Punitive Damages In Products Liability Cases

Posted in on January 30, 2014

By Mark P. Robinson, Jr. and Kevin F. Calcagnie

The purpose of punitive damages is a public one – to publish wrongdoing and deter future misconduct by either the defendant or other potential wrongdoers. (Stevens v. Owens-Corning Fiberglass Corp. (1996) 49 Cal.App.4th 1645, 1658, 57 Cal.Rptr.2d 525; Adams v. Murakami (1991) 54 Cal.3d 105, 112, 284 Cal.Rptr. 318.) In order to sustain an award for punitive damages, proof of malice does not require an actual intent to harm. Conscious disregard for safety of another may be sufficient where the defendant is aware of the probable dangerous consequences of his or her conduct, and he or she willfully fails to avoid those consequences. (Taylor v. Superior Court, (1978) 24 Cal.3d 890, 894-5, 157 Cal.Rptr. 693).

In Potter v. Firestone and Rubber Company (1993) 6 Cal.4th 965, 1004, 25 Cal.Rptr.2d 550, the California Supreme Court cited two cases for guidance of the trial court as examples of where punitive damages may be assessed in unintentional tort actions. One of the those cases, Grimshaw v. Ford Motor Company (1981) 119 Cal.App.3d 757, 174 Cal.Rptr. 348, was a product liability action involving an automobile manufacturer. In Grimshaw, the plaintiff suffered burn injuries when his vehicle burst into flames during a rear-end collision. At trial, the evidence showed that Ford had known of the probability of such fires from its own previous testing. Ford could have made inexpensive design changes to prevent fuel tank fires, but instead deferred corrective action. The appellate court held that the evidence supported a finding of malice, justifying an award of punitive damages. (119 Cal.App.3d at 813)

Another example of punitive damages awarded where an automobile manufacturer has failed to remedy a defective design with an available safer alternative, is found in Hasson v. Ford Motor Company (1982) 32 Cal.3d 388, 138 Cal.Rptr. 705). In Hasson, the plaintiff was injured when the brakes failed on his vehicle. The evidence at trial showed that the brake loss was due to vaporization of the brake fluid, and that the manufacturer could have alleviated the danger by warning dealers and users to periodically replace brake fluid, or by installing a safer alternative design- a dual master cylinder- as factory equipment. Based on testimony that the manufacturer knew of the problem with its brake systems and yet failed to install dual master cylinders on the vehicles, the California Supreme Court held that substantial evidence supported the jury’s punitive damages award. (32 Cal.3d at pages 400-403.)

Failure to adequately test a product can also provide a basis for punitive damages. In West v. Johnson & Johnson Products, Inc. (1985) 174 Cal.App.3d 831, the court affirmed a punitive damages award against the manufacturer of a tampon, in an action by a plaintiff who contracted toxic shock syndrome. The evidence showed that adequate testing would have revealed an association between tampon use and toxic shock, that the manufacturer’s testing was inadequate, and that the manufacturer decided not to do any further testing even with faced with consumer complaints. The appellate court affirmed the award of punitive damages, holding that the evidence demonstrated that the manufacturer had acted in conscious disregard of the safety of others. (174 Cal.App.3d at 869)

Similarly, in Hilliard v. A.H. Robins (1983) 148 Cal.App.3d 374, a product liability action involving a defective intrauterine device, the appellate court found that the trial court had erred in granting a directed verdict for the defendant on the issue of punitive damages. The court found that there was substantial evidence from which a jury could have found that the manufacturer acted with a conscious disregard of the safety of others, justifying an award of punitive damages. The court pointed out the Robins was aware of “reports from its own employees” about the hazard with its design as well as injuries caused by the design, and “yet did practically nothing.” (148 Cal.App.3d at 397-8) The court also noted that the defendant’s failure to adequately test its product before marketing it or during marketing was evidence that the defendant had acted with a conscious disregard for safety. (148 Cal.App.3d at 399).

