Amicus Curiae Brief — Ford Motor Co. v. Ramon Romo

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5) APR 2 2005

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No. 02-1097 a

In the Supreme Court of the Gnited States

FORD MOTOR COMPANY,

Petitioner,

v.

JUAN RAMON ROMO ET AL.,

Respondents.

On Petition for a Writ of Certicrari to the

California Court of Appeal, Fifth Appellate District

BRIEF FOR THE PRODUCT LIABILITY ADVISORY COUNCIL, INC.,

THE CHAMBER OF COMMERCE OF THE UNITED STATES, THE

CALIFORNIA CHAMBER OF COMMERCE, FLORIDA CHAMBER OF

COMMERCE, INC., THE NATIONAL ASSOCIATION OF MANUFAC-

TURERS, AMERICAN CHEMISTRY COUNCIL, GENERAL AVIATION

MANUFACTURERS ASSOCIATION, PHARMACEUTICAL RESEARCH

AND MANUFACTURERS OF AMERICA, SPORTING GOODS

MANUFACTURERS ASSOCIATION, THE AMERICAN TORT REFORM

ASSOCIATION, THE CIVIL JUSTICE ASSOCIATION OF CALIFOR-

NIA, AND THE ILLINOIS CIVIL JUSTICE LEAGUE AS AMICI CURIAE

IN SUPPORT OF PETITIONER

HUGH F. YOUNG, JR. ANDREW L. FREY

Product Liability Advisory EVAN M. TAGER

Council, Inc. Counsel of Record

1850 Centennial Park Drive RICHARD B. KATSKEE

Suite 510 Mayer, Brown, Rowe & Maw

Reston, VA 20191 1909 K Street, NW

Washington, DC 20006

Counsel for amicus Product (202) 263-3000

Liability Advisory Council, Inc. Counsel for all amici

Additional Counsel Listed On Inside Cover

ROBIN S. CONRAD

National Chamber Litigation

Center, Inc.

1615 H Street, NW

Washington, DC 20062

Counsel for amicus the Chamber of

Commerce of the United States

FRED MAIN

Senior Vice President & General

Counsel

California Chamber of Commerce

1215 K Street, Suite 1400

Sacramento, CA 95814

Counsel for amicus the California

Chamber of Commerce

Roy C. YOUNG

General Counsel

Florida Chamber of Commerce,

Inc.

225 S. Adams St., Ste. 200

Tallahassee, FL 32301

Counsel for amicus Florida

Chamber of Commerce, Inc.

JAN S. AMUNDSON

General Counsel

QUENTIN RIEGEL

Deputy General Counsel

National Association of

Manufacturers

1331 Pennsylvania Ave., NW

Washington, DC 20004

Counsel for amicus the National

Association of Manufacturers

DAVID F. ZOLL

DONALD EVANS

American Chemistry Council

1300 Wilson Blvd.

Arlington, VA 22209

Counsel for amicus American

Chemistry Council

JEFFREY R. SURAL

General Counsel

General Aviation Manufacturers

Association

1400 K Street, NW, Ste. 801

Washington, DC 20005

Counsel for amicus General

Aviation Manufacturers Association

Marjorie E. Powell

Senior Assistant General Counsel

PhRMA

1100 Fifteenth St., NW

Washington, DC 20005

Counsel for amicus the Pharmaceu-

tical Research and Manufacturers of

America

VICTOR E. SCHWARTZ

Shook, Hardy & Bacon LLP

600 14th St., NW, Ste. 800

Washington, DC 20005

SHERMAN JOYCE

American Tort Reform Association

1850 M St., NW, Ste. 1095

Washington, DC 20036

Counsel for amicus the American

Tort Reform Association

FRED J. HIESTAND

The Civil Justice Association

of California

1121 L Street, Ste. 404

Sacramento, CA 95814

Counsel for amicus the Civil

Justice Association of California

ee ee ee

apts

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ........................ ll

INTEREST OF THE AMICI CURIAE ................ ]

INTRODUCTION AND SUMMARY OF ARGUMENT . |

i i pe, sind ROT TE OEE TS eee 3

A. The Lower Courts Are Systematically

Misapplying The First Guidepost By Treating

The Marketing Of Products Entailing Risk Of

Personal Injury As Reprehensible Per Se ........ 4

B. The Lower Courts Are Systematically

Misapplying The Second Guidepost By

Viewing High Compensatory Damages As

Automatically Justifying High Ratios And

Large Punitive Awards ..................... 1]

C. The Lower Courts Need Guidance As To The

Proper Application Of The Third Guidepost

When The Plaintiff Seeks To Analogize The

Defendant’s Design Decision To A Crime

Punishable By Imprisonment ................. 16

D. The Lower Courts Need Guidance Regarding

The Proper Application Of The BMW

Guideposts When The Plaintiff Has

Encouraged The Jury To Punish The

Defendant For The Effects Of Its Design

Decision On Individuals Who Are Not Before

ME Bh by a ek ee eee ee eae 17

NE 35 and ke sce ves beeeeeacLoe 20

il

TABLE OF AUTHORITIES

Page(s)

Cases:

BMW of N. Am., Inc. v. Gore,

SUt Cs Oe Ce once ae eee ee passim

Bielicki v. Terminix Int’l Co., 225 F.3d 1159

Ce ere perros rt rrr re or 16

Burton v. R.J. Reynolds Tobacco Co.,

205 F. Supp. 2d 1253 (D. Kan. 2002) ............. 11

Campbell v. State Farm Mut. Auto. Ins. Co.,

2001 WL 1246676 (Utah Oct. 19, 2001),

cert. eramted, 1272 S. C2. TESS GAM) nos co ec ccinees 16

Carroll v. Otis Elevator Co., 896 F.2d 210 ;

COG, Tees + oe kk owe neo ee hee 5

Cass v. Stephens, 2001 WL 28092

(Ten. CX, Ag. Fa 21, SPO ck x vin ie aeenss 16, 17

Clark v. Chrysler Corp., 310 F.3d 461 (6th Cir. 2002) ... 10

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

SRE UD. GO GEE 5 6 6 cs Cosa waeeee eee. 1, 2, 6

Cooper Tire & Rubber Co. v. Tuckier, 826 So. 2d

679 (Miss.), cert. denied, 123 S. Ct. 97 (2002) ...... 10

ili

TABLE OF AUTHORITIES — Continued

Page(s)

