# Reply Brief — Ford Motor Company v. Buell-Wilson, 127 S. Ct. 2250 (2007) (No. 06-1068)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Reply Brief
- **Published:** January 1, 2007

## Text

No. 06-1068

IN THE

Supreme Court of the United States

FORD MOTOR COMPANY,
Petitioner,
Vv.
BENETTA BUELL-WILSON, ET AL.
Respondents.

On Petition For A Writ Of Certiorari
To The California Court Of Appeal

REPLY BRIEF FOR PETITIONER

THEODORE B. OLSON THEODORE J. BOUTROUS, JR.
Counsel of Record WILLIAM E. THOMSON
GIBSON, DUNN & CRUTCHER LLP EILEEN M. AHERN
1050 Connecticut Avenue, NW GIBSON, DUNN & CRUTCHER LLP
Washington, DC 20036 333 South Grand Avenue
(202) 955-8500 Los Angeles, CA 90071
(213) 229-7000
DAVID G. LEITCH

ROBERT W. POWELL JOHN M. THOMAS

MICHAEL J. O’REILLY BRYAN CAVE LLP

FORD MOTOR COMPANY 161 N. Clark é
One American Road Chicago, IL 60601

Dearborn, MI 48126 (312) 602-5058

(313) 322-7453

Counsel for Petitioner Ford Motor Company

RULE 29.6 STATEMENT

The corporate disclosure statement in the petition for a
writ of certiorari remains accurate.

il
TABLE OF CONTENTS
Pages
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RRs MORRIE FAIR FECL LD INN, oes ccececcescerscsseesccevsenessoeneese l
A. Question 1—Vague Standards Governing
Punitive Damage Liability In Product
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B. Question 2—The Special Due Process
s Excessiveness Issues Posed By Product
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C. Question 3—Philip Morris Requires, At A
Minimum, Vacatur And Remand In This
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APPENDIX A: Excerpts of Ford’s Petition for Re-
view in the California Supreme Court dated Au-
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APPENDIX B: Excerpts of Ford’s Petition for Re-
hearing in the California court of appeal dated
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APPENDIX C: Excerpts of Ford’s Opening Brief in
the California court of appeal dated July 8, 2005........... 24a

APPENDIX D: Excerpts of Ford’s Reply brief in the
California court of appeal dated January 17, 2006......... Ala

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TABLE OF AUTHORITIES
‘i Page(s)

CASES
Beck v. Washington,

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

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Bouie v. City of Columbia,

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City of Chicago v. Morales

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Clark v. Chrysler Corp.,

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Dewey v. Des Moines,

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Henry v. City of Rock Hill, 3

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In re Exxon Valdez,

S72 FF SE Be rk Ces Be vevctintttind ssc ncaa 6,7
Johnson v. Ford Motor Co.,

So es SS Rie Ce Bictinitenisctauetnbecinioiadin > pena 8
Kentucky v. Stincer,

Se Wk FT iota ieaealanenie 6
Lawrence v. Chater,

FE NI PA whicdvtcsideisiniaiacemepentiacatiiaceliianeate ae
Pac. Mut. Life Ins. Co. v. Haslip,

FP SEB. BRINE wisiniicinceioascinassrcaitanilisaibicdepa a Reise iadiees 4,5

~People v. Snyder,

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People v. Wharton,

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Philip Morris USA v. Williams,

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Stanley v. Illinois,

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State Farm Mut. Auto. Ins. Co. v. Campbell, 538 3

Fe ED ciensecrhceincbnsinincersviechitiediiaacatiiains passim
Taylor v. Kentucky,

Pa Ae Me TU isin indicts casiaenninoenticibpluntodamieteriaetien 9
TXO Prod. Corp. v. Alliance Res. Corp.,

POP GAS C1999) oecetcessecansvsisossaseovencsventvicsnninencinenn 4,5

CONSTITUTIONAL PROVISIONS
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OTHER AUTHORITIES
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REPLY BRIEF FOR PETITIONER

This case presents important, recurring questions regard-
ing Due Process Clause restraints on punitive damages. Re-
spondents have virtually nothing to say to refute the certwor-
thiness of these issues, so they devote their opposition largely
to misstating and distorting the record and the applicable
court rules. But the record here could not be clearer: At
every level, Ford advanced due process challenges to both
liability for and the amount of punitive damages, and the
court of appeal’s decision contains detailed and express
analysis rejecting Ford’s arguments. These issues, therefore,
are not only preserved, but ripe for this Court’s resolution.

