517 U.S. 559 (S.Ct. 1996)

[561] Andrew L. Frey argued the cause for petitioner. With him on the briefs were Kenneth S. Geller, Evan M. Tager, Michael C. Quillen, Dennis J. Helfman, and David Cordero.

Michael H. Gottesman argued the cause for respondent. With him on the brief were Jonathan S. Massey, Andrew W. Bolt II, John W. Haley, Bruce J. McKee, Kenneth J. Chesebro, and Stephen K. Wollstein.^[1]

[562] JUSTICE STEVENS delivered the opinion of the Court.

The Due Process Clause of the Fourteenth Amendment prohibits a State from imposing a "`grossly excessive'" punishment on a tortfeasor. TXO Production Corp. v. Alliance Resources Corp., 509 U. S. 443, 454 (1993) (and cases cited). The wrongdoing involved in this case was the decision by a national distributor of automobiles not to advise its dealers, and hence their customers, of predelivery damage to new cars when the cost of repair amounted to less than 3 percent of the car's suggested retail price. The question presented [563] is whether a $2 million punitive damages award to the purchaser of one of these cars exceeds the constitutional limit.

I

In January 1990, Dr. Ira Gore, Jr. (respondent), purchased a black BMW sports sedan for $40,750.88 from an authorized BMW dealer in Birmingham, Alabama. After driving the car for approximately nine months, and without noticing any flaws in its appearance, Dr. Gore took the car to "Slick Finish," an independent detailer, to make it look "`snazzier than it normally would appear.'" 646 So. 2d 619, 621 (Ala. 1994). Mr. Slick, the proprietor, detected evidence that the car had been repainted.^[2] Convinced that he had been cheated, Dr. Gore brought suit against petitioner BMW of North America (BMW), the American distributor of BMW automobiles.^[3] Dr. Gore alleged, inter alia, that the failure to disclose that the car had been repainted constituted suppression of a material fact.^[4] The complaint prayed for $500,000 in compensatory and punitive damages, and costs.

At trial, BMW acknowledged that it had adopted a nationwide policy in 1983 concerning cars that were damaged in the course of manufacture or transportation. If the cost of repairing the damage exceeded 3 percent of the car's suggested [564] retail price, the car was placed in company service for a period of time and then sold as used. If the repair cost did not exceed 3 percent of the suggested retail price, however, the car was sold as new without advising the dealer that any repairs had been made. Because the $601.37 cost of repainting Dr. Gore's car was only about 1.5 percent of its suggested retail price, BMW did not disclose the damage or repair to the Birmingham dealer.

Dr. Gore asserted that his repainted car was worth less than a car that had not been refinished. To prove his actual damages of $4,000, he relied on the testimony of a former BMW dealer, who estimated that the value of a repainted BMW was approximately 10 percent less than the value of a new car that had not been damaged and repaired.^[5] To support his claim for punitive damages, Dr. Gore introduced evidence that since 1983 BMW had sold 983 refinished cars as new, including 14 in Alabama, without disclosing that the cars had been repainted before sale at a cost of more than $300 per vehicle.^[6] Using the actual damage estimate of $4,000 per vehicle, Dr. Gore argued that a punitive award of $4 million would provide an appropriate penalty for selling approximately 1,000 cars for more than they were worth.

In defense of its disclosure policy, BMW argued that it was under no obligation to disclose repairs of minor damage to new cars and that Dr. Gore's car was as good as a car with the original factory finish. It disputed Dr. Gore's assertion that the value of the car was impaired by the repainting and argued that this good-faith belief made a punitive award inappropriate. BMW also maintained that transactions in jurisdictions other than Alabama had no relevance to Dr. Gore's claim.

[565] The jury returned a verdict finding BMW liable for compensatory damages of $4,000. In addition, the jury assessed $4 million in punitive damages, based on a determination that the nondisclosure policy constituted "gross, oppressive or malicious" fraud.^[7] See Ala. Code §§ 6-11-20, 6-11-21 (1993).