Ford Motor Co. v. Ammerman, 705 N.E.2d 539

fs 12, 19

Honda Motor Co. v. Oberg, 512 U.S. 415 (1994) ........ 2

Maiorino v. Schering-Plough Corp., 695 A.2d 353

(N.J. Super. Ct. App. Div. 1997) ................. 15

Memphis Cmty. Sch. Dist. v. Stachura,

EF WE MCN OOD os wk ancien scenes eeveweses 15

_ North Am. Refractory Co. v. Easter, 988 S.W.2d 904

On 10

Owens-Corning Fiberglas Corp. v. Ballard,

739 So. 2d 603 (Fla. Dist. Ct. App. 1998),

approved 749 So. 2d 483 (Fla. 1999).............. 19

Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1 (1991)... 1,6

San Diego Bldg. Trades Council v. Garmon,

oe 15

Sand Hill Energy, Inc. v. Ford Motor Co., :

83 S.W.3d 483 (Ky. 2002) ................ 10, 11, 12

Soule v. General Motors Corp., 882 P.2d 298

Sr ko eed Vokes xaos Nola ds 6

TXO Prod. Corp. v. Alliance Res. Corp.,

a ]

——_-—_—-_-— ~~ _ Ee —

iV

TABLE OF AUTHORITIES — Continued

Page(s)

Waddill v. Anchor Hocking, Inc., 27 P.3d 1092

(Or. Ct. App. 2001), pet. for cert. pending,

Pr en er ee rare 10,11, 12

White v. Ford Motor Co., 312 F.3d 998 (9th Cir. 2002) .. 18

Williams v. Philip Morris Inc., 48 P.3d 824

Pee a EE 6 fv bak KR OH ee eas oes 11,19

Statutes, and Rules:

49 U'S.C.A. § 30165(a) (West 1997) ................. 16

a ee eae ak ae l

Miscellaneous:

Richard C. Ausness, Retribution and Deterrence:

The Role of Punitive Damages in Products

Liability Litigation, 74 KY.L.J. 1 (1985)............ 8

Andrew C. Clausen & Annette M. Carwie,

Problems Applying the Life of Georgia

v. Johnson Case in the Liability Setting:

Where Do We Go With Punitive Damages

After BMW v. Gore?, 58 ALA. LAW. 46 (1997) ...... 8

Thomas B. Colby, Beyond the Multiple Punishment

Problem: Punitive Damages as Punishment

for Individual, Private Wrongs,

SY DEE, 1. TRV. Fe GE) oc keke et a eeceewee 18

Vv

TABLE OF AUTHORITIES — Continued

Page(s)

David G. Owen, Problems in Assessing Punitive

Damages Against Manufacturers of Defective

Products, 49 U. CHI. L. REV. 1 (1982) ............ 6,9

A. Mitchell Polinsky & Steven Shavell, Punitive

Damages: An Economic Analysis,

111 HARV. L. REV. 869 (1998) .................. 13

George L. Priest, Punitive Damages Reform:

The Case of Alabama, 56 LA. L. REV. 825 (1996) .... 15

Cass R. Sunstein et al., Assessing Punitive Damages

(With Notes on Cognition and Valuation in Law),

507 VALE LS. 2071 (199) . ww ccc cceesccsveucn 15

Aaron D. Twerski, Punitive Damages: Through

the Five Prisms, 39 VILL. L. REV. 353 (1994) ........ 8

W. Kip Viscusi, Corporate Risk Analysis: A

Reckless Act?, 52 STAN. L. REV. 547 (2000) ... 5, 6, 8,9

W. Kip Viscusi, Jurors, Judges, and the Mistreatment

of Risk by the Courts, 30 J. LEGAL STUD. 107

Ot PE eee Or re EE eS 5

INTEREST OF THE AMICI CURIAE

Amici Curiae are organizations that together represent

business companies ‘nd associations of businesses engaged in

all forms of manufacturing and other commerce throughout the

United States and around the world. In this era of expansive

tort litigation against corporations and even entire industries,

amici’s members have been forced to defend against products

liability lawsuits seeking millions and sometimes billions of

dollars in jury-imposed punitive damages. It has been amici’s

experience that, in such cases, the lower courts routinely have

been misapplying and, indeed, effectively nullifying the three

excessiveness guideposts identified by this Court in BMW of

North America, Inc. v. Gore, 517 U.S. 559 (1996). Amici are

uniformly of the view that the lower courts need guidance from

this Court as to the proper application of the BMW guideposts

in the products liability context and have joined together in both

this case and Ford Motor Co. v. Estate of Tommy Smith, No.

02-1096, to urge the Court to grant plenary review in one or

both of these cases to provide that needed guidance.’

INTRODUCTION AND SUMMARY OF ARGUMENT

Over the last dozen years, this Court has addressed (or will

address) excessiveness challenges to punitive awards in five

cases — Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1 (1991);

TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443 (1993);

BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (1996); Cooper

Indus. Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 441-

' Letters of consent from both parties have been filed with the Clerk

of the Court. Pursuant to Rule 37.6, amici state that no counsel for

a party authored this brief in whole or in part, and that preparation

and submission of this brief was funded entirely by amicus curiae the

Product Liability Advisory Council, Inc. (“PLAC”). PLAC is a non-

profit association with 131 corporate members who seek to contribute

to the improvement and reform of the law governing the liability of

product manufacturers. A complete list of PLAC’s members is

attached hereto as Appendix A.

2

443 (2001); State Farm Mut. Auto. Ins. Co. v. Campbell, No.

01-1289 (argued Dec. 11, 2002).

Significantly, none of these cases involved a products

liability claim.? As a consequence, lower courts have found a

lack of clear guidance as to the proper application of the BMW

guideposts in the products liability context. Left to their own

devices, they have often misapplied or, like the court below,

refused outright to apply the guideposts, essentially on the

ground that death (or serious personal injury) is different.

Ironically, there is no context in which it is more important to

ensure that punitive damages are not arbitrary and do not

exceed society’s interest in rational deterrence than this one.

Products are the lifeblood of the American economy.

Multimillion dollar punitive awards rendered against

manufacturers who have made good-faith design decisions and

whose products meet and even exceed federal safety standards

not only deprive product manufacturers of property without fair

notice but have the inevitable effect of chilling innovation,

encouraging excessive precautions, and increasing the price of

products beyond the means of many potential purchasers.

Amici believe, therefore, that it is vitally important for the .

