Products Liability Law Daily $3M punitive damages award against Mazda reversed, but wrongful death and compensatory damages upheld
Monday, July 10, 2017

$3M punitive damages award against Mazda reversed, but wrongful death and compensatory damages upheld

By John W. Scanlan, J.D.

A $3 million punitive damages award against Mazda to the driver of a Mazda3 who was injured in a crash was reversed by the Alabama Supreme Court because there was not substantial evidence that Mazda’s conduct had been wanton. However, a $3 million compensatory damages award to the driver was upheld, as well as an award of $3.9 million in wrongful death damages to the family of a passenger who died in the crash (Mazda Motor Corp. v. Hurst, July 7, 2017, Murdock, G.).

While driving a 2008 Mazda3, the 16-year-old driver lost control of the car while speeding. The car hit a light pole on the driver’s side, spun around the pole before coming to a stop, and burst into flames. Both she and her 15-year-old passenger survived the impact with non-life-threatening injuries, but the passenger was unable to escape the vehicle and died from burn injuries, and the driver sustained third-degree burns to about 15 percent of her body. The parents of the passenger brought suit against Mazda and the driver; the driver subsequently brought a cross-claim against Mazda. The parents settled their negligence claim against the driver for $100,000 and dropped negligence and wantonness claims against Mazda, and the driver dismissed her negligence claim against Mazda. The parents’ wrongful death claim under the Alabama Extended Manufacturer’s Liability Doctrine (AEMLD) against Mazda and the driver’s AEMLD and wantonness claims against Mazda went to trial.

The passenger’s parents and the driver (the plaintiffs) alleged that the Mazda3’s fuel system was defectively designed because the plastic fuel tank was placed one-half inch from a steel muffler that had sharp protruding edges pointed toward the fuel tank, and that during the accident the muffler’s sharp edge cut the fuel tank, allowing gasoline vapors to leak and ignite, causing the fire. At the time the Mazda3 was designed, Ford owned one-third of Mazda; Ford and Mazda jointly designed the car, although Mazda designed the fuel system. At the close of evidence, the trial court denied Mazda’s request to instruct the jury on contributory negligence/product misuse as a defense to the passenger’s family’s AEMLD claims. The jury then found for the plaintiffs, awarding the passenger’s family $4 million (which the court reduced by $100,000 for the settlement with the driver), and awarding the driver $3 million in compensatory damages and $3 million in punitive damages [see Products Liability Law Daily’s October 23, 2014 analysis]. After its post-judgment motions were denied, Mazda appealed on various grounds.

Scientific testimony. The state high court first found that the trial court had not erred in admitting the testimony of the plaintiffs’ expert in design defect and causation. In Daubert, the U.S. Supreme Court distinguished between "scientific" evidence and "technical or other specialized knowledge." Mazda argued that the expert’s testimony should have been considered "scientific testimony" under the stricter requirements of Rule 702(b), whether it actually was scientific because, it asserted, he repeatedly represented his testimony to be "scientific." However, the plaintiffs never asserted that the expert’s inquiry was scientific, with the court noting that their counsel specifically objected during the expert’s deposition when Mazda’s counsel referred to it as scientific, and the expert never claimed to be a scientist or that his conclusions were based on a specific scientific theory. In a 230-page record of his testimony, the expert made one reference to "scientific evidence" and three references to having used the "scientific method," which the high court found was merely his shorthand way for describing his use of failure analysis. It was clear from his testimony that his conclusions were based on his specialized knowledge and experience in automotive technology and the industry rather than a "scientific theory, principle, methodology, or procedure" pursuant to Rule 702(b), and that his testimony represented the application of his knowledge and experience to the testimony of other witnesses and to a comparison of the car at issue to other vehicles.

Jury instructions. The trial court did not err in denying Mazda’s requested jury instruction on contributory negligence regarding the driver’s AEMLD claim because there was not substantial evidence that the driver’s alleged negligence proximately caused her injuries. Although Mazda argued that the same negligence (the driver’s) also caused the fuel system to fail, its argument—and the testimony of its design expert upon which its argument was based—did not distinguish sufficiently between a vehicular speed sufficient to cause the accident and a greater speed sufficient to cause the failure of an otherwise crashworthy fuel system design. The court observed that the expert did not testify that the car’s speed was so great as to cause this particular muffler to penetrate the fuel tank in a manner in which it normally would not have done.

