Grimshaw v. Ford case brief

Grimshaw v. Ford

FACTS

• Richard Grimshaw (child) suffered severe burns on face and body in Ford Pinto accident

• Jury finds in Grimshaw’s favor, awarding $2,516,000 for compensatory damages, and $125 million in punitive damages from Ford

• This is a LOT of money. Trial judge reduced the awards significantly – Grimshaw forced to remit all but $3.5 million; Court of Appeals affirmed the reduction

• Ford disregarded the probability of injury

• Placement of fuel tank between back axle and bumper – not very safe

• Design scheme focused on attractiveness, not safety

Issue: Grimshaw as a rejection of cost-benefit analysis?

• Ford conducted cost/benefit analysis – determined B, P, L

• In doing such analysis, Ford was explicitly taking into account costs and benefits

Why were punitive damages granted?

• CA code §3294 sets standards for punitive damages – malice

• Court said Ford exhibited malice in order to maximize corporate profits

• We know that cost/benefit analysis is done all the time and we think it is generally good

• Grimshaw makes no sense then – it is an anomaly in the system

• Wanton disregard?

How is the reduction in awards consistent with the refutation of Ford’s cost-benefit analysis?

• the trial judge (and appeals court) took other factors into account (Ford’s bottom line, the huge magnitude of the jury award, etc.)

• Courts are more likely to adhere to and apply some form of cost-benefit analysis as opposed to juries – courts restrain the juries.

• POLICY Issues:

Consumer choice/economic disparity

Cost-benefit analysis in the abstract/ cost-benefit analysis discreetly

Prevailing social value that we should only be exposed to a certain level of risk, period.