NC Personal Injury Punitive Damages Endangered by Tort Reform

NC Personal injury punitive damages under attack

NC Personal injury punitive damages are under attack by a vast array of business lobbying groups including the American Tort Reform Association, the Cato Institute, and the U.S. Chamber of Commerce. These organizations lobby state and federal law makers for the restriction and/or elimination of NC personal injury punitive damages. Backed by the money that big business generates, these lobbyists can have huge influence in elections. Partly in response to these pressures, in 2011 North Carolina amended its personal injury punitive damage statutes to further restrict the types of cases which would qualify for these types of injuries.

Despite these attacks by business groups, personal injury punitive damages sometimes represent the last line of defense for public safety.

GM Ignition Switch Failure Case

The following cautionary case shows why personal injury punitive damages are needed.

On March 10, 2010, Brooke Melton, a pediatric nurse living in Paulding County, Georgia, was enjoying her 29th birthday. As she drove toward her home that evening in her white Chevrolet Cobalt, the ignition switch unexpectedly turned to the accessory position. NC personal InjuryImmediately, the car lost all power, including power propulsion, power steering, and power braking. Her car then veered across 2 lanes of traffic, was struck by another vehicle, and crashed down a 15 feet embankment.

Brooke's parents, Ken and Beth Melton, got the call no parent should receive from a doctor at the local hospital. Brooke's neck was broken, and she was not expected to survive. Brooke died later that night.

The story of how Brooke's death occurred that night actually starts years earlier, in the late 1990's, when engineers at GM altered the ignition switch on various GM models. The change, approved in 2002, was designed to be cheaper, even though it did not meet GM's own engineering specifications. In exchange for the cost savings, the change decreased the strength of the ignition switch's ability to stay in the "on" position, making it susceptible to key weight, jostling, or light impact, at which point the ignition might switch to the "accessory" position. Once the switch occurred, all power was cut from the engine, including power to operate the airbags. GM's own test drive in 2004 of Cobalt resulted in a stall when the test engineer's knee grazed the key fob. In spite of these flaws, GM began installing the switch in its Chevy Cobalt, the Pontiac G5, Saturn Ion, and Chevrolet HHR (Heritage High Roof), as well as the Solstice and Sky sports cars.

Almost immediately after installing the switch on its newly released vehicles, GM started getting complaints of unexpected stalling from cars equipped with the defective switch. The problem was determined by GM to be an aggravation, but not a safety problem, and the costs of a recall outweighed safety concerns. Still, GM did seek to fix the problem in secret. In 2005, GM engineers quietly re-designed the ignition switch, covering the tracks of their redesign by not assigning a new part number to the improved switch, a practice unheard of in the industry and in violation of their own standards.

As crashes and deaths mounted, GM still considered the fixes too expensive, and instead, they sent a bulletin to dealers to warn customers about dangling too many objects to their key chains. In 2006, after two teenagers were killed when their Cobalt turned off during operation and the car struck a tree, the Wisconsin Highway Patrol definitively linked their deaths to the ignition switch malfunction. Still, GM refused to take action or admit a connection.

Following the 2010 death of their daughter, Ken and Beth Melton hired local Georgia attorney Lance Cooper to investigate Brooke's death. Mr. Lance hired an engineering automotive expert who noticed that later model ignition switches did not have the defect of Brooke's Cobalt. Only after x raying the old and newer switches was the change discovered. GM quickly settled the Melton's wrongful death case upon the discovery. Up to that point, GM and its engineers denied ever altering the design, or having any knowledge of any problems with the ignition switch.

In February, 2014, GM finally issued their recall for the ignition switch defect. In testimony before Congress, GM produced various documents evidencing the ignition problem, documents they hid from the Melton's attorney and maintained did not exist throughout their case. GM now admits that 50 crashes and 13 deaths were directly caused by their defective switch. Highway safety groups put the figure much higher than, possibly as high as 300 deaths. The Melton's engineer estimated that the cost of repairing the ignition switch would have been less than $1 in parts per car.

Corporations May Put Profits Ahead of Safety

In the world of corporate America, where profits are the driving force of most, if not all, companies, it is not hard to predict GM's actions. . It is not the first time, nor sadly, likely the last time, a manufacturer made a decision to leave dangerous products in the hands of consumers. In terms of profits, it is sometimes easier to pay the victims for their losses than to issue a recall that would prevent them from being victims in the first place. For example, in 1972 Ford Motor Company failed to issue a recall of their Pinto vehicles despite knowing that the car had a defectively designed rear gas tank, which when impacted, could explode. Ford's own analysis demonstrated that the $11 per vehicle recall price was nearly three times more expensive than the payments it would likely make to the estimated 200-400 people who died from the defect. Thus, like GM, Ford did nothing.

North Carolina Personal Injury Punitive Damages Law

In order to combat this cost-analysis decision process by corporations and protect public safety, most states, including North Carolina, allow juries to award personal injury punitive damages. The purpose of personal injury punitive damages is to "deter the defendant and others from committing similar wrongful acts", North Carolina GS 1D-1. Personal Injury punitive damages are awarded in addition to the damage suffered by the victim.

In North Carolina, personal injury punitive damages are only applicable when a defendant exhibits "egregiously wrongful acts" which show a conscious and intentional disregard to the rights and safety of others. In order to be susceptible to these damages the defendant must know "or should know is reasonable to result in injury, damage or other harm". North Carolina GS 1D-5.

Personal Injury Punitive Damages Act as a Deterrent

Clearly, the conduct of GM, where they manufactured a defective switch, and then hid the problem and lied about the problem, all the while knowing about the danger and continuing to sell their dangerous vehicles, shows an intentional disregard for the public's safety. Thus, to the extent that North Carolina allows punitive damages, the damages might be able to discourage GM, and companies like them, from deciding to keep dangerous products on the market for the sake of profits.

When federal regulators fail to do their job (as the NTSB failed to order the GM recall), the public has no choice but to protect themselves. Currently, the law allows that self-protection, by giving the public, through the jury system, the right to impose penalties on companies like GM.

Each case is different. Many factors such as the severity of injuries, ability to prove liability, amount of liability insurance coverage, jurisdiction, medical expenses, and many other factors can determine the outcome of a particular case. You should not use these examples as a representation of what recovery you will obtain in your particular case, as every case is unique. Ruth Smith does not guarantee that the outcome of your case will be similar to the results listed above.