Court Throws Out $259 Million Verdict Against DaimlerChrysler

Automaker Scores Major Legal Victory in Minivan Lawsuit

AUBURN HILLS, Mich., Oct. 19 -- The Fourth Circuit Court of Appeals in Richmond, VA today threw out a $259 million verdict against DaimlerChrysler Corporation after concluding that a lower court wrongly excluded critical evidence during the trial, and allowed the jury to return an unjustified punitive damage award. The case will be sent back to Charleston, SC for a new trial on compensatory damages only. "Although we believe the Appeals Court made the right decision and that DaimlerChrysler is not responsible for this tragedy, any loss of life in one of our vehicles is a cause of great concern to us," said Ken Gluckman, Vice President and Associate General Counsel at DaimlerChrysler Corporation. "The most tragic thing about this case is that Sergio's death could have so easily been prevented if he had been wearing his seat belt. "The Appeals Court today struck a blow for common sense and fairness in the courtroom," Gluckman added. "This ruling corrects mistakes made by the lower court and grants our request for a new trial based on relevant evidence." The Court stated that it would "reverse the jury's verdict awarding punitive damages." The Court found that the plaintiff "failed to demonstrate clearly and convincingly a consciousness of wrongdoing." The DaimlerChrysler minivan involved in this accident was designed to meet or exceed every applicable federal motor vehicle safety standard. Meeting these safety standards hardly represents "willful, wanton, or reckless disregard for others" -- the required standard of proof for punitive damage awards. The Court also ordered that, on retrial, the trial judge must allow the jury to hear that Sergio Jimenez was not wearing his seatbelt at the time of the accident. This critical fact had been withheld from the jury. In fact, at trial the plaintiff's lawyer had been permitted to misleadingly state that Sergio was belted. The Court found that "the failure to admit the evidence of seatbelt non-use was prejudicial to DaimlerChrysler's case." "The plaintiff's lawyers fought to deny the jury access to critical pieces of evidence" said Gluckman. "The trial court incorrectly allowed the plaintiff's attorneys to present a highly inaccurate account of DaimlerChrysler's conduct, distort the safety record of one of the safest vehicles on the road and unfairly inflame the jury."

Background On April 10, 1994, the driver of a 1985 Dodge Caravan ran a red light and drove directly into the path of an oncoming car. The force of the subsequent collision was so great that it caused the minivan to roll over completely and spin 180 degrees. Because he was not wearing his seat belt, six-year-old Sergio Jimenez was thrown from the vehicle and suffered fatal injuries. Medical experts from both sides testified that Sergio would have survived the accident had he been wearing his seat belt. On October 8, 1997, a South Carolina jury handed a $262.5 million judgment against Chrysler -- $12.5 million in compensatory damages plus $250 million in punitive damages. On November 7, 1997, DaimlerChrysler filed post-trial motions requesting that the verdict be set aside, reduced, or that a new trial be ordered. More than two years later, in December 1999, the court denied DaimlerChrysler's request for a new trial, reduced the compensatory damages from $12.5 million to $9 million, kept the punitive damages intact, and adopted -- nearly verbatim -- the plaintiff's proposed opinion. On March 7, 2000, DaimlerChrysler Corporation filed an appeal with the United States Court of Appeals for the Fourth Circuit in Richmond, Virginia. On March 1, 2001, the appeals court heard oral arguments in the case. Their decision described above was issued on October 19, 2001. DaimlerChrysler Corporation was represented on appeal by Ted Olson -- formerly of Gibson, Dunn & Crutcher, and currently Solicitor General of the United States.