Bloomberg News report
POLSON, Mont. (Sept. 23, 2014) — Hyundai Motor Co. must pay $73 million in punitive damages to the families of two Montana teenagers killed in a 2011 crash blamed on a steering defect, a judge said.
Lake County District Judge Deborah Kim Christopher rejected Hyundai's bid to further reduce the original $240 million punitive award, ruling that Montana's limits on such damages are unconstitutional. Judge Christopher also upheld the state court jury's award of $8.1 million in actual damages to the families of Trevor Olson and his cousin Tanner Olson, leaving a total judgment of $81 million.
The families sued in 2011, alleging that Tanner Olson lost control of a 2005 Hyundai Tiburon because a defective steering knuckle broke. The subsequent crash killed both boys.
Hyundai showed “an indifference to or reckless disregard of the health and safety of the motoring public,” Judge Christopher said in her Sept. 19 order upholding the punitive damage award. The auto maker had 127 warranty reports on steering knuckle problems, Judge Christopher said.
“The defendants had over a decade of notice of problems or defects with their steering knuckles in their passenger vehicles—which problems or defects were contrary to their own material specifications—and apparently took no steps whatsoever to investigate,” the judge said.
Hyundai will appeal, Jim Trainor, a company spokesman, said in emailed message.
“Hyundai believes the rulings are erroneous and constitute an extreme outlier in the law on punitive damages,” Mr. Trainer said. “Nationally, both state and federal courts have consistently upheld the constitutionality of punitive damages caps.”
Hyundai contended the accident was caused by fireworks exploding in the car just before the crash.
The original $248 million jury award was the sixth largest in the U.S. so far this year. It's also the largest ever against Hyundai, according to data compiled by Bloomberg News.
Plaintiffs' attorney John Bohyer declined to comment on the ruling.
This Bloomberg News report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.