Notable 2007 Jury Verdicts: $50M punitive award sidesteps high court ruling

In the first major punitive damages award since the U.S. Supreme Court placed new limits on punitive damages last February, a Los Angeles jury ordered DaimlerChrysler to pay $5.2 million in compensatory damages and $50 million in punitives to a man run over by his own truck.
The verdict was in favor of a 38-year-old longshoreman who died after he was run over when he tried to reenter a 1992 Dodge Dakota that had slipped from park to reverse. The man’s family man argued DaimlerChrysler had known about the problem for years but failed to address it, leaving millions of vehicles on the road that could spontaneously slip from park to reverse.
The verdict came down two weeks after the Supreme Court’s decision in Philip Morris USA v. Williams 127 S.Ct. 1057, which placed further constraints on punitive damages. The high court ruled that juries are not allowed to punish a defendant for injuries to non-parties.
But the plaintiffs’ lawyers attempted to make their punitive damages verdict bulletproof” by openly addressing the Supreme Court ruling in the jury instructions.
“We will keep that award because we were aware of the legal background as it shifted,” said plaintiffs’ attorney Scott Nealey of San Francisco.
The vehicle was owned by the injured man’s employer, who ignored a dozen recall notices on the transmission. The jury found the employer 15 percent liable, DaimlerChrysler 75 percent liable, and assessed the remaining 10 percent of the blame to the victim.
The defense maintained there’s no such thing as a position between park and reverse, noting that the company never found one, and neither did an investigation by the National Highway Traffic Safety Administration (NHTSA).
Chrysler contended that Mraz must have mistakenly put the vehicle in reverse, rather than park.
But the plaintiffs’ team countered with a “smoking gun” corporate memo they claim demonstrates the company never tested the three most problematic vehicles – the Dakota, the Jeep Cherokee and the Dodge Ram – to determine the cause of the problem. The memo, written by a senior safety manager at the company, warned that conducting a thorough investigation could provide “product liability credence to a hypothesis we have long ignored [and] continually challenged.”
So rather than do those tests, the company conducted a “fake recall,” according to Nealey, in which they switched out one part in the transmission for another. Several DaimlerChrysler engineers testified at trial that they were bewildered by the recall because it did nothing whatsoever to fix the problem.
Ultimately, jurors returned a verdict of $55.4 million. They awarded a little more than $3 million for economic damages, about $2 million for non-economic damages and $50 million in punitives.
Counsel for the defendants declined comment.
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Verdict: $55.2 million total
$50 million in punitive damages
State: California
Type of case: Product liability.
Trial: 1 week
Deliberations: 2 days
Status: An appeal has been filed. A schedule for briefing is expected in late January.
Case name: Mraz v. DaimlerChrysler
Date of verdict: March 7, 2007
Plaintiffs’ attorney: Robert Nelson and Scott Nealey of Lieff, Cabraser, Heimann & Bernstein in San Francisco; Chuck D. Naylor in San Pedro, Calif.
Defense attorneys: Robert M. Hanlon Jr. of Hanlon, Bogioli & Hanlon in Edison, N.J.; Barry R. Schirm, Dommond E. Lonnie and David Schultz of Grace, Cosgrove & Schirm in Los Angeles.