Court to grant plenary review in a products liability case to

supply needed guidance as to the proper excessiveness inquiry

in this context. We further submit that this case and Ford v.

Smith are ideal for providing this needed guidance. Together,

these two cases provide the Court with the opportunity to

explain (i) the criteria that should be considered in determining

when a product manufacturer’s decision to employ a design

later found by a jury to be defective should be treated as

sufficiently reprehensible to warrant “a punitive sanction that

is tantamount to a severe criminal penalty” (BMW, 517 U.S. at

585); (ii) the role of the ratio guidepost when compensatory

? The Court has used a product liability case to address the

procedural requirements for administration of punitive damages. See

Honda Motor Co. v. Oberg, 512 U.S. 415 (1994).

3

damages are high, the probability of escaping liability for

tortious conduct is low, and the compensatory damages exceed

the defendant’s “gain” from choosing the design at issue over

the supposedly safer one proposed by the plaintiff; (iii) the

proper application of the comparative fines guidepost when the

plaintiff seeks to analogize the defendant’s tort to criminal

conduct; and (iv) the significance of the fact that, when the

conduct involves the design of a mass-produced product, other

juries may either vindicate the defendant or seek to punish it for

the same design decision. As we discuss below, each of these

four issues recurs in products liability litigation and is well

illustrated in the two Ford cases that are now before the Court.

ARGUMENT

Only seven years ago, this Court observed that a $2 million

punitive damages award is “tantamount to a severe criminal

penalty” and suggested that punishment of this magnitude must

be reserved for “egregious” misconduct. BMW, 517 US. at

585. While many courts have taken thai admonition to heart in

cases that have not involved personal injury by ordering

remittiturs of large punitive awards to mere fractions of

themselves, we are aware of no post-BMW products liability

case in which a reviewing court has ordered a remittitur of a

punitive award to less than seven figures. In other words, in

every post-BMW products liability case involving a sustainable

finding of punitive liability, the reviewing court concluded that

the defendant warranted a punishment “tantamount to a severe

criminal penalty.” These penalties have ranged from a $1.09

billion dollar punitive award (reduced from $4.8 billion) in a

case alleging that General Motors defectively designed its gas

tanks by placing them behind instead of above the rear axle to

the $290 million penalty in this case to a $79.5 million penalty

in an individual smoker’s tobacco case to the $15 million

punishment in Ford v. Smith to a $1 million penalty in the case

of a fishbowl that shattered while being carried. It defies

common sense, however, to suggest that every products liability

case in which there is sufficient evidence to support some

4

amount of punitive damages is one in which a penalty of

millions or hundreds of millions of dollars is warranted. See

BMW, 517 U.S. at 580 (“That conduct is _ sufficiently

reprehensible to give rise to tort liability, and even a modest

award of exemplary damages does not establish the high degree

of culpability that warrants a substantial punitive damages

award.”). As this case and Ford v. Smith both well illustrate,

the lower courts are routinely misapplying the BMW guideposts

to uphold seven, eight, and nine-digit punitive awards precisely

because the cases involve products liability. The two cases are

thus excellent vehicles for providing the lower courts with

much- needed guidance as to the proper excessiveness analysis

in the products liability context.

A. The Lower Courts Are Systematically Misapplying The

First Guidepost By Treating The Marketing Of

Products Entailing Risk Of Personal Injury As

Reprehensible Per Se.

“Perhaps the most important indicium of the reasonableness

of a punitive damages award” (BMW, 517 U.S. at 575), the

degree of reprehensibility of the defendant’s conduct is also the

guidepost most susceptible to misapplication in products

liability actions. The linchpin of this guidepost is “the accepted

view that some wrongs are more blameworthy than others.”

Ibid. This guidepost thus requires reviewing courts to locate

the conduct on a spectrum of reprehensibility, with a “high

degree of culpability” necessary for “a substantial punitive

damages award” (id. at 580). Reviewing courts have gone

astray by treating products liability as a category that uniformly

resides at the high end of the reprehensibility spectrum —

without any serious effort at intra-category comparison —

merely because such cases tend to involve serious personal

injury.

Unlike many other classes of torts, products liability claims

by definition involve physical injuries or death. Looking

through the virtually inescapable lens of hindsight bias at a

5

seriously injured plaintiff on the one hand and a large corporate

defendant that balanced safety against other benefits such as

product usefulness, attractiveness, and cost to consumers on the

other, juries are easily provoked to a state of outrage that leads

them to award astounding sums in punitive damages

irrespective of the true culpability of the defendant’s conduct or

the need for punishment and deterrence. As Judge Easterbrook

has explained in a case involving the design of the emergency

stop button on an escalator:

The ex post perspective of litigation exerts a hydraulic

force that distorts judgment. Engineers design

[complex products] to minimize the sum of

construction, operation, and injury costs. * * *

Come the lawsuit, however, the passenger injured

by a stop presents himself as a person, not a probability.

Jurors see today’s injury; persons who would be injured

if buttons were harder to find and use are invisible.

Although witnesses may talk about them, they are

spectral figures, insubstantial compared to the injured

plaintiff, who appears in the flesh. * * * [N]o matter

_how conscientious jurors may be, there is a bias in the

system. Ex post claims are overvalued and technical

arguments discounted in the process of litigation. And

the claims of crippled neighbors receive more weight

than do potential injuries to be felt by passengers (and

stockholders) in other states.

Carroll v. Otis Elevator Co., 896 F.2d 210, 215-16 (7th Cir.

1990) (Easterbrook, J., concurring) (citation omitted); see also

W. Kip Viscusi, Jurors, Judges, and the Mistreatment of Risk

by the Courts, 30 J. LEGAL STuD. 107, 116 (2001)

(corporations’ “superior ex ante risk judgments may be

outweighed by the ex post reality of the accident victim”); W.

Kip Viscusi, Corporate Risk Analysis: A Reckless Act?, 52

STAN. L. REV. 547, 552 (2000) (mock juror study revealed that

even proper corporate balancing of risks against costs leads to

6

inflated punitive damages awards). Such hindsight bias is

compounded substantially when the plaintiff is able to show

that the defendant employed cost-benefit analysis in selecting

one particular design rather than another — that the defendant

“traded lives for dollars.” See David G. Owen, Problems in

Assessing Punitive Damages Against Manufacturers of

Defective Products, 49 U. CHI. L. REV. 1, 11 (1982)).’

As this Court has recognized, appellate review can play a

vital role in filtering out such bias and helping to ensure that

punitive awards comport with the requirements of due process.