BMW filed a post-trial motion to set aside the punitive damages award. The company introduced evidence to establish that its nondisclosure policy was consistent with the laws of roughly 25 States defining the disclosure obligations of automobile manufacturers, distributors, and dealers. The most stringent of these statutes required disclosure of repairs costing more than 3 percent of the suggested retail price; none mandated disclosure of less costly repairs.^[8] Relying on these statutes, BMW contended that its conduct was lawful in these States and therefore could not provide the basis for an award of punitive damages.

BMW also drew the court's attention to the fact that its nondisclosure policy had never been adjudged unlawful before this action was filed. Just months before Dr. Gore's case went to trial, the jury in a similar lawsuit filed by another Alabama BMW purchaser found that BMW's failure to disclose paint repair constituted fraud. Yates v. BMW of North America, Inc., 642 So. 2d 937 (Ala. 1993).^[9] Before the [566] judgment in this case, BMW changed its policy by taking steps to avoid the sale of any refinished vehicles in Alabama and two other States. When the $4 million verdict was returned in this case, BMW promptly instituted a nationwide policy of full disclosure of all repairs, no matter how minor.

In response to BMW's arguments, Dr. Gore asserted that the policy change demonstrated the efficacy of the punitive damages award. He noted that while no jury had held the policy unlawful, BMW had received a number of customer complaints relating to undisclosed repairs and had settled some lawsuits.^[10] Finally, he maintained that the disclosure statutes of other States were irrelevant because BMW had failed to offer any evidence that the disclosure statutes supplanted, rather than supplemented, existing causes of action for common-law fraud.

The trial judge denied BMW's post-trial motion, holding, inter alia, that the award was not excessive. On appeal, the Alabama Supreme Court also rejected BMW's claim that the award exceeded the constitutionally permissible amount. 646 So. 2d 619 (1994). The court's excessiveness inquiry applied the factors articulated in Green Oil Co. v. Hornsby, 539 So. 2d 218, 223-224 (Ala. 1989), and approved in Pacific Mut. Life Ins. Co. v. Haslip, 499 U. S. 1, 21-22 (1991). 646 So. 2d, at 624-625. Based on its analysis, the court concluded that BMW's conduct was "reprehensible"; the nondisclosure was profitable for the company; the judgment "would not have a substantial impact upon [BMW's] financial position"; the litigation had been expensive; no criminal sanctions had been imposed on BMW for the same conduct; the award of no punitive [567] damages in Yates reflected "the inherent uncertainty of the trial process"; and the punitive award bore a "reasonable relationship" to "the harm that was likely to occur from [BMW's] conduct as well as . . . the harm that actually occurred." 646 So. 2d, at 625-627.

The Alabama Supreme Court did, however, rule in BMW's favor on one critical point: The court found that the jury improperly computed the amount of punitive damages by multiplying Dr. Gore's compensatory damages by the number of similar sales in other jurisdictions. Id., at 627. Having found the verdict tainted, the court held that "a constitutionally reasonable punitive damages award in this case is $2,000,000," id., at 629, and therefore ordered a remittitur in that amount.^[11] The court's discussion of the amount of its remitted award expressly disclaimed any reliance on "acts that occurred in other jurisdictions"; instead, the court explained that it had used a "comparative analysis" that considered Alabama cases, "along with cases from other jurisdictions, involving the sale of an automobile where the seller misrepresented the condition of the vehicle and the jury awarded punitive damages to the purchaser." ^[12]Id., at 628.

[568] Because we believed that a review of this case would help to illuminate "the character of the standard that will identify unconstitutionally excessive awards" of punitive damages, see Honda Motor Co. v. Oberg, 512 U. S. 415, 420 (1994), we granted certiorari, 513 U. S. 1125 (1995).

II

Punitive damages may properly be imposed to further a State's legitimate interests in punishing unlawful conduct and deterring its repetition. Gertz v. Robert Welch, Inc., 418 U. S. 323, 350 (1974); Newport v. Fact Concerts, Inc., 453 U. S. 247, 266-267 (1981); Haslip, 499 U. S., at 22. In our federal system, States necessarily have considerable flexibility in determining the level of punitive damages that they will allow in different classes of cases and in any particular case. Most States that authorize exemplary damages afford the jury similar latitude, requiring only that the damages awarded be reasonably necessary to vindicate the State's legitimate interests in punishment and deterrence. See TXO, 509 U. S., at 456; Haslip, 499 U. S., at 21, 22. Only when an award can fairly be categorized as "grossly excessive" in relation to these interests does it enter the zone of arbitrariness that violates the Due Process Clause of the Fourteenth Amendment. Cf. TXO, 509 U. S., at 456. For that reason, the federal excessiveness inquiry appropriately begins with an identification of the state interests that a punitive award is designed to serve. We therefore focus our attention first on the scope of Alabama's legitimate interests in punishing BMW and deterring it from future misconduct.

