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Ford is Still Haunted by Exploding Gas Tanks as a Multi-Million Dollar Award of Punitive Damages is Affirmed

No doubt one of the biggest business and legal stories of 2010 has been the automobile acceleration and braking recalls by Toyota. The CEO has been grilled by Congress, Toyota has run numerous commercials apologizing for the effect of the recalls on its customers and affirming is commitment to safety and quality, hundreds of articles and blog posts have been written, and speculation has run rampant as to whether Toyota will survive in the USA. I keep expecting Howie Long and Chevrolet to take on Toyota the way they have Honda (but does Toyota make a self-propelled lawnmower?), or a Chrysler-Toyota ad battle that mimics the AT&T-Verizon "Maps" battle, or Mike Rowe to do a Dirty Jobs show that demonstrates how much dirtier it is to do Toyota brakes instead of Ford brakes.

 The whole controversy will likely disappear in a few months from the public's radar. Toyota's image of building reliable cars that live for 200,000 miles will return, and the market share of General Motors and Chrysler will continue to fall. Toyota may successfully navigate the current PR minefield, but what will be the long-term effect on Toyota of the already numerous lawsuits that have been filed? A recent appellate case from Illinois provides an excellent example for both the plaintiffs and defense bar to consider.

 The controversy in Jablonski v. Ford Motor Co., 2010 Ill. App. LEXIS 65 (Ill. App. Ct. 5th Dist. Feb. 1, 2010), was the safety of the gas tanks in the Ford Panther platform vehicles - those large body-on-frame Lincoln Town Car, Mercury Grand Marquis, Ford Crown Victoria, and Ford Crown Victoria Police Interceptor vehicles. These vehicles, unlike most automobiles, were designed and manufactured with aft-of-axle or vertical-behind-the-axle fuel tanks: fuel tanks located forward of the trunk, behind the rear axle, and between the rear wheels.

 In 2003 Dora and John Jablonski's 1993 Lincoln Town Car was stopped in a line of traffic at a construction site on I-270 in Madison County, Illinois (suburban St. Louis). A driver behind them, while looking for her sunglasses, did not see the stopped traffic and ran into the Jablonski's car while going between 56 and 65 mph. The fuel tank of the Lincoln was crushed, a pipe wrench located in the trunk of the Lincoln penetrated the fuel tank, and the resulting fire that was caused by gasoline leaking from the damaged fuel tank caused John's death and extensive injuries to Dora. A jury eventually awarded $ 43 million in damages to the plaintiffs, John's estate and Dora, including $ 15 million in punitive damages, and the appellate court in Jablonski v. Ford Motor Co. affirmed the evidentiary rulings of the trial court and the determination of damages by the jury.

The plaintiffs claimed that the fuel tank of the Lincoln had been negligently designed, and additionally that Ford had engaged in willful and wanton conduct by failing to inform owners of the Panther platform vehicles such as the plaintiffs of the defective fuel tank and of safety kits that likely would have prevented the fire that killed John and injured Dora. Ford raised numerous defenses in response.

The Jablonski v. Ford Motor Co. opinion is very lengthy (72 pages on and detailed, with an extensive review of the trial record and evidence and an exhaustive list of citations. It is worthwhile reading for all attorneys who litigate product liability and punitive damages claims.

While there were numerous factual claims and disputes and many expert witnesses, the evidence showed that as far back as 1970 Ford engineers had noted that the location of the aft-of-axle fuel tanks posed a safety hazard. In 1971 a Ford engineering report determined that the cost of a design change for moving the fuel tank above the rear axle would have been $ 9.95 per vehicle. That design change was not incorporated into the Panther platform that was created in 1979. As a result of some fuel tank fires in Panther platform police cruisers, though, Ford created an upgrade kit and an optional trunk pack to protect the Panther platform fuel tanks and notified all of its dealers and all of the registered owners of Police Interceptor vehicles of the upgrade kits and trunk packs. Ford, though, did not notify civilian owners of Panther platform vehicles.

