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GM Ordered to Pay Record $150 Million

From Reuters

An Alabama jury Monday ordered General Motors Corp. to pay a record $150 million in damages to a paralyzed man who alleged that a door latch on his Chevrolet S-10 Blazer failed in a crash, allowing him to be thrown from the vehicle, lawyers said.

The verdict is the largest ever against an auto maker, eclipsing a $125-million jury award against Ford Motor Co. in the early 1980s for design defects in the Pinto.

GM, which has its headquarters here, called the award “completely outrageous” and sharply criticized the Alabama court system for allowing increasingly high damage awards by juries.

“Today’s decision is the crowning example of a state tort system gone berserk,” GM General Counsel Thomas Gottschalk said in a statement. “We will appeal. This verdict should not be allowed to stand.”

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With $50 million in compensatory damages and $100 million in punitive damages, the jury award in Lowndes County (Ala.) Circuit Court is the largest ever against GM.

Lawyers for plaintiffs Alex and Thelma Hardy of Lowndes County alleged that the type of GM door latches used on their 1987 Blazer were weak and defective, placing consumers at risk.

About 125 million of the latches were installed in more than 40 million GM vehicles built between 1978 and 1987 in North America.

“The verdict reflects the awful fact that GM knew that Americans would be killed and injured because of a weak and substandard door latch that GM knew for 14 years was defective and was failing in wrecks,” said George Fryhofer, a lawyer for the Hardys.

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Alex Hardy was paralyzed from the waist down when his Blazer crashed on U.S. Route 80 on Aug. 3, 1991. He was ejected from the vehicle in the crash.

Hardy alleged that the truck’s axle broke, causing the crash, and that the driver’s side door came open when the car rolled over. GM contended that the door did not open and that the axle broke because of the crash and was not the cause of it.

GM said Hardy admitted shortly after the crash that he had fallen asleep at the wheel after drinking a few beers. However, a blood alcohol test was not taken until seven hours after the crash and results were not conclusive.

In court testimony, Hardy also admitted he was not wearing a seat belt at the time of the crash.

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Fryhofer said he will continue to campaign for GM to recall the door latches. He said court documents show that GM estimated in 1989 that a recall would have cost the auto maker about $916 million.

But GM said the latches meet or exceed all federal safety standards and have never been subject to an investigation by the National Highway Traffic Safety Administration.

According to federal accident statistics, the chance of an occupant being ejected from a 1982-87 model GM vehicle equipped with the latches are slightly less than in non-GM vehicles.

The auto maker began using a new generation of latches in the 1988 model year, but insists that does not mean the previous design had problems.

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