The GM "Defective Door Latch" Case
Why An Alabama Jury Hit General Motors with Punitive Damages
The Lowndes County, Alabama, jury that assessed $100 million in punitive damages against the General Motors Corporation on Monday, June 3, 1996, for selling vehicles with dangerously defective door latches did so only after it learned that:
at least 112 people have been killed or injured when the "type III" door latches on GM vehicles failed, resulting in occupants being ejected from the vehicles;
GM's own engineers reported in the 1980s that the performance of the type III door latch was a "problem," "substandard," and "unacceptable," and that the door latch even failed GM's own crash tests;
a 1982 study by a GM engineer concluded that there would be 18,000 door openings each year in wrecks involving GM vehicles equipped with type III door latches;
after it considered -- and rejected -- a recall, GM documents indicate that it destroyed its entire inventory of type III door latches;
GM deliberately chose not to recall and fix the defective door latches because company documents reveal that GM thought a recall would cost too much -- about $916 million; and
GM routinely settled defective door latch cases until 1994, which is when an eight-year statute of limitations expired, preventing the federal government from ordering a recall of the more than 30 million GM cars still on the road with type III door latches. GM told The Wall Street Journal that the timing was "pure coincidence."
The Alabama verdict came in the case brought by Alex Hardy and his wife, Thelma. As a result of an August 3, 1991, accident, Mr. Hardy was permanently paralyzed below the waist and confined to a wheelchair for life. Mr. Hardy, now 42, was driving his 1987 S-10 Chevrolet Blazer when the rear axle of the vehicle broke, causing it to rollover. Mr. Hardy was ejected from the vehicle during the rollover when the driver's side door came open due to a defective door latch.
At trial, engineering and forensic experts testified that the door latch had failed and that Mr. Hardy was thrown out of the driver's side door. GM's response was to claim that Mr. Hardy had been "drinking and driving." However, there was no evidence of this. A blood alcohol test conducted after the accident showed no alcohol in Mr. Hardy's blood.
The jury awarded Mr. Hardy and his wife $50 million for past and future health care costs, lost income and to compensate Mr. Hardy because he will never walk again. The jury also assessed $100 million in punitive damages against GM for callously putting millions of Americans at risk of death or serious injury.
GM's own documents reveal that company executives considered in 1989 whether to recall all type III door latches and replace them with modified latches. The company calculated that 30 million GM vehicles were on the road with type III latches, and that 70 million latches would have to be replaced at a cost of $3.09 per latch plus about $10 for labor to replace each latch. Thus, GM determined that a recall would cost $216 million for parts and $700 million for labor.
However, GM instead conducted a "silent" recall, in which it instructed its dealers to replace problematic type III door latches with new modified latches -- but not to tell customers. In 1989, GM spent more than $1.3 million to destroy its inventory of type III latches. Not one witness from GM came to the trial to deny any of the facts revealed by the company's own documents and tests.
Before 1994, GM settled all cases filed against it alleging that the type III door latch was defective and caused injury or death. By settling cases without conducting discovery, GM avoided producing documents or witnesses from which injured Americans could learn the scope of GM's knowledge about the defective door latches. For example, GM settled cases without even deposing experts who were prepared to testify against the company.
By 1994, GM's strategy had become crystal clear. The company knew that under federal regulations, the government could not order a recall if a defective motor vehicle had been sold more than eight years before the government took action. GM sold the last new cars (1987 model vehicles such as Alex Hardy's) with the type III door latches beginning in September 1986. Thus, by settling cases and not revealing documents or crash tests during this eight-year period, GM evaded the Federal Motor Vehicle Safety law and a potential mandatory recall of these defective vehicles.
Used with permission from The Association of Trial Lawyers of America. All rights reserved.