Opposition Brief — Ford Motor Motor Co. v. Buell-Wilson (No. 09-297)

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No. 09-297

j Supreme Court, U.S.

- lv y FILED

\XP | oct 2g 2003

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en ee

CFFECE OF THE CLERK

(ee ee ee

In The Supreme Court

of the United States

OCTOBER TERM 2009

FORD MOTOR COMPANY,

Petitioner,

BENFTTA BUFLL-WILSON AND BARRY S. WILSON.

Respondents.

On Petition For A Writ Of Certiorari

To The California Court Of Appeal

BRIEF IN OPPOSITION

JEROME B. FALK, JR DENNIS A. SCHOVILLE

Counsel of Record LOUIS G. ARNELL

STFVEN L. MAYER SCHOVILLE & ARNELL, LLP

JOHN P. DUCHEMIN 2404 Broadway

HOWARD RICE NEMEROVSKI CANADY San Diego, California 92102

FALK & RABKIN Telephone: 619/232-9901

A Professional C orporation _ Facsimile: 619/232-9904

Three Embarcadero Center, 7th FI.

San Francisco, Califomia 9411 |

Telephone: 415/434-1600

Facsimile 415/217-5910

{frorneys For Respondents

TABLE OF CONTENTS

STATEMENT OF THE CASE

REASONS FOR DENYING THE PETITION

;. FORD DID NOT RAISE THE ISSUE

PRESENTED AT EVERY STAGE

OF T

I]. FORD'S “VAGUENESS/FAIR NOTICE”

HE STATE PROCEEDINGS.

CHALLENGE DOES NOT MERIT

CERTIORARI.

A

CONCLUSION

APPENDIX:

Califomia Law Gave _ Ford

Ample Notice Of The Circum-

stances Under Which Punitive

Damages Could Be Awarded.

Ford Does Not Make (And Has

Not Preserved) A Substantive

Due Process Argument, And

Amici Therefore May Not Do

So.

l'ord’s ““Vagueness/Fair Notice”

Claim Has No Support In This

Court's Cases.

There Is No Conflict In The

Cases.

Excerpts of Appellant’s Petition

for Review in the Supreme

Court of Califomia, filed

August 28, 2006

Page

&

TABLE OF AUTHORITIES

Cases

Adams v. Robertson, 520 U.S. 83 (1997)

B&B Insulation, Inc. v. Occupational Safety &

Health Review Comm'n, 583 F.2d 1364

(Sth Cir, 1978)

Bankers Life & Cas. Co. v. Crenshaw, 486

U.S. 71 (1988)

Barber v. Jefferson County Racing Ass'n, 960

So. 2d 599 (Ala. 2006), cert. denied, 551

U.S. L131 (2007)

Barclays Bank PLC \. Franchise Tax Bd., 512

U.S. 298 (1994)

Beck v. Washington, 369 U.S. 541 (1962)

Bertero v. Nat'l Gen’! Corp., 13 Cal. 3d 43

(1974)

BMW of N. Am., Inc. v. Gore, 517 U.S. $59

(1996)

Boynton v. Virginia, 364 U.S. 454 (1960)

Canyon Ferry Road Baptist Church of East

Helena, Inc. v. Unsworth, 556 F.3d 1021

(9th Cir. 2009)

City of Lincoln v. Barringer, 102 Cal. App. 4th

1211 (2002)

Clark v. Arizona, 548 U.S. 735 (2006)

Colautti v. Franklin, 439 U.S. 379 (1979)

Page(s)

8,9

26

ill

TABLE OF AUTHORITIES

Page(s)

Coll. Hosp., Inc v. Superior Court, 8 Cal. 4th

704 (1994) 13

Connally v. Gen. Constr. Co., 269 U.S. 385

(1926) 20

Ebbetts Puss Forest Watch v. Cal. Dept of

Forestry & Fire Prot., 43 Cal. 4th 936

(2008) §

Egan v. Mut. of Omaha Ins. Co., 24 Cal. 3d

809 (1979) 24

Evans v. Centerstone Dev. Co., 134 Cal. App.

4th 151 (2005) 9

Golden Day Sch., Inc. v. Dep t of Educ., 69

Cal. App. 4th 681 (1999) 6

Grimshaw v. Ford Motor Co., 119 Cal. App. 3d

757 (1981) 12, 14, 15, 22

Haggblom v. City of Dillingham, 191 P.3d 991

(Alaska 2008) 26

Hasson v Ford Motor Co., 32 Cal. 3d 388

(1982) 14,24

Heavenly valley v. El Dorado County Bd. of

Equalization, 84 Cal. App. 4th 1323 (2000) 6

Pac. Mut. Life Ins. Co. v Haslip, 499 US. |

(1991) 18

Palmer v. A.H. Robins Co., 684 P.2d 187

(Colv. 1984) 24, 25

People v. Villa, 45 Cal. 4th 1063 (200%) S

1V

TABLE OF AUTHORITIES

Philip Morris USA v. Williams, 549 U.S. 346

(2007)

Redrup v. New York, 386 U.S. 767 (1967)

Riegel v. Medtronic, Inc., 552 U.S. 312, 128 S.

Ct. 999 (2008)

Roberts vy. Lomanto, 112 Cal. App. 4th 1553

(2003)

Roe v. McDonalds Corp., 129 Cal. App. 4th

1107 (2005)

Roman Catholic Bishop v. Superior Court, 128

Cal. App. 4th 1155 (2005)

Romo y. Ford Motor Co., 113 Cal. App. 4th

738 (2003)

S&H Riggers & Erectors, Inc. v. Occupational

Safety & Health Review Comm'n, 659 F.2d

1273 (Sth Cir. 1981)

Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47

(2007)

Sierra Club v. City of Orange, 163 Cal. App.

4th $23 (2008)

Smith v. Wade, 461 U.S. 30 (1983)

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

538 U.S. 408 (2003)

State v. Thirteenth Judicial Dist. Court, 208

P.3d 408 (Mont. 2009)

26, 2

26

TABLE OF AUTHORITIES

Stoner v. Nash Finch, Inc. , 446 N.W.2d 747

(N.D. 1989)

Sturm, Ruger & Co. v. Day, 594 P.2d 38

(Alaska 1979), overruled on other grounds,

Dura Corp. v. Harned, 703 P.2d 396

(Alaska 1985)

Sw. Tel. & Tel. Co. v. Danaher, 238 U.S. 482

(1915)

Taylor v. [llinois, 484 U.S. 400 (1988)

Toole v. Richardson-Merrell, Inc., 251 Cal.

App. 2d 689 (1967)

T'XO Prod. Corp. v. Alliance Res. Corp., 509

U.S. 443 (1993)

Unilogic, Inc. v. Burroughs Corp., 10 Cal.

App. 4th 612 (1992)

Union Mut. Life Ins. Co. v. Kirchoff, \}69 U.S

103 (1898)

United Parcel Serv, Inc. v. Mitchell, 451 U.S

56 (1981)

Village of Hoffman Estates v. Flipside,

Hoffman Estates, Inc., 455 U.S. 489 (1982)

Webb v. Webb, 451 U.S. 493 (1981)

Wilson v. 21st Century Ins. Co., 42 Cal. 4th

713 (2007)

tN

>

18,

TABLE OF AUTHORITIES

Statutes and Regulations

49 U.S.C. §30103(e)

29 C.F.R. §1926.28(a)

S.CT. R. 14.1 (a)

CAL. CIV. CODE

§3294(a)

§3294(c)(1)

§3294(c)(2)

CAL.R.C1

8.204(a)(1)(B)

8.504(a)

8.504(b)(1)

8.516(b)(2)

&.520(b)(2)

8. 520(b)\(3)

STATEMENT OF THE CASE

Ford’s Petition offers a one-sided account of the facts

and evidence. The Court of Appeal’s opinion fairly summa-

rizes the events that led to this litigation, including the

Wilsons’ catastrophic injuries, and the evidence presented at

trial. Pet. App. 6a-17a.

The Wilsons sued Ford after Mrs. Wilson was crushed

and rendered paraplegic when her Ford Explorer rolled over

and the roof failed. The jury awarded Mrs. Wilson $109.6

million, and Mr. Wilson $13 million, in compensatory dam-

ages. /d. at 17a, 33a. It also awarded $246 million tn punitive

damages. /d. at 18a. The tnal court reduced the compensa-

tory damages to $70 million for Mrs. Wilson and $5 million

for Mr. Wilson, and the punitive damages to $75 million. /d.

at 19a-20a.

The Court of Appeal affirmed the finding of liability but

further reduced both compensatory and punitive damages.