No one doubts that a State may protect its citizens by prohibiting deceptive trade practices and by requiring automobile [569] distributors to disclose presale repairs that affect the value of a new car. But the States need not, and in fact do not, provide such protection in a uniform manner. Some States rely on the judicial process to formulate and enforce an appropriate disclosure requirement by applying principles of contract and tort law.^[13] Other States have enacted various forms of legislation that define the disclosure obligations of automobile manufacturers, distributors, and dealers.^[14] [570] The result is a patchwork of rules representing the diverse policy judgments of lawmakers in 50 States.

That diversity demonstrates that reasonable people may disagree about the value of a full disclosure requirement. Some legislatures may conclude that affirmative disclosure requirements are unnecessary because the self-interest of those involved in the automobile trade in developing and maintaining the goodwill of their customers will motivate them to make voluntary disclosures or to refrain from selling cars that do not comply with self-imposed standards. Those legislatures that do adopt affirmative disclosure obligations may take into account the cost of government regulation, choosing to draw a line exempting minor repairs from such a requirement. In formulating a disclosure standard, States may also consider other goals, such as providing a "safe harbor" for automobile manufacturers, distributors, and dealers against lawsuits over minor repairs.^[15]

We may assume, arguendo, that it would be wise for every State to adopt Dr. Gore's preferred rule, requiring full disclosure of every presale repair to a car, no matter how trivial and regardless of its actual impact on the value of the car. [571] But while we do not doubt that Congress has ample authority to enact such a policy for the entire Nation,^[16] it is clear that no single State could do so, or even impose its own policy choice on neighboring States. See Bonaparte v. Tax Court, 104 U. S. 592, 594 (1881) ("No State can legislate except with reference to its own jurisdiction. . . . Each State is independent of all the others in this particular").^[17] Similarly, one State's power to impose burdens on the interstate market for automobiles is not only subordinate to the federal power over interstate commerce, Gibbons v. Ogden, 9 Wheat. 1, 194-196 (1824), but is also constrained by the need to respect the interests of other States, see, e. g., Healy v. Beer Institute, 491 U. S. 324, 335-336 (1989) (the Constitution has a "special concern both with the maintenance of a national economic union unfettered by state-imposed limitations on [572] interstate commerce and with the autonomy of the individual States within their respective spheres" (footnote omitted)); Edgar v. MITE Corp., 457 U. S. 624, 643 (1982).

We think it follows from these principles of state sovereignty and comity that a State may not impose economic sanctions on violators of its laws with the intent of changing the tortfeasors' lawful conduct in other States.^[18] Before this Court Dr. Gore argued that the large punitive damages award was necessary to induce BMW to change the nationwide policy that it adopted in 1983.^[19] But by attempting to alter BMW's nationwide policy, Alabama would be infringing on the policy choices of other States. To avoid such encroachment, the economic penalties that a State such as Alabama inflicts on those who transgress its laws, whether the penalties take the form of legislatively authorized fines or judicially imposed punitive damages, must be supported by the State's interest in protecting its own consumers and its own economy. Alabama may insist that BMW adhere to a particular disclosure policy in that State. Alabama does not [573] have the power, however, to punish BMW for conduct that was lawful where it occurred and that had no impact on Alabama or its residents.^[20] Nor may Alabama impose sanctions on BMW in order to deter conduct that is lawful in other jurisdictions.