See Haslip, 499 U.S. at 21 (“appellate review makes certain

that the punitive damages are reasonable in their amount and

rational in light of their purpose to punish what has occurred

and to deter its repetition”). But when appellate courts

evaluating reprehensibility make precisely the same errors that

infected the underlying jury verdicts, such review does nothing

to ameliorate the constitutional violations.’

The present case is illustrative. Nomuinally applying the

reprehensibility guidepost, the court below found Ford’s

> Tronically, the corporate cost-benefit analysis that drives juries to

award massive punitive damages is the very same risk-utility test that

jurors are instructed to apply in making the underlying liability

determination. See Soule v. General Motors Corp., 882 P.2d 298,

311 (Cal. 1994) (jury must evaluate allegedly defective automobile

design by balancing and weighing “such competing design

considerations as risk, benefit, feasibility, and cost”).

* The problem is exacerbated when, as in this case, the appellate

court bases its decision on factual findings that the jury never even

made. Like petitioner, we believe that review is warranted not only

to address the proper application of the BMW guideposts in the

products liability context, but also to clarify that, when conducting

the de novo review required by Cooper Industries, courts should

defer only to factual findings actually made by the jury, not to every

inference that could conceivably be drawn from the evidence, when

there is no reason to infer that the jury actually drew such inferences.

7

conduct to be “grossly reprehensible,” stating:

While defendant did not intend the death to the victims,

the award here cannot be compared to cases involving

a business fraud resulting only in economic harm.

Further, the malicious conduct involved mass

production and marketing of the dangerous vehicle

purely for defendant’s economic betterment. Unlike

BMW, where the defendant’s conduct was not even

unlawful in all states and invoived only economic

_ consequences, the conduct here placed tens of

thousands of lives at risk and actually claimed three

such lives in the present case.

Pet. App. 38a (internal quotation marks and citations omitted).°

In other words, the court below held that Ford’s conduct

was at the extreme high end of the reprehensibility spectrum

merely because (a) Ford knowingly (i.e., intentionally) mass

produced and sold a product that, although useful and highly

desirable to consumers, also entailed some risk of harm, and (b)

an accident involving that product resulted in the deaths of

three people. In so doing, the court turned on its head the first

principle of products liability law — that because most

products entail some risk of harm, the task of a responsible

manufacturer is to strike a reasonable balance between safety

and a host of other considerations, including “marketability,

> Indeed, in responding to Ford’s argument that there was

insufficient evidence to support a finding of “malicious or

despicable” conduct, the court was even more forthright, holding:

[Ford’s argument] ignores the fact that the design and

production of the vehicle was the despicable conduct * * *.

Such conduct could kill people. The question is not whether the

conduct, if it occurred, was despicable, the question is whether

there is sufficient evidence from which a rational trier of fact

could find that the knowing conduct occurred.

Pet. App. 25a-26a.

8

appearance, ease of operation, durability, freedom from

maintenance or repair, ease of manufacture, and economics of

materials and labor.” Richard C. Ausness, Retribution and

Deterrence: The Role of Punitive Damages in Products

Liability Litigation, 74 Ky. L.J. 1, 88-89 (1985). Thus, the

same activities that are the hallmark of good corporate behavior

and should generally insulate the defendant from all liability

(see note 3, supra) — or, at most, should be a basis for

compensatory damages only — were treated as an aggravating

factor supporting a jaw-dropping nine-figure punitive exaction.°

By conflating intentional conduct — i.e., cost-benefit

analysis in design decisions and the marketing of products —

with intentional harm — i.e., “affirmative acts of misconduct”

(BMW, 517 U.S. at 576) — the court below deprived the

reprehensibility guidepost of any constraining force in the

products liability context. As one commentator has explained,

design defect cases inevitably involve “‘conscious design

choice[s]’ * * * implicat[ing] a manufacturer’s decisionmaking

process concerning risk-utility”; “[uJnlike the standard

negligence case of yesteryear, the modern products liability

case comes with ‘intent’ built in.” Aaron D. Twerski, Punitive

Damages: Through the Five Prisms, 39 VILL. L. REV. 353, 356

(1994).’ The consequence of equating complex design

° Cf. Andrew C. Clausen & Annette M. Carwie, Problems Applying

the Life of Georgia v. Johnson Case in the Liability Setting: Where

Do We Go With Punitive Damages After BMW v. Gore?, 58 ALA.

LAw. 46, 49 (1997) (“Regardless of how high the manufacturer sets

the design safety standard, when an accident does occur, the

plaintiffs lawyer will have an expert to testify the product could have

been made safer, and the injury prevented, if the manufacturer had

just been willing to spend some additional money. As a result, an

argument for reprehensibility can be supported in virtually every

case.”’).

” See also, e.g., Viscusi, Corporate Risk Analysis, supra, 52 STAN.

L. REV. at 566 (“undertaking [cost-benefit] analysis and making a

9

decisions for inherently dangerous products like automobiles

with intentionally harming the injured plaintiff is that “every

actor could be held strictly liable [under that standard] for

punitive, in addition to compensatory, damages for any

consequence to any person that was contemplated in advance

of any course of action.” Owen, supra, 49 U. CHI. L. REV. at

22; see also id. at 23 (“The decision to market a product in a

certain condition with certain risks may have been a good one

because the expected benefits were great, and the product may

not have been legally defective at all, yet under this standard

the manufacturer remains subject to punishment for

‘disregarding’ the lesser risks by proceeding to sell the product

with any danger whatsoever”).

When that distorted view of intentionality is imported into

the reprehensibility analysis, any attempt by a manufacturer to

“think about risks in a systematic manner and to undertake

[cost-benefit] calculations to ensure that there is appropriate

risk balancing that is sufficiently protective” (Viscusi,

Corporate Risk Analysis, supra, 52 STAN. L. REV. at 5 50) will

be seen as the egregious misconduct justifying severe

punishment under BMW. And the resulting sky’s-the-limit

punitive awards will deter the socially responsible commercial

behavior that products liability law was designed to foster.

Unfortunately, the court of appeal’s simpleminded equation

of knowledge that a product can cause death or physical injury

with high reprehensibility — while sloughing off such objective

indicia of low reprehensibility as compliance with federal

safety standards and consistency with industry customs and

conscious [and correct] decision to forego the improvement will

subject a company to the charge that it ‘deliberately intended to injure

the plaintiff”); Owen, supra, 49 U. CHI. L. REV. at 26 (“a

manufacturer’s choices involving necessary safety trade-offs and

Statistically inevitable risks always can be viewed in a sense as

intentional wrongs to consumers hurt by such products, as safe on

balance as such products may actually be”) (footnote omitted).

