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Old 09-29-2004, 07:46   #1 (permalink)
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US:Damages are cut in Ford pickup case

Damages are cut in Ford pickup case

Victim's parents cite parking brake

BY MARGARET CRONIN FISK
BLOOMBERG

A federal judge ordered Ford Motor Co. to pay $41.5 million in punitive damages to the parents of a 3-year-old boy killed when an F-350 pickup truck ran over him.

U.S. District Judge David Warner Hagen in Reno, Nev., reduced a verdict of $52 million in punitive damages that a jury awarded in March to Jimmie and Ginny White, who claimed that a defective parking brake caused their son Walter's death.

In 1998, a jury had awarded the Whites $151 million in punitive and $2.3 million in actual damages. Actual damages were upheld on appeal while a new trial was ordered on punitive damages.

Ford asked Hagen to reverse or reduce the March punitive award, arguing that the judgment exceeded the 9:1 ratio set by the U.S. Supreme Court as the general limit of punitive damages to actual damages. Hagen said the company's failure to warn of a "dangerous product defect" triggered an exception to that Supreme Court rule.

"In light of the extreme reprehensibility of Ford's conduct, the disastrous consequences of its actions, and the difficulty in establishing proper compensation for the Whites' emotional harm, the court finds this is a case where the ratio of punitive to compensatory damages can and should exceed single digits," Hagen said.

Ford never corrected its failure to warn customers of the defect, Hagen said in a decision issued Aug. 31. The Dearborn carmaker instead "persisted" in "arguing that the defect never existed," Hagen said.

The $41.5-million punitive award is "unconstitutional and excessive," said Ford attorney Malcolm Wheeler, citing a reduction in an award against State Farm Mutual Automobile Insurance Co. after a 2003 U.S. Supreme Court decision.

"Under this court's interpretation of State Farm, every case with a death or serious injury would warrant a punitive judgment higher than a single-digit ratio," Wheeler said. "That's clearly not what the Supreme Court decided." Ford will appeal the decision, Wheeler said.

The State Farm ruling contained a loophole for punitive judgments, Stanford Law School professor Robert L. Rabin said. "The court in State Farm said that in most cases a single-digit award would satisfy the demands of due process, but they did leave an opening for particularly egregious cases," Rabin said.

The court allowed exceptions dependent on the behavior of the defendants and the injury, said Shanin Specter, attorney for the Whites.

The Whites said a defective parking brake had caused the Ford pickup to move as their son fell out of the truck. The Whites claimed that the F-350 brake had a "skip-out" problem and could spontaneously disengage, Specter said. Ford knew before Walter White's death in October 1994 that the truck could roll even if the parking brake had been engaged, Specter said.

Ford had issued a technical service bulletin to dealers warning of the problem and subsequently recalled its trucks to fix it, he said. "Ford told the government it would recall this in August 1994, but they did it in waves," Specter said.

The Whites didn't receive notice of the recall until March 1995, after their son's death, said Specter.

Any punitive award was unjustified because the company had instituted a voluntary recall, Wheeler said.
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