Noting that Ford had not challenged the sufficiency of the evi-

dence (id. at Ila), the court descnbed the history of the

Explorer’s design. Ford based the Explorer on a prior SUV

(the Bronco ll) with a terrible history of instability and

susceptibility to rollovers. /d at 10a-13a. Although Ford

knew of these problems, it retained critical Bronco I! design

elements bearing on stability (a narrow track width and high

engine mount and center of gravity) and carried over a high

percentage of parts from the Bronco Il, while rebranding it as

the Explorer. /d. at 12a-13a. Because making the necessary

design changes would have delayed the Explorer’s release

date, Ford manayement rejected repeated requests by its engi-

neers lo increase the vehicle’s track width and lower its centet

of gravity, thereby preserving a lethal feature of the Bronco II.

/d at l2a-l4a. For cosmetic reasons, management also

increased the Explorer’s tire size, exacerbating the vehicle’s

instability. /d. at 14a. In subsequent years, as it modified the

Explorer’s design, Ford management again declined for

nN

economic reasons to improve the Explorer’s stability. /d. at

1 5a-16a.

The Explorer was not just unstable; it also had a weak

roof structure prone to crush in a rollover. /d. at lla, 16a.

Rollovers in vehicles with sturdy roofs are relatively nonvio-

lent events for passengers who are properly restrained (as was

Mrs. Wilson). /d. at 16a. Ford could have significantly

strengthened the roof for about $20 per vehicle. /d.

The Court of Appeal upheld Mr. Wilson’s $5 million

compensatory damage award and Mrs. Wilson’s $4.6 million

econoinic damaye award, but reduced her noneconomic dam-

ages to $18 million. /d. at 43a-45a, 73a, 119a. The Petition

does not challenge the resultant $27.6 million award of

compensatory damages.

With respect to punitive damages, the court found that

Ford had known that the vehicle was dangerously unstable

and prone to rollover in norma! driving conditions; had known

that the roof structure was weak and prone to collapse in a

rollover; and had known of technologically and economically

feasible ways to stabilize the vehicle and strengthen its roof

but chose for financial reasons not to do so. /d. at 52a-S3a.

The court also found that Ford had “evinced a reckless disre-

gard for the safcty of its customers” and had engaged in ‘‘‘a

pattern of deficient design regarding safety in favor of

increased financial returns and was the result of the conscious

disregard of Ford executives.’ /d. at 68a-69a. It added that

“Ford's actions were the result of intentional conduct and

deliberate decisions by Ford’s management, knowing the

unreasonable nsk of harm posed to consumers, as opposed to

a mere accident.” /d. at 69a. Consequently, it concluded that

“the reprehensibility of Ford’s conduct was high.” Jd. at 67a;

accord, id. at 71a.

Nevertheless, the court reduced the punitive damages to

$55 million, a ratio of essentially 2:1. /d. at 73a. It noted this

Court’s comment in State Farm that “‘[w]hen compensatory

damages are substantial, then a lesser ratio, perhaps only equa!

to compensatory damages, can reach the outermost limit of the

due process guarantee.’”’ /d. at 71a (quoting State Farm Mut

Auto. Ins. Co. v. Campbell, 538 U.S. 408, 425 (2003)). In this

case, however, it concluded “that a two-to-one ratio is war-

ranted because the degree of Ford’s reprehensibility is also

high.” /d. It added that “[aJn award exceeding a two-to-one

ratio would exceed the constitutional maximum... under the

facts of this case.’ /d. at 73a.

Ford filed a Petition for Review in the California

Supreme Court which was summarily denied. Pet. 7. This

Court then granted certiorari and remanded the case to the

Califomia Court of Appeal for reconsideration in light of

Philip Morris USA v. Williams, 549 U.S. 346 (2007)

(“Williams [’). 550 U.S. 931 (2007). On remand, the Court

of Appeal held that Ford had failed to preserve the third-party

harm issue raised in Williams, and had therefore forfeited its

right to assert it, in three distinct ways: (1) Ford failed to pro-

pose a legally correct instruction dealing with the issue of

third-party harm (Pet. App. 77a-92a); (2) on appeal, Ford

failed to raise any issue regarding the failure to give a third

party harm instruction (id. at 95a-98a); and (3) it likewise

failed to raise that issue in its Petition for Review to the

California Supreme Court. /d. Ford’s Petition does not attack

this aspect of the Court of Appeal’s opinion, or otherwise

raise the third-party harm issue. Accordingly, Ford has aban-

doned the issue that was the subject of the Court’s pnor GVR

order

The California Supreme Court initially granted Ford's

second Petition for Review but deferred briefing or a decision

pending disposition of the second Philip Morris USA \

Williams case When this Court dismissed the writ in

Williams I/ as improvidently granted (129 S. Ct. 1446 (2009))

the Califomia Supreme Court dismissed review, Pet. App

120a

REASONS FOR DENYING THE

PETITION

Ford has not challenged the judgment insofar as it

awards compensatory damages for marketing a defective and

dangerous product. Instead, the Petition targets only the puni-

live damages award, and rests on only a single ground: the

asserted vagueness of California’s punitive damages law as

applied to the particular facts of this case.

The Petition should be denied. Once again, Ford seeks

to raise an issue that it failed to preserve in the Califomia

courts: although the original Court of Appeal opinion rejected

tord’s vagueness contentions, Ford failed to properly present

that issue in its onginal Petition for Review to the California

Supreme Court. Tord claims that it preserved the vague-

ness/fair notice issue by mentioning it in a footnote. However,

California law requires that an issue be raised in the text of the

brief, under an appropriate topic heading; issues raised only in

a footnote are disregarded. Moreover, to raise an issue for

discretionary review in the Califomia Supreme Court, it must

be included in a concise statement of the issues presented.

Ford did not comply with any of these requirements. And

while it subsequently attempted to resurrect that forfeited

issue by raising it on remand to the Court of Appeal, that court

properly held that the only issue before it as a result of this

Court’s GVR order was the (third-party harm issue raised by

Williams | and now abandoned by Ford. See Part |, infra

In any event, the Court of Appeal’s rejection of Ford’s

as-applied vagueness argument presents no issuc Meriting cer-

uiorart. The jury and the Court of Appeal found that Ford had

knowingly sold a dangerous and defective vehicle that could

have been made safe for a modest amount. California law

gave clear notice by statute—and tn decisional law (including

several cases involving Ford)—that such conduct could sub

ject a manufacturer to punitive damages. Ford identifies no

contlict between the decision below and any decision of this

Court, a federal Court of Appeals, or the highest court of a

wa

state. Indeed, three decisions of this Court have rejected simi-

lar vagueness challenges to punitive damages awards. See

Part Il, infra. Certioran should be denied

FORD DID NOT RAISE THE ISSUE

PRESENTED AT EVERY STAGE OF

THE STATE PROCEEDINGS.

The vagueness issue Ford now seeks to raise was pre-

sented at tral and in the Court of Appeal. Pei. 5-7. However,

lord’s representation that it “again rais[ed] its as-applicd

vagueness challenge” in its original Petition for Review to the

California Supreme Court (id. at 7) is inaccurate. Its failure to

do so forfcited the issuc as a matter of California law, and

nothing Ford did thereafter could revive it.

Under well-established California rules regarding peti

tions for discretionary review in the Supreme Court, a Petition

for Review “must begin with a concise, nonargumentative

Statement of the issues presented for review.” CAL. R. CT.

8.504(b)(1); compare S. CT. R. 14.1(a) (imposing similar

requirement on petitions for writs of certiorari) The

California Supreme Court ordinarily does not consider issues

not expressly raised or fairly included therein. CAL. R. C1

8.520(b)(2), (3); see, e.g., People v. Villa, 45 Cal. 4th 1963,

1076 (2009); Ebbetts Pass Forest Watch v. California Dep t of

Forestry & Fire Prot., 43 Cal. 4th 936, 951 n.$ (2008); Wilson

v. 2/st Century Ins. Co., 42 Cal. 4th 713, 726 (2007): com-

pare, e.g., Riegel v. Medtronic, inc., 552 U.S. 312, 128 8. Ct

999, 1011 (2008) (similar rule in this Court)

lord does not even claim to have met this requirement

and tor good reason. Its Petition tor Review identified three

“Issues Presented” on which revicw was sought. A federal

vavueness/ fair notice” claim was not among them. See

Resp. App. 4a. Nor was the issue “fairly included” in the

“Issues Presented.” Accordingly, that issue was not properly

6

presented to the highest court of California. See Beck v

Washington, 369 U.S. 541, 553 (1962). |

Moreover, California appellate rules also require that all

briefs “[s}tate each point under a separate heading or subhead-

ing summarizing the point.” CAL. R. CT. 8.204(a)(1)(B).’

