design in use for a quarter-century, that had never been

found defective in any case — and in fact, far from causing

widespread harm, had never even been the subject of a

lawsuit, much less a judgment. Indeed, the roof design was

ahead of its time, far surpassing federal roof-strength

regulations first adopted several years later — regulations

that, by definition, “meet the need for motor vehicle

safety.” 49 U.S.C. § 30111(a).

The Smith and Romo cases do, and should, give pause

about the need for additional guideposts to protect against

arbitrary punishment. Due process should foreclose

punishment when different engineers (and juries) can

reach different conclusions on a design’s merits. For by

definition, where reasonable minds can believe a design is

8

safe, there is no basis for finding wantonness in its use,

and no way to predict its adoption will be punished. Due

process should foreclose punishment when a manufacturer

complies with an on-point federal standard. For Congress

has mandated that NHTSA adopt standards that are

“practicable” and “meet the need” for motor vehicle safety.

49 U.S.C. § 30111(a). Compliance with an on-point safety

standard, even if not a defense as a matter of law to

liability, by definition negates the evil intent required for

punitive damages and makes punishment inappropriate;

indeed, a finding that a complying design reveals evil

intent is an ad hoc indictment of NHTSA’s own good faith

— something no case should allow and no manufacturer

should be charged with predicting. Without these kinds of

constitutional safeguards, irrational and arbitrary pun-

ishment will be routine.

Indeed, Smith and Romo are not unique; they are the

norm. Take the case of Nissan’s experience with claims of

“unintended acceleration” in its 300ZX car. “Unintended

acceleration” is when a car accelerates when the driver

does not intend it to accelerate. Most all cars have been

the subject of such claims. The problem is most often pedal

error: the driver hits the gas instead of the brake. Nissan

had won at least three jury verdicts, two directed verdicts

and a summary judgment in cases alleging a defect-caused

unintended acceleration in Nissan’s 300ZX car.‘ After

* Ammel v. Nissan Motor Co., Ltd., San Diego County (Calif.)

Superior Court No. 577345 (Feb. 20, 1991) Gury verdict of no design

defect); Silverman v. Swenson, Orange County (Calif.) Superior Court

No. 522924 (Nov. 5, 1991) Gury verdict of no design defect); Rinck v.

Nissan Motor Co., Hamilton County (Tenn.) Circuit Court No. N-33587

(July 30, 1990) (jury verdict for Nissan); Robertson v. Nissan Motors

(Continued on following page)

9

investigation, Nissan believed the reports were caused by

pedal error. NHTSA also had investigated such claims in

hundreds of 300ZX cars, found “no safety related defect,”

and also determined that incidents were likely caused by

pedal error. Far from ignoring the problem, Nissan com-

mitted $30 million to retrofit the cars to protect against

pedal error. Nonetheless, in Nissan Motor Co., Ltd. v.

Armstrong, 32 S.W.3d 701, 710-11 (Tex. App. 2000), pet. for

review filed (Tex. Feb. 21, 2001) (No. 01-0030), a Texas jury

held that the same unintended acceleration incidents,

which NHTSA and Nissan found to be caused by drivers’

pedal errors, proved a throttle design defect. The jury then

imposed punitive damages on the theory that Nissan was

indifferent to safety because it agreed with NH7'SA on the

likely cause of the incidents and committed $30 million to

addressing that cause, rather than changing a throttle

part that neither thought was the cause. The Texas Court

of Appeal affirmed a $2 million punitive damages award.

Clark v. Chrysler Corp., 310 F.3d 461 (6th Cir. 2002),

is another example of punitive damages gone awry. There,

a car’s door latch separated in a collision, allowing the

door to open, and plaintiff’s decedent to be ejected from

the vehicle. NHTSA had adopted a standard for door latch

strength, a standard explicitly designed “to minimize the

likelihood of occupants being thrown from the vehicle as a

result of impact.” 49 C.F.R. § 571.206 S1. Chrysler’s latch

was twive as strong as NHTSA’s standard required.

Corp. in U.S.A., Los Angeles County (Calif.) Superior Court No.

C666570 (Aug. 13, 1991) (directed verdict); Gallo v. Nissan Motor Corp.,

Los Angeles County (Calif.) Superior Court No. SEC63128 (Apr. 19,

1990) (directed verdict); Bonanno v. Jordan, United States District

Court for the District of Vermont No. 2:92-CV-333 (Aug. 30, 1991)

(summary judgment).