As Ford’s Supplemental Brief shows, Philip Morris USA
v. Williams, 127 8. Ct. 1057 (2007), strongly supports Ford’s
arguments on all three questions presented and, at the least,
requires vacatur and remand. Indeed, respondents’ lengthy,
belabored efforts to explain away Philip Morris confirm that
there is easily “a reasonable probability that the decision be-
low rests [on] premise[s] that the lower would reject if given
the opportunity for further consideration” in light of Philip
Morris. Lawrence v. Chater, 516 U.S. 163, 167 (1996).

A. Question 1—Vague Standards Governing Puni-
tive Damage Liability In Product Design Cases.

1. Respondents’ waiver arguments are utterly baseless.
Respondents concede that Ford expressly raised its as-
applied vagueness challenge to California’s punitive damage
liability standards in the court of appeal, Opp. 5, and that
court expressly decided it. Pet. App. 50a-Sla. Respondents
nonetheless assert that Ford “did not present it properly to the
California Supreme Court in its Petition For Review” and
“(t]he issue appears only in a footnote.” Opp. 5. But this is
manifestly false. Indeed, it was a principal theme of Ford’s
petition, which expressly raised it in the very first paragraph:

2

Unless reviewed and overturned, that decision will
render it irrelevant that a manufacturer’s design de-
cisions resulted in a product that complies with in-
dustry standards and custom, comports with relevant
federal safety standards and reasonable policy
judgments, and performs as well or better than com-
parable competing products. In place of these
knowable standards, the decision substitutes a vague
regime that will permit tens of millions of dollars of
punishments to be imposed if a jury deems a manu-
facturer’s conduct “despicable” on the strength of
nothing more than a finding that, as will almost al-
ways be the case, the product might possibly have
been made “safer” if more money had been spent in
making it. That is neither constitutional nor ra-
tional. Review is necessary to conform California’s
product liability and punitive damage law to reason,
common sense, and the United States Constitution.

Reply Appendix (“Reply App.”) 3a (emphasis added).

Ford’s petition expressly sought Supreme Court review
in part because the appellate court’s interpretation of Califor-
nia law was unconstitutional. Ford argued that the court be-
low had “held that juries are authorized to deem a manufac-
turer’s design decisions malicious, and impose severe pun-
ishment, even where undisputed, objective indicators... af-
firmatively refute malice as a matter of law. This ruling con-
tradicts ... due process. This issue is especially important
because punitive damages ‘pose an acute danger of arbitrary
deprivation of property.”” Reply App. 5a (quoting State
Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 417-18
(2003)). Further: “[{T]he Court of Appeal’s interpreta-
tion ... renders it unconstitutionally vague as applied in this
case, both because Ford did not have notice sufficient to tai-
lor its conduct to avoid punishment and because of the risk of
arbitrary and discriminatory enforcement.” Reply App. lla
n.2 (emphasis added) (citing, eg., City of Chicago v.

Morales, 527 U.S. 41, 56 (1999)). Thus, Ford easily satisfied
California’s rules, which merely require that an issue be
“fairly included” in those presented for review. !

2. Respondents’ other claims are equally misguided.
Respondents deny that the court of appeal held that objective
referents, such as industry custom, were “irrelevant” to puni-
tive damages, arguing that the decision allows juries to con-
sider them. Opp. 10-11. The court, however, not only held
that “compliance with industry . . . custom was irrelevant...
to punitive damages,” Pet. App. 23a, but also that “admission
of such evidence is reversible error.” Jd. 22a. More funda-
mentally, respondents seem to miss entirely the point that the
thrust of Ford’s argument is that California law improperly
permits juries to engage in standardless, subjective, and ad
hoc policy judgments that ignore all objective factors that
might otherwise give manufacturers “fair notice,” contrary to
State Farm and Philip Morris. See Pet. 11-18; Supp Br. 1-3;
see also AAM/NAM Br. 10-18; PLAC Br. 5-10.2