10

practice — is not unique.* To the contrary, we are unaware of

a single published post-BMW opinion concluding that a

manufacturer’s conduct was not sufficiently egregious to

warrant the penalty imposed. This Court’s guidance as to the

proper application of the reprehensibility guidepost in the

products liability context is therefore urgently needed.

° See, e.g., Clark v. Chrysler Corp., 310 F.3d 461, 482 (6th Cir.

2002) (““Chrysler’s conduct resulted in the loss of life, which clearly

evidences a greater disregard for the rights and safety of others than

failure to reveal that a car has been repainted.”); Sand Hill Energy,

Inc. v. Ford Motor Co., 83 S.W.3d 483, 494 (Ky. 2002) (rejecting

arguments that truck transmission conformed to industry standards,

was never subjected to recall, and involved “good faith judgment

call” as to reasonableness of design, and concluding that conduct was

reprehensible because “by Ford’s own engineers and through many

consumers, some of whom were maimed or killed, Ford was

forcefully informed that its transmission was dangerous”), pet. for

cert. pending sub nom. Ford Motor Co. v. Estate of Tommy Smith,

No. 02-1096; Cooper Tire & Rubber Co. v. Tuckier, 826 So. 2d 679,

690 (Miss.) (holding that, although only 1 out of 66,000 tires was

defective, “[w]hen this one defective tire results in a person’s death,

there is sufficient evidence to establish” reprehensibility), cert.

denied, 123 S. Ct. 97 (2002); Waddill v. Anchor Hocking, Inc., 27

P.3d 1092, 1098 (Or. Ct. App. 2001) (“conscious indifference to the

possibility that the fishbowl] could injure someone during ordinary

use and the failure to warn of that possibility * * * implies a wilful

disregard of a known risk to consumer safety”), pet. for cert. pending,

No. 02-370; North Am. Refractory Co. v. Easter, 988 S.W.2d 904,

919 (Tex. Ct. App. 1999) (reprehensibility guidepost satisfied even

though defendant “believed that its products were safe,” because its

product “endangered the health and safety of at least three

individuals”).

11

B. The Lower Courts Are Systematically Misapplying The

Second Guidepost’ By Viewing High Compensatory

Damages As Automatically Justifying High Ratios And

Large Punitive Awards.

In BMW, this Court quite properly rejected a “categorical

approach” to the ratio guidepost, reminding bench and bar that

it is impossible to “draw a mathematical bright line between the

constitutionally acceptable and the constitutionally

unacceptable that would fit every case.” 517 U.S. at 582-583.

Unfortunately, many lower courts have construed this

pronouncement to be an invitation to disregard the ratio

guidepost rather than to build an analytical framework through

case-by-case development. Nowhere is this problem more

evident than in the products liability context. Not only do some

courts employ a mathematical bright line rule that single-digit

ratios are per se indicative of a constitutionally permissible

punishment — no matter how large the compensatory damages

may be — but others have simply cast aside the reasonable

relationship requirement on the ground that the injuries were

severe.’ Because products liability actions by definition

” See, e.g., Burton v. R.J. Reynolds Tobacco Co., 205 F. Supp. 2d

1253, 1263 (D. Kan. 2002) (allowing $15 million in punitive

damages, or 76.4 times compensatory damages, on theory that

personal injuries warrant greater ratios than economic injuries); Sand

Hill Energy, 83 S.W.3d at 494 (affirming punitive damages of 5

times multimillion dollar compensatory award because “[t]he harm

to Tommy Smith was death. The harm to his estate was the total

destruction of his power to labor and earn money. It would be

impossible to overstate the degree of harm.”); Williams v. Philip

Morris Inc., 48 P.3d 824, 840-842 (Or. Ct. App. 2002) (affirming

punitive damages award of $79.5 million, or 97 times compensatory

damages, because “the jury could have found that defendant’s actions

resulted in Williams’ death; based on that finding, it could have

believed, in light of defendant’s profits, that only a large award would

be proportionate to the harm that defendant caused”); Waddill, 27

P.3d at 1099 (“It is common knowledge that broken glass is

dangerous and can cause serious injuries. We cannot say that it is

EE

12

involve death or physical injury, this circular approach renders

the ratio guidepost a nullity in such cases.

Once again, the present case is illustrative. The court below

expressly reasoned that “the importance of the [ratio] factor is

somewhat reduced” and affirmed the $290 million punitive

exaction notwithstanding the 63:1 ratio on the ground that the

multimillion dollar “wrongful death compensatory damages do

not fully reflect the harm to the victims.” Pet. App. 39a. In

other words, the court evaded the ratio guidepost by beginning

with an already large compensatory award and then positing

that, because people died, the compensatory damages

necessarily understate the actual harm to the plaintiffs — this

despite the fact that California imposes no cap on either

economic or non-economic damages.

Other courts, though not expressly jettisoning the ratio

guidepost entirely, have disregarded this Court’s statement in

BMM that there is no single ratio that fits all cases and instead

have reflexively assumed that, when the ratio is in the single —

or even double — digits, no further analysis is necessary to

conclude that the punitive award comports with due process.

In Smith, for example, the Kentucky Supreme Court apparently

felt that it had discharged its duty under BMW by reducing the

punitive award from a ratio of approximately 7:1 to 5:1. See

Sand Hill Energy, 83 S.W.3d at 496. It accordingly gave no

consideration to whether a 5:1 ratio that yields a $15 million

punitive exaction is indicative of excessiveness in view of such

factors as the absence of a financial motive for designing the

excessively disproportionate to punish a company that makes glass

products that can cause the degree of damage that plaintiff suffered

by an award that is no more than ten times the actual injury that its

actions caused.”); Ford Motor Co. v. Ammerman, 705 N.E.2d 539,

562 (Ind. Ct. App. 1999) (affirming ratio of 2.73:1 on $4 million

compensatory award and 18.25:1 on $400,000 compensatory award

because, “[u]nlike Gore the injuries suffered by the plaintiffs in this

case are physical, permanent, and severe”). -

13

transmission as Ford did, the fact that Ford’s design was

identical to those of most other automakers, the fact that

NHTSA repeatedly has found the design not to be defective,

and the fact that numerous juries have exonerated Ford of even

compensatory liability for the design. See Pet. for Cert. at 6-7,

Ford Motor Co. v. Estate of Tommy Smith, No. 02-1096.

