U.S. Supreme Court Discusses Which Damages Are Appropriate When a Party Acts in Bad Faith

Earlier this month, the United States Supreme Court issued a written opinion in a product liability case involving the question of which types of damages are appropriate when a party acts in bad faith during the discovery process. Ultimately, the court concluded that damages to compensate the plaintiff for actual costs incurred are appropriate, but punitive damages may not be awarded by the court.

Tire TreadThe Facts of the Case

The plaintiffs were involved in a serious accident when their motor home swerved off the road and flipped over. At the time of the accident, the plaintiffs’ motor home was equipped with Goodyear tires. The plaintiffs filed a product liability lawsuit against Goodyear, claiming that the tire was not safe for motorhome applications because it was not designed to withstand the amount of heat generated when driven at highway speeds.

The pre-trial discovery process lasted for several years. Goodyear was slow to respond to many discovery requests. Specifically, the plaintiffs repeatedly asked Goodyear to hand over the internal test results for the model of tire installed on the motor home, but the information released by the company failed to include any of the requested information.

Eventually, the case was settled for an undisclosed amount before it reached trial. However, months after the settlement was finalized, the plaintiffs learned that Goodyear had released test results for the tire to the plaintiffs in another similar but unrelated lawsuit. The test results showed that the tire got unusually hot at speeds of 55 to 65 miles per hour. When asked about the failure to provide the results to the plaintiffs, Goodyear admitted that it had concealed them.

The plaintiffs asked the court to issued discovery sanctions against Goodyear. Specifically, the plaintiffs sought compensation for their litigation expenses. The court awarded the plaintiffs $2.7 million, finding that the case would have settled much earlier had the requested information been released when requested. The court issued a contingent award of $2 million if an appellate court determined that the original award was excessive.

The Supreme Court’s Opinion

The U.S. Supreme Court heard Goodyear’s appeal and reversed the award of $2.7 million as well as the $2 million contingent award. The court explained that, as a general rule, courts do have the power to issue sanctions when parties act in bad faith. However, a court’s power to issue sanctions only extends to compensatory damages.

Here, the court held that the $2.7 million award contained amounts in excess of the money spent by the plaintiffs on legal fees. Thus, the award was considered punitive. The court also reversed the contingent $2 million award, finding that the lower court failed to provide adequate reasoning for that specific amount. Thus, Goodyear will have the option of either accepting the $2 million award or having the lower court recalculate the proper amount.

Have You Been Injured in a Maryland Car Accident?

If you or a loved one has recently been injured in a Maryland car accident, you may be entitled to monetary compensation. This may even be the case if no other motorists were involved in the accident. Often, single-vehicle accidents are results of mechanical failures. In such cases, a product liability lawsuit may be appropriate. Call 410-654-3600 to discuss your case with a dedicated personal injury attorney who can advise you on your available options. Calling is free, and we will not receive any fee for our services unless you are successful in recovering compensation for your injuries.

More Blog Posts:

April Is Distracted Driving Awareness Month, Maryland Car Accident Attorney Blog, published April 11, 2017.

Parental Liability for Car Accidents Caused by Minors, Maryland Car Accident Attorney Blog, published April 25, 2017.

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