GM Ordered to Pay Record $105.2 Million in Crash Case : Lawsuit: Jury finds that alleged design flaw in pickup led to youth’s death. Watchdog groups seek a recall.
An Atlanta jury on Thursday found General Motors Corp. liable for a teen-ager’s death in a fiery 1989 crash, awarding his family $105.2 million in damages and increasing the pressure for a nationwide recall of 4.7 million GM pickup trucks.
The award to the parents of 17-year-old Shannon Moseley included $101 million in punitive damages, which if upheld by the trial judge would be the largest amount ever paid in a product-liability case involving auto safety.
The punitive damages, which exceeded the amount sought by the Moseleys, amounted to a sharp slap from the jury to GM.
“It’s the strongest possible message to GM to recall these trucks,” said Clarence M. Ditlow, executive director of the Center for Auto Safety, a private watchdog group in Washington. “The jury was just incensed by GM’s 20-year cover-up of this defect.”
Ditlow described the alleged safety defect in the GM pickup as even worse than the reported problems with the Ford Pinto. Ford recalled 1971-1976 Pinto sedans after the government alleged that the subcompacts’ gas tanks tended to explode in rear-end collisions.
For financially troubled GM, the decision is yet one more blow. The auto maker faces more than 25 similar lawsuits, and the National Highway Traffic Safety Administration is considering a recall of the pickups.
GM has maintained that there is no design flaw in its 1973-1987 Chevrolet and GMC C-K series pickups. In a statement Thursday, the company said it was confident--despite the jury decision--that the government would conclude that the vehicles do not have a safety-related defect.
“We believe today’s verdict is not correct, and we intend to file an appeal,” the nation’s largest auto maker said. However, GM added that its representatives were prepared to meet with NHTSA officials to discuss the significance of the Moseley case.
The trucks’ fuel tank is mounted outside the vehicles’ frame, a design that safety watchdogs say makes them unusually prone to fires when struck from the side. The Center for Auto Safety has demanded a recall, claiming that 300 deaths have been caused by the design.
The Atlanta case--one of only a handful concerning the trucks that have gone to trial--drew widespread attention because of the federal investigation. Broadcast live on cable television’s Court TV service, the trial pitted the testimony of ex-GM Chairman Robert C. Stempel against that of former company safety engineer Ronald E. Elwell, who revealed damaging and previously unknown information about the auto maker’s internal decision-making processes.
The jury heard four weeks of testimony in Fulton County State Court and then deliberated for 19 hours over three days before returning its verdict in favor of Thomas and Elaine Moseley of Snellville, Ga.
Their son died after his 1985 GMC pickup was struck by a drunk driver in 1989. The Moseleys said their son survived the crash but died from a fire caused by the damaged fuel tank.
GM argued that the youth died from a head injury caused by the impact of the crash. The company denied that gasoline from the punctured fuel tank fed the fire.
The most damaging evidence against GM came from Elwell, the company’s former safety engineer for pickups. Elwell had testified on the auto maker’s behalf in previous cases.
In his testimony, Elwell painted a dark picture of a company that ordered employees not to write memos critical of its trucks. He also said GM did not conduct proper safety tests, knew early on that the placement of the fuel tanks was hazardous and failed to fix the problem.
Stempel--who was forced to resign late last year as chairman because of GM’s poor financial performance--testified that the GM trucks were safe. But under intense cross-examination by attorney James Butler Jr., he acknowledged that the pickups were more likely than competitors’ trucks to catch fire in side collisions.
In closing arguments, Butler warned that more consumers would die unless jurors spoke clearly. “GM has a heavy dose of justice coming,” he said. “The time is now.”
GM attorney Fred H. Bartlit Jr. told the jurors that much of the testimony in the case did not make sense. “We all feel desperately sorry for the Moseleys,” he said. “But testimony that is inconsistent with the laws of nature cannot help.”
In a separate hearing Thursday to set punitive damages, Butler argued that GM had shown callous disregard for consumers’ health and safety.
Bartlit acknowledged that the jury’s decision to award punitive damages was a “crushing blow.”
He added: “Your decision is going to make us a better company.”
But GM’s critics said that can only happen if the auto maker promptly recalls the trucks, a move the company seems unwilling to make at this time.
Nonetheless, the Center for Auto Safety and other consumer groups plan to launch a publicity campaign next week to pressure GM to voluntarily recall the pickups. The Clinton Administration also could bring pressure to bear.
“The adverse publicity that is going to flow from this decision--along with all the other problems GM is facing--is going to greatly increase pressure on GM to recall the vehicles,” said Stephen Oesch, general counsel of the Insurance Institute for Highway Safety. The Arlington, Va., group called for a recall last year after its independent tests indicated a safety defect.
Oesch, a former attorney for the NHTSA, also predicted public pressure will be brought to bear on the government to force a recall.
Ditlow said a recall would be the best move financially for GM, which is expected to report a 1992 loss of more than $20 billion next week, largely because of a charge for retiree health benefits.
He estimated that a voluntary recall would cost GM about $300 million. Without a recall, Ditlow said, continued litigation could cost the company more than $1 billion on top of the $200 million he says has already been paid.
The award in the Moseley case can be increased or lowered by Judge A. L. Thompson. Jury Verdict Research, which monitors legal proceedings, says the amount appears to be the largest auto-safety award ever.