This Court already has indicated that hi gh ratios like the one

in BMW weigh in favor of a finding of excessiveness when

damages are not small and the conduct, albeit an intentional

tort, is not egregious. It also has identified several

circumstances in which a high ratio of punitive to

compensatory damages may be justified: when “a particularly

egregious act has resulted in only a small amount of economic

damages”; when “the injury is hard to detect,” suggesting that

the defendant could have expected to escape liability for its

conduct and be underdeterred as a result; and when “the

monetary value of noneconomic harm might have been difficult

to determine,” prompting concern that the defendant has not

been made to internalize the full social costs of its conduct and

thus has been underdeterred. BMW, 517 U.S. at 582. See A.

Mitchell Polinsky & Steven Shavell, Punitive Damages: An

Economic Analysis, 111 HARV. L. REV. 869, 877-900 (1998)

(explicating economic theory of deterrence). The Court has

not, however, had the opportunity to fill in other boxes in the

matrix. Most notably, it has not addressed the situation

presented here and in other products liability cases in which the

harm is not intentional, the compensatory damages are

themselves in the seven figures and far exceed any rational (and

fairly apportioned) measure of the defendant’s “ill- gotten” gain

from its conduct, and there is no possibility that the harm would

go undetected.

The present case and Ford v. Smith together present this

Court with an ideal opportunity to provide further guidance

regarding proper application of the ratio guidepost in this

recurring context. Although the ratios in the two cases are

dramatically different — 63:1 and 5:1 — both cases afford the

Uitte...

14

Court the opportunity to expound on the circumstances in

which even a modest ratio may be indicative of an excessive

punishment. In both cases, the defendant concededly did not

act with malicious intent; in both cases, the source of the harm

was not difficult to detect, obviating any concern that the

defendant might escape liability for tortious conduct; in both

cases, the compensatory damages are largely noneconomic and

run into the millions of dollars, making it unlikely that the

award understated the injury; and in both cases, the

compensatory damages far outstrip the amount the defendant

could be said to have “gained” by virtue of choosing the design

at issue over the one proffered by the plaintiffs’ expert.

In this case for example, the evidence was that the cost of

including a roll bar in 1978 and 1979 Broncos would have been

$10 to $12 per vehicle. When multiplied by the total number

of Broncos sold without a roll bar, the amount that Ford can be

said to have saved by choosing the design that it did rather than

the alternative design proposed by plaintiffs’ expert is in the

range of $1,485,000 to $1,782,000 — a fraction of the $6.2

million in compensatory damages that plaintiffs received, even

without any additional punitive award.'® In Ford v. Smith, it is

a matter of common sense that Ford saved nothing by choosing

to locate the point of hydraulic release where it did.

It is a matter of common sense and wide judicial and

scholarly recognition that, in such circumstances, the

compensatory damages ordinarily suffice to achieve appropriate

'° Although for purposes of illustrating our point, we have calculated

the “gain” by reference to the total number of 1978 and 1979 Broncos

sold nationwide, we do not mean to suggest that it would be

permissible for a jury in an individual case, applying the law of a

single state, to seek to remove the entire gain from the nationwide

sale of a product. Not only would that violate the prohibition against

extraterritorial punishment articulated in BMW; it also would fail to

account for the exoneration and excessive aggregate punishment

problems discussed in Section D, infra.

15

deterrence.'' It follows that even a 1:1 ratio may therefore

reflect that the punitive award is excessive in relation to the

State’s interest in deterrence. Self-evident though these

concepts may seem, however, not a single reviewing court

confronted with a punitive award in the products liability

context has even contemplated the possibility that the factors

present in such a case may mandate that a lower ratio be

regarded as the dividing line between a permissible and an

unconstitutional punishment. Review is warranted to provide

'' See, e.g., Memphis Cmty. Sch. Dist. v. Stachura, 477 U.S. 299, 307

(1986) (“[dJeterrence * * * operates through the mechanism of

damages that are compensatory”) (emphasis omitted); San Diego

Bldg. Trades Council v. Garmon, 359 U.S. 236, 247 (1959) (“The

obligation to pay compensation can be, indeed is designed to be, a

potent method of governing conduct and controlling policy.”);

Maiorino v. Schering-Plough Corp., 695 A.2d 353, 370 (N.J. Super:

Ct. App. Div. 1997) (concluding that “the large compensatory

damage award to Maiorino of $435,000 by itself provided significant

deterrence even to an employer as large as Schering” and holding

therefore that “[aJn $8,000,000 punitive damage award was not

necessary to punish Schering or to deter it and other employers from

engaging in the type of conduct found to be discriminatory by the

jury”); Cass R. Sunstein et al., Assessing Punitive Damages (With

Notes on Cognition and Valuation in Law), 107 YALE L.J. 2071,

2082 (1998) (“Compensatory damages work well for deterrence if

and only if it is easy to identify the injurer, bring suit, and collect full

damages. Under these conditions, the wrongdoer faces liability for

the full social costs of the wrong. Thus there is no need for additional

damages if the probability of detection and successful suit for

compensation is 100%.”); George L. Priest, Punitive Damages

Reform: The Case of Alabama, 56 La. L. Rev. 825, 831 (1996)

(“[T]he strongest theory in the modern tort academy is that full

compensatory damages generate exactly the optimal level of

deterrence of accidents — not too little and not too much. For

purposes of deterrence or accident prevention, there is no need for

punitive damages of any dimension, not to mention unlimited

punitive damages, given the availability of full compensatory

damages.”) (footnote omitted).

16

needed guidance with respect to this guidepost.

C. The Lower Courts Need Guidance As To The Proper

Application Of The Third Guidepost When The

Plaintiff Seeks To Analogize The Defendant’s Design

Decision To A Crime Punishable By Imprisonment.

The decision below also is emblematic of a recurring

misapplication of the third BMW guidepost, which calls for a

comparison of the punitive award with “civil or criminal

penalties that could be imposed for comparable misconduct”

(517 U.S. at 583). Eschewing the congressionally established

fine for marketing defective vehicles,'* the court of appeal

equated Ford’s design decision with “involuntary

manslaughter” (Pet. App. 35a), and reasoned that the third

guidepost was therefore entirely “inapplicable” (id. at 39a). It

explained: “Such a comparison [with civil fines] is appropriate

when the conduct to be punished cannot result in imprisonment

if committed by an individual, but is inappropriate when the

malicious conduct could result in substantial imprisonment if

committed by an individual instead of a corporation.” Jbid.

