Vested Interest - Tort Briefs - July 2001 Issue

Ford, Firestone paying Heavily to bypass juries

Legal experts say Ford Motor Co. and Bridgestone/Firestone are paying unusually large settlements to avoid going before a jury. Depending on the particular factors in the case, the average defective-product death settlement ranges from $1 million to $3 million. To settle cases involving death, together they are paying $4 million to $8 million. In cases involving paralysis, the totals ranges from $12 million to $18 million. Experts say both companies are seeking to avoid potentially ruinous jury awards. (Chicago Tribune – May 26, 2001)

U.S. Supreme Court rules on 'excessive' punitive damages

In an 8-1 decision, the U.S. Supreme Court ruled that appeals courts must give full or de novo review of the constitutionality of verdicts. The court ruled for the first time that punitive damage awards are nonfactual determinations by a jury, and as a result do not deserve deference under the Seventh Amendment’s guarantee of a jury trial in civil cases. Before the ruling, appellate judges generally used an “abuse of discretion” standard that shielded most multimillion-dollar awards on appeal. (law.com – May 15, 2001)

Federal Judge orders Iraq to pay $13 million to four Americans

Senior U.S. District Judge Louis F. Oberdorfer has ordered the Iraqi government to pay almost $13 million in damages to four Americans who were working in Kuwait as civilian contractors with the Department of Defense and were jailed after the Persian Gulf War over alleged border infractions. The judge also ordered Iraq to pay about $6 million to the wives of the four men for loss of companionship and psychological trauma. Although there is no guarantee the men will be able to recover any funds from Iraq, attorneys for the men said they will seek special legislation in Congress to authorize the government to use frozen Iraqi assets in this country. (Liability & Insurance Week – June 4, 2001)

Record settlement on toy vehicle risk

Fisher-Price will pay a record $1.1 million fine to settle charges it did not report a fire risk with one of its toy vehicles, the biggest penalty imposed by regulators on a toymaker. The Consumer Product Safety Commission said the company agreed to pay the fine but did not agree with the allegations and believed it had met the reporting requirements. The CPSC said Fisher-Price failed to report 116 fires involving the battery-run Power Wheels ride-in toy vehicle. At least nine children received minor burns. (Reuters’ – June 8, 2001)

Federal judge fines Wal-Mart

A federal judge fined Wal-Mart $750,000 for violating an agreement to improve treatment and training of its deaf employees. U.S. District Judge William D. Browning also ordered the store chain to produce a 30-second TV ad to be aired in Phoenix and Tucson every day for two weeks. The commercial must explain the Americans with Disabilities Act, state that Wal-Mart has violated it, and refer people who may have been discriminated against to the Arizona Center for Disability Law or the EEOC. (AP – June 15, 2001)

New York harassment case against TWA settles for $2.6 million

A sexual harassment case filed by the EEOC on behalf of women working at John F. Kennedy International Airport for Trans World Airlines Inc. has settled for $2.6 million. The agreement requires TWA to set aside $1.1 million to cover harassment claims from an estimated 3,000 women who were employed by TWA at the airport between 1988 and 1998. The settlement comes about one month after American Airlines acquired TWA after the airlines was forced into bankruptcy. (Liability & Insurance Week – May 28, 2001)

California award of $26 million against Ford is upheld

California’s First District Court of Appeal has upheld a $26 million judgment against Ford Motor Co. in a lawsuit brought by a couple after the husband was seriously injured in 1996 when his Ford Bronco II rolled over. The plaintiff was left completely quadriplegic after the crash and has since died following complications from his injuries. A jury initially awarded him $39.7 million for his injuries and his wife $13 million for loss of consortium. Then the awards were cut in half on the grounds that plaintiff was partially responsible. (Liability & Insurance Week – June 4, 2001)

California Smoker with Lung Cancer wins $3 billion judgment

A longtime smoker with lung damage won a record $3 billion damage award and said he believed the tobacco industry’s claims that smoking was harmless. The plaintiff smoked over two packs of Marlboros every day for over 40 years and in 1999 was diagnosed with lung cancer, which spread to his lymph nodes, back and brain. The jury found against Philip Morris on six claims of fraud, negligence and making a defective product. Plaintiff was awarded $3 billion in punitive damages and $5.5 million in general damages. A juror said the size of the award was designed to hurt Philip Morris and to make the company “take notice.” (AP – June 7, 2001)

Jury to tobacco companies: cough up $17.8 million

A New York jury has found tobacco companies liable for deceptive business practices, ordering them to pay up to $17.8 million to help cover the costs of treating ailing New York smokers. The mixed verdict on Monday followed a two-month trial in U.S. District court pitting New York’s largest insurer, Empire Blue Cross and Blue Shield, against Philip Morris, R.J. Reynolds Co. and other cigarette makers. (AP – June 5, 2001)