Judge Cuts Hyundai's Fine To $73 Million In Montana Wrongful Death Suit

September 24, 2014

In May of this year, a jury in Montana ruled against Hyundai, siding with the families of two teenage boys who died in a 2005 Hyundai Tiburon. The jury set a massive, $240 million penalty, which Hyundai subsequently appealed.

According to Auto News, the judge in the case has now cut that fine by about two-thirds, to $73 million. Will Hyundai appeal again?

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The families of cousins Trevor and Tanner Olson claimed that the Tiburon Trevor drove had a defective steering knuckle. That defect, they alleged, led to the fatal collision that killed not only the Olsons, but also Stephanie Nicole Parker-Shepherd, a passenger in a vehicle that the Tiburon hit.

However, there are some complicating facts in the case:

  • Hyundai did, in fact, issue a recall for the Tiburon in 2005. While it's still unclear whether the Olson's vehicle was affected by that recall, we do know that the recall didn't involve the steering knuckle.
  • That said, the steering knuckle on the Tiburon wasn't trouble-free. Hyundai admits that it received 127 warranty reports related to problems with steering knuckles. So, even though the Tiburon's steering may not have been "officially" defective, there's evidence to suggest that it was flawed. Whether it caused the collision is up for debate, since defective or not, steering knuckles often break in high-speed collisions.
  • There's some question as to whether the teenagers' recklessness might've facilitated the accident. Though it's often a terrible idea to blame the victim in court cases, Hyundai alleges that fireworks went off in the vehicle prior to the crash, and tests suggest that the company might be right. Also, it's clear that the teens weren't wearing seatbelts at the time, which doesn't paint a picture of careful, law-abiding drivers.

Despite those doubts, the jury found in favor of the plaintiffs. It set a fine of $240 million -- the largest penalty ever issued against Hyundai and three times larger than the plaintiffs had sought. That figure is over and above the $8.1 million in real damages awarded to the Olsons' families.

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Hyundai appealed the ruling, and Judge Deborah Kim Christopher has scaled back the punitive damages to $73 million, which is more in line with what the Olsons had originally wanted. Paired with the existing $8.1 million in actual damages, that put Hyundai's payout at just over $81 million.

Hyundai still wasn't satisfied, though, pointing to the fact that Montana caps punitive damages at $10 million. In response, Judge Christopher said that the state's monetary cap was unconstitutional. Furthermore, she alleged that Hyundai has exhibited a decade-long pattern of negligence with its vehicles, which justified the higher fine. (And in fairness, that's the sort of things that punitive damages were meant to address.)

Hyundai plans to appeal once again, insisting that Montana's cap on punitive damages is, in fact, quite legal. Hyundai's Jim Trainor issued this statement:

"Hyundai believes the rulings are erroneous and constitute an extreme outlier in the law on punitive damages. Virtually every other state court that has considered the constitutionality of punitive damages caps has held that such laws do not violate the jury trial right because the jury’s fact-finding function is preserved. Nationally, both state and federal courts consistently have upheld the constitutionality of punitive damages caps. With these rulings and the other erroneous rulings made at trial, Hyundai looks forward to its appeal in this matter."

We'll keep you posted as the appeal progresses.


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