Relevance and Admissibility of Evidence on Punitive Damages

The elements of a claim for punitive damages may be established through a broad spectrum of both direct and circumstantial evidence. Malice may be proven either expressly through direct evidence or by implication through indirect evidence from which the jury draws inferences. (Taylor, supra at page 894; Angie M. v. Superior Court (Hiemstra) (1995) 44 Cal.Rptr. 2d 197, 228, 37 Cal.App.4th 1217) Ratification of conduct by a corporate employer may also be proved by circumstantial evidence. (Siva v. General Tire and Rubber Company, Inc. (1983) 146 Cal.App.3d 152, 159, 194 Cal.Rptr. 51; Hale v. Farmers Insurance Exchange (1974) 42 Cal.App.3d 681, 691, 117 Cal.Rptr. 146)

Where punitive damages are an issue, evidence of a defendant’s conduct which might otherwise be considered cumulative, is permissible to demonstrate the elements of a punitive damages claim:

“Cumulative evidence: The court has discretion to exclude evidence that is cumulative (or repetitive) of evidence already in the record…

“Compare punitive damages cases: Courts may be more willing to allow cumulative evidence where punitive damages are sought. Reason: Evidence of repeated wrongdoing establishes the tortfeasor’s awareness of the probable dangerous consequences of its conduct. [Hilliard v. A. H. Robins Co. (1983) 148 Cal.App.3d. 374, 400, 196 Cal.Rptr. 117, 134]”

(Wegner, Fairbank and Epstein, California Civil Trials and Evidence (TRG: 1996) Sections 8:3225-3227. Emphasis in text)

An analysis of the evidence which has been presented by plaintiffs in cases involving awards of punitive damages, demonstrates the wide range of relevance and admissibility on issues relating to punitive damages:

A. Corporate Knowledge

Pre-injury knowledge concerning potential injury or death resulting from a particular course of action or inaction, is perhaps the most important issue in a punitive damages claim. In a case involving a defective product, one of the most common sources of evidence in this regard is testing performed by the manufacturer. An example is found in Grimshaw v. Ford Motor Co. (1981) 119 Cal.App.3d 757, 174 Cal.Rptr. 348. In Grimshaw, an accident involving an individual who was burned when the Pinto in which he was a passenger burst into flames when struck from behind, the court held that the manufacturer’s conduct justified the jury’s award of punitive damages. The critical evidence on the issue of the manufacturer’s knowledge of the potential injury came from results of crash tests conducted by Ford. The appellate court concluded that there was ample evidence to support a finding of malice and Ford’s responsibility for malice, pointing out: “Through the results of the crash tests Ford knew that the Pinto’s fuel tank and rear structure would expose consumers to serious injury or death in a 20-30 mile-per-hour collision.” (119 Cal.App.3d. at 813) (See also, Toole v. Richardson-Merrell (1967) 251 Cal.App.2d, 689, 714, 60 Cal.Rptr. 398, wherein a drug manufacturer continued to defend the sale of a certain drug, even though tests demonstrated that it could cause blindness in test animals.)

A second source of evidence commonly used to establish knowledge on the part of a corporate defendant is information received concerning consumer complaints about an allegedly defective product. Such information has been held relevant to and admissible on the issue of conscious disregard for safety. (West v. Johnson & Johnson Products, Inc. (1985) 174 Cal.App.3d 831, 869, 220 Cal.Rptr. 437.)

B. Injury to or Disregard for Safety of Others

When presenting evidence related to punitive damages issues, the plaintiff is not limited exclusively to evidence concerning the plaintiff’s injuries. Evidence concerning injuries to others, including other types of injuries caused by the same conduct, has been held to be admissible.

In Hilliard v. A.H. Robins Co., supra, the plaintiff was permitted over the objection of defendants to introduce into evidence that the Dalkon Shield IUD used by the plaintiff had caused death and septic abortions in other users. The Appellate Court concluded that such evidence was relevant as having a tendency to prove that the defendant was aware of the probable dangerous consequences of its product. (148 Cal.App.3d at 399.)

The court concluded:

“The conscious disregard concept of malice does not limit an inquiry into the effect of the conduct and activities of the defendant on the plaintiff. The inquiry is directed at and is concerned with defendant’s conduct affecting the safety of others. Any evidence that directly or indirectly shows or permits an inference that defendant acted with a conscious disregard of the safety or rights of others, that defendant was aware of the probable dangerous consequences of defendant’s conduct and/or that defendant willfully and deliberately failed to avoid those consequences is relevant evidence.”

(148 Cal.App.3d 374, 401.)

Evidence concerning a disregard for the safety of others, whether or not such conduct results in injury to others, may also be admissible. In Barajas v. USA Petroleum Corp. (1986) 184 Cal.App.3d 974, 990, 220 Cal.Rptr. 513, an action against a petroleum corporation arising from an explosion at its plant, the trial court permitted evidence that there had been other incidents concerning failure to report fires and fire-related incidents, thereby jeopardizing the safety of workers in its plant. On appeal the court held that the trial court had not erred in allowing the evidence, noting that even though information about other incidents could have theoretically affected the liability and non-punitive damage assessment, such evidence was admissible on the issue of conscious disregard for safety, which had been alleged by the plaintiff. (See also, Nolin v. National Convenience Stores, Inc. (1979) 95 Cal.App.3d 279, 284, 157 Cal.Rptr. 32), wherein the plaintiff presented evidence of several prior accidents at the same location caused by the same condition.)

