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Corporations nationwide issued a collective gasp on Wednesday when the California Supreme Court let stand the largest punitive damages award ever upheld at the appellate level. By a 4-3 vote, the justices refused to review or depublish a 4-month-old ruling by Fresno’s Fifth District Court of Appeal that reinstated a $290 million punitive damages award against Ford Motor Co. in a car-crash case that had been tainted with allegations of juror misconduct. Theodore Boutrous Jr., a partner at Los Angeles’ Gibson, Dunn & Crutcher who represents Ford, expressed regret at the Supreme Court’s action and said he intends to seek certiorari by the U.S. Supreme Court. “This is an extreme and unconstitutional punitive damage award that violates due process,” he said. “Here you have a published opinion affirming an extremely large award that seems to violate every principle the U.S. Supreme Court has set down.” Ford’s 11 powerful amici — including the Chamber of Commerce of the United States — had agreed in their briefs, calling the award “breathtaking” and a complete “evisceration” of all criteria established by the U.S. Supreme Court in deciding punitive damages. But only three justices — Joyce Kennard, Janice Rogers Brown and Marvin Baxter — voted to take the case. Plaintiffs’ lawyer Joseph Carcione Jr., meanwhile, called Wednesday’s decision “a major victory” and said it sends a strong message to big corporations that they need to step up to the plate and accept responsibility for their actions. “If you don’t hit them with punitive damages, they keep coming back,” the Redwood City lawyer said. “You better take the money out of their pockets.” In Romo v. Ford Motor Co., S108991, Evangelina, Maria and Juan Romo sued Ford after their parents and one brother were killed in an automobile crash on Father’s Day 1993. They claimed that their dad’s used 1978 Ford Bronco — with a fiberglass roof and no roll bar — was defectively designed. At trial in 1999, jurors hit Ford with $6.2 million in compensatory damages, plus $290 million in punitive damages after finding that Ford had acted with malice in designing and manufacturing the Bronco and not warning consumers about rollover dangers. Stanislaus County Superior Court Judge Roger Beauchesne reduced the compensatory award to about $4.9 million and ordered a new trial on punitive damages because of alleged juror misconduct. During deliberations, it was discovered, one juror had improperly discussed a “60 Minutes II” episode on fires in older Ford Mustangs, while another related a dream in which she, her children and all the other jurors’ children died in a Bronco crash while Ford executives stood by chanting, “Where’s the proof? Where’s the proof?” The Fifth District reversed Beauchesne, however, saying the evidence was insufficient to prove juror misconduct. In reinstating the punitive damages award, the court’s justices called Ford’s behavior “despicable” and suggested the company had built a killer car. “The evidence supports the jury’s conclusion that defendant willfully and consciously ignored the dangers to human life inherent in the 1978 Bronco,” Justice Steven Vartabedian, an appointee of Republican Gov. George Deukmejian, wrote for the court. “Such corporate conduct can constitute involuntary manslaughter.” The Supreme Court’s decision to leave the ruling undisturbed comes at a time when the debate over punitive damages is at an all-time high. Earlier this month, Los Angeles jurors caused a stir by awarding $28 billion in punitive damages to a dying smoker. The Wall Street Journal, in an Oct. 15 editorial, called that award the “zenith of absurdity,” and many experts predict that it will be drastically reduced. In Ford’s petition for review, Boutrous strongly attacked the Fifth District’s holding on juror misconduct and the jury’s finding on corporate malice. He also argued that the Fifth District violated state and federal law by invoking Ford’s worldwide wealth in sustaining the punitive award and asked the high court to address the corporate malice standard in light of heightened standards for punitive damages instituted by the state Legislature in 1987. “The law in this area is now virtually incomprehensible,” he wrote, “depriving defendants of ‘fair notice’ and leading to arbitrary, discriminatory and unconstitutional punishments like the one imposed here.” Ford’s amici largely carried the banner on the punitive issue, arguing that the Fifth District’s decision contravenes the U.S. Supreme Court’s decision in BMW of North America Inc. v. Gore, 517 U.S. 559, a 1996 decision that identified guidelines — including the degree of reprehensibility of a company’s conduct — that can be used in imposing punitive damages. They also said the Fifth District ignored Cooper Industries Inc. v. Leatherman Tool Group Inc., 532 U.S. 424, in which the federal high court last year said that courts should review punitive damage awards de novo to determine whether they are constitutionally excessive. Some of Ford’s amici had high hopes that the California Supreme Court might grant review, considering that at least two of its justices — Brown and Ming Chin — have expressed a desire for the court to rein in punitive damages. Two years ago, Brown wrote and Chin signed a concurring opinion in Lane v. Hughes Aircraft Co., 22 Cal.4th 405, suggesting punitive damages should rarely exceed three times the compensatory damages. But on Wednesday, Chin chose not to cast the fourth vote necessary for review of Romo. Plaintiffs’ lawyer Carcione had said previously that Romo would not be a good vehicle for limiting punitive damages because it involved the deaths of three people. The U.S. Supreme Court’s ruling in BMW, he noted, involved a flawed paint job on a luxury automobile, while a case granted cert June 3 — State Farm Mutual Auto Insurance Co. v. Campbell, 122 S.Ct. 2326 — stems from a bad-faith claim. “We look at the nature of the conduct,” said Carcione. “Are we talking about cold toast, or are we talking about cold bodies? Killing three people is bad stuff and [Ford] needs to pay for it.” All in all, Carcione said he believes Ford is getting off light. “I basically think my jury was very, very conservative,” he said. “When you are giving $290 million in punitive damages against a company that makes $33 million a day, you’re being conservative.”

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