Other courts likewise have used this rationale to nullify the

third guidepost or to invoke it affirmatively as justification for

multimillion dollar punishments."

'2 In 1978 and 1979, the model years in question, the maximum fine

for selling an entire fleet of defective vehicles nationwide was

$800,000. 49 U.S.C.A. § 30165(a) (West 1997).

'3 See, e.g., Bielicki v. Terminix Int'l Co., 225 F.3d 1159, 1166 (10th

Cir. 2000) (refusing to give weight to $5,000 civil penalty under

FIFRA and explaining that, “[a]lthough the punitive damages award

is exceptional when compared only to the applicable fines, the

authorization of imprisonment in the criminal context can justify a

higher award”); Campbell yv—State Farm Mut. Auto. Ins. Co., 2001

WL 1246676, at *17 (Utah Oct. 19, 2001) (disregarding applicable

fines for unfair insurance practices in part because “State Farm’s

officers could be imprisoned” for those practices), cert. granted, 122

S. Ct. 2326 (2002); Cass v. Stephens, 2001 WL 28092, at *33 (Tex.

17

Because virtually any tort can be restated as a crime,

analysis of this sort would remove all limitations on punitive

damages in products liability actions, and, indeed, in any case

involving personal injuries. If Ford’s conduct here can be

equated with the crime of involuntary manslaughter, so can any

wrongful death case in which punitive damages are awarded.

A reviewing court could vitiate the constitutional guidelines

recognized in BMW in any personal injury case by equating the

conduct with battery or mayhem, crimes that also can carry

prison sentences. And any tort causing property damage could

be analogized to malicious mischief. Indeed, the same over-

generalizing logic could characterize the conduct in BMW as

criminal fraud — for which offenders can be imprisoned. By

this device alone, decisions like the one in this case render the

third BMW guidepost a dead letter. In the event the Court does

not reach this issue in State Farm, the present case is an ideal

vehicle for doing so.

D. The Lower Courts Need Guidance Regarding The

Proper Application Of The BMW Guideposts When The

Plaintiff Has Encouraged The Jury To Punish The

Defendant For The Effects Of Its Design Decision On

Individuals Who Are Not Before The Court.

Another feature of products liability cases that renders it

essential for this Court to give plenary consideration to such a

case is the fact that hundreds of thousands if not millions of

other people will have used or come into contact with the

product for which the plaintiff is seeking to impose punishment.

Indeed, the recitation of the number of other units on the market

or other people injured by the product is a routine feature of

closing arguments in such cases, as both the present case and

Ford v. Smith well illustrate. See Pet. for Cert. at 3-4, 25 n.12;

Pet. for Cert. at 5, 15-16, Ford Motor Co. v. Estate of Tommy

Ct. App. Jan. 11, 2001) (upholding $5 million and $2.5 million

punitive awards in oil and gas accounting case-in part because theft

of property is punishable by imprisonment).

18

Smith, No. 02-1096. But, with the encouragement of plaintiffs’

counsel, juries and reviewing courts consistently act as if the

case before them is the only one in which the defendant will be

or has been sued, while paradoxically assuming that the product

is injuring or is likely to injure multiple people, for which fact

the defendant should be severely punished.

This kind of approach presents twin problems of

constitutional magnitude. On the one hand, if a verdict that is

not limited to punishing for the injury caused to the particular

plaintiff is aberrational — either because the product has not in

fact injured anyone else or because the defendant has been

vindicated in the preponderance of other cases alleging the

same defect — it necessarily will overpunish the defendant in

violation of due process. In addition, to the extent it overrides

the determinations of juries in other states, such a verdict

violates the deeply embedded constitutional principle that states

are co-equal sovereigns. BMW, 517 U.S. at 571-573; see also

White v. Ford Motor Co., 312 F.3d 998, 1013-1020 (9th Cir.

2002). On the other hand, if other juries have in the past or

could in the future impose punitive damages against the

defendant for the same design, allowing the punishment to be

predicated on or sustained on the basis of statistics about the

number of units sold or the number of people injured is a recipe

for an excessive aggregate punishment that violates the

defendant’s due process rights."

'* For a more detailed treatment of these and related problems

associated with the propensity of courts to allow punishment to be

based on the fact that the defendant’s conduct may have affected

other individuals who are not before the court, see Brief for the

Chamber of Commerce of the United States of America as Amicus

Curiae in Support of Petitioner, State Farm Mutual Automobile

Insurance Co. v. Campbell, No. 01-1289 (argued Dec. 11,2002). For

a recent scholarly treatment of this subject, see Thomas B. Colby,

Beyond the Multiple Punishment Problem: Punitive Damages as

Punishment for Individual, Private Wrongs, 87 MINN. L. REV. 583

(2003) (arguing that there is no historical basis for — and the

19

Once again, the present case and Ford v. Smith are perfect

illustrations of these dual problems.'* In the present case, it is

undisputed that no other court or jury — in 25 years — has ever

found the design defect alleged here. See Pet. for Cert. at 4 n.2.

Yet plaintiffs sought and received a punishment that removed

the total profits from the sale of all 1978 and 1979 Broncos

three times over. \n upholding this enormous exaction, the

court of appeal took no account of the fact that the verdict

might have been an aberration; nor did it consider the

possibility that, if anyone else ever were to be injured as a

result of the roof design, that person might be entitled to his or

her own punitive damages award, presumably again calculated

with reference to the number of vehicles marketed with this

design.

In Smith, the record reflects that numerous other juries had

vindicated Ford in cases in which plaintiffs had claimed a

defect in the design of its transmission. See Pet. for Cert. at 7,

Constitution forbids — allowing juries to impose punitive damages

for injuries to individuals other than the plaintiff).