| The California Supreme Court has broad power to “decide any issues
that are raised or fairly included in the petition,” Cal.R.Ct. 8.516(b), and
applies this prudential criterion liberally. See People v. Snyder, 22 Cal.
4th 304, 310-11 (2000) (though not raised below, question whether, in
view of constitutional and statutory constraints, Legislature had power to
enact statute as interpreted below was “fairly included” in issue whether
lower court’s interpretation was correct). It may even~consider issues
“neither raised nor fairly included in the petition.” Cal.R.Ct. 8.516(b)(2).
Respondents’ reliance (Opp. 5) on cases like Beck v. Washington, 369
U.S. 541 (1962), is therefore wholly misplaced. See id. at 550-553 (issue
precluded where “unbroken line of precedent” showed state supreme
court “has unfailingly refused to consider constitutional attacks upon stat-
utes not made in the tral court” and petitioner failed to adhere to cate-
gorical appellate court rule requiring that errors “be definitely pointed out
in the ‘assignments of error’ in appellant’s brief’) (emphasis added).

- Respondents falsely claim Ford argued the relevance of objective
standards only “as a matter of California law.” Opp. 11 (original empha-
sis). Ford’s opening brief had an entire section showing that “if Califor-
nia law would allow punishment on this record, then the law is unconsti-
tutionally vague as applied.” Reply App. 33a-38a. -

4

Responden © argue that this case is not certworthy be-
cause Ford is making an “as applied,” rather than a facial
challenge. Opp. 11. But these egregious problems recur
regularly in product liability design cases and “there is no
other context in which it is more important to ensure that pu-
nitive damages are not applied arbitrarily.” PLAC Br. 3; see
also Chamber Br. 9 (“the American business community has
an acute interest in preventing the arbitrary imposition of pu-
nitive damages based on conduct that complies with reason-
able objective guideposts for appropriate behavior’).

Respondents also contend that, because Ford does not
challenge the jury’s award of compensatory liability, Ford
“has no standing” to show how California’s test for design
defect interacts with its punitive damage statute. Opp. 12.
But this makes no sense. Ford clearly has standing to chal-
lenge the application of such an amorphous and subjective
defect “standard” as a predicate for a $55 million punitive
damage award in the absence of other objective standards
that would allow Ford to avoid punishment. See Pet. 11-15.

Although respondents claim that there is no vagueness
problem here because Ford “knew” it could have made the
Explorer safer if it had spent more money, Opp. 12-13, that is
the very crux of the vagueness problem: “The unavoidable
reality is that manufacturers are always aware that. . . their
products could have been made even safer,” and thus “in
every products liability case[] a plaintiff will be able to offer
‘proof’” of this. AAM/NAM Br. 18 (original emphasis). If
this is all that is required for punitive damages, then “the law
effectively provides no guidance on how a manufacturer can
avoid such liability.” PLAC Br. 8; see also Chamber Br. 4-6.

Finally, ignoring the many vagueness decisions cited by
Ford, Pet. 10-11, 15-18, respondents assert that Pac. Mut.
Life Ins. Co. v. Haslip, 499 U.S. 1 (1991), and the plurality
opinion in TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S.
443 (1993), are “the relevant vagueness cases.” Opp. 13.

But while TXO fleetingly referred to a vagueness issue, 509
U.S. at 465-466, both it and Haslip addressed only the due
process challenges to the amount of punitive damages. See
id. at 463, 465-466; Haslip, 499 U.S. at 24 n.12.3

B. Question 2—The Special Due Process Excessive-
ness Issues Posed By Product Design Cases.

1. Respondents also make the specious claim that Ford
waived the due process excessiveness issue. Opp. 6-8. But
Ford, having argued for pages that the Due Process Clause
and California law prohibited the imposition of any punitive
damages because its conduct was objectively reasonable,
then declared that “[e]ven if liability for punitive damages
were not otherwise precluded, the $75,000,000 punitive
judgment would have to be set aside in its entirety as grossly
excessive [under] . . . the Due Process Clause.” Reply App.
39a (original emphasis). When respondents argued in re-
sponse that Ford’s conduct was highly reprehensible, Ford
replied: “[A]s discussed in detail above, Ford’s good faith
‘belief that its conduct was lawful was based on, among other
things, its compliance with federal safety standards and in-
dustry custom, and significantly lessens any reprehensibility.
See BMW of N. Am., Inc. v. Gore (1996) 517 U.S. 559, 565,
570-71, 577-78 (defendant’s reliance on other state statutes
authorizing the conduct at issue was reasonable and substan-
-tially-mitigated reprehensibility).” Reply App. 45a. And the
court of appeal analyzed the State Farm/Gore reprehensibil-