C. Conduct Subsequent to Plaintiff’s Injury

Hilliard, supra, also makes it clear that, at least in a product liability case, the plaintiff is not limited to evidence of the defendant’s conduct which occurred prior to the injury in question. In Hilliard, the trial court set an evidentiary cut-off date of May 1974 concerning the activities of the defendant, on the grounds that the plaintiff had stopped using the defendant’s product on that date. The ruling prevented plaintiff from presenting any evidence of the defendant’s subsequent activities in connection with the plaintiff’s punitive damages claim. However, the appellate court held that the rulings were erroneous, since the evidence reflected directly on the issues related to punitive damages:

“Proffered evidence which deals with events occurring after plaintiff had last used the product is generally inadmissible. On the issue of malice and punitive damages, however, the plaintiff may present any evidence which would tend to prove the essential factors of the conscious disregard concept of malice. This includes evidence of subsequent activities and conduct of defendant Robins .”

(148 Cal.App.3d at 374.)

The court went on to state:

“Evidence Code Section 1151 makes evidence of subsequent repairs inadmissible to establish prior negligence or other culpable conduct. This statutory exclusion of evidence rule is based on the public policy consideration that the exclusion of evidence encourages persons to take subsequent precaution for the purpose of promoting and encouraging safety, without fear of having such conduct used to establish liability…

“The policy purpose of Evidence Code Section 1151 is to exclude evidence of affirmative, remedial or precautionary conduct. The policy consideration was not to exclude evidence of the failure to make changes in a defective product or the failure to withdraw a dangerous product from the market. Admitting evidence of no product change or of no withdrawal from the market, on the issue of punitive damages, is consistent with the public policy consideration of Evidence Code Section 1151. Failure to make changes in a known defective product or failure to remove such a product from the market does not promote public safety.

“Such conduct is contrary to any policy aimed at promoting or encouraging product safety. Such conduct is admissible evidence on the punitive damages issue in order to provide meaningful consumer protection against the manufacture and distribution of dangerous, defective products.”

(148 Cal.App.3d at 401-2.)

D. Government Action

Where a government agency has made an inquiry or investigation with respect to the defendant’s products and the defect in question, those communications are relevant to the issues of knowledge and conscious disregard for safety. According to the court in Hilliard, supra, the fact that the defendant failed to remove its product from the market until it was pressured to do so by the Food and Drug Administration was evidence of its awareness of the probable dangerous consequences of its product and its deliberate failure to avoid those consequences. (148 Cal.App.3d at 399.)

Similarly, in Toole, supra, it was shown that the Food and Drug Administration had compelled the defendant manufacturer to issue a drastic warning letter notifying the medical profession of known cases of cataracts in humans from use of its drug, thereby demonstrating knowledge of the probable risk of harm. (251 Cal.App.2d at 715.)

In West v. Johnson & Johnson, supra, evidence that a government agency had, without the assistance of a manufacturer, quickly determined the relationship between the product use and injuries, where the manufacturer had not done a similar analysis, was held to be evidence of inadequate testing, supporting a finding of a conscious disregard of the safety of others. (174 Cal.App.3d at 869.)

E. False Representations and Concealment

In addition to providing a basis for an allegation of fraud, false representations by a defendant concerning safety may demonstrate a conscious disregard for safety. In Hilliard, supra, evidence was submitted showing that the manufacturer’s “detailman” (a combination of salesperson and public relations person) made false representations concerning the safety of the

subject product. (148 Cal.App.3d at 410-411.) In Toole, supra, the evidence demonstrated that appellant’s salesmen had been instructed by their employer to blame side effects on other drugs. In addition, there was evidence that the manufacturer had falsified test data. (251 Cal.App.2d at 714-15.)

Evidence that a manufacturer has concealed or withheld information concerning the dangers of its products from a government agency is also relevant and admissible on the issue of malice. In Toole, supra, the Court of Appeals concluded that malice and willful and reckless conduct was established by the evidence, including “falsification of test data” “and the withholding from the FDA and the medical profession of vital information” regarding testing of the product. (251 Cal.App.2d at 714)

It is important to note that fraudulent conduct for purposes of punitive damages is not the same as a cause of action for fraud. Punitive damages are merely a remedy incident to a cause of action. (Hilliard v. A.H. Robins (1983) 148 Cal.App.3d 374, 391) Civil Code Section 3294’s definition of fraud does not require reliance by the injured party, or that a promise be made to the plaintiff:

“‘Fraud’ means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.”

