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February 5, 2006

Sixth Circuit Reverses $3,000,000 Punitive Damages Award As Constitutionally Excessive

In Clark v. Chrysler Corp.,  2006 U.S. App. LEXIS 2435 (6th Cir. Feb. 1, 2006) [Docket No. 04-5279]|Lexis|, the United States Court of Appeals for the Sixth Circuit held that a $3,000,000 punitive damages award against Chrysler in a products liability case was constutionally excessive.

The case arose out of the death of Charles Clark, who was fatally injured in an automobile accident while driving a 1992 Dodge Ram club cab pickup truck when he pulled into an intersection in front of an oncoming vehicle and the two vehicles collided. Mr. Clark, who was not wearing a seat belt, was ejectedfrom his vehicle. He died a short time later.  His wife sued Chrysler, claiming that its pickup truck was defectively and negligently designed.

After a three-day trial, the jury rendered a unanimous verdict in favor of Mrs. Clark on claims of strict liability, negligence, and failure to warn. The jury found that  Mr. Clark and Chrysler were each 50% at fault.  It  returned a verdict of $471,258.26 in compensatory damages and $3,000,000 in punitive damages. The district court court entered a judgment against Chrysler for $3,235,629.13, which included half of the compensatory damages award plus the $3 million in punitive damages.  The Sixth Circuit affirmed. 

The Supreme Court granted Chrysler's petition for certiorari.  The Court granted Chrysler's petition, vacated the Sixth Circuit's judgment, and remanded the case "for further consideration in light of State Farm." Chrysler Corp. v. Clark, 540 U.S. 801 (2003).  The Sixth Circuit in turn remanded to the district court for reconsideration in light of State Farm. 

The district court reaffirmed and Chrysler again appealed to the Sixth Circuit, which held that "application of the Gore guideposts to the facts of this case reveals that a punitive damage award approximately equal to twice the amount of compensatory damages, or $471,258.26, would comport with the requirements of due process."  Judge Moore, dissenting from the punitive damages determination, would have sustained the district court's punitive damages award.

February 5, 2006 | Permalink

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