This rule applies to Petitions for Review. /d@. RULE 8,504(a)

Ford did not meet this requirement either. Neither the Table of

Contents nor the section headings in the Petition for Review

refer to the issue of vagueness or fair notice. Resp. App. 2a-

3a. For this reason as well, Ford did not properly present this

issue to California’s highest court in its first Petition for

Review.

Although these deficiencies were known to Ford

(Plaintiffs drew them to the Court’s attention in opposition to

Ford's earlier certiorari petition (Bricf in Opposition 5-6, Ford

Motor Co. v. Buell-Wilson, No. 06-1068 (U.S. Apr. 3, 2007))),

Ford's Petition does not mention them. Instead, it cites one

‘Of course, the California Supreme Court has the power to decide

issues that were neither raised in the Petition for Review nor “fairly

included” therein. CAL. R. CT. 8.516(b2). But that proves nothing. This

Court's rules similarly provide that only questions presented by a petition

for writ of certiorari or “fairly included therein{ ] will be considered by the

Court.” S. CT. R. 14.1(a). Nevertheless, the Court sometimes decides

issues that are not presented or fairly included in the petition. See, e.g,

Redrup v. New York, 386 U.S. 767, 769-71 (1967); Boynton v. Virginia,

164 US. 454, 457 (1960). This occastonal practice has never prevented

the Court from enforcing Rule 14.1(a) in the vast majornty of cases. Simi

lurly, the California Supreme Court's power to consider issues that are not

presented in a Petition for Review does not prevent that Court or this Court

from enforcing the rule requinng parties seeking discretionary review to

identify the issues as to which review is sought

Cases applying thes rule are legion, See, ¢ x, Serra Club v. City of

Orange, \63 Cal. App 4th 523, 542 (2008); Roe v. McDonald's Corp , 129

Cal. App. 4th 1107, LL 14 (2005); City of Lincoln v. Barringer, 102 Cal

App. 4th 1211, 1228 (2002), Heavenly Valley v. El Dorado County Bd. of

equalization, 84 Cal App. 4th 1323, 1345 ni ? (2000), Golden Dav Sch

Inc. v. Dep't of Educ, 69 Cal. App. 4th 681, 095 n.9 (1999)

oblique statement in the Introduction to the Petition for

Review, as well as a footnote. Pet. 5. However, in light of the

well-settled California rules requiring that issues raised in a

Petition for Review be identified both in the ‘Issues Pre-

sented” and in the argument headings contained in the body of

the Petition, the few sentences cited by Ford were insufficient

to raise the vagueness/fair notice issue presented in the current

Petition.”

Moreover, what Ford said in the Introduction to the

Petition was insufficient to raise vagueness as an issue of

federal due process. In that Introduction, Ford addressed the

three sssues that it had identified in the Issues Presented por-

tion of the Petition. See Resp. App. 4a. Its discussion of the

second of these issues contended that—as a matter of

California statutory law—punitive damages could not be

awarded beca?se (in Ford’s view) the Court of Appeal’s opin-

ion authorized junes “to deem a mianufacturer’s design

‘In the reply bref filed in support of its prior petition, Ford also

relied on the statement in its Petition for Review that the California Court

of Appeal’s decision imposes

a vague regime that will permit tens of millions of dollars of

punishments to be imposed if a jury deems a manufacturer's

conduct “despicable” on the strength of nothing more than a

finding that, as will almost always be the case, the product

might possibly fave been made “safer” if more money had

been spent in making it. That is netther constitutional nor

rational. Review is necessary to conform Califomia’s prod-

uct liability and punitive damage law to reason, common

sense, and the United States Constitution. (Resp. App. 5a

(yuoted at Reply Bnef for Pctitoncr 2))

Ford's decision not to rely on this passage in its present petition ts

understandable. “A party may not preserve a constitutional challenge by

generally invoking the Constitution in state court and awaiting review tn

this Court to specify the constitutional provision it is relying upon.”

Bankers Life & Cas. Co. v. Crenshaw, 486 U.S. 71, 77 (1988); cf Taylor +

Illinow, 484 U.S. 400, 406 n.9 (1988)

decisions malicious, and impose severe punishment, even

where undisputed objective indicators . . . affirmatively refute

malice as a matter of law.” . at 7a. Ford then asserted that

{t]his ruling contradicts California law, decisions

from other jurisdictions, and due process. This

issue is especially important because punitive

damages “‘pose an acute danger of arbitrary

deprivation of property.” (State Farm Mut. Ins.

Co. v. Campbell (2003) 538 U.S. 408, 417-18...)

(/d. at 7a)

This unexplained, fleeting reference to due process and

the quote from Campbell in the middle of a state law argu-

ment was insufficient to raise the vagueness/fair notice issue

that Ford now presents. The reference to due process did not

invoke the federal constitution; nor did it mention the void-

for-vagueness doctrine in any of the customary ways—.e., by

using the terms “void for vagueness,” “unconstitutionally

vague,” “unconstitutionally uncertain” or “lack of fair notice.”

Nor did this passage attempt to explain what was vague or

uncertain about California’s punitive damages regime, let

alone contend that California’s punitive damages statute was

unconstitutionally vague either on tts face or as applied (a

proposition that, as shown below, would have taken a great

deal of explaining). That claim is therefore barred. See Clark

v. Arizona, 548 U.S. 735, 762-65 (2006).4

These obliaue statements in the Petition for Review

contrast sharply with the vagueness arguinent Ford had pre-

sented earlier in the litigation. As the Petition correctly

represents, Ford raised the vagueness issue at trial (Pet. 5) and

“The cite to Campbell did not put the Califomia Supreme Court on

notice that a federal claim of vagueness was being asserted. ‘“‘The discus

sion of ‘a federal case, in the midst of an unrelated argument, is insufficient

to inform a state court that 1t has been presented with a claim.""” Adams v

Robertson, 820 US. 83, 88 (1997) (citation omitted)

with crystal clarity (and at considerable length) presented it to

the Court of Appeal. Pet. 6.° Surely if Ford had intended to

raise the issue again in the California Supreme Court, its law-

yers would have done so just as plainly. And if they had,

Plaintiffs’ Answer to the Petition for Review would have

responded accordingly—or risked a withering comment in

Ford’s reply. In fact, however, Plaintiffs took note of Ford’s

failure to assert vagueness as an tssue for review, and there-

fore did not address vagueness/fair notice in their Answer to

the Peution for Review. See Answer to Petition for Review,

Buell-Wilson v. Ford Motor Co., No. $146150 (Cal. S. Ct.

Sept. 18, 2006). Morcover, Ford’s reply ncither mentioned the

omission nor made any mention of the vagueness issuc itself.

See Reply to Answer to Petition for Review (Oct. 2, 2006).

Given these omissions, the Califormia Supreme Court had no

reason tc delieve that Ford sought review on a federal issue of

vagueness or fair notice. See Adams v. Robertson, 520 US.

83, 89 (1997) (constitutional issue waived where, inter alia,

petitioner failed to discuss issue in state supreme court reply

brief even though it had been raised by respondent).

Nor is the footnote cited by Ford (which was buried at

the end of the Petition fer Review) sufficient to raise the

vagueness/fair notice issue. Numerous California decisions

apply the “heading rule” discussed above, and hold that

presentation of an issue in a footnote is insufficient under

Califorma law to bnng an issuc to an appellate court’s atten-

tion. See, e.g., Evans v. Centerstone Dev. Co., 134 Cal. App.

4th ISL, 160 (2005) (‘We do not have to consider issues dis-

cussed only in a footiste”) (citation omitted); Roberts v

Lomanto, \|2 Cal. App. 4th 1553, 1562 (2903) (same);

Ford's first Appellants’ Opening Bnef devoted more than six

pages to an as-applied vagueness argument. See App. Opening Brf. 56-63,

Buell-Wilson vo Ford Motor Co., No. D045154 (Cal. Ct. App. July 8,

2005)

1Q

Unilogic, Inc. v. Burroughs Corp., 10 Cal. App. 4th 612, 624

n.2 (1992) (same).

For all these reasons, the only issue Ford presents in its

petition was not presented to the California Supreme Court “‘at

the time and in the manner required by the state law.” Webb v.

Webb, 45} U.S. 493, 501 (1981). Because Ford failed to pre-

serve it in its first Petition for Review, the vagueness issue

was forfeited.

Nothing Ford did thereafter could resuscitate this issue.

After the California Supreme Court denied review, Ford filed

a petition for certiorari that attempted to raise the issue of

vagueness. Petition for Wnt of Certiorari 9-22, Ford Motor

Co. v. Buell-Wilson, No. 06-1068 (U.S. Jan. 30, 2007). Plain-

tiffs filed a bmef in opposition pointing out that the issue had

not been preserved. Brf. in Opp. 4-6 (Apr. 3, 2007). The

Court subsequently granted the petition, vacated and

remanded for reconsideration tn light of Williams /. 550 US.