(See also Pistorius v. Prudential Insurance Company of America (1981) 123 Cal.App.3d 541, 556, 176 Cal.Rptr. 660, wherein the court held that it was proper to instruct that punitive damages may be recovered by reason of defendant’s fraud or malice or oppression, without establishing that the underlying cause of action was fraud.)

F. Testimony of Defendant’s Former or Current Employees

Testimony of defendant’s former or current employees relating to actions and inactions by the company is relevant and admissible on the issues of conscious disregard for safety. For example, In Hasson v. Ford Motor Co. (1982) 32 Cal.3d 388, 138 Cal.Rptr. 705, a former employee of the defendant for 30 years who held numerous high level engineering and management positions, testified that Ford knew of a problem with the braking systems on Lincoln Continentals, but that it deliberately failed to warn dealers or owners of available remedial steps because it was protecting the Continental’s reputation among consumers. He further testified that Ford deliberately failed to run adequate tests to accurately define the nature of the problem. (32 Cal.3d at 402-403.) The Appellate Court recited this testimony in holding that there was substantial evidence supporting an award of punitive damages.

G. Expert Testimony

Expert witness testimony is relevant and admissible on issues relating to punitive damages, as well as in establishing the ultimate issue of conscious disregard for safety. In West, supra, plaintiff’s experts were permitted to testify that had the defendant performed appropriate testing of its product, the potential for injury would have been recognized much earlier than actually discovered. (174 Cal.App.3d at 851.)

On the issue of conscious disregard for safety, the plaintiff’s expert testified that the fact that the manufacturer had not performed particular tests or experiments on its product prior to marketing was “an act of unbelievable irresponsibility” and “obviously in total disregard to the public safety and welfare in my opinion.” (174 Cal.App.3d at 852 and 869.)

In Hasson v. Ford Motor Co., supra, the plaintiff’s expert was permitted to testify that in his opinion there had been a conscious disregard of safety on the part of Ford for its failure to put a dual master cylinder on its 1966 Lincoln Continental. (32 Cal.3d at 403.)

H. Business Promotion and Marketing

Where a defendant’s business activity subjects the public to potential danger, evidence that the defendant has continued to promote its business despite such knowledge can support a punitive damages claim. For example, in a product liability action, evidence of a manufacturer’s efforts to continue to market its product, despite knowledge of the potential for harm, is admissible on the issues related to punitive damages. In Hilliard v. A.H. Robins, supra, the Court concluded that evidence of any conduct by the defendant in continuing to manufacture its product while aware of the probable dangerous consequences, would have a tendency to prove that the defendant willfully and deliberately failed to avoid those consequences. (148 Cal.App.3d at 399.)

In Toole v. Richardson-Merrell, Inc. (1967) 251 Cal.App.2d 689, 715, 60 Cal.Rptr. 398, evidence that the defendant “continued with plans vigorously to promote” the sale of its product and of “marketing, promoting, selling and maintaining” the product on the market in view of its knowledge of the toxic effects, was held to amount to a reckless and wanton disregard, justifying an award of punitive damages.

I. Profit Motive or Cost Savings

Evidence of a defendant’s pecuniary motivation in failing to alter its course of conduct despite a substantial risk of harm, is also a factor in demonstrating a willful and conscious disregard for safety. In Grimshaw, supra, Ford internal documents showed that placement of the gas tank of the Pinto over the axle surrounded with a protective barrier would have cost $9.95 per car, and that equipping the car with a reinforced rear structure, smooth axle, improved bumper and additional crush space would have cost only $15.30 per vehicle. Despite this information, management decided to defer these “fixes” based on cost savings. (119 Cal.App.3d at 776-7.) The Appellate Court noted:

“There was evidence that Ford could have corrected the hazardous design defects at minimal cost but decided to defer correction of the shortcomings by engaging in a cost benefit analysis balancing human lives and limbs against corporate profits. Ford’s institutional mentality was shown to be one of callous indifference to public safety. There was substantial evidence that Ford’s conduct constituted a conscious disregard of the probability of injury to the members of the consuming public.”

(119 Cal.App.3d at 813.)

In Toole, supra, evidence of the defendant’s profit motive was submitted in the form of testimony establishing that a vice president, in response to a suggestion that the company’s drug should be withdrawn from the market, stated that the drug “was the biggest and most important drug in Merrell history… and that the company intended to defend it at every step.” (251 Cal.App.2d at 714-15.)