3 In fact, Haslip supports Ford by contrasting the more lenient due
process review applicable to the size of a penalty with the more searching
scrutiny used to address the imposition of liability in the first instance.
Id. And to the extent California’s statute on its face appears to provide a
stringent punitive damage standard, Opp. 14, the stark disjunction be-
tween the facial and as-applied standards increases the due process prob-
lem. See Bouie v. City of Columbia, 378 U.S. 347, 353 (1964) (a “poten-
tially greater deprivation of the right to fair notice ... where . . . a statute
precise on its face has been unforeseeably and retroactively expanded by
judicial construction, than in the typical ‘void for vagueness’ situation”).

6

ity guidepost in detail without giving any weight to the ob-
jective factors that Ford argued mitigated reprehensibility.
_ Pet. App. 54a-57a.4 This easily satisfies this Court’s
“pressed or passed upon” standard. See, e.g., Kentucky v.
Stincer, 482 U.S. 730, 745 n.18, 747 n.22 (1987).°

2. Respondents’ excursion into the “merits,” Opp. 15-
16, is misguided. They cannot dispute that this Court found
the issue of how the excessiveness guideposts apply in the
personal injury case to be certworthy—but did not resolve
it—in Philip Morris. This issue has confused lower courts,
which “treat[] all product-liability cases as if they fall on the”
high end of the reprehensibility spectrum merely because
they involve physical harm, the design decisions at issue are
‘intentional’ rather than ‘accidental,’ and the jury necessarily
found reckless disregard for safety as part of its threshold de-
cision to impose punitive liability.” PLAC Br. 11-12.

Similarly unavailing are respondents’ strenuous attempts
to distinguish Clark v. Chrysler Corp., 436 F.3d 594 (6th Cir.
2006), and Jn re Exxon Valdez, 472 F.3d 600 (9th Cir. 2006).
Opp. 16-18. These cases contrast starkly with the court of
appeal’s dismissive treatment of the objective factors. Pet.
23-27. Despite the severe injuries in Clark (death), the Sixth
Circuit found the existence of a reasonable disagreement to

4 Respondents assert that Ford’s discussion of the excessiveness issue
in its petition for review to the state-supreme court “never mentions the
exclusion” of “industry custom,” Opp. 7, but this also is false. Ford ex-
pressly argued that “the Court of Appeal failed to take into account the
multiple objective factors — such as industry standards and custom. . ..
Even if these factors do not completely bar punitive damages, they are
relevant to gauging . . . reprehensibility. . . .”). Reply App. 12a.

5 Respondents’ complaints that Ford has expanded its arguments be-
low are not only incorrect, but irrelevant. Dewey v. Des Moines, 173
U.S. 193, 197-198 (1899) (parties are entitled to “enlarge” upon argu-
ments made below and “are not confined here to the same arguments
which were advanced in the courts below upon a Federal question there
discussed”; see also Stanley v. Illinois, 405 U.S. 645, 658 & n.10 (1972).

7

be significant, militating against a finding of high reprehen-
sibility. 436 F.3d at 603. And /n re Exxon Valdez analyzed
the “intent” factor very differently from the court here, which
improperly conflated an intentional, lawful act (designing a
motor vehicle) with an intent to cause injury. Pet. App. 57a.

C. Question 3—Philip Morris Requires, At A Mini-
mum, Vacatur And Remand In This Case.

As Ford’s Supplemental Brief shows, this case, from
start to finish, was shot-through with improper invocations—
over Ford’s objections—of third-party harms as a basis for
punishing Ford. Supp. Br. 4-8. In addition to arguing waiver
yet again, respondents now sweepingly claim that “nothing in
Philip Morris supports Ford’s petition.” Opp. 19. Both
claims are, to put it bluntly, nonsense. Indeed, respondents’
opposition, which labors for almost 15 pages to address
Philip Morris, confirms that, at the very least, the California
courts should address that decision’s impact on this case in
the first instance. See Lawrence, 516 U.S. at 167.