Driver’s wantonness claim. However, the Alabama Supreme Court agreed with Mazda that the driver had not presented substantial evidence for her wantonness claim because she had not established that Mazda had knowledge that its fuel system design would result in the kind of fire that happened in this case. Mazda submitted evidence that in crash tests the Mazda3 had exceeded NHTSA’s Federal Motor Vehicle Safety Standards (FMVSS) for pole side-impact, side-collision, and rear-end offset-collision tests, with zero fuel spillage in each of the tests even though NHTSA’s standards permitted a small amount of spillage. It also submitted evidence that it had passed tests to ensure compliance with European and Japanese standards, as well as an independent contractor’s test for NHTSA standards, and that NHTSA had received no consumer complaints about the muffler or fuel tank for this particular model and that no other lawsuits had been filed about its muffler or fuel tank design. There was no evidence to support the driver’s suggestion that Mazda had actually tested the California-specific model (which had a different fuel system design due to stricter emissions regulations) and the plaintiffs did not introduce any evidence countering the testimony of Mazda’s corporate representative that he was not aware of any post-crash fuel-fed fires involving 2008 Mazda3 cars.

The driver asserted that Ford internal documents instructing its engineers that components should have smooth and rounded surfaces next to a fuel tank, that trims and flanges should not project toward a fuel tank, and that heat shields between mufflers and fuel tanks should have a material hardness stronger than adjacent components showed that Mazda knew that the design of its fuel system could cause a post-collision fuel-fed fire. However, even if the Ford documents represented a generally-accepted industry standard, Mazda’s alleged violations of this standard constituted substantial evidence of a design defect under the AEMLD, but not that it had conscious knowledge that injury would likely or probably result from its design.

New trial. The reversal of the driver’s wantonness claim did not require a new trial on the separate AEMLD/design defect claim because the court was able to determine that the jury had concluded that the car had a design defect. Mazda argued that the jury’s verdict was a "good count-bad count" case requiring vacating of the entire verdict and remand for a new trial because the jury’s compensatory and punitive damages award did not distinguish between the damages attributable to the AEMLD claim and those attributable to the wantonness claim. In a normal good count-bad count case, a court cannot presume that a jury that returned a general verdict had found in the plaintiff’s favor on the so-called good count rather than on the bad count. However, the jury found in favor of the passenger’s family on their AEMLD design defect claim, which involved the same accident and was based upon the same evidence, and awarded them a substantial damages award. Because it was not plausible that the jury found Mazda liable for a design defect under AEMLD for the passenger’s family’s claims but not the driver’s identical claims, the unavoidable conclusion was that the jury found that Mazda violated the AEMLD with respect to the driver’s claim by selling a defectively designed car.

Damages. The court declined to grant remittitur to Mazda of the $3.9 million wrongful death damages award to the passenger’s family because it was not excessive. Mazda argued that the ratio of punitive to compensatory damages was excessive, but this ratio did not apply because there are no compensatory damages in a wrongful death case in Alabama. Furthermore, reprehensibility may be found in a wrongful death case even though wantonness is not present because the U.S. Supreme Court had already upheld the state’s scheme of allowing for punitive damages for negligent conduct when a death results in order to further the purpose of protecting human life. The evidence showed that avoiding the defect would not have been difficult, in that multiple car models—including a version of the 2008 Mazda3 itself designed for California—would not have presented the same risk of fire because they had a different design. Finally, the award was not out of line with other wrongful death awards.

There was no reason for altering the $3 million compensatory damages award to the driver. However, because the court reversed the wantonness verdict, it also vacated the punitive damages award to the driver because the driver had asked for punitive damages based only on wantonness.

The case is No. 1140545.

Attorneys: D. Bruce Petway (Beasley Allen Crow Methvin Portis & Miles PC) for John Hurst.

Companies: Mazda Motor Corp.

MainStory: TopStory DesignManufacturingNews DamagesNews ExpertEvidenceNews EvidentiaryNews DefensesLiabilityNews MotorEquipmentNews MotorVehiclesNews AlabamaNews

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