The (Ir)relevance of BMW v. Gore to Products Liability Litigation

The (Ir)relevance of BMW v. Gore to Products Liability Litigation

In BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), the United States Supreme Court took an unprecedented step: it held that a punitive damages award that was the product of a constitutionally sufficient process nevertheless violated the Due Process Clause of the Fourteenth Amendment. The Court provided three "guideposts" for the inquiry into whether a punitive award is so "grossly excessive" as to violate due process:

1. the degree of reprehensibility of the defendant's conduct,
2. the ratio of the punitive award to the actual damages incurred by the plaintiff, and
3. the comparison of the punitive award to the civil or criminal penalties that could be imposed for comparable conduct. Gore, 517 U.S. at 575-76.

At the time, Gore seemed to provide defendants with a new arrow in the quiver with which to challenge punitive damage awards -- one grounded in substantive due process. Reported decisions reveal, however, that Gore has had no perceptible impact on punitive awards in the products liability field.

As of June 30, 1998, there are six reported products liability decisions since Gore involving excessiveness and/or due process challenges. None of these decisions conclude that the underlying punitive damages awards violate the defendant's due process rights. See Owens-Corning Fiberglas v. Ballard, 1998 WL 204710 (Fla. Dist. Ct. App.) (upholding, in a case where the compensatory award was $1.8 million, a $31 million punitive award in favor of plaintiff suffering from terminal lung cancer caused by exposure to asbestos products); Barnett v. La Société Anonyme Turbomeca France, 963 S.W.2d 639 (Mo. Ct. App. 1997) (finding, in a case where the trial court remitted the compensatory award to $25 million, that an $87.5 million punitive damages award against the manufacturer of a helicopter that stalled in mid-flight, killing plaintiffs' decedent, was not violative of defendant's due process rights, but reducing the punitive award on state law grounds); Mobil Oil Corp. v. Ellender, 934 S.W.2d 439 (Tx. Ct. App. 1996) (rejecting, in a case where the compensatory award was approximately $600,000, defendant's argument that $3.3 million award in favor of survivor of millwright who died of leukemia caused by benzene exposure violated due process, but reducing award on state law grounds), modified 1998 WL 226454 (Tex. May 8, 1998); Owens-Corning Fiberglas Corp. v. Rivera, 683 So.2d 154 (Fla. Dist. Ct. App. 1996) (rejecting, in a case where the compensatory damages were approximately $3.5 million, asbestos manufacturer's argument that $1.5 million punitive award, when viewed in the light of prior punitive damages awards in respect of same product, constituted violation of due process rights); Stevens v. Owens-Corning Fiberglas Corp., 57 Cal. Rptr. 2d 525 (1996) (rejecting same argument made by Owens-Corning in Rivera in a case where the compensatory award was approximately $25,000 and the punitive award was $2 million); Lakin v. Senco Products, Inc., 925 P. 2d 107 (Or. Ct. App. 1996) (rejecting manufacturer's argument that $4 million punitive award in favor of plaintiff seriously injured by "double firing" of nail gun was unconstitutionally excessive in a case where the compensatory award in favor of plaintiff and his wife totalled approximately $6.1 million).

It may be that it is too soon to evaluate the impact of Gore in the products liability field; none of the punitive awards at issue in the above-referenced decisions are as facially outrageous as the $4 million punitive award in favor of Dr. Gore, whose new car was de-valued $10,000 by BMW's undisclosed repairs. It also may be that in many jurisdictions state law mechanisms render Gore irrelevant; the Texas statute implicated in Ellender, for example, "capped" punitive damages at four times actual damages. See Ellender, supra, 934 S.W.2d at 463 (citing Tex. Civ. Prac & Rem. § 41.007, effective September 2, 1987). The Texas legislature subsequently amended the statute to restrict punitive awards to either two times economic damages plus noneconomic damages, or $200,000, whichever is greater, thereby further lessening the likelihood of a Gore-based challenge to a Texas punitive award.

This area merits close monitoring for developments in the personal injury arena.