931 (2007). On remand, the Court of Appeal held that the

“third party harm’’/failure-to-instruct issue that was the subject

of this Court’s GVR order had been forfeited by Ford because

(1) it did not propose a legaily correct third party harm

instruction at trial; (2) did not raise the failure-to-instruct issuc

in its appeal to the Court of Appeal; and (3) did not raise that

issue in its Petition for Review to the Supreme Court. Pet.

App. 74a, 77a-98a.

In Ford’s bneting on remand, Ford attempted to revive

the vagueness issue. The Court of Appeal held that Ford

could not do so in light of the limited scope of this Court’s

remand order:

{Wje conclude Philip Morris does not require that

we change any of the holdings in our onginal

opinion, and thus, with some changes, “we reiter-

ate [our original opinion] in its entirety.”

= * ~ +

We... decline Ford’s (and amici curiaes’) request

that we reconsider our original holdings on the. .

I]

issues related to the punitive damages award other

than whether that award improperly punished

Ford for harm to third parties. The United States

Supreme Court's direction to this court was to

reconsider our original decision “in light of Philip

Morris.” The only issue decided by Philip Morris

was whether and when third party harm could be

considered in imposing punitive damages. Based

on our analysis of Philip Morris, our review of

Buell-Wilson 1, and the proceedings in the trial

court, we conclude that nothing in Philip Morris

requires us to reconsider the remainder of our

original decision. (Pet. App. 3a, 52a (citations

omitted))

The Court of Appeal thereupon republished without substan-

tive change its prior opinion on a number of issues, including

the issue of vagueness/fair notice. Pet. App. 61a-62a.

Because the vagueness issue had been forfeited, Ford’s

attempt to reinstate the issue by presenting it in its second

Petition for Review came too late. The issue is therefore

procedurally barred. See Union Mut. Liye Ins. Co. v. Kirchoff,

169 U.S. 103 (1898).

FORD'S “VAGUENESS/FAIR

NOTICE” CHALLENGE DOES NOT

MERIT CERTIORARI.

Even if it had not been waived by Ford’s failure to raise

the issue in its first Petition for Review in the California

Supreme Court, Ford’s “vagueness/fair notice” claim would

not warrant certiorari. As shown in Section II(C), infra, the

decision below does not conflict with any decision of this

Court. Nor does it conflict with decisions of other courts.

Section II(D), infra.

12

Nor does Ford present a substantial federal claim. It

asserts that it lacked sufficient notice that it could be liable for

punitive damages in circumstances such as those presented in

this case.° But Ford was on notice, long before it designed

the Explorer, that knowingly designing and selling a vehicle

that exposes cainsumers to r*s of severe injury or death, when

the defect could be correctew at minimal cost, could result in

punitive damages hability. indeed, nearly thirty years ago a

California court delivered this precise message to Ford in

Grimshaw v. Ford Metor Co., 119 Cal. App. 3d 757 (1981),

where the court stated that “it should have been clear (to Ford]

that a manufacturer of a dangerous, defective product might

be hable for punitive damages if it knowingly exposed others

to the hazard.” /d. at 811.

That is precisely what Ford did in this case. The Court

of Appeal affirmed, as supported by substantial evidence, the

jury’s determination that Ford knowingly produced an automo-

bile that (1) would roll over in normal driving conditions and

on dry pavement if a driver swerved to avoid an obstacle;

(2) had a roof so weak that it would collapse dunng a rollover;

and (3) could easily have been made more stable and given a

stronger roof through well-known, available and cost-effective

design changes. Pet. App. Ila-l6a, 52a-53a. Yet to avoid a

few months’ delay of the vehicle's release date and to increase

its profits, Ford declined to make feasible and affordable

design corrections urged by its own engineers. /d. at 12a-1Sa.

Ford’s Petition does not challenge these conclusions, nor

°*Ford’s argument, if accepted, would eviscerate state punitive dam-

ages Statutes, with no readily available means of legislative repair. Puni-

tive damages statutes are usually phrased as laws of general applicability,

limiting the availability of punitive damages to cases of extreme reprehen-

sibility. See p.13, infra (quoting the definitions of “malice” and “oppress-

sion” in California’s punitive damages statute). What more could a

legislature do to delineate the circumstances in which tortious conduct

could justify an award of punitive damages?

13

could it. Indeed, Ford’s own lawyer admitted to the jury that

Ford “knowingly put a defective product out on the market

and caused the family tragedy that you see before you now.”

RT8512-13.

For the reasons that follow, Ford was given ample

notice that such conduct could give rise to liability under

California’s punitive damages law.

A. California Law Gave Ford Ample Notice Of

The Circumstances Under Which Punitive

Damages Could Be Awarded.

California law carefully defines the circumstances in

which punitive damages can be awarded. Section 3294(a) of

the California Civil Code (Pet. App. 224a) requires “clear and

convincing evidence that the defendant has been guilty of

oppression, fraud, or malice.” It defines “malice” as ‘‘conduct

which is intended by the defendant to cause injury to the

plaintiff or despicable conduct which is carried on by the

defendant with a willful and conscious disregard of the rights

or safety of others.” CAL. CIV. CODE §3294(c)(1). It defines

“oppression” as “despicable conduct that subjects a person to

cruel and unjust hardship tn conscious disregard of that per-

son’s rights.” /d. §3294(c)(2). In accordance with the statute

and California precedent (see, e.g., Coll. Hosp., Inc. v

Superior Court, 8 Cal. 4th 704, 721 (1994)), the jury was

instructed that the sine qua non for either malice or

oppression—‘‘despicable conduct”—is “‘conduct that is so

mean, vile, base or contemptible that it would be looked down

on and despised by reasonable people.” RT8281. These

resinctive standards were the result of legislation adopted in

1987 for the purpose of limiting the availability of punitive

damages; they “represent{ed}] a new substantive limitation on

punitive damage awards.” Coll. Hosp., Inc., 8 Cal. 4th at 725.

Ford made the design decisions affecting Petitioner’s

Explorer between 1989 and 1997. Pet. App. 12a-l6a. By that

time, Ford had received more than ample notice, directly from

14

the California courts, that knowingly designing and selling a

defective product that could kill or cause severe bodily

injury especially where the defect could have been corrected

for a minimal cost—could give rise to liability for punitive

damages. In Grimshaw, Ford had designed a product (the

Pinto) that it knew would expose consumers to risk of serious

injury or death, a defect that it could have corrected at mini-

mal cost. 119 Cal. App. 3d at 813. Ford argued that “its due

process nghts were violated because it did not have ‘fair

waming’ that its conduct would render it liabie for punitive

damages.” /d. at 811. Grimshaw rejected this contention,

relying on cases dating back to 1941 holding that punitive

damages were recoverable “where the defendant’s conduct

constitutes a conscious disregard of the probability of injury to

others.” /d. In particular, the court stated that since the deci-

sion in Joole v. Richardson-Merrell, Inc., 251 Cal. App. 2d

689 (1967), “it should have been clear [to Ford] that a manu-

facturer of a dangerous, defective product might be liable for

punitive damages if it knowingly exposed others to the haz-

ard.” Id’

Grimshaw 1s not the only Califomia case that has held

Ford liable for knowingly designing and selling dangerous

automobiles in conscious disregard of the safety of consum-

ers. See Husson v. Ford Motor Co., 32 Cal. 3d 388, 402-03

(1982) (substantial evidence supported award of punitive

damages where Ford knew aboui failing brakes on a vehicle

‘In Grimshaw, the court said that Ford “knew that the Pinto’s tue!

tank and rear structure would expose consumers to serious injury or death

in a 20- to 30-;uile-per-hour collision” and that “Ford could have corrected

the hazardous design defects at minimal cost but decided to defer

correction of the shortcomings” for financial reasons. 119 Cal. App. 3d at

813. “Ford's institutional mentality was shown to be one of callous

indifference ta public safety” /d History does indeed repeat itself, as the

cases discussed in the text following and the findings of the Court of

Appeal in this case make all too clear

15

but deliberately failed either to warm consumers or adopt

remedial measures); Romo v. Ford Motor Co., 113 Cal. App.

4th 738, 755 (2003) (Ford held subject to punitive damages

after designing a flawed roof that crushed people during roll-

overs and declining to strength-test the roof; Ford’s conduct

was “highly reprehensible” in that its “nonaccidental, mali-

cious conduct” of knowingly placing a flawed product with

consumers showed “reckless disregard of consumers’ safety

and lives’’).