The appellate court found that the jury in Jablonski v. Ford Motor Co. was entitled to determine and find liability on plaintiffs' claims of negligent design and location of the fuel tank, failure to warn of the risks of puncture of the fuel tank by items in the trunk, and failure to inform consumers of the existence of the upgrade and trunk pack kits. The appellate court found that the plaintiffs presented extensive evidence of alternative fuel tank locations that were recognized and used in the automobile industry, including at Ford. While Ford vigorously provided opposing evidence to the claim that the fuel tank was negligently designed and located, the jury was entitled to resolve the conflicting evidence in favor of the plaintiffs. 

Ford asserted that it did not have a duty in Illinois to provide a postsale warning to the plaintiffs. The appellate court disagreed. "Sound public policy requires that a manufacturer be held to a continuing duty to warn of a hazard and to notify consumers of its product if the hazard can be avoided. We hold that a manufacturer has a continuing duty to warn of a hazard of which it had a duty to warn at the time the product was manufactured, including using reasonable care to inform foreseeable users of product developments designed to eliminate the hazard."

In addition, Ford argued that it was improper for the trial court to admit evidence about its preinjury, postsale design efforts to improve the Panther platform Police Interceptors. The appellate court noted that while evidence of post-accident remedial measures was not admissible to prove prior negligence, "Evidence of the feasibility of an alternative design is relevant and material in an action alleging an unreasonably dangerous product under both negligence and strict liability theories." Thus, the evidence concerning the upgrade kits and trunk packs that were developed by Ford for the Police Interceptor vehicles fell within the alternative-feasible-design exception to the subsequent-remedial-measures rule. "The precise issue before this court is not the admissibility of evidence of subsequent remedial measures; rather, the issue is the admissibility of evidence of preinjury, postsale design changes solely on the issue of a failure to warn of those changes." 

Ford also asserted on appeal that the trial court should not have permitted the admission of the plaintiffs' exhibit that consisted of a list of 416 alleged similar incidents involving postcollision fires in Ford vehicles. The appellate court held that this list of prior similar incidents was admissible because "The list of 416 similar accidents only included rear-end collisions that caused postcollision fires in Ford vehicles with aft-of-the-axle fuel tanks as a result of the fuel tank being punctured in the accident. We find that the trial court did not abuse its discretion in determining that the accidents submitted were substantially similar to the accident in this case. Thus, the list of 416 similar incidents was properly admitted to prove both negligence and notice."

The appellate court's reasoning in affirming the award of punitive damages provides a succinct overview of this case and a warning to manufacturers. "Here, we find no error in the trial court's initial decision to allow Dora to proceed with a willful-and-wanton-conduct claim for punitive damages or its decision to submit the punitive-damages claim to the jury. We see no need to restate all the evidence in support of the punitive-damages claim, but we will summarize. The plaintiffs presented significant evidence in support of their claim that Ford's Panther platform vehicles are defective in that the aft-of-the-axle location of the unshielded fuel tank renders them susceptible to postcrash fires in high-speed rear-end collisions because the fuel tank is crushed or breached, causing gasoline to spill and ignite. Evidence of this claim was presented by expert testimony and by the presentation of numerous substantially similar accidents that resulted in severe injuries and deaths. The plaintiffs offered evidence of Ford's knowledge of the alleged defective condition of the Panther platform vehicles through proof that Ford was aware of the many prior similar occurrences and evidence that, long before the Panther platform was manufactured, a researcher funded by Ford, as well as Ford's own engineers, had recommended that a safer design was to place the fuel tank above the axle. Well before the Jablonski accident, Ford adopted a policy of placing the fuel tank forward of the axle in all new passenger automobile designs. Finally, the evidence offered by the plaintiffs revealed that, prior to the Jablonski accident, Ford did nothing to warn civilian users of Panther platform vehicles of the potential danger, did nothing to remedy the defect, and took no other action to avoid injuries caused by the defect. In fact, the evidence reveals that it was not until mounting complaints led to a NHTSA investigation, and the state police agencies of at least two states demanded action, that Ford addressed the problem. Once Ford acknowledged the need for corrective action, in less than a year it developed relatively simple design modifications that resulted in the modified Panther platform vehicle passing a 75-mile-per-hour rear-end crash test, but it took no action to warn or otherwise remedy the danger for civilian users such as the Jablonskis."

Jablonski v. Ford Motor Co. may be only an intermediate state appellate decision, but it provides an excellent review of product liability law in Illinois and elsewhere. It should be required reading for all current and future litigators.