J. Evidence of Corporate Authorization or Ratification

Frequently, decisions approving wrongful conduct are allegedly made by “lower level” employees, whom the defense will claim do not fall within the definition of “officer, director or managing agent.” BAJI 14.74 provides:

“An agent-employee acts in a managerial capacity where the degree of discretion permitted the agent-employee in making decisions is such that the agent’s employee’s decisions will ultimately determine the business policy of the principal-employer.”

In making a determination on the issue of managerial capacity, an employee’s title is not determinative. A defendant may not insulate itself from liability by giving an employee a non-managerial title and relegating to him crucial policy decisions. (Egan v. Mutual of Omaha Insurance Co. (1979) 24 Cal.3d 809, 823, 157 Cal.Rptr. 482.)

When employees personally manage crucial aspects of the employer’s relationship with others, with little if any supervision, they possess sufficient discretion for the law to impute their actions to the corporation. (Egan, supra, at p. 823.) Moreover, if top management has insulated itself from the decision making process, such that lower level employees find themselves without power to correct wrongful conduct, those persons may be held to be acting in a managerial capacity.

In Grimshaw v. Ford Motor Company, supra, the defendant contended that two individuals who were aware of the results of the crash tests and defects in the Pinto’s fuel tank system did not occupy managerial positions. The court rejected this argument, stating that it could be inferred from the testimony either that the two engineers had approached management

about redesigning the vehicle or that, being aware of management’s attitude, they decided to do nothing, and that therefore the decision not to take corrective action was made by persons “exercising managerial authority.” (119 Cal.App.3d at p. 814.)

Punitive Damage Awards in Automobile Products Liability Cases

A. Safety vs. Profits

Evidence that an automobile manufacturer has been made aware of a design defect, but has chosen to defer corrective measures in order to maximize profits, has played a significant role in punitive damages awards. In Ford Motor Company v. Durrill, 714 S.W.2d 329 (Tex.App. – Corpus Christi 1986), the parents of a girl who sustained fatal burn injuries in a rear-end accident brought suit against the manufacturer of their 1974 Mustang II. The plaintiffs contended that the fuel tank was located in a hostile environment in that it was punctured and torn by adjacent components, and that the filler neck had pulled out. The jury rendered a substantial punitive damages award and the manufacturer appealed.

In finding that punitive damages were appropriate, the court found significance in the evidence concerning the cost savings realized by the manufacturer through deferring implementation of safer alternative designs:

“It is apparent from the record that Ford knew that there was a risk of fuel tank puncture and resulting fires, had the technology to substantially reduce the risk of such fires, but did not do so. There was also evidence from which the jury could infer that for the most part Ford did not act until mandated by the government. Ford saved more than 200 million dollars over a three year period by delaying implementation of modifications of its fuel integrity system.”

(714 S.W.2d 338)

The court also found that evidence concerning Ford’s attitude toward government safety regulations had a clear bearing on the issue of “conscious indifference to the rights and safety of others.” At trial the plaintiffs had submitted the deposition of the acting head of the National Highway Traffic Safety Administration (NHTSA) concerning a meeting with President Nixon in 1971 “regarding the need of the government to be aware of costs and problems involved in implementing government regulations.” The deposition included testimony:

“…that Iaccoca and Henry Ford II had expressed to him many times that ‘safety has really killed all of our business’. They had also expressed to him the notion that the Japanese were a threat to the automobile business. They had told him that they wished the government was not as stringent regarding safety.”

(714) S.W.2d at 339)

In Ford Motor Company v. Stubblefield 171 Ga.App.331 (1984), a passenger in a 1975 Mustang II sustained fatal burn injuries when rear-ended by another vehicle. In the subsequent product liability action the decedent’s heirs were awarded punitive damages. In affirming the award the appellate court noted:

“The evidence here was sufficient to authorize the jury to find the sum of $8 million dollars was an amount necessary to deter Ford from repeating its conduct. That is, its conscious decisions to defer implementation of safety devices in order to protect its profits. One internal memo estimated that ‘the total financial effect of the fuel system integrity program [would] reduce company profits over the 1973-1976 cycle by $(109) million’, and recommended that Ford ‘defer adoption of the [safety measures] on all affected cars until 1976 to realize a design cost savings of $20.9 million compared to 1974’.”