Nor could Ford reasonably have believed that compli-

ance with federal government safety regulations would pre-

clude punitive damages. 49 U.S.C. §30103(e) provides that

“fcjompliance with a motor vehicle safety standard... does

not exempt a person from liability at common law.”’ More-

over, Grimshaw had already held that punitive damages were

necessary to deter wrongful conduct because “[g]overnmental

safety standards ... have failed to provide adequate consumer

protection against the manufacture and distnbution of defec-

tive products.” 119 Cal. App. 3d at 810. There was no ambi-

guity in California law on this point.”

Accordingly, Ford had every reason to know long

before it designed and marketed the Explorer that designing

an automobile with known dangerous defects posing a serious

threat to human life and health—such as the deadly combina-

tion of a propensity to roll and a weak roof structure-—and

rejecting low-cost, safer alternatives could lead to punitive

damages.

“Similarly, as the Court of Appeal noted, no prior Califormia case

had held that “cxpert disputes concerning design provide a defense to

punitive damage lability.” Pet App. 55a. There was no ambiguity in

Caltfomia law on this point either

16

8. Ford Does Not Make (And Has Not Preserved)

A Substantive Due Process Argument, And

Amici Therefore May Not Do So.

It is important to distinguish Ford’s vagueness thcory

from a contention—which certain amici attempt to advance—

that the imposition of punitive damages in this case violates

substantive Due Process because Ford assertedly complied

with applicable laws and regulations and at least some paid

experts defended the Explorer’s design. Brf. of DRI at 10-22;

Brf. of Product Liability Advisory Council, Inc. at 2-13; Brf.

of Alliance of Automobile Mfgs. at 12-21; Brf. of Chamber of

Commerce at 2-11. ‘That substantive Due Process argument

improperly goes beyond the vagueness/fair notice argument

that Ford does make. Amici cannot expand the issue(s) raised

by Ford's Petition. See United Parcel Serv, Inc. v. Mitchell,

451 U.S. 56, 60 n.2 (1981).

Moreover, a substantive Due Process claim could not

properly have been asserted by Ford (and, a fortiori, cannot

properly be raised by amici) because that Due Process argu-

nent was never made by Ford in the state court bnefing. Ford

did argue below that, as a matter of California law, regulatory

compliance and/or the existence of a dispute among experts

precluded the imposition of punitive damages. The Court of

Appeal understood this as a state law issue, and rejected

Ford’s (and amici’) arguments. Pet. App. 52a-6la. Ford then

re-raised those arguments in its Petition for Review, but again

did so only as contentions of California law.” See Petition for

Review 25-32, Buell-Wilson v. Ford Motor Co., No. $146150

(Cal. S. Ct. Aug. 28, 2006).

In any event, even if—-arguendo—a plausible argument

could be made that the Constitution prohibits punitive dam-

ages where the defendant’s conduct complied with federal

“Neither Ford nor any of the amici even attempt to show that any

such substantive Due Process contention was presented to the California

courts.

17

regulations, or where reasonable experts might disagree, that

would be a problem of overbreadth, not vagueness, which

would be corrected by an appropriate instruction, if requested.

Such an instruction would inform the jury that if it found that

the defendant had complied with all applicable regulations, or

if it found that reasonable experts might disagree as to the

lawfulness of the defendant’s conduct, no punitive damages

could be imposed. See Williams 1, 549 U.S, at 355.'° Ford

failed to propose an instruction on the first of these points. It

did propose an instruction on the second point (AA346),

which the trial court rejected aS crroncous. '' Yet, as the Court

of Appeal held, Fords appeal did not raise any failure-to

instruct issue (and neither did its onginal Petition for Review)

As a result, Ford has forfeited the right to raise such an issue

now. Pet. App. 95a-96a."

‘" 4mici presume that the facts supporting their contentions of expert

disagreement and regulatory compliance are undisputed and established,

and therefore assume that the Court could reverse the judgment if it

accepted their substantive Due Process argument. That assumption is

incorrect. To begin with, there is no federal regulatory standard for vehicle

stability. Pet. App. 60a. As for the roof strength defect, there is a federal

regulation, but there was a factual dispute as to whether this vehicle did

comply with applicable regulations. See RT2136:24-2137:8, 2141:26

2142:13; AA2621 (evidence that Ford cheated on the FMVSS 216 roof

crush test); RT} 986:3-23, 2131:4-2132:10 (evidence that many Explorers

on the road are not strong enough to pass test). The Court must assume

that the jury resolved that dispute against Ford. See BMW of N. Am., Inc. \

Gore, 517 U.S. 559, 585 (1996)

"Ford's description of its “reasonable people could disagree”

instruction ts misleading. The passage quoted in the Petition (at 4-5) was

in the second sentence of a longer instruction AA346. But the tnal cour

rejected as erroneous the first sentence of the instruction, which Ford has

not quoted. RT8134:13-26

“Any such argument would have been meritless. The jury was

correctly instructed that it could not award punitive damages unless it

found that Ford's conduct was objectively “despicable” See p13, supra

(continued )

18

C. Ford's “Vagueness/Fair Notice” Claim Has No

Support In This Court’s Cases.

Ford cites to many of the Court’s vagueness opinions

involving dissimilar statutes applied in dissimilar contexts

Pet. 21-24 But the “rules against vagueness are not

‘mechanically applied,’ but depend in their application, on

‘the nature ef the enactment.’” Barclays Bank PLC v

Franchise Tax Bd., 512 U.S. 298, 316 (1994) (citation

omitted). That principle matters here, because all the factors

which this Court has listed in desenbing the cases in which

vagueness scrutiny 1s most relaxed are present in this case:

this case involves “economic regulation,” “civil rather than

criminal penalties,” and an applicable “scienter requirement.”

Villave of Hoffman Estates y. Flipside, Hoffman Estates, Inc.,

455 U.S. 489, 498-99 (1982).

Consequently, the most relevant vagueness cases are

those which, inexplicably, Ford ignores: the Court's recent

decisions rejecting similar vagueness challenges to punitive

damages laws far less specific than Californma’s. See 7XO

Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 465-66

(1993) (plurality opinion) (“the notice component of the Due

Process Clause is satisfied if prior law fairly indicated that a

punitive damages award might be imposed in response to

egregiously tortious conduct”); Pac. Mut. Life Ins. Co. v

Haslip, 499 U.S. 1, 19-20, 24 n.12 (1991)'°; Smith v. Wade,

{ continued)

In deciding whether Ford's conduct met this standard, the jury could con

sider Ford's evidence of regulatory compliance and expert debate. Ford

was theretore free to—and did—present such evidence, and to use that

evidence in argument to urge the jury not to award punitive damages See

p.cl, infra

Justice O'Connor dissented in Haslip, arguing that Alabama's

punitive damages law—which was implemented by an instruchion telling

the jury that “[i]mposition of punitive damages ts entirely discretionary

with the jury, that means you don't have to award it unless this jury feels

(continued

19

461 U.S. 30, 49, 51 (1983) (rejecting vagueness challenge to

punitive damages award against prison guard on the ground

that actual intent was not required and that punitive damages

could be awarded for reckless or callous indifference: “[Wle

are not persuaded that a recklessness standard is too vague to

be fair or useful”; recklessness “was sufficient to tngger a

jury’s consideration of the appropriateness of punitive dam-

ages”). While ignoring these three cases that reject a vague-

ness challenge, Ford cites no case holding a punitive damages

Statute unconstitutionally vague, either on its face or as

applied

Ner do this Court’s cases establish any general rule that

“if reasonable people can disagree about whether particular

conduct is prohibited by a statute, the fair notice required by

due process is absent.” Pet. 21. For example, Colautti v

Franklin, 439 U.S. 379 (1979), holds that a state statute regu-

lating permissible methods of abortion was impermissibly

vague where, inter alia, it did not contain a mens rea or Sci-

enter requirement, and therefore could be used to punish doc

tors who made good faith medical decisions regarding the

medically appropnate abortion procedure in a particular case

See id. at 401; see also Village of Hoffman Estates, 455 US. at

499 (“the Court has recognized that a scienter requirement

may mitigate a law’s vagueness, especially with respect to the

adequacy of notice to the complainant that his conduct ts

proscnibed’’)

hese cases are of no help to Ford because, under

Calitoria law, “an award of punitive damages first requires a

finding of scienter—malice, fraud, or oppression.” Roman

Catholic Bishop v Superior Court, 128% Cal. App. 4th 1155,

1171 (2005S). And as already shown, tt was also necessary for

continucd)

at you should du sv” (s« 99 U.S at6éunl) was void for vaguen

Id at 42-53. No other member of the Court joined that dissent

20

Plaintiffs to prove that Ford's conduct was “despicable” in the

sense that it was “so mean, vile, base or contemptible that it

would be looked down on and despised by reasonable peo-

ple.” See p.13, supra.”

