20 May Olson v Hyundai Motor Co.
Just last week a Polson jury found that two Missoula teenagers died in a head-on wreck because the Hyundai Tiburon they were driving contained a defective steering knuckle. I don’t usually blog about verdicts for the sake of blogging about verdicts — but this one ties in with what we’ve been talking about the last several weeks on the blog: punitive damages.
The facts of the case were that cousins Trevor Olson — 19 years old — and Tanner Olson — 14 years old — were driving on Highway 93 when their Hyundai Tiburon swerved into oncoming traffic, killing the Olson cousins as well as one of the occupants of the oncoming vehicle. The Olsons’ attorneys argued that it was the defective steering wheel that caused the wreck. Hyundai’s attorneys argued that the boys had purchased and set off a firecracker in the vehicle, which caused the wreck.
Not only did the jury find that a defect in the Hyundai caused the wreck, but they found that $5,606,668 is the amount that will balance the scales to compensate Trevor’s family and his estate for his death (including $500,000 to each of his siblings). The jury also found that Tanner’s family will be compensated by $2.5 million for his death (and $500,000 to his siblings). That is, $8,106,668 in compensatory damages.
Then, the jury found that Hyundai acted with actual malice by covering up the defective steering wheel. The penalty for such cover-up? $240 million in punitive damages.
This punitive damages verdict, of course, blows the $10 million Montana punitive damages cap out of the water. It also errs of State Farm v. Campbell. Remember that Campbell essentially holds that anything higher than a 9 to 1 ratio of punies to compensatory damages is unconstitutional (here, here and here).
It sounds like the defendants are going to appeal a lot of things about this verdict. It sounds like the biggest problem the defense has with the trial was the judge’s various rulings on what kind of evidence would be allowed before the jury.
But, what else do I expect to see thrown into the appeal? The basis of the verdict. Not only do I think the defense may quibble about the compensatory damages, but, obviously, the punies. What will the Montana Supreme Court say about the Montana punitive damages cap in Masters? And, if it strikes that cap down there, how will it interpret Campbell? Will it cut the punitive damages down to $72 million (9 x 8 million compensatories) or will it find some grounds in Campbell to explain that this is one of those cases punitive damages beyond a 10 to 1 ratio should be allowed? I think that there is room for this argument. After all, the United States Supreme Court stated that Campbell was all about economic damages. In Olson, two teenaged boys are dead (as is a mother of two young children), it seems the factors under Campbell’s guidepost one are different enough to warrant a different result.
And, what do you think? Is $240 million too much to punish a company that a jury found killed two boys on the cusp of manhood by ignoring a serious defect?