(319 S.E.3d at 481)

In American Motors Corporation v. Ellis, 403 So.2d 459 (Fla.App. 1981), the trial court directed a verdict for the manufacturer on a punitive damages claim. However, the appellate court reversed and ordered a new trial on punitive damages, holding that the trial court had erred in directing a verdict on that issue. In doing so, the court noted that the jury could have found that the manufacturer had decided to forego a recommended design change in order to protect its profits:

“In the present case, there was evidence educed from which the jury could have found that AMC was aware of the catastrophic results of fuel tank fires in its vehicles from its own crash tests, and that AMC chose not to implement the recommendations of its engineers to relocate the fuel tank in order to maximize profits.”

(403 So.2d at 467)

B. Consumer Complaints

An automobile manufacturer’s actions, or lack thereof, in response to complaints about its automobiles, can support punitive damages. Where a manufacturer has received information about safety-related malfunctions of its vehicles which are being used by the public, an inadequate response may demonstrate sufficient disregard for safety to justify punitive damages.

In Ford Motor Company v. Nowak, 638 S.W.2d 582 (Tex.App. – Corpus Christi 1982), a wrongful death action, the decedent had left her engine on and walked behind her car to close a gate. The car shifted into gear and rolled over her, causing fatal injuries. The decedent’s heirs brought suit against the manufacturer on a theory of “false park”, contending that the defective design of the shift lever was such that it could be left in a position which would appear to be in park, but in fact would be in an intermediate position such that vehicle vibration could move the transmission into reverse.

Appealing from the jury verdict which included an award of punitive damages, the manufacturer argued that punitive damages were not appropriate. In reviewing the evidence, the court noted the consumer complaints received by Ford, as well as Ford’s failure to correct the problem:

“In the instant case, the pertinent evidence is as follows: Between 1971 and 1977 Ford received numerous complaints from several people regarding the problem of the FMX transmission self-shifting from park to reverse if the vehicle was not properly shifted into park, i.e., left on the gate post. Of the accident reports received by Ford between 1971 and 1977 on automatic transmission passenger cars, 234 accidents appeared to have been caused by an untended car backing up. Of those 234 cases, 89 of them resulted in some type of injury to the operator, pedestrians or someone outside the car. There were 728 accidents between 1971 and 1977 that were attributed to the failure of the transmission.”

(638 S.W.2d at 593)

Although Ford changed the owner’s manual to include a cautionary instruction about shifting into park, the court stated that Ford had demonstrated a “willful disregard of the consumers of such defect over a lengthy period of time.”

“Even this was not a correction of the design defect, but was an instruction to the owners of Ford automobiles. After reviewing all of the evidence, it is apparent that Ford knew of the dangerous condition but failed to correct it when it was economically and technologically able to do so.”

(638 S.W.2d at 596)

In Rinker v. Ford Motor Company, 567 S.W.2d 655 (Mo.App. 1978), the plaintiff was injured when her 1969 LTD continued to accelerate after she had taken her foot off the accelerator. The plaintiff alleged that the fast idle cam on the carburetor had broken because it was made of a nylon which degrades and fractures easily. The evidence included a summary and report from Ford Motor Company to the United States Department of Transportation showing that Ford had received 29 reports from owners of Ford made vehicles who had reported fast idle cam breakage, causing jamming of throttles on similar carburetors. (567 S.W.2d at 663)

Appealing from an award which included punitive damages, Ford contended that there was no evidence of conduct on its part which reached the “aggravated character indispensable to an award of punitive damages.” In upholding the award, the appellate court stated:

“The evidence would have permitted the jury to find that Ford’s director of automotive safety knew that a limited number of 1968 and 1969 Ford vehicles were equipped with fast idle cams subject to breakage; that a broken fast idle cam could cause the throttle to jam open, hurtling the vehicle forward at a high rate of speed with no effective method of properly stopping the car; that prior to Ms. Rinker’s accident, over a period of four years, 29 reports of incidents involving broken fast idle cams had been received by Ford; that Ford took no steps to warn its dealers or customers of this problem.”

(567 S.W.2d at 667)

“In this case the jury could undoubtedly have found that the breaking of a cam and the jamming of the accelerator causing the vehicle to travel at a high rate of speed without an effective means of control was a threat to safety of not only the occupant of the vehicle but also to the occupants of other vehicles and pedestrians in the vicinity. The jury had the right to weigh Ford’s inactivity against the hazard presented and could well conclude that Ford consciously or knowingly elected to disregard what it well knew to be a genuine potential for danger.”

(567 S.W.2d at 668)

C. Crash Testing

Aside from consumer complaints, another direct source for a manufacturer’s knowledge of defective designs is the crash testing performed on its vehicles. Manufacturers are required to extensively test their vehicles to determine their crashworthiness by simulating collision impact forces. These tests tell the manufacturer how a vehicle’s various systems will fare in a collision, and may reveal safety deficiencies that should be remedied, but which are sometimes ignored.