In the absence of punitive damages cases directly on

point, or even cases in other contexts that would support its

vagueness theory, Ford is forced to rely heavily on a case that

does not address the constitutional issue of vagueness at all,

and admittedly involves “an issue of statutory interpretation

and not a due process challenge.” Pet. 23. Safeco /nsurance

Co. of America v. Burr, 551 U.S. 47 (2007), concems the

interpretation of a federal statute authorizing punitive damages

for “willful” violations. See id at 52. The Court held that

“willful” misconduct includes “reckless disregard” of statu-

tory duties and that if a defendant’s interpretation of the statute

is “not objectively unreasonable,” its reliance on_ that

interpretation is not “reckless” within the statute’s meaning

ld atéy

The Court's interpretation of this federal statute says

nothing about whether California's punitive damages statute

was unconstituttonally vague as applied in this case. [To begin

with, the Court has already held that recklessness is not an

unconsututionally vague standard for imposing punitive dam-

ages liability. Smith, 461 U.S. at 49-51. Moreover, Safeco’s

“The remaining cases Ford cites are no more relevant. Connally \

General Construction Co., 269 U.S. 385 (1926), does not hold that a

Statute 1s unconstitutionally vague if tts interpretation depends on the

“probably varying impressions of jurors” (Pet 21-22 (citing 269 US at

395)), but only that a statute is unconstitutionally vague if it “either torbid

or requires the doing of an act tn terms so vague that men of common

intelligence must necessarily guess at its meaning.” /d at 391. Sw. Tel &

Te! Co. vo Danaher, 238 US. 482 (1915), holds only that a statutory

penalty could not be imposed against a company where “[t}here was no

intentional wrongdoing, no departure from any prescnbed or known

standard of action, and no reckless conduct’ (id at 490})-——1e, conduct

poics apart from Ford's actions in this case

2 I

“-

analysis 1s Inappesite. In that case, the question of whether

the defendants’ misinterpretation of an adimittedly ambiguous

Statutory term was reckless, as the statute required, was a pure

issue Of law to be decided by the courts. In contrast, whether

ford knew that the Explorer posed a high msk of causing

physical harm was a question of fact to be decided by a jury.

As noted, Ford was free to—and did—argue to the jury that it

was not guilty of oppression, fraud, or malice and to support

this claim by presenting evidence of regulatory compliance

and any good-faith expert debate. See, e.g, AAS28-35;

AA2618-56; RT1723-36; RTS145, 5179 (regulatory compli-

ance); RT5152-54, $164-67; AA716-19, 756 (expert disagree-

ment).'” It was also free to use that evidence to argue that no

punitive damages should be awarded. But as long as a reason-

able jury could reject this evidence, and find that Ford’s con-

duct met California’s well-established criteria for awarding

punitive damages, nothing in Safeco prevented the jury from

resolving this factual issue adversely to it.

The “qualified immunity” cases cited by Ford (see Pet.

23-24) are also irrelevant. Those cases have nothing to do

with vagueness. Instead, they turn on a substantive rule that

public officials are only liable for unconstitutional actions

when their conduct violated “clearly established” legal princi-

ples. Ford makes no claim in its Petition that, as a matter of

substantive constitutional law, punitive damages can only be

awarded when the defendant’s conduct violated “‘clearly estab-

lished” legal principles. Its contention 1s only that Califomia

law was unconstitutionally vague, at least as applied to the

The statement of some amici (e.g, Brf. of DRI at 4 (emphasis in

original)) that under the decision below, “compliance with federal, state,

and tndustry standards ts irre/evant to the imposition of punitive damages,”

is false. [fit had been irrelevant, evidence on those issues would have been

excluded. In fact, the dectsion holds only that such compliance ts not an

absolute bar to punitive damages. Pet. App. S6a-6la

facts of this case. The qualified immunity cases have nothing

relevant to say on that issue.

D. There Is No Conflict In The Cases.

Ford purports to find conflicts everywhere—between

the decision in this case and decisions of this Court; decisions

of other state and federal courts that have addressed “‘vague-

ness as-applied” challenges to punitive damages awards; and

the general methodology used by the courts in evaluating such

claims. None of the claimed conflicts is real.

3 There is no conflict with respect to the only issue

presented by the Petition. As noted above, no case strikes

down a punitive damages statute as unconstitutionally vague

(either on its face or as applied) merely because some but not

all reasonable people (or, as in this case, paid experts testify-

ing after-the-fact) would find the defendant’s conduct lawful

or because the defendant's product complied with applicable

regulatory standards.

a Ford nevertheless argues that certioran is war-

ranted because of a supposed conflict in the lower courts

because some decisions purportedly refuse to consider as-

applied challenges to punitive damages awards once a facial

challenge to the statute has been rejecied. Pet. 10-19. Ford is

wrong. No state or federal case has ever held that as-applied

vagueness challenges are barred if a statute 1s not facially

invalid.

This includes the decision below. Ford clatms that the

Court of Appeal “effectively refused to entertain Ford’s

as-applied vagueness challenge because a 1981 decision had

found Califomia’s punitive damages statute to be facially

valid.” Pet. 3. This ts incorrect. In the first place, that 1981

case included an “as-applied” challenge, which the Court of

Appeal rejected. See Grimshaw, 119 Cal. App. 3d at 811.

Moreover, the opinion in the present case did not refuse to

entertain an as-applied challenge or ignore the particular facts

of this case. Ford’s claims to the contrary rest on both a

mischaractenzation of what the Court of Appeal said and a

truncated quotation from its opinion. In fact, in the third para-

graph of the opinion quoted tn the footnote below, which Ford

omits from its Petition (see Pet. 6), the Court of Appeal

rejected Ford’s as-applied claim on the merits.'® Ford’s asser-

tion that the California Court of Appeal “rejected Ford’s

vagueness challenge simply because other courts had rejected

vagueness challenges in other cases involving different facts”

(Pet. 18) is false.

Ford’s contention that the California courts refuse to

entertain as-applied vagueness challenges to punitive damages

awards (see Pet. 11-12) is also false. The only vagueness

challenge in Bertero yv. National General Corp., 13 Cal. 3d 43

(1974), was a facial one: the defendant contended that the

California punitive damages statute was unconstitutionally

vague “because it fails to provide sufficient guidance for the

‘Here is what the Court of Appeal said in rejecting Ford’s vague-

ness clanmn

Ford contends that if punitive damages can be

awarded on this record, Civii Code section 3294 is uncon-

ststutionally vague because it failed to give Ford fair notice

that its conduct could subject it to punitive damages. This

contention is also unavailing.

Ford made this same argument over 25 years ago in

Grimshaw, supra, 119 Cal. App.3d 757, 174 Cal. Rptr. 348

The Court of Appeal rejected it, concluding that “punitive

damages are recoverable in a nondeliberate or unintentional

tort where the defendant’s conduct constitutes a conscious

disregard of the probability of injury to others.” (/d. at

p81], 174 Cal. Rptr. 348.)

Additionally, Ford bases this contention on the fact

that, at most, reasonable people could disagree with the

decisions u made. However, we have already discussed and

rejected thiy argument, ante. (Pet. App. 61a-62a (emphasis

added))

24

trial courts charged with implementing it.” /d. at 66 n.13.

Similarly, while constitutional challenges to California’s puni-

tive damages statute were dismissed out of hand in Hasson v.

Ford Motor Co., 32 Cal. 3d 388, 402 n.2 (1982), nothing in

the decision indicates that the constitutional challenges were

based on vagueness, much less as-applied vagueness. Finally,

Egan v. Mutual of Omaha Insurance Co., 24 Cal. 3d 809, 819

(1979), did not reyect constitutional challenges at all; the court

merely noted that the proposition that Califomia’s punitive

damages statute was unconstitutional had been “frequently

rejected”’ in other cases. In fact, no California decision “‘effec-

tively preclude[s] California courts from considenng

as-applied vagueness challenges to California’s punitive dam-

ages statute” (Pet. 12)—as the decision below irrefutably

demonstrates. See pp.22-23, supra."’

The same is true for the non-California cases that Ford contends

have followed the same approach that Ford mistakenly ascribes to

California. Pet. 12. The only vagueness argument advanced in Palmer v.

