Constitutional Law Keyed to Chemerinsky
BMW of North America, Inc. v. Gore
Facts
In 1990, the Respondent purchased a new BMW for $40,000 from an authorized dealer in Alabama. After 9 months he decided to take the car to a detailer to have it shined and cleaned. This specialist informed Respondent that his car had been painted to cover minor damage to the body. At trial, the Petitioner admitted that it was company policy to repair any damage to vehicles during shipping. If the cost of the repair exceeded 3% of the car’s retail value, it was placed in company service and later sold as used. But, if the cost of repair was less than 3% the car was sold at full retail value. Actual damages to Respondent were estimated at 10% of the car value based on expert testimony. Punitive damages were determined by estimating that Petitioner had sold approximately 1,000 cars in Alabama for more than they were worth. On appeal, the Supreme Court of Alabama found Petitioner’s conduct reprehensible and that the punitive damage award would not have a substantial impact on the financial viability of the company. However, the Court found the computation of the amount was in error and reduced the award to $2 million accordingly.
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