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On August 12, 2009, the South Carolina Court of Appeals affirmed a jury award against Ford Motor Company for $620,759.79 in actual damages, reduced to $589,721.80, and $3 million in punitive damages. This action involved an under-hood fire in a Ford Expedition. In December 1999, the Ford Expedition at issue was manufactured by Ford and a short time later purchased by the Duncans. On March 1, 2005, after the Duncans parked the vehicle in the carport of their home, a fire started underneath the hood. The Duncans were not physically injured by the fire but it destroyed their home.
Prior to this incident, Ford had recalled two lines of vehicles due to under-hood fires which were attributed to the failure of the speed control deactivation switch, specifically, the failure of the kapton seal within the switch. These recalls were in 1999 of the Ford panther platform line and in 2005 of the F-series line, including the Expedition. The Duncans filed suit against Ford to recover their damages. The jury returned a verdict in favor of the Duncans for $620,759.79, reduced by their comparative fault to $589,721.80, and $3 million in punitive damages. Ford appealed.
Of significance on appeal was the Court of Appeals’ decision to affirm the $3 million punitive damages award. Ford argued that the jury’s award should be reversed because Ford’s conduct did not rise to the level of reckless, willful or wanton. The Court of Appeals disagreed.
First, the Court found sufficient evidence to support the jury’s award, highlighting the fact that following the recall of the panther platform line in May 1999, Ford investigated the cause of the under-hood fires and included their findings in an SIT report dated June 11, 1999 that identified the failure of the seal as a potential cause of the fires. Notwithstanding this knowledge, Ford installed a virtually identical switch in the Duncans’ Expedition.
Further, the Court found that the Duncans’ expert that testified to Ford’s net worth, assets, gross profits, and the amount of compensation it paid executives was appropriate testimony, relevant to the trial court’s instructions to the jury to “punish the defendant but not effect economic bankruptcy.”
Finally, the Court found that the punitive damages award was not unconstitutionally excessive, finding the following: (1) Ford’s conduct was sufficiently reprehensible evidenced by Ford’s reckless disregard for the health and safety of others through its pattern of installing switches in vehicles that caused fires; (2) the award amounting to 5.087 times the actual damages was reasonable due to the actual damage the fire caused to the Duncans’ home as well as the potential serious physical injury the Duncans could have suffered; and (3) the applicable civil fines for violation of safety standards were at such a low level that there was no basis for comparing those with the punitive damages award. Therefore, the Court of Appeals affirmed the decision of the lower court.
Duncan v. Ford Motor Company, 682 S.E.2d 877 (S.C. Ct. App. 2009).
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