BMW of North America, Inc. v. Gore

Facts

The Respondent purchased a BMW sports sedan from an authorized BMW dealer in Birmingham, Alabama. After approximately nine months, Respondent took the car to an independent detailer to have the car detailed. The proprietor of the independent detailer detected evidence that the car had been repainted. The repainting was done by BMW to repair acid rain damage that occurred when the car was in transit from Germany. Respondent brought suit against the Petitioner alleging that the failure to disclose the fact that the car had been repainted constituted suppression of a material fact. At trial, Petitioner acknowledged it had adopted a nationwide policy of selling cars as new without advising the dealer that any repairs had been made when the repair cost did not exceed three percent of the suggested retail price. At trial, Respondent introduced evidence that his repainted car was worth less than a car that had not been refinished. In support of a punitive damages claim, he introduced evidence that since 1983 Petitioner had sold nine hundred eighty three refinished cars as new, including fourteen in Alabama. Petitioner disputed evidence that refinished cars were worth less, argued that its good-faith belief made punitive damages inappropriate and that transactions other than Alabama had no relevance to respondent’s claim. The jury found Petitioner liable for $4,000 in compensatory damages and $4 million in punitive damages. The trial judge denied Petitioner’s motion to set aside the punitive damages, finding that it was not grossly excessive, and therefore did not violate the Due Process Clause of the 14th Amendment of the Constitution. After post-trial motions, the Alabama Supreme Court reduced the award to $2 million on the ground that the jury improperly multiplied Gore’s compensatory damages by the number of similar sales in all States.