1. Ford amply preserved its argument that permitting re-
liance on injuries to third parties not before the court violates
due process. Among other things, Ford moved in limine to
exclude the Broncoll evidence implicating third-party
harms, proposed relevant jury instructions, and moved to
preclude respondents’ improper arguments. See Supp. Br. 7-
10. And, as respondents concede, Ford complained in the
court of appeal “that Plaintiffs had asked the jury to punish it
for Bronco II injuries suffered by non-parties.” Opp. 8.

Respondents argue that “Ford raised Bronco IJ-related
jury arguments only in the part of its brief challenging the
use of Bronco II evidence as a matter of state law.” Opp. 8
(original emphasis). Respondents are plainly wrong. Ford

6 The record thus is much stronger than in Philip Morris, where “the
sole objection . . . preserved was to the trial court’s refusal to give defen-
dant’s requested charge.” 127 S. Ct. at 1068 (Ginsburg, J., dissenting).

8

expressly argued that the Bronco II evidence and argument
was improper “because due process forbids imposing puni-
tive damages against a defendant for conduct other than the
specific conduct that harmed the plaintiffs before the court.”
Reply App. 30a-31la (citing State Farm, 538 U.S. at 423).
And Ford specifically cited a California Supreme Court deci-
sion interpreting State Farm on this point, and argued that
Ford had impermissibly been directly punished for alleged
third-party harms. /d. at 31a n.4 (citing Johnson v. Ford Mo-
tor Co., 35 Cal. 4th 1191, 1206 n.6 (2005)); see also id. at
45a. In fact, Ford’s introduction to this section “under-
scored ... the serious due process implications of preventing
a defendant facing unprecedented punishment from present-
ing relevant evidence in its defense... and allowing irrele-_
vant and improper evidence to be used in support of such
punishment.” Reply App. 28a (citing, inter alia, State Farm,
538 U.S. at 423). This Court made precisely this point in
Philip Morris. 127 S. Ct. at 1063; see also Supp. Br. 6 n.1.

Respondents belatedly contend that Ford failed to pre-
serve this issue by not objecting to respondents’ improper
argument at trial. Opp. 8. But they did not make this argu-
ment below and the court of appeal rejected Ford’s claims on
the merits. Pet. App. 17a-20a. Respondents ignore Ford’s
motion in limine specifically seeking to bar such argumenis,
Supp. Br. 8, which preserved Ford’s objections. See People
v. Wharton, 53 Cal.3d 522, 549 n.3 (1991).7

Respondents assert that “the mass-marketing as repeated
misconduct, or indeed the imposition of punishment based in
any way on third-party injuries, is one of the few issues that
Ford’s 68-page Petition for Rehearing did not raise.” Opp.
10 (original emphasis). This, too, is false. Ford’s rehearing
petition expressly argued that the decision below “flatly vio-

7 Respondents cite no authority for their meritless claim that Ford’s
proposal of alternative instructions on third party harm waives a chal-
lenge to improper evidence and argument. Opp. 8, 28-29.

9

lates State Farm ... because the Court is punishing Ford for
its conduct as to third parties not before the Court and ‘hypo-
thetical claims’ of those third parties.” Reply App. 20a; see
also id. 2\a-22a.8 Thus, Ford’s third-party harm arguments
were pressed and passed upon below and properly preserved.
See Taylor v. Kentucky, 436 U.S. 478, 483 & n.10 (1978).

2. The volume and intensity of respondents’ efforts to
avoid the implications of Philip Morris itself demonstrates
that the Court should, at a minimum, grant, vacate, and re-
mand this case. There is plainly a “reasonable probability”
that the lower courts on remand would find that Philip Mor-
ris alters the result, Lawrence, 516 U.S. at 167.

