COURT OF APPEAL AFFIRMS $55 MILLION PUNITIVE DAMAGES AWARD AFTER REMAND FROM U.S. SUPREME COURT

Buell-Wilson v. Ford Motor Co. (March 10, 2008, D045154) ___ Cal.App.4th ___

This opinion from the Fourth Appellate District, Division One, holds that Ford forfeited any claim to a new trial based on its argument that the jury improperly imposed punitive damages for harm caused to nonparties. The case involved a product defect action against Ford arising out of the rollover of a Ford Explorer. A jury awarded plaintiff over $109 million in compensatory damages, including $105 million in noneconomic damages. The jury also awarded plaintiff's husband $5 million for loss of consortium. The jury further found that Ford acted with oppression, fraud, or malice, and awarded $246 million in punitive damages. The trial court reduced plaintiff's noneconomic damages award to $65,393,996 and reduced the punitive damages to $75 million.

On appeal, the court further reduced the damages, concluding that the jury's compensatory award resulted from passion and prejudice, and ordering a remittitur of the noneconomic damages to $18 million, roughly four times the economic damages. Finally, the court reduced the punitive damages to $55 million, which represents about twice the amount of compensatory damages awarded, after reduction by the trial and appellate courts. The U.S. Supreme Court later vacated the Court of Appeal's decision and remanded it for reconsideration in light of Philip Morris USA v. Williams (2007) 127 S.Ct. 1057, which held that juries may not punish a defendant for harm to nonparties.

On remand, the Court of Appeal ruled that Ford had forfeited any right to request a new trial based on Williams. Although Ford had requested a jury instruction to protect against the risk of punishment for harm to nonparties, the court nevertheless found that Ford had forfeited its due process rights. First, Ford failed to anticipate the Supreme Court's precise holding in Williams --Ford's proposed instruction would have told the jury not to consider harm to others for any purpose, whereas Williams allows jurors to consider harm to others when evaluating the reprehensibility of the defendant's conduct. Second, Ford requested a fall-back instruction that told jurors they could only consider conduct affecting California citizens. Because that instruction allowed the jury to consider harm to nonparties in California, the court treated that as a forfeiture of Ford's right to insist on an instruction prohibiting punishment for nonparties altogether. Third, Ford failed to object to plaintiffs' counsel's closing argument, which tracked Ford's fallback instruction and asked the jury to punish for harm to nonparties in California. Fourth, Ford failed to request a limiting instruction at trial. Fifth, Ford had not complained about the instructional error in the prior appeal.

This opinion is similar to the Oregon Supreme Court's opinion on remand in Williams. Both cases were remanded by the U.S. Supreme Court, and the lower courts in both cases decided that the defendant had waived its right to complain about the sort of due process violation discussed in the Supreme Court's opinion.

Ford has announced its intent to seek review in the California Supreme Court. If Ford does not obtain Supreme Court review, this opinion's expansive waiver/forfeiture analysis will make it very difficult for parties to preserve arguments regarding instructional errors.

To monitor further developments in this and other punitive damages cases, visit our blog at http://www.calpunitives.com/.

www.horvitzlevy.com

If you do not wish to continue to receive these informational bulletins,
please e-mail jpaul@horvitzlevy.com with a subject line "UNSUBSCRIBE."