MONTGOMERY, Ala. - BMW must pay $50,000, not $2 million, for failing to tell a customer his new car had been damaged by acid rain and repainted, the Alabama Supreme Court has ruled.
The case had been sent back to the state Supreme Court by the U.S. Supreme Court, which said the $2 million punitive damage award was 'grossly excessive.'
The award had been won by a Birmingham doctor who had not been told that his new BMW sedan had been partly repainted to touch up acid rain damage that had occurred during shipping.
The Alabama Supreme Court unanimously said on May 9 that BMW's conduct 'was reprehensible enough to justify the imposition of punitive damages.' But it agreed that $50,000 was enough because the repairs 'were merely cosmetic,' and because the loss to the physician was purely economic.
Ira Gore Jr. bought a BMW 535i in 1990. Nine months later, when he took it to a shop to have decorative detail work done on it, he learned that the paint had been touched up. He sued BMW of North America Inc., and an Alabama jury awarded him $4,000 in compensation. The jury added $4 million in punitive damages after testimony showed about 1,000 other Americans had unknowingly bought similarly touched-up BMWs.
The state Supreme Court reduced the punitive award to $2 million.
BMW appealed to the U.S. Supreme Court, which sent the case back to the Alabama Supreme Court last May, telling the state justices to consider how reprehensible the conduct being punished was; the ratio between the compensatory damages and the punitive damages; and how the award compares with civil or criminal sanctions that could be imposed for the same conduct.
Gore's lawyer, A.W. Bolt of Birmingham, said the state Supreme Court's decision to reduce the punitive damages was not an appropriate punishment for BMW's actions, which he termed a deliberate misrepresentation.
'I think any time a business misrepresents itself to over 1,100 of its customers, and they are financially hurt, that a $50,000 punishment is way too light,' Bolt said. 'It's like a gnat on an elephant - it means nothing to them. And in the long run, that's not good for anybody.'
Bolt said his client has 21 days to either accept the decision, ask to have the case sent back to the lower court for retrial, or ask the Alabama Supreme Court to reconsider its decision.
BMW said in a statement that it would not appeal the $50,000 award. 'BMW is very pleased that the Alabama Supreme Court affirmed the U.S. Supreme Court's finding that the punitive damages originally associated with this case were grossly excessive, and that the company's conduct was not reprehensible,' the company said. 'BMW has always contended that the facilities it maintains to repaint cars if they are damaged in transit from its German factories (are) an investment in customer satisfaction that should be applauded.'