Respondents urged the jury to punish Ford for alleged
harms to third parties in a manner virtually identical to that
which the Court rejected in Philip Morris. See Supp. Br. 6-7.
Indeed, respondents expressly concede that the “block-
quoted passage” in which they urged the jury to impose puni-
tive damages “does refer to the Bronco II having killed or
injured many people.” Opp. 26. This is tantamount to an
admission that they directly and improperly appealed to the
jury to punish Ford for alleged harms to third parties. Al-
though respondents now astonishingly assert that they never
suggested that anyone else was actually injured by the design
of the Bronco II or Explorer, Opp. 24-26, this strained and
post hoc parsing of fragments of the record is, mildly put,
unpersuasive. Even now respondents cannot stop themselves
from trying to tar Ford with other cases involving different
vehicles and third parties with unrelated injuries. Opp. 12.9

8 The third-party harm issue was expressly included within Issue 3 in
Ford’s Petition For Review in the California Supreme Court and ad-
dressed at numerous junctures. Reply App. 3a, 5a, 12a-13a.

9 Respondents claim there was no actual evidence regarding third party
harm, as opposed to improper, unsupported argument, Opp. 9, 24-25, but
this is a more egregious due process violation, not less. Philip Morris,
127 S. Ct. at 1063 (“[T]o permit punishment for injuring a nonparty vic-
tim would add a near standardless dimension to the punitive damages

10

Finally, respondents claim that “[w]hat most matters .. .
is not passages in a trial transcript but the text of the pub-
lished appellate opinion allegedly creating confusion or con-
flict in the law.” Opp. 22. But Philip Morris makes clear
that Ford was entitled to procedural protections—which it
asked for but was denied—precluding punishment based on -
alleged third-party harms. Supp. Br. 1-3. The court of ap-
peal rejected Ford’s arguments, and respondents have previ-
ously acknowledged that the court was punishing Ford for
harms to other parties resulting from sales of other vehicles.
Pet. App. 107a, 55a-57a. Respondents argue that because the
court analyzed the third party evidence under the rubric of
“reprehensibility,” there is no constitutional problem.
Opp. 22-24. But this was true of the opinion Philip Morris
reversed. 127 S. Ct. at 1064-1065. Because the Due Process
Clause forbids “a jury to base [a punitive damage] award in -
part upon its desire to punish the defendant for harming per-
sons who are not before the court,” id. at 1060 (first emphasis
added), and “state courts cannot authorize procedures that
create an unreasonable and unnecessary risk of any such con-
fusion occurring,” id. at 1065, any ambiguity on the precise
use of alleged third-party harms below requires vacatur and
remand. See Henry v. City of Rock Hill, 376 U.S. 776, 776
(1964) (remand proper if “not certain that the case [is] free
from all obstacles to reversal on an intervening precedent”).

[Footnote continued from previous page]

equation.... The trial will not likely answer such questions as to non-
party victims. The jury will be left to speculate.”). And respondents did
elicit testimony about other Explorer and Bronco II cases, including those
that “involved people getting hurt or killed,” RT 7963, and asked a Ford
expert if he had examined the “data of the people that have been brain
damaged, quadriplegia, paraplegia in Ford rollover accidents,” suppos-
edly contained on disks counsel “represented[ed were] evidence in this
case” and that “would take you several hundred hours to go through.”
RT 7961. Respondents also introduced evidence on the Bronco II’s fatal
rollover rate, see, e.g., 1265-1266, calling this its “death record.” RT 669.

Respectfully submitted.

DAVID G. LEITCH
ROBERT W. POWELL
MICHAEL J. O’ REILLY
Ford Motor Company
One American Road
Dearborn, MI 48126
(313) 322-7453

THEODORE B. OLSON

Counsel of Record
GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Avenue, NW
Washington, DC 20036 ~
(202) 955-8500

THEODORE J. BOUTROUS, JR.
WILLIAM E. THOMSON

EILEEN M. AHERN

GIBSON, DUNN & CRUTCHER LLP
333 South Grand Avenuc

Los Angeles, CA 90071

(213) 229-7000

JOHN M. THOMAS
BRYAN CAVE LLP
161 N. Clark
Chicago, IL 60601
(312) 602-5058

Counsel for Petitioner Ford Motor Company

April 16, 2007

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_2116%3A07. Public record. Not legal advice.