In Toyota Motor Co., Ltd. v. Moll, 438 So.2d 192 (Fla. App. 1983), a fuel system crashworthiness case involving a 1973 Toyota Corona, three sisters sustained fatal burns when they were struck from behind by another vehicle. In affirming the award of punitive damages, the appellate court noted that Toyota’s crash tests from the mid to late-60’s demonstrated Toyota’s knowledge of defects in the design used on the Corona’s fuel system:

“On the issue of punitive damages, the inquiry focused on Toyota’s knowledge of these defects and its failure to take prompt remedial action. Testimony revealed that Toyota learned as early as 1966 or 1967, that the rigid filler pipe would rotate forward, i.e., it would face into the trunk space, if the car was hit in the rear by another vehicle going 20 miles per hour. This was significant because there is virtually no protection between the trunk space and the passenger compartment in the 1973 Toyota Corona. The 1966 or 67 crash tests also indicated that the gas cap would be pried off as the filler neck rotated forward…

We hold that the record in the case at bar fully justifies the trial court’s decision to submit the issue of punitive damages to the jury. Moreover, there is ample evidence from which the jury could have reasonably concluded that Toyota knew of the defects and, in wanton disregard of the safety of the purchasing public, continued to market the ’73 Corona without correcting its life-threatening design flaws.”

(438 So.2d at 195)

Crash testing was also used to show knowledge on the part of the manufacturer in Ford Motor Co. v. Durrill, supra:

“There was also evidence that Ford had tested the ‘breakaway’ filler pipe and had determined that a nitrile nylon liner was capable of sustaining impacts at higher impact levels but did not use either. A crash test on a 1971 Pinto revealed pull-out of the fuel tank and leakage through a puncture in the upper right front surface of the fuel tank which was caused by contact between the fuel tank and a bolt in the differential housing.”

(714 S.W.2d at 338)

In American Motors Corporation v. Ellis, supra, the court allowed evidence of crash testing, even though most of the tests were performed after the sale of the subject vehicle, for the purpose of showing feasibility of later design changes, which were developed through such testing. (403 So.2d at 464-6)

D. Misleading or Deceptive Marketing

When an automobile manufacturer intentionally or negligently makes false representations concerning the safety of its product, such conduct may be a basis for an award of punitive damages. An example is found in Leichtamer v. American Motors Corporation, Ohio 424 N.E.2d 568 (1981). In Leichtamer, two individuals were killed and two others were seriously injured when their Jeep CJ-7 pitched over while negotiating a double terraced hill. At trial the plaintiffs alleged that the injuries were proximately caused by the displacement of the vehicle’s roll bar, which resulted from a weakness of the sheet metal housing upon which the roll bar attached. The plaintiffs also contended that the advertised use of the vehicle involved a great risk of forward pitch-overs.

At trial the plaintiffs presented evidence of a national advertising program by AMC which included a multi-million dollar television ad campaign encouraging people to buy a Jeep:

“The television advertising campaign was aimed at encouraging people to buy a Jeep as follows:

‘Ever discover the rough, exciting world of mountains, forests, rugged terrain? The original Jeep can get you there, and Jeep guts will bring you back…’ The campaign also stressed the ability of the Jeep to drive up and down steep hills. One Jeep CJ-7 television advertisement, for example, challenges a young man, accompanied by his girlfriend: ‘…[Y]ou guys aren’t yellow, are you? Is it a steep hill? Yeah, little lady, you could say it is a steep hill. Let’s try it. The king of the hill is about to discover the new Jeep CJ-7…’ Moreover, the owners manual for the Jeep CJ-5/CJ-7 provided instructions as to how ‘a four-wheel drive vehicle can proceed in safety down a grade which could not be negotiated safely by a conventional two-wheel drive vehicle.”

(424 N.E.2d at 572-3)

In response to interrogatories, the jury found that Jeep had used “willfully suggestive advertising depicting Jeeps going up and down steep and rugged terrain without any risk or warning.” (424 N.E.2d at 573)

The appellate court upheld the award of punitive damages, finding that although the advertisements alone were not sufficient evidence of malice, when taken in conjunction with inadequate testing, the advertising campaign provided a basis for punitive damages:

“The television and commercial advertising considered in conjunction with the evidence pertaining to the testing of the vehicle for rollovers and pitch-overs is sufficient, however, to support a finding of punitive damages…The commercial advertising clearly contemplates off-the-road use of the vehicle. The salesman’s guide to the vehicle described the roll bar in the following terms: ‘Surround yourself and your passengers with the strength of a rugged, reinforced steel roll bar for added protection. A very practical item, and a must if you run competition with a 4WD club. Adds rugged good looks too.’ Given the foreseeability of rollovers and pitch-overs, the failure of appellants to test to determine whether the roll bar ‘added protection’ represents a flagrant indifference to the probability that a user might be exposed to an unreasonable risk of harm. For appellants to have encouraged off-the-road use while providing a roll bar that did little more than add ‘rugged good looks’ is a sufficient basis for an award of punitive damages.”