'° There are many other examples of cases in which courts

demonstrated no concern about the aberrational verdict and excessive

aggregate punishment problems. See, e.g., Williams, 48 P.3d at 839,

841 (reinstating $79.5 million punitive award in tobacco case in part

because it was “reasonably inferable from the evidence that

defendant’s products * * * caused a significant number of deaths each

year in Oregon during the pertinent time period,” while g ving no

weight to fact that other juries in both Oregon and elsewhere had

been and would continue to be asked to punish defendant for the

same conduct); Ammerman, 705 N.E.2d at 560-564 (upholding $13.8

million punitive award derived from amount it would have cost

defendant to retool its factories in order to remedy the defect,

notwithstanding fact that other juries had exonerated defendant);

Owens-Corning Fiberglas Corp. v. Ballard, 739 So. 2d 603, 607

(Fla. Dist. Ct. App. 1998) (giving no weight to fact that defendant

had 7,000 pending claims against it, in course of upholding $31

million punitive award), approved, 749 So. 2d 483 (Fla. 1999).

20

Ford Motor Co. v. Estate of Tommy Smith, No. 02-1096. In

addition, NHTSA, the expert federal agency, has repeatedly

declined to find the very defect upon which respondent’s

judgment rests. Jd. at 6-7, 23 n.9. In such circumstances, it is

the height of unfairness to allow a litigant in an individual case

to deprive Ford of its vindications by prevailing upon the jury

to punish it on behalf of all 200 people who plaintiff alleged

were killed as a result of Ford’s design choice.

The consequence of allowing any one jury that power is to

ensure that, sooner or later, every manufacturer of any product

that is involved in a non-negligible number of injuries will be

subjected to at least one and maybe several enormous punitive

exactions — even if, as in this case, it appears that no other

person has ever alleged the defect found by the jury or, as in

Smith, the vast majority of juries have concluded not only that

the defendant did not act with an egregious mental state but that

the product was not defective at all. In other words, a run-away

jury in a single case could arrogate to itself the power to make

a once-and-for-all determination that a product should never

have been placed on the market — thus wiping out all of the

other jury verdicts and regulatory findings exonerating the

defendant. Review is warranted to provide the lower courts

with needed guidance regarding this important, recurring issue

in products liability cases.

CONCLUSION

The petition for certiorari should be granted.

Respectfully submitted.

ANDREW L. FREY

EVAN M. TAGER

Counsel of Record

RICHARD B. KATSKEE

Mayer, Brown, Rowe & Maw

1909 K Street, NW

Washington, DC 20006

(202) 263-3000

APRIL 2003

APPENDIX

la

APPENDIX A

CORPORATE MEMBERS OF THE PRODUCT

LIABILITY ADVISORY COUNCIL, INC.

3M

Allegiance Healthcare Corporation

Altec Industries

Altria Group, Inc.

American Household, Inc.

American Suzuki Motor Corporation

Andersen Corporation

Anheuser-Busch Companies

Ansell Healthcare, Inc.

Appleton Papers, Inc.

Astec Industries

Aventis Pharmaceuticals

BASF Corporation

Baxter International, Inc.

Bayer Corporation

Beretta U.S.A. Corp.

BIC Corporation

Biro Manufacturing Company, Inc.

Black & Decker (U.S.) Inc.

BMW of North America, LLC

Boeing Company

Bombardier Recreational Products

BP Amoco Corporation

Bridgestone/Firestone, Inc.

Briggs & Stratton Corporation

Bristol-Meyers Squibb Company

Brown and Williamson Tobacco >

Brown-Forman Corporation

Caterpillar Inc.

CCA Industries, Inc.

Centerpulse USA Inc.

Chevron Corporation

2a

Compaq

Continental Tire North America, Inc.

Cooper Tire and Rubber Company

Coors Brewing Company

Crown Equipment Corporation

DaimlerChrysler Corporation

Dana Corporation

Deere & Company

Delphi Corporation

Dorel Juvenile Group, Inc.

E & J Gallo Winery

E.I. DuPont de Nemours and Company

Eaton Corporation

Eli Lilly and Company

Emerson Electric Co.

Engineered Controls International, Inc.

Estee Lauder Companies

ExxonMobil Corporation

FMC Corporation

Ford Motor Company

Freightliner LLC

General Electric Company

General Motors Corporation

Georgia-Pacific Corporation

GlaxoSmithKline

GLOCK, Inc.

Great Dane Limited Partnership

Guidant Corporation

Harley-Davidson Motor Company

Harsco Corporation

Honda North America, Inc.

Hyundai Motor America

ICON Health & Fitness, Inc.

International Truck and Engine Corporation

Isuzu Motors America, Inc.

Johnson & Johnson

Johnson Controls, Inc.

SOR NS MER Sine aes POMS CORRS He oat Sabie a

RENE ESTAS IEE a pee Na ni

3a

Joy Global, Inc.

Kawasaki Motors Corp., U.S.A.

Kia Motors America, Inc.

Kolcraft Enterprises, Inc.

Kraft Foods North America, Inc.

Lincoln Electric Company

Masco Corporation

Mazda (North America), Inc.

McNeilus Truck and Manufacturing, Inc.

Medtronic, Inc.

Mercedes-Benz of North America, Inc.

Michelin North America, Inc.

Miller Brewing Company

Mitsubishi Motors North America, Inc.

Niro Inc.

Nissan North America, Inc.

Novartis Pharmaceuticals Corporation

PACCAR Inc.

Panasonic

Pentair, Inc.

Pfizer Inc.

Pharmacia Corporation

Polaris Industries, Inc.

Porsche Cars North America, Inc.

Purdue Pharma L.P.

Raymond Corporation

Raytheon Aircraft Company

Remington Arms Company, Inc.

Rheem Manufacturing

RJ Reynolds Tobacco Company

Schindler Elevator Corporation

SCM Group USA Inc.

Sears, Roebuck and Co.

Shcii Oil Company

Siemens Corporation

Smith & Nephew, Inc.

Snap-on Incorporated

4a

Sofamor Danek, Medtronic Inc.

Solutia Inc.

Sturm, Ruger & Company, Inc.

Subaru of America, Inc.

Synthes (U.S.A.)

Textron Inc.

The Dow Chemical Company \

The Goodyear Tire & Rubber Company

The Heil Company

The Procter & Gamble Company

The Sherwin-Williams Company

Thomas Built Buses, Inc.

Toro Company

Toshiba America Incorporated

Toyota Motor Sales, USA, Inc.

TRY, Inc.

UST (U.S. Tobacco)

Volkswagen of America, Inc.

Volvo Cars of North America, Inc.

Vulcan Materials Company

Water Bonnet Manufacturing, Inc.

Whirlpool Corporation

Wilbur-Ellis Company

Wyeth

Yamaha Motor Corporation, U.S.A.

Zimmer, Inc.

(This list is current as of March 24, 2003)