10

Nonetheless, a jury imposed punitive damages and the

Sixth Circuit (over dissent) affirmed them, on the ground

that NHTSA’s strength requirements were not adequate

for real accidents. 310 F.3d at 469, 481; see 310 F.3d at 483

(Nelson, J., dissenting). Thus, just as manufacturers

cannot count on avoiding punitive damages by complying

with their own engineering judgments, even when repeat-

edly validated by juries, neither can they count on

NHTSA’s independent judgment.

The law, amici respectfully submit, thus affords no

real notice of the conduct that will subject a manufacturer

to punitive damages if it allows juries to both exonerate

and punish a manufacturer for adopting the same design —

or to punish as maliciously dangerous designs far exceed-

ing expert standards that already “meet the need for

motor vehicle safety.” 49 U.S.C. § 30111(a).

Indeed, carmakers are sometimes subject to punitive

damages no matter what choice they make. For example,

in Romo, the punitive damages award was affirmed in

part because Ford changed the challenged design. Ford

reinforced the roof in a later model year Bronco, which, the

California Court of Appeal reasoned, proved Ford acted

reprehensibly in using the prior roof in 1978. Romo Pet. App.

35a. The message: No good deed goes unpunished. See also

General Motors Corp. v. Johnston, 592 So.2d 1054, 1060

(Ala. 1992) (affirming, as reduced, punitive damages based

on evidence that GM “attempt[ed] to correct the problem”

while failing to notify buyers).°

* Indeed, this reasoning points up the need for territorial limits on

punitive damages. Federal Rule of Evidence 407, and many like state

(Continued on following page)

11

Yet other cases hold punitive damages justified

because the manufacturer did not change the design. E.g.,

American Motors Co. v. Ellis, 403 So.2d 459, 467 (Fla. App.

1981) (punitive damages justified because, although aware

of danger, “AMC chose not to implement the recommenda-

tion of its engineers to relocate the fuel tank”); Wangen v.

Ford Motor Co., 294 N.W.2d 437, 462 (Wis. 1980) (punitive

damages appropriate because Ford did not change design

of gas tank and surrounding components despite known

fire hazard); see Armstrong, 32 S.W.3d at 710-11 (affirming

punitive damages because Nissan allegedly knew part

could fail and cause unintended acceleration, but did not

issue mandatory retrofit or special warning).

These cases send exactly the wrong message. They tell

manufacturers that even designs found safe by juries or

that comply with on-point NHTSA standards that by

Congressional mandate must “meet the need for motor

vehicle safety” will be punished; that automakers cannot

escape punitive damages whether they keep designs or

change them; that no matter what choices they make and

how often they are vindicated by juries they will be pun-

ished eventually in some case; and that punitive damages

are accordingly simply a random risk and an inescapable

cost of doing business.

That turns the purposes of punitive damages upside ~

down. The law justifies punitive damages on the basis that

they are meant to shape conduct. They cannot shape

rules, forbid consideration of subsequent design changes on liability. It

is perverse indeed if one state, like California, can impose nationwide

punishment based on the very design innovation that federal (and other

xtates’) law seeks to encourage and so refuses to punish.

12

conduct if they are imposed whatever the conduct and no

conduct can predictably protect against them. And punish-

ing manufacturers for products they reasonably believed

reasonably safe, i.e. lawful — which belief was supported by

NHTSA standards and investigation reports, industry

standards, and numerous jury verdicts — is fundamentally

unfair and violates the notice requirement of the Due

Process Clause. See, e.g., Southwestern Tel. & Tel. Co. v.

Danaher, 238 U.S. 482, 490 (1915) ($6,300 civil penalty

violated “fundamental principles of justice,” even if the

defendant “should have known that the Supreme Court of

the State in the exercise of its judicial power might hold

[its conduct] unreasonable,” where “the prevailing view

elsewhere was otherwise”).

>

In short, Smith and Romo are not unique. They reveal

a devastating lack of controls on punitive damages in the

lower courts, which prevents punitive damages from

serving their legitimate purposes — fair retribution and

deterrence. The result is the very “arbitrary deprivation of

property” that Oberg condemns as a violation of due

process.-The Court should grant review to set specific

guidelines, and limits on the availability of punitive

damages, that prevent such random punishment.

II. ENORMOUS AWARDS THAT EVISCERATE THE

GORE FACTORS.

Even where some punitive damages are appropriate,

the Due Process Clause “imposes substantive limits” on

the amount of punitive damages. Cooper, 532 U.S. at 433- !