(424 N.E.2d at 580)

Although the manufacturer contended that the television commercials should not have been admitted in the absence of a specific representation contained in the commercials as to the quality or merit of the product, and in the absence of testimony from the plaintiff that the use of

the product was in reliance upon such representations, the appellate court held the advertisements were germane to the issues of the product’s intended and foreseeable use.

“The commercial advertising of a product will be the guiding force upon the expectations of consumers with regard to the safety of a product, and is highly relevant to a formulation of what those expectations might be. The particular manner in which a product is advertised as being used is also relevant to a determination of the intended and reasonably foreseeable uses of the product.”

(424 N.E.2d at 578)

E. Inadequate Testing

As noted by the court in Leichtamer, supra, the adequacy of an automobile manufacturer’s testing can reflect on the question of disregard for safety. In Leichtamer, the court found it noteworthy that the vehicle had not been sufficiently tested:

“The manufacturer alone has the ability to screen out many product hazards that are hidden from the consumer. While a manufacturer has no duty to provide a crash proof vehicle (Citation), the record reveals that these appellants took no steps to ascertain the safety of the roll bar device of the 1976 Jeep CJ-7 vehicles. According to interrogatories answered by appellants, no ‘proving ground’ tests, ‘vibration or shock’ tests, or ‘crash’ tests were performed on a 1976 Jeep vehicle equipped with roll bar assemblies.”

(424 N.E.2d at 580)

Other decisions have also addressed claims of inadequate testing by the vehicle manufacturer in the context of punitive damages. In Maxey v. Freightliner Corporation, 722 F.2d 1238 (5th Cir. 1984), a husband and wife were burned to death when their 1963 Freightliner truck tilted on its side and the right fuel tank ruptured. In the subsequent wrongful death action the heirs contended that the fuel system located outside the frame rails of the vehicle was an unreasonably dangerous location.

The trial court granted a judgment notwithstanding the verdict on the punitive damages claim, but the appellate court reversed. Relying heavily on the lack of testing done by the manufacturer, the court held that there was evidence from which a jury might infer a conscious indifference to safety:

“Although Freightliner commenced manufacturing the trucks with this fuel system designed in the 1950’s, it neglected to test its product before marketing and in the succeeding years. It made no effort to modify its fuel tank design or placement or to conduct further tests after a 1965 drop test demonstrated tank rupturability. Freightliner never crash tested an old or new truck with such tanks, and never considered doing so, although the evidence indicates that the crash danger of placing fuel tanks in impact areas was a subject of theoretical critiques since the 1940’s, so that, consequently, crash resistant fuel systems had been developed, for instance, for army helicopters and Indianapolis race cars. The defendant Freightliner’s annual budget has never and does not now include any items concerned with crash safety, nor does the company employ a crash safety expert on its staff.”

(722 F.2d at 1241)

In American Motors Corporation v. Ellis, supra, the court commented that the manufacturer “failed to conduct further crash tests or experiments to determine feasible alternatives, despite its knowledge that its present design could not survive crash tests at relatively low speeds.” (403 So.2d at 467)

F. Failure to Warn

The failure of an automobile manufacturer to warn the public of a known hazard, in addition to establishing that a product is defective, may also provide support to a claim for punitive damages.

In Ford Motor Co. v. Durrill, supra, the plaintiff contended that Ford’s failure to warn of the defective design of the Mustang II’s fuel system was a proximate cause of the plaintiff’s damages. The evidence showed that the vehicle owner, who also owned a Pinto, received a recall letter from Ford concerning the Pinto, and that the plaintiff instructed his employees not to drive it. He was informed by a Ford dealer that the letter did not apply to Mustang II’s. In reviewing the evidence supporting the jury’s findings of gross negligence, which it defined as “a conscious indifference to the rights or welfare of others,” the court stated:

“There was also ample evidence for the jury to conclude that the Ford Pinto and the Mustang II were essentially the same vehicle with regard to fuel system integrity, that Ford knew it, but chose not to warn Mustang II owners as they had done the Pinto owners.”

(714 S.W.2d at 338)