Jury Adds Punitive Award in Ford Case
A San Diego jury Thursday socked Ford Motor Co. with an enormous punitive damage verdict, bringing to $368.6 million the total awarded in the case of a San Diego woman who was paralyzed in the rollover of her Explorer SUV.
The punitive verdict of $246 million came two days after the jury awarded $122.6 million in compensatory damages to Benetta Buell-Wilson, 49, and her husband, Barry Wilson. The jury found that her 1997 Explorer was defective because of its instability and weak roof.
It was the first-ever damage award against Ford involving a rollover of an Explorer, perennially the country’s top-selling sport utility vehicle. Ford has settled hundreds of cases involving Explorer rollovers but had won 13 trials in which plaintiffs claimed Explorers were defective because of their rollover risk, inadequate roof strength or both.
“We will definitely appeal,” Ford spokeswoman Kathleen Vokes said after Thursday’s verdict in San Diego County Superior Court.
Among other things, Ford contends the judge erred in barring evidence comparing the safety of the Explorer with that of other SUVs.
“We can appreciate the empathy that this jury felt for the plaintiff, but this was an extremely severe crash initiated by the driver, and any SUV would have rolled over under similar circumstances,” she said.
Buell-Wilson was paralyzed after she lost control of her Explorer in January 2002. The vehicle ran off the road and rolled over 4 1/2 times.
In its initial verdict Tuesday, the jury decided to tack on punitive damages, voting 9 to 3 that Ford had acted with fraud or malice in its design and marketing of the Explorer. The additional $246 million was approved Thursday on the same 9-3 vote.
“Ford’s known for many years now ... that they had a stability problem in their SUV,” said Lou Arnell, a lawyer for Buell-Wilson. It was “certainly a profits over safety calculus.”
Arnell also said Ford “could have settled this case for a very small amount.... I think they were drunk and arrogant off their past successes.”
After Thursday’s verdict, Buell-Wilson offered to waive $100 million of the punitive damages if Ford agreed to recall all Explorers through the 2001 model year to improve their stability and roof strength. Ford redesigned the vehicles in 2002, widening the track and lowering the center of gravity to increase stability.
Buell-Wilson said she felt “really great” about the verdict, but added, “I’d feel even better if Ford took us up on our offer."Introduced in 1990, the Explorer triggered the SUV boom and revolutionized the vehicle market. More than 5 million Explorers are on the road today. Though sales of new Explorers fell from 433,847 in 2002 to 373,118 last year, the vehicle is still the most popular SUV and one of the top-selling vehicles of any kind.
James Lowe, a Cleveland plaintiffs’ lawyer, predicted that the verdict would raise pressure on Ford to increase settlement offers to avoid trials. Otherwise, Lowe said, Ford “will win some cases and then will get hammered again, because when juries ... understand the decisions Ford made” in designing the Explorer, “they will respond as this jury did.”
Ford is expected to ask Superior Court Judge Kevin Enright to slash the damages, which Ford lawyer Theodore Boutros called “patently unconstitutional” and “off the charts.”
The U.S. Supreme Court ruled in 2003 that punitive damages in most cases should not exceed compensatory damages by more than 9 to 1. With large compensatory awards, punitive awards should not be much greater than compensatory awards, the court said.
It’s unlikely the verdict will have a major effect on Ford, said an analyst who noted that the Explorer had survived worse blows to its reputation. In 2000, a massive recall was ordered of Firestone tires after a rash of deadly rollover wrecks linked to tire failures. Most of the roughly 350 deaths and hundreds of injuries in the U.S. and abroad involved tires mounted on Explorers.
According to David Healy, an analyst with Burnham Securities Inc., if the Explorer “could survive the entire Firestone rollover controversy without having any visible impact on sales, then probably one more case wouldn’t make any difference.”
Ford shares fell 14 cents Thursday to $14.75 on the New York Stock Exchange.
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Here are the largest verdicts in defective-product lawsuits against automakers. Many of the awards were later reduced by the trial judge or on appeal. Award Rank (mill.) Year Location Case description 1 $4,900.0 1999 California Anderson vs. General Motors; Malibu gas tank rupture; award was later reduced and case settled 2 368.6 2004 California Buell-Wilson vs. Ford; Explorer rollover; awaiting post-trial motions 3 296.2 1999 California Romo vs. Ford; Bronco II rollover; punitive damages reduced,paid 4 262.5 1997 South Carolina Jimenez vs. Chrysler; minivan rear-door latch failure; reversed, settled 5 225.0 2002 Texas Benavides vs. Ford; Ford F-150 door latch design; settled 6 153.2 1998 Nevada White vs. Ford; Ford F-350 parking brake; punitives reversed,retried 7 150.0 1996 Alabama Hardy vs. General Motors; Chevrolet S-10 Blazer door latch; settled 8 144.8 1998 Mississippi Robinson vs. Ford; Ranger rollover; settled 9 128.5 1978 California Grimshaw vs. Ford; Pinto rear-end collision fire; reduced, paid 10 122.0 2002 Alabama Jernigan vs. General Motors; Oldsmobile Delta 88 door beams; reversed, settled
Source: Bloomberg News