A California jury yesterday ordered General Motors Corp. to pay $4.9 billion to six people severely burned when a drunk driver slammed into the back of their 1979 Chevrolet Malibu in 1993.
The drunk driver, traveling at least 50 miles an hour, hit the Malibu, which was slowing for a stoplight, as the group was returning home from Christmas Eve church services.
The jury award -- what may be the largest ever in a product liability case -- is two-thirds more than GM's entire profit for 1998. Judges can and do reduce what they consider to be excessive damage awards.
"There's never been anything like this in the history of American tort law," said Victor Schwartz, a nationally recognized lawyer specializing in liability law. "This just shows that the new figures of billions of dollars that have begun to be tossed around in the tobacco cases have changed the perspective of the American jurors."
Brian J. Panish, lead attorney for the plaintiffs, said the jury award was based on hundreds of GM documents presented at the trial showing there was an internal debate over the design of the gas tank in its cars and that the automaker refused to spend an estimated $4 to $12 per vehicle to make the tanks safer.
With the gas tank design changes, Panish said, at worst there might have been a few broken bones.
After a 10-week trial, the state court jury awarded Patricia Anderson, her four children and Jo Tigner, a family friend who was in the car, $107 million in compensatory damages and $4.8 billion in punitive damages for their injuries.
GM immediately said it would appeal the verdict. "This extremely severe crash was caused by a single factor -- drunken driving," said GM spokesman Terry Rhadigan in a statement issued by the automaker. Rhadigan said the Malibu met all the federal safety standards at the time it was manufactured. The company also said the car's speed at the time of the crash was 70 miles per hour.
"It's very tragic. It's a severe crash, but it's not GM's fault," Rhadigan said in a telephone interview.
GM said the driver of the car that caused the crash had a blood-alcohol content of 0.20, a number that was not disputed by Anderson's lawyers. Anyone driving with a blood-alcohol content of more than 0.08 is considered legally drunk in California.
During the trial, the jury was told how the four Anderson children, ranging in age from 14 months to eight years, suffered horrible burns. One child, Panish said, had one hand burned off and her ears burned down to the bone. He said that so far, she has had to have 70 operations. Her younger sister has had 60 surgeries.
Although attorneys for the crash victims introduced hundreds of documents, a key to the case appeared to be what has come to be known as the "Ivey Memo," named for a former GM engineer. It has been used successfully in a number of fire-crash cases against GM in recent years and basically outlines the internal debate within GM over gas tank design.
Joan Claybrook, an auto safety expert and head of the National Highway Traffic Safety Administration in the Carter administration, said, "The reason for safe car design is if a drunk driver does hit you . . . you're not harmed."
Claybrook also echoed the statements by Panish, saying that the "jury had to impose a punitive damage award significant enough for this huge company to pay attention." Both Claybrook and Panish said the award represents only two weeks' gross revenue for the world's largest automaker.
Theodore Olson, a Washington lawyer specializing in appellate and constitutional law, predicted that the verdict may not survive further legal challenges. "When verdicts are extravagant -- and anyone could say this is extravagant -- these verdicts will either be overturned or reduced."
The recent multibillion-dollar settlements with the tobacco industry have ratcheted up in jurors' minds what it takes to punish defendants in civil cases, some experts said yesterday. Last year the tobacco industry, which had been sued by more than 40 states, reached a $206 billion multi-state settlement to end those cases.
"When jurors read that the tobacco companies paid hundreds of billions to settle cases, their calculus changes," Schwartz said. "They feel the large companies will only get the message if you talk in billions of dollars." Before 1970, he said, there were no million-dollar punitive damage awards. Then the damages began to grow steadily. As an example, he said that this May, an Alabama family was awarded $581 million in a dispute with a satellite-dish company that had overcharged them $1,200.
In one of the most notable product liability cases, an elderly woman who spilled hot coffee on her lap as she drove away from a McDonald's restaurant was awarded $2.9 million in 1994 for her troubles. The court later reduced the award to $640,000, and McDonald's eventually settled for an undisclosed amount.
A few years ago, an Alabama jury awarded a doctor $4 million in punitive damages because he was not told his new BMW had been repainted. The U.S. Supreme Court struck down the award, and the doctor eventually received $50,000 in an out-of-court settlement.
Washington Post Staff Writer Saundra Torry contributed to this story.