$4.9-Billion Jury Award Slams GMJul 10, 1999 | Detroit Free Press General Motors Corp. was slapped Friday with the largest penalty ever handed out in a product-liability case, a $4.9-billion judgment a Los Angeles jury awarded to six passengers severely burned in a 1979 Chevrolet Malibu.
On Christmas Eve 1993, a drunken motorist slammed into the rear of the Chevy Malibu and the gas tank exploded. Patricia Anderson, her four children and family friend Jo Tigner were all burned in the fire.
The Los Angeles Superior Court jury focused on GM documents that the plaintiffs' lawyers said showed the carmaker knew its gas tanks were unsafe, but was unwilling to pay for a recall of the vehicles.
A key piece of evidence was a 1973 memo prepared by engineer Ed Ivey that said deaths from fires cost GM only $2.40 a car and fixing the tank in a Malibu would cost GM as much as $4 to $12 per car. Later, GM proposed a design standard that aimed to prevent fuel system leaks in survivable accidents.
Juror Sheila Nash said the verdict "tells them they are responsible. They knew what they were doing. They had records of what they were doing."
The huge award stands out because it is by far the largest in a recent series of product liability judgments against Detroit automakers.
While some legal scholars contend the large awards reflect a general mood in the nation to hold individuals and institutions more accountable for their actions, others argue the legal system has run amok as lawyers convince juries to reach into the deep pockets of corporations. General Motors spokesman Terry Rhadigan said the verdict will be appealed. "It was a very severe crash and we estimate the speed of the driver who struck this vehicle at 70 m.p.h.," Rhadigan said. "Unfortunately they were sitting still at a stoplight."
"This extremely severe crash was caused by a single factor -- drunken driving," Rhadigan said. "This crash was not GM's fault."
Jurors awarded Anderson, her children and Tigner $107 million in compensatory damages and $4.8 billion in punitive damages.
"Not only is this the biggest judgment against an auto manufacturer, it is the largest personal-injury verdict ever, and the loudest message ever sent that the kind of behavior GM engaged in is not acceptable and they need to clear up their act," said Ralph Hoar, an Arlington, Va., product-liability lawyer who has argued hundreds of cases against the automakers.
"These verdicts are happening because people are increasingly upset when they see evidence of corporate misbehavior and people being unaccountable for their actions," Hoar said.
Until Friday, the largest product-liability judgment had been the $262.5-million award against Chrysler Corp. in October. It was awarded to the parents of a 6-year-old boy who died after he was thrown from a Chrysler minivan that had a defective rear-door latch. That case is on appeal.
Prior to that, an Alabama jury ordered GM to pay $150 million to a paralyzed man who said a door latch failed on his Chevrolet truck and he was thrown out in a rollover crash.
Last August, a jury awarded $2.3 million in compensatory damages and $150.9 million in punitive damages against Ford Motor Co. in the case of a 3-year-old Nevada boy who had climbed into his parents' Ford F-350 pickup in 1994 to look for his piggy bank, fell or jumped out and went under the wheels of the truck as it rolled down their driveway. He died from the injuries. His parents, Jimmie and Ginnie White, were held 40-percent responsible for the accident, so Ford was required to pay only 60 percent of the $2.3 million in compensatory damages.
Industry analysts said it is unlikely Ford will ever have to pay the family anything near the punitive judgment. Historically, most huge jury awards are reduced considerably on appeal.