A.H. Robins Co., 684 P.2d 187 (Colo. 1984), was that Colorado’s punitive

damages statutes suftered from “facial vagueness.” /d at 214. The court

therefore had no reason to address whether the statute was unconstitution

ally vague as applied. Nor was an as-applied vagueness challenge made in

Sturm, Ruger & Co. v. Day, 594 P.2d 38 (Alaska 1979), overruled on other

grounds, Dura Corp. v. Harned, 703 P.2d 396 (Alaska 1985). Instead,

defendant again raised only a challenge based on facial vagueness, con

tending that Alaska’s punitive damages statute gave “the jury .. . no stan-

dards by which to determine the extent of a defendant’s culpability and the

amount of damages to be assessed.”” /d. at 46. Likewise, in Stoner v. Nash

Finch, Inc., 446 N.W.2d 747 (N.D. 1989), the defendant claimed only that

North Dakota’s punitive damages statute was “void for vagueness" because

“the ‘vagueness’ of the proscnbed conduct, coupled with the ‘lack of

objective guidelines by which to set the amount of punishment,’ results in

‘arbitrary punishiment’” tn violation of {the Due Process Clause].”’ /d. at

755. Accordingly, none of these decisions involves a refusal by the state

courts to address an ‘‘as applied” vagueness challenge to application of a

State punitive Gamages statute

Ford's constitutiona! “‘vagueness/tair notice” claim is premised on

(continued )

bh

Wy

For these reasons, neither the decision below nor the

other state court cases Ford cites conflict with the cases Ford

identifies as having followed the correct approach to resolving

as-applied vagueness challenges. Pet. 15-17. No jurisdic-

tion—and certainly not Califormia—has ‘forever insulated”

punitive damages awards from “‘as-applied vagueness chal-

lenges regardless of the conduct at issue.” Pet. 16. To the

contrary, the California courts, like the courts in other states,

remain open for consideration of such claims.

4 Ford also contends that certiorari should be

granted to “clanfy the legal standard that courts should apply

when deciding as-applied challenges to punitive damages

statutes.” Pet. 19. It argues that such clarification is necessary

because of a supposed conflict in decisions that adjudicate

as-applied vagueness challenges. Ford says that some courts

permit punitive damages if “reasonable persons could con-

clude the conduct at issue was unlawful... even if reasonable

persons could also conclude the conduct was lawful.” /d@. In

contrast, other courts supposedly “hold that as-applied vague-

ness challenges fail only where reasonable persons could nor

conclude the conduct was lawful.”” /d. (emphasis in orginal).

This supposed conflict is a fiction. None of the cases

Ford cites to support this supposed conflict involves claims

for punitive damages. Moreover, none of these cases

(... continued)

the assertion that at least some persons would have found its conduct rea-

sonable in light of federal automotive safety standards, “ongoing genuine

debate in the engineering community,” etc. Pet. 7. No similar claim of

constitutional dimension was made in any of the other state court cases

Ford cites in trying to show the existence of a widespread conflict. None

of the defendants 1n Palmer, Day or Stoner attempted to show that their

conduct was “objectively reasonable” so as to preciude the availability of

punitive damages on an as-applied constitutional “vagueness/fair notice”

theory

"Barber v. Jefferson County Racing Ass'n, 960 So. 2d 599 (Ala.

(continued... )

26

discusses the objective reasonableness of any litigant’s con-

duct, much less addresses whether punitive damages (or,

indeed, any other civil or criminal penalties) are permissible

even if some reasonable persons would conclude that the

defendant’s conduct was lawful. Accordingly, none of these

cases supports Ford’s Petition.

That leaves Ford with two Fifth Circuit cases, which

similarly do not involve punitive damages. Both S&H

Riggers & Erectors, Inc. v. Occupational Safety & Health

Review Commission, 659 F.2d 1273 (Sth Cir. 1981), and B&B

Insulation, Inc. v. Occupational Safety & Health Review

Commission, 583 F.2d 1364 (Sth Cir. 1978), interpreted an

OSHA regulation that, inter alia, made employers responsible

for “requiring the wearing of appropnate personal protective

equipment in all occupations where there is an exposure to

hazardous conditions.” 29 C.F.R. §1926.28(a).

B&B Insulation held that this regulation could be

enforced against an employer only as applied to “conditions

which the cited employer’s industry would recognize as haz-

ards requiring the use of safety equipment.” 583 F.2d at 1366.

(... continued)

2006), cert. denied, 551 U.S. 1131 (2007), holds that the state’s cnminal

gaming law was not unconstitutionally vague as applied to the defendants’

attempt to operate slot machine-like devices at their racetracks. State v

Thirteenth Judicial District Court, 208 P.3d 408 (Mont. 2009), similarly

holds that a state statute making it a crime to leave the scene of an automo-

bile accident involving death or injury was not unconstitutionally vague as

applied Canvon Ferry Road Baptist Church of East Helena, Inc. v

Unsworth, 556 F.3d 1021 (9th Cir. 2009), holds that a state’s campaign

disclosure law was unconsttutionally vague as applied to activities that

resulted in no detriment to the putative donor and had no market value

And Haygblom v. City of Dillingham, 191 P.3d 991 (Alaska 2008), held

that 4 city ordinance requinng the euthanasia of dogs that had bitten a per-

son without provocation was not unconstitutionally vague where the con-

duct of plaintiff's dog fell within the “hard core” of the conduct prohibited

by the ordinance. /d at 997 n.21

In so holding, the court first recognized that the regulation

incorporated a tort law “reasonable man” standard, pursuant to

which “evidence of customary conduct of those similarly situ-

ated may be probative in determining his behavior.” /d. at

1370. However, the court then went on to demand “a closer

identification between the projected behavior of the reason-

able man and the customary practice of employers in the

industry” than is found in tort law. /d. The court gave two

reasons for its departure from tort concepts of reasonableness.

First, unlike the tort system, “the purpose of the [Occupational

Safety and Health Act] is preventive rather than compensa-

tory.” /d. at 1370-71. Moreover, the Congress that enacted

the Act “thought specificity of standards desirable.” /d. at

1371. Consequently, as the Fifth Circuit later stated in S&H

Riggers, the B&B Insulation court “concluded ... that rigid

application of the tort law concept [of the reasonable person

standard] would be inconsistent with the preventive goals of

OSHA and Congress’s expressed preference for specific rather

than general standards.” S&H Riggers & Erectors, 659 F.2d

at 1277. S&H Riggers confirmed B&B Insulation, but added

an additional ground for holding an employer liable for violat-

ing the OSHA regulation in question where the employer

has ‘‘actual knowledge that personal protective equipment is

required for employee safety.” 659 F.2d at 1281."

These two Fifth Circuit cases are irrelevant here, for

multiple reasons. First, these cases interpreted a new federal

regulation that was so vague that “no two members of the

[Occupational Safety and Health Review] Commission had

ever reached agreement on the regulation’s meaning.” S&H

Riggers, 659 F.2d at 1281. In contrast, this case concems a

long-standing state statute, whose operative terms are not only

'"Ford states that this exception does not apply if the employer

“could reasonably conclude that additional... protection was not neces-

sary.” Pet. 21 (purporting to quote 659 F.2d at 1283). No such language

appears in the opinion

28

defined in the statute itself but have also been the subject of

innumerable judicial decisions that have elaborated its mean-

ing in situations very much like those presented here. See

pp.14-15, supra. This makes all the difference; indeed, even

S&H Riggers recognized that the “reasonable person stan-

dard”’ is “‘one of the rudimentary precepts of our law’”’ and

concluded that “[p]ossibly a reasonable person standard that

does not accept industry practice as controlling can give

employers adequate notice of the requirements of [the OSHA

regulation].”” 659 F.2d at 1280 (citation omitted). Moreover,

the courts in B&B Jnsulation and S&H Riggers knowingly

departed from common law standards of notice to further

OSHA’s “preventive purpose and the intended specificity of

its standards” (583 F.2d at 1371), concerns that have no place

in implementing common law rules. For these reasons, Ford

cannot cite a single case —and there is none——that has relied

on these Fifth Circuit decisions in addressing a constitutional

due process/‘fair notice” challenge to a punitive damages

award.””

"Even if the rules promulgated by the Fifth Circuit in the two

OSHA cases could be shochomed wholesale into the quite different

domain of punitive damages Ford would not be helped. As noted above,

S&H Riggers expressly pennits the imposition of administrative penalties

where the employer had ‘“‘actual knowledge” that safety equipment was

required. See 659 F.2d at 1283. That principle forecloses any “fair notice”

claim here. As the Coun of Appeal found, Ford knew that the Explorer

wus dangerously unstable and prone to rollover in normal driving condi

trons, knew that the roof structure was weak and pronc to collapse in a

ro!lover, and knew of technologically and economically feasible ways to

stabilize the vehicle and strengthen its roof that it reyected for financial

reasons, Pet. App. S2a-Sda

9

“&

CONCLUSION

Che Petition should be dented.