In this case, we accept the Alabama Supreme Court's interpretation of the jury verdict as reflecting a computation of the amount of punitive damages "based in large part on conduct that happened in other jurisdictions." 646 So. 2d, at 627. As the Alabama Supreme Court noted, neither the jury nor the trial court was presented with evidence that any of BMW's out-of-state conduct was unlawful. "The only testimony touching the issue showed that approximately 60% of the vehicles that were refinished were sold in states where failure to disclose the repair was not an unfair trade practice." Id., at 627, n. 6.^[21] The Alabama Supreme Court therefore properly eschewed reliance on BMW's out-of-state conduct, id., at 628, and based its remitted award solely on [574] conduct that occurred within Alabama.^[22] The award must be analyzed in the light of the same conduct, with consideration given only to the interests of Alabama consumers, rather than those of the entire Nation. When the scope of the interest in punishment and deterrence that an Alabama court may appropriately consider is properly limited, it is apparent—for reasons that we shall now address—that this award is grossly excessive.

III

Elementary notions of fairness enshrined in our constitutional jurisprudence dictate that a person receive fair notice not only of the conduct that will subject him to punishment, but also of the severity of the penalty that a State may impose.^[23] Three guideposts, each of which indicates that BMW did not receive adequate notice of the magnitude of the sanction that Alabama might impose for adhering to the nondisclosure policy adopted in 1983, lead us to the conclusion that [575] the $2 million award against BMW is grossly excessive: the degree of reprehensibility of the nondisclosure; the disparity between the harm or potential harm suffered by Dr. Gore and his punitive damages award; and the difference between this remedy and the civil penalties authorized or imposed in comparable cases. We discuss these considerations in turn.

Degree of Reprehensibility

Perhaps the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct.^[24] As the Court stated nearly 150 years ago, exemplary damages imposed on a defendant should reflect "the enormity of his offense." Day v. Woodworth, 13 How. 363, 371 (1852). See also St. Louis, I. M. & S. R. Co. v. Williams, 251 U. S. 63, 66-67 (1919) (punitive award may not be "wholly disproportioned to the offense"); Browning-Ferris Industries of Vt., Inc. v. Kelco Disposal, Inc., 492 U. S. 257, 301 (1989) (O'Connor, J., concurring in part and dissenting in part) (reviewing court "should examine the gravity of the defendant's conduct and the harshness of the award of punitive damages").^[25] This principle reflects the accepted view that some wrongs are more blameworthy than others. Thus, we have said that [576] "nonviolent crimes are less serious than crimes marked by violence or the threat of violence." Solem v. Helm, 463 U. S. 277, 292-293 (1983). Similarly, "trickery and deceit," TXO, 509 U. S., at 462, are more reprehensible than negligence. In TXO, both the West Virginia Supreme Court and the Justices of this Court placed special emphasis on the principle that punitive damages may not be "grossly out of proportion to the severity of the offense." ^[26]Id., at 453, 462. Indeed, for Justice Kennedy, the defendant's intentional malice was the decisive element in a "close and difficult" case. Id., at 468.^[27]

In this case, none of the aggravating factors associated with particularly reprehensible conduct is present. The harm BMW inflicted on Dr. Gore was purely economic in nature. The presale refinishing of the car had no effect on its performance or safety features, or even its appearance for at least nine months after his purchase. BMW's conduct evinced no indifference to or reckless disregard for the health and safety of others. To be sure, infliction of economic injury, especially when done intentionally through affirmative acts of misconduct, id., at 453, or when the target is financially vulnerable, can warrant a substantial penalty. But this observation does not convert all acts that cause economic harm into torts that are sufficiently reprehensible to justify a significant sanction in addition to compensatory damages.

Dr. Gore contends that BMW's conduct was particularly reprehensible because nondisclosure of the repairs to his car formed part of a nationwide pattern of tortious conduct. Certainly, evidence that a defendant has repeatedly engaged in prohibited conduct while knowing or suspecting that it was unlawful would provide relevant support for an argument [577] that strong medicine is required to cure the defendant's disrespect for the law. See id., at 462, n. 28. Our holdings that a recidivist may be punished more severely than a first offender recognize that repeated misconduct is more reprehensible than an individual instance of malfeasance. See Gryger v. Burke, 334 U. S. 728, 732 (1948).

In support of his thesis, Dr. Gore advances two arguments. First, he asserts that the state disclosure statutes supplement, rather than supplant, existing remedies for breach of contract and common-law fraud. Thus, according to Dr. Gore, the statutes may not properly be viewed as immunizing from liability the nondisclosure of repairs costing less than the applicable statutory threshold. Brief for Respondent 18-19. Second, Dr. Gore maintains that BMW should have anticipated that its failure to disclose similar repair work could expose it to liability for fraud. Id., at 4-5.

