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$290 Million Verdict Against Ford Upheld


LOS ANGELES October 23, 2002, Gina Keating writing for Reuters repoted that The California Supreme Court let stand a $290 million award against Ford Motor Co. stemming from the deaths of three people in a 1993 rollover accident involving a Bronco sport utility vehicle.

Ford said it would appeal the case, Romo v. Ford Motor Co., to the U.S. Supreme Court. Shares in the auto maker traded as low as $8.71 in after-hours trade, down from a regular session close of $9.17 on the New York Stock Exchange.

"This is an extreme and unconstitutional punitive damage award and we will ask the U.S. Supreme Court to overturn it," Ford spokeswoman Kathleen Vokes told Reuters.

Punitive damages are designed to punish willful corporate wrongdoing, while compensatory damages are awarded to cover any provable losses due to emotional, physical or monetary damage.

California juries have drawn corporate ire recently for ordering sky-high punitive damages against cigarette and auto makers. On Oct. 4, a Los Angeles jury awarded $28 billion to a dying smoker who sued Philip Morris -- the largest such award to an individual in U.S. history.

The California high court denied Ford's request to review the punitive damages award and to make a state appellate court opinion that described the auto maker's conduct as "despicable" unavailable as the basis for any future lawsuits.

The California Supreme Court voted 4-3 to reject further review of the lawsuit brought by Juan Romo and his two younger sisters after their parents and brother died when the roof of the 1978 Bronco was crushed in a crash south of Sacramento.

Joe Carcione, the attorney for the Romo family, had argued that the Bronco was prone to roll over and had a weak, poorly designed roof that Ford knew could fail.

Ford officials had denied the rollover allegations and said the removable, fiberglass roof panel on the Bronco exceeded federal safety standards at the time the vehicle was made.

Carcione said he was "overjoyed" with the court's decision.

"They knowingly, wantonly and willfully put a car on the road that would kill people ... who were wearing their seat belts," he said. "That's what the (California) Supreme Court stared at and said, 'Oh my God."'

In July 1999, a central California jury ordered Ford to pay $295 million to the Romo children, including $5 million in compensatory damages and $290 million in punitive damages.

The Stanislaus County trial judge rejected Ford's motion to nullify the punitive damages award but granted a new trial based on juror misconduct.

The trial judge later ruled that jurors improperly discussed a "60 Minutes II" television program while deciding the case and heard about "a morbid nightmare" one juror had in which Broncos rolled over on other jurors' children.

In June, the Fifth District Court of Appeal in Fresno affirmed the award and rejected the order for a new trial, roundly condemning Ford in a unanimous opinion.

"We think it obvious that putting on the market a motor vehicle with a known propensity to roll over and, while given the vehicle the appearance of sturdiness, consciously deciding not to provide adequate crush protection ... constitutes despicable conduct," the justices said then. "Such conduct could kill people."

Ford's attorneys had argued that the plaintiffs did not show that company officers, directors or policy makers knew the Bronco was dangerous but put it on the market anyway.

The appellate court rejected that argument, adding: "A corporate defendant cannot shield itself from liability through layers of management committees."

The auto maker also challenged the punitive damages award as "excessive" based on a ratio suggested by the U.S. Supreme Court.

Both arguments will likely be the foundation of Ford's appeal to the U.S. Supreme Court, a source familiar with the case said.

The Romo award also could be affected by a case now before the U.S. high court, State Farm v. Campbell, that tests that ratio in a $145 million punitive damages award, Ford's lawyer Theodore Boutrous said.