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The California Supreme Court has granted review of an Explorer rollover case that awarded $82 million against Ford Motor Co., which is seeking a reduction in damages following a recent U.S. Supreme Court decision limiting how much a defendant’s harm to parties not involved in a case should influence punitive damages. The Ford verdict is the most significant that remains unresolved following the U.S. Supreme Court’s ruling in Philip Morris USA v. Williams, 127 S. Ct. 1057 (2007). In that case, which was brought by the family of a lifetime smoker, the Supreme Court found that jurors, when determining punitive damages, could not punish Philip Morris USA Inc., a subsidiary of tobacco company Altria Group Inc., for harm done to those not involved in the case. However, the court continued, such conduct against third parties could play a role in determining the reprehensibility of the company’s conduct. Last month, the U.S. Supreme Court agreed to rehear the Philip Morris case. After issuing its Philip Morris decision, the Supreme Court remanded several cases that addressed punitive damages, including the Ford case, in which jurors originally awarded $368 million, including $246 million in punitive damages. Most of those damages, which were later reduced, went to Benetta Buell-Wilson, who was rendered a paraplegic after her Explorer rolled over. In March, California’s 4th Appellate District, on remand, concluded that the Philip Morris decision had no bearing on the case because Ford had failed to submit proper jury instructions that would have warned against assessing punitive damages based on harm to third parties. Ford immediately petitioned the California Supreme Court, challenging that conclusion. Buell-Wilson v. Ford Motor Co., No. S163102 (Calif.). “The U.S. Supreme Court’s opinion carefully did not rule that the error was failure to give jury instruction,” said Theodore Boutrous, a partner at Los Angeles-based Gibson, Dunn & Crutcher representing Ford. “It said where there is a risk that the jury might punish for third-party harm, the state courts have an obligation to protect against this risk.” The California Supreme Court, which granted review of the Ford case earlier this month, has put briefings on hold pending the U.S. Supreme Court’s decision in Philip Morris. In the Ford case, the judge overseeing the original verdict and the 4th Appellate District had reduced damages to about $82 million, including $55 million in punitive damages. In its recent decision, the 4th Appellate District found that the Philip Morris opinion was irrelevant to the case because Ford had forfeited its right to raise the issue of third-party harm, in part because its lawyers had failed to challenge the jury instruction throughout the case. “Ford didn’t raise it in the trial court properly, didn’t raise it in the court of appeal and not at all in the California Supreme Court,” said Jerome Falk, a partner at San Francisco’s Howard Rice Nemerovski Canady Falk & Rabkin who represents the plaintiffs in the Ford case.

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