We recognize, of course, that only state courts may authoritatively construe state statutes. As far as we are aware, at the time this action was commenced no state court had explicitly addressed whether its State's disclosure statute provides a safe harbor for nondisclosure of presumptively minor repairs or should be construed instead as supplementing common-law duties.^[28] A review of the text of the statutes, [578] however, persuades us that in the absence of a statecourt determination to the contrary, a corporate executive could reasonably interpret the disclosure requirements as establishing safe harbors. In California, for example, the disclosure statute defines "material" damage to a motor vehicle as damage requiring repairs costing in excess of 3 percent of the suggested retail price or $500, whichever is greater. Cal. Veh. Code Ann. § 9990 (West Supp. 1996). The Illinois statute states that in cases in which disclosure is not required, "nondisclosure does not constitute a misrepresentation or omission of fact." Ill. Comp. Stat., ch. 815, § 710/5 (1994).^[29] Perhaps the statutes may also be interpreted in another way. We simply emphasize that the record contains no evidence that BMW's decision to follow a disclosure policy that coincided with the strictest extant state statute was sufficiently reprehensible to justify a $2 million award of punitive damages.

[579] Dr. Gore's second argument for treating BMW as a recidivist is that the company should have anticipated that its actions would be considered fraudulent in some, if not all, jurisdictions. This contention overlooks the fact that actionable fraud requires a material misrepresentation or omission.^[30] This qualifier invites line-drawing of just the sort engaged in by States with disclosure statutes and by BMW. We do not think it can be disputed that there may exist minor imperfections in the finish of a new car that can be repaired (or indeed, left unrepaired) without materially affecting the car's value.^[31] There is no evidence that BMW acted in bad faith when it sought to establish the appropriate line between presumptively minor damage and damage requiring disclosure to purchasers. For this purpose, BMW could reasonably rely on state disclosure statutes for guidance. In this regard, it is also significant that there is no evidence that BMW persisted in a course of conduct after it had been adjudged unlawful on even one occasion, let alone repeated occasions.^[32]

Finally, the record in this case discloses no deliberate false statements, acts of affirmative misconduct, or concealment of evidence of improper motive, such as were present in Haslip and TXO. Haslip, 499 U. S., at 5; TXO, 509 U. S., at 453. We accept, of course, the jury's finding that BMW suppressed [580] a material fact which Alabama law obligated it to communicate to prospective purchasers of repainted cars in that State. But the omission of a material fact may be less reprehensible than a deliberate false statement, particularly when there is a good-faith basis for believing that no duty to disclose exists.

That conduct is sufficiently reprehensible to give rise to tort liability, and even a modest award of exemplary damages does not establish the high degree of culpability that warrants a substantial punitive damages award. Because this case exhibits none of the circumstances ordinarily associated with egregiously improper conduct, we are persuaded that BMW's conduct was not sufficiently reprehensible to warrant imposition of a $2 million exemplary damages award.

Ratio

The second and perhaps most commonly cited indicium of an unreasonable or excessive punitive damages award is its ratio to the actual harm inflicted on the plaintiff. See TXO, 509 U. S., at 459; Haslip, 499 U. S., at 23. The principle that exemplary damages must bear a "reasonable relationship" to compensatory damages has a long pedigree.^[33] Scholars have identified a number of early English statutes authorizing the [581] award of multiple damages for particular wrongs. Some 65 different enactments during the period between 1275 and 1753 provided for double, treble, or quadruple damages.^[34] Our decisions in both Haslip and TXO endorsed the proposition that a comparison between the compensatory award and the punitive award is significant.