34; Gore, 517 U.S. at 585-86. In deciding whether the line |

has been crossed, courts must focus on the defendant’s |

degree of reprehensibility or culpability, the relationship

ea

13

between the penalty and the harm to the victim caused by

the defendant, and the sanctions in other cases for compa-

rable misconduct. Gore, 517 U.S. at 575-85; see Cooper, 532

U.S. at 440.

Ford’s petitions in Smith and Romo demonstrate that

the Gore guideposts provide no real or consistent controls

on the amount of damages in product liability cases.

Perhaps because the Gore factors were developed in a case

that did not involve personal injuries or engineering

judgments, the lower courts in automotive product liability

struggle with them. Some cases apply the guideposts,

some ignore them, and some discard them. (Smith Pet. 21-

30; Romo Pet. 9-23) The arbitrary award of crushing

amounts, on top of random imposition of punitive liability,

makes the absence of controls doubly offend due process.

Again, Smith and Romo are not alone. A single case

demonstrates that there is no practical limit on punitive

damages in product liability cases. In Anderson v. General

Motors Corp., Los Angeles County (Calif.) Superior Court

No. BC 116926, notice of appeal filed, No. B135147 (Cal.

Ct. App: Sept. 9, 1999), people injured in a post-collision

fire sued GM, claiming that placement of the gasoline tank

behind the rear axle created an excessive danger of fuel-fed

fire in the event of a crash. The vehicle met all relevant

requirements for rear-end crashworthiness, and the fuel

tank was in the same location as 98% of the other vehicles

marketed. Nevertheless, the jury not only found the tank

defective, it awarded $4,800,000,000 ($4.8 billion) in

punitive damages. The trial court, purporting to apply

Gore, reduced it to a mere $1.09 billion.

That judgment, even as reduced, was 218 times

greater than any California award in any published case

(before Romo) and 19 times greater than any punitive

14

damage award ever affirmed in any federal court in any

reported case. One year’s post-judgment interest alone

would be 22 times the largest award ever affirmed in a

reported California case (again before Romo) and almost

twice the largest ever affirmed in a reported federal case.

No one -— literally, no one — could have foreseen in the

1970s, when the tank was designed, that a manufacturer

would be subjected to over a billion dollars in punishment.

The results in real cases prove there are no practical

controls on the amount of punitive damages in product

liability cases. Punitive damages awards are random; in

just the last few years, punitive damages in automotive

product liability cases against the big three American auto

manufacturers (GM, Ford and Chrysler) have included

$3 million (Clark), $15 million (Smith), $290 million

(Romo), and $1.09 billion (Anderson). The ratio between

the high and low awards — over 300 to 1 — for similar

claims (alleged defects that cause severe injuries or death)

and similar sized companies alone confirms that existing

law provides no controls.

Massive punitive awards like Romo’s $290 million

award, for designs that complied with federal standards

and had never before caused injury, demonstrate that

punitive damages have spiraled out of control in automotive

litigation. Judges’ failure to rein them in demonstrates

that current constitutional standards do not provide

sufficient lower court guidance. Indeed, the Smith majority

opinion unintentionally proves the problem. The Kentucky

Supreme Court there observed that “the reality” of “national

experience” facing an automaker is that a $15 million

punitive damages award is reasonably foreseeable. (Smith

App. 19a) This circular “reality,” in which each enormous

award justifies the next, is the problem, not the answer.

ean aE een

15

The Smith and Romo cases give the Court an oppor-

tunity to set substantive due process limits on imposition

of punitive damages, define jury instructions that will help

assure adherence te those substantive limits, explain the

territorial reach of jury awards, and clarify the reviewing

courts’ duty to control jury excesses. The Court should

grant certiorari to provide that specific guidance on the

constitutional limitations on punitive damages.

¢

CONCLUSION

For these reasons, the Alliance and AIAM respectfully

urge the Court to grant the Petitions.

DATED: April 7, 2003

Respectfully submitted,

JOHN WHATLEY LESLIE G. LANDAU

ALLIANCE OF AUTOMOBILE Counsel Of Record

MANUFACTURERS ROBERT A. BRUNDAGE

1401 H Street, N.W. CLAUDIA Y. SANCHEZ

Suite 900 BINGHAM MCCUTCHEN LLP

Washington, D.C. 20005 Three Embarcadero Center

(202) 326-5500 San Francisco, California 94111

(415) 393-2000

CHARLES H. LOCKwoopD

ASSOCIATION OF INTERNATIONAL

AUTOMOBILE MANUFACTURERS

1001 19th Street, Suite 1200

Arlington, Virginia 22209

(703) 525-7788