Respectfully,

DENNIS A. SCHOVILLEI

Louis G. ARNELI

SCHOVILLE & ARNELL, LLP

JEROME B. FALK, JR

Counsel of Record

STEVEN L. MAYER

JOHN P. DUCHEMIN

HOWARD RICE NEMEROVSKI CANADY

FALK & RABKIN

A Professional Corporation

APPENDIX

APPENDIX

IN THE

SUPREME COURT OF CALIFORNIA

BENETTA BUELL-WILSON et al.,

Plainuffs and Respondents,

FORD MOTOR COMPANY, etal

Uetendants and Appellants

After A Decision By The Court of Appeal

Fourth Appellate District, Division 1, Case Nos. D045154, D045579

San Diego County Supenor Court

(he Honorable Kevin A. Enright

No. GIC800836

PETITION FOR REVIEW

THEODORE J. BOUTROUS, JR. (132099) DANIEL M. KOLKEY (79102)

WILLIAM E. THOMSON (187912) GIBSON, DUNN &

GIBSON, DUNN & CRUTCHER LLP CRUTCIIER LLP

333 S. Grand Avenue, Suite 4700 One Montgomery Street

Los Angeles, CA 9007) San Francisco, CA 94104

Vel: (213) 229-7000 Te): (415) 393-8200

Fax: (213) 229-7520 Fax: (415) 986-5309

THEODORE B. OLSON (038137) Attorneys for Appellant

GIBSON, DUNN & CRUTCHER LLP Ford Motor Company

1050 Connecticut Avenue, N.W

Washington, DC. 20036-5306

Telephone. (202) 955-8500

Facsimile: (202) 467 0539

TABLE OF CONTENTS

ISSUES PRESENTED FOR REVIEW

WHY REVIEW SHOULD BE GRANTED

FACTUAL AND PROCEDURAL BACKGROUND

\ [he Alleged Stability Defect

=) lhe Alleged Root Defect

( (he Verdict And Appeal

DISCUSSION

| [his Court Should Grant Review [To Secure

Uniformity Of Decision Regarding The

Admissibility Of Industry Standards and

Custom [n Design Defect Actions

\ [he Court Should Grant Review To

Decide If Industry Standards and

Custom Evidence Is Admissible On

[he Design Defect Issue

| Such Evidence Is Relevant To

Both Prongs Of The Barke?

Defect Inquiry

Ihe Courts of Appeal Are Split

On This Issuc

[he Court Of Appeal’s Decision

('ontradicts [he Restatement

Third Of Torts

TABLE OF CONTENTS

) .

r Ape

} Ihe Court O! Appeal's Decision

Is Inconsistent With [he Rule In

The Majority Of Other States

.. 'he Court Should Also Grant Review

lo Make Clear That Such Evidence Is

Admissible On Punitive Damage

sucs

{] This Court Should Grant Review To Addre

[he Standards For Imposing Punitive

Damages In Product Design Cases Unde:

Sec tion 3994

If] This Court Should Grant Review To Clarify

lhe Standards For Scrutinizing Punitive

Damages lor Excessiveness Under The Duc

Process Clause In The Product Liability

Context

\ Misinterpretation Of The De Nov

Review Standard 5

B Misinterpretation Of he

2

R eprenens bility Guidep

CONCLUSION

CERTIFICATION OF WORD COUNT 38

ISSUES PRESENTED FOR REVIEW

[In a product lability design case, 1s evidence of

industry standards and custom, including the product's real

world safety performance relative to comparable products,

relevant to the issues of design defect and punitive damages?

2 In a product lability design case, can malice

within the meaning of Civil Code section 3294 be deemed

established by clear and convincing evidence against a motor

vehicle manufacturer where (a) the vehicle complies with

applicable federal standards that are required by law to “meet

the need for motor vehicle safety,” (b) the federal government

has rejected the precise standards used by plaintiffs’ expert to

condemn the product as defective, (c) the vehicle is as safe o1

safer than comparable vehicles, and (d) there is an objectively

reasonable, genuine debate over whether the product 1s

detective?

3, In evaluating punitive damages pursuant to the

federal due process de novo review standard, may a court

(a) apply the state-law substantial evidence test to presume

that the jury made findings it did not expressly make and to

disregard objective factors mitigating reprehensibility, and

(b) punish the manufacturer’s lawful conduct, including its

sale of a product to third parties not before the court, even

where the manufacturer prevailed in the previous eleven cases

involving that same product?

Sa

WHY REVIEW SHOULD BE

GRANTED

The decision below creates new and draconian rules for

product liability cases, including a virtual liability-without-

fault standard for punitive damages. Unless reviewed and

overtumed, that decision will render it irrelevant that a

manufacturer’s design decisions resulted in a product that

complies with industry standards and custom, comporis with

relevant federal safety standards and reasonable policy

judgments, and performs as well or better than comparable

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 manufacturer's conduct “despicable” on the strength

of nothing more than a finding that, as will almost always 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 rational. Review is necessary to conform

Califomia’s product liability and punitive damage law to

reason, common sense, and the United States Constitution.

Before this product design trial, eleven Ford Explorer

cases involving similar claims had gone to judgment, and in

all eleven cases judgment was entered in favor of Ford Motor

Company (hereafter “Ford”’). (Appellant's Appendix 1154-

1237 (hereafter ““AA’’).) But in this case, the jury returned

split verdicts finding that the Explorer was defective, and that

Ford had acted with “malice” in designing it. The jury

awarded an astonishing $368 million in compensatory and

punitive damages.

Although the Court of Appeal found that the jury was

inflamed by “passion and prejudice” and not acting as a “fair

and neutral trier of fact” (Buell-Wilson v. Ford Motor

Company (August 17, 2006, D045154, D045579) — slip

opinion, p. 37 (hereafter “slip opn.’’)), and thus reduced the

6a

compensatory and punitive damages to $82.6 million, it

otherwise affirmed the judgment. In so doing, the court

declared that the jury was empowered to regulate automotive

safety ~ even to the point of overnding the federal agency

expressly charged by Congress with this responsibility —

“because ‘[g]overnmenta! safety standards... have failed to

provide adequate consumer protection.’ (/d., pp. 49-50.) At

the same time, tn deciding three important issues of law, the

court jettisoned as irrelevant the most reliable and objective

information for making decisions about product design and

safety.

First, the court held as a matter of law that industry

standards and custom — inciuding comparative accident

Statistics showing that the product was as safe or safer than

comparable products — are “irrelevant not only to the issue of

defect, but also to punitive damages.” (Slip opn., p. 24.) This

holding departs from the rcasoning of Barker v. Lull

Engineering Co. (1978) 20 Cal.3d 413 (hereafter Barker),

extends a split among the Califomia courts of appeal, and

places California at odds with the majority of other

jurisdictions, as well as the Restatement Third of Torts,

Product Liability. The court’s ruling that it is “reversible

error’ (slip opn., p. 23) to allow introduction of such data

regarding how products comparatively perform in the real

world wil! preclude both plaintiffs and defendants from

providing juries with the most crucial information -- precisely

the kind that actual govemmental regulators themselves would

rely on — for making decisions about public safety. (See Daly

v. Gen. Motors Corp. (1978) 20 Cal.3d 725, 746 [Product

designs do not evolve in a vacuum, but must reflect the

realities of the market place, kitchen, highway, and shop”’);

Bammerlin v Navistar Int'l Transp. Corp. (7th Cir. 1994) 30

F.3d 898, 901 [Jurors are not engineers, and data on accident

rates speak more loudly than abstract arguments’ ’].)

Second, the court held that juries are authorized to deem

a manufacturer’s design decisions malicious, and impose

severe punishment, even where undisputed, objective

indicators — such as ongoing genuine debate in the

engineering community, accident data showing the product is

among the safest in its class, and governmental regulatory

decisions confirming the manufacturer’s judgment —

affirmatively refute malice as a matter of law. This ruling

contradicts California law, decisions from other junsdictions,

and due process. This issue is especially important because

punitive damages “pose an acute danger of arbitrary

deprivation of property.” (State Farm Mut. Auto. Ins. Co. v.

Campbell (2003) 538 U.S. 408, 417-18 (hereafter Strate

Farm).) The danger is heightened in design defect cases,

which require jurors to second-guess complex policy

judgments, in hindsight, regarding whether a product’s utility

outweighs its nsks, and always in the context of an accident

resulting in tragic personal injuries likely to provoke the jury’s

passion.

Third, the court misinterpreted the due-process

excessiveness standards governing punitive damages. These

standards require “exacting” de novo judicial scrutiny (see

State Farm, supra, pp. 417-18), but the court conflated de

wove review with state-law substantial evidence analysis and,

as a result, declined to consider key objective factors tn

upholding a record-setting $55 million punishment. Instead,

the court relied on factors condemned by State Farm, such as

Explorer sales to consumers not before the court, even though

Ford had prevailed in the cleven pnor Explorer cases.

For these reasons, this Court should grant review