SUV Case Will Keep Haunting Automakers

Mike McKee
The Recorder
11-03-2006

Automakers’ pleas went unanswered Wednesday as the California Supreme Court refused to review or de-publish a ruling that leaves Ford Motor Co. on the hook for $82.6 million in damages and will probably expose the auto industry to greater liability for defective vehicles.

Theodore Boutrous Jr., a partner in Los Angeles’ Gibson, Dunn & Crutcher who represents Ford in the case, said the court’s decision "leaves California product liability law in a state of havoc." He claims the underlying ruling "is bad for both businesses and consumers and violates due process."

The automobile industry has had its eyes on the case since June 2004, when San Diego jurors awarded Benetta Buell-Wilson more than $368 million in damages after she was paralyzed when her Ford Explorer rolled over on Interstate 8.

Of that amount, $246 million was for punitive damages because jurors felt Ford had acted reprehensibly and had taken no steps to correct design flaws that made the vehicle prone to rollovers.

San Diego County Superior Court Judge Kevin Enright subsequently reduced the overall award to $150 million. Then four months ago, the 4th District Court of Appeal cut it even further, to $82.6 million.

In his petition for review, Boutrous argued that the trial court judge had erred in computing punitive damages. Even more worrisome to automakers, he added, the judge had prevented Ford from introducing critical evidence on industry safety standards.

In particular, he wrote, Judge Enright refused to let Ford present evidence that would have shown the Explorer was one of the safest sport utility vehicles on the road.

"The court of appeal’s ruling," Boutrous argued in his petition, "will require juries in countless product liability cases throughout the state to make ad hoc, individualized design defect determinations based not on how safely the product is actually performing in the real world, but on the opinions of litigation experts divorced from actual safety data."

Ford’s petition was supported in amicus curiae briefs filed by Nissan Motor Co., DaimlerChrysler Corp., American Honda Motor Co., Hyundai Motor Co., Mercedes-Benz USA, the Alliance of Automobile Manufacturers, the Product Liability Advisory Council, the California Chamber of Commerce and the Chamber of Commerce of the United States of America.

Donald Falk, a partner in Mayer, Brown, Rowe & Maw’s Palo Alto office who represents the Product Liability Advisory Council, wrote that he believed the appellate court’s ruling was the first to hold "that evidence comparing a product’s real-world safety record with that of other similar products is irrelevant to the question whether punitive damages should be awarded."

Jerome Falk Jr., a partner at Howard, Rice, Nemerovski, Canady, Falk & Rabkin who represented Buell-Wilson and her husband, responded in court papers by arguing that Ford’s position was flawed. Case law, he said, makes it clear that comparing a product’s safety or design features with those of competitors isn’t relevant.

"What matters, those cases hold," he wrote, "is whether the challenged product is defective, not whether other products on the market are."

Falk argued that "the salient facts are that Ford knew the Explorer was defectively dangerous, could have done something about it and didn’t."

Earlier this week, Boutrous said manufacturers were already seeing fallout from the appellate court ruling.

"Plaintiffs’ lawyers are saying that the evidence of how the product actually performs has to be excluded," he said. "It untethers the punitive damages from reality, so we’ll be seeing bad safety policy being made by juries."

The case is Buell-Wilson v. Ford Motor Co., S146150.