In Haslip we concluded that even though a punitive damages award of "more than 4 times the amount of compensatory damages" might be "close to the line," it did not "cross the line into the area of constitutional impropriety." 499 U. S., at 23-24. TXO, following dicta in Haslip, refined this analysis by confirming that the proper inquiry is "`whether there is a reasonable relationship between the punitive damages award and the harm likely to result from the defendant's conduct as well as the harm that actually has occurred.' " TXO, 509 U. S., at 460 (emphasis in original), quoting Haslip, 499 U. S., at 21. Thus, in upholding the $10 million award in TXO, we relied on the difference between that figure and the harm to the victim that would have ensued if the tortious plan had succeeded. That difference suggested that the relevant ratio was not more than 10 to 1.^[35]

[582] The $2 million in punitive damages awarded to Dr. Gore by the Alabama Supreme Court is 500 times the amount of his actual harm as determined by the jury.^[36] Moreover, there is no suggestion that Dr. Gore or any other BMW purchaser was threatened with any additional potential harm by BMW's nondisclosure policy. The disparity in this case is thus dramatically greater than those considered in Haslip and TXO. ^[37]

Of course, we have consistently rejected the notion that the constitutional line is marked by a simple mathematical formula, even one that compares actual and potential damages to the punitive award. TXO, 509 U. S., at 458.^[38] Indeed, low awards of compensatory damages may properly support a higher ratio than high compensatory awards, if, for example, a particularly egregious act has resulted in only a small amount of economic damages. A higher ratio may also be justified in cases in which the injury is hard to detect or the monetary value of noneconomic harm might have been difficult to determine. It is appropriate, therefore, to reiterate our rejection of a categorical approach. Once again, "we return to what we said . . . in Haslip: `We need not, and [583] indeed we cannot, draw a mathematical bright line between the constitutionally acceptable and the constitutionally unacceptable that would fit every case. We can say, however, that [a] general concer[n] of reasonableness . . . properly enter[s] into the constitutional calculus.' " Id., at 458 (quoting Haslip, 499 U. S., at 18). In most cases, the ratio will be within a constitutionally acceptable range, and remittitur will not be justified on this basis. When the ratio is a breathtaking 500 to 1, however, the award must surely "raise a suspicious judicial eyebrow." TXO, 509 U. S., at 481 (O'Connor, J., dissenting).

Sanctions for Comparable Misconduct

Comparing the punitive damages award and the civil or criminal penalties that could be imposed for comparable misconduct provides a third indicium of excessiveness. As Justice O'Connor has correctly observed, a reviewing court engaged in determining whether an award of punitive damages is excessive should "accord `substantial deference' to legislative judgments concerning appropriate sanctions for the conduct at issue." Browning-Ferris Industries of Vt., Inc. v. Kelco Disposal, Inc., 492 U. S., at 301 (opinion concurring in part and dissenting in part). In Haslip, 499 U. S., at 23, the Court noted that although the exemplary award was "much in excess of the fine that could be imposed," imprisonment was also authorized in the criminal context.^[39] In this [584] case the $2 million economic sanction imposed on BMW is substantially greater than the statutory fines available in Alabama and elsewhere for similar malfeasance.

The maximum civil penalty authorized by the Alabama Legislature for a violation of its Deceptive Trade Practices Act is $2,000; ^[40] other States authorize more severe sanctions, with the maxima ranging from $5,000 to $10,000.^[41] Significantly, some statutes draw a distinction between first offenders and recidivists; thus, in New York the penalty is $50 for a first offense and $250 for subsequent offenses. None of these statutes would provide an out-of-state distributor with fair notice that the first violation—or, indeed the first 14 violations—of its provisions might subject an offender to a multimillion dollar penalty. Moreover, at the time BMW's policy was first challenged, there does not appear to have been any judicial decision in Alabama or elsewhere indicating that application of that policy might give rise to such severe punishment.

The sanction imposed in this case cannot be justified on the ground that it was necessary to deter future misconduct without considering whether less drastic remedies could be expected to achieve that goal. The fact that a multimillion dollar penalty prompted a change in policy sheds no light on the question whether a lesser deterrent would have adequately protected the interests of Alabama consumers. In [585] the absence of a history of noncompliance with known statutory requirements, there is no basis for assuming that a more modest sanction would not have been sufficient to motivate full compliance with the disclosure requirement imposed by the Alabama Supreme Court in this case.

IV

We assume, as the juries in this case and in the Yates case found, that the undisclosed damage to the new BMW's affected their actual value. Notwithstanding the evidence adduced by BMW in an effort to prove that the repainted cars conformed to the same quality standards as its other cars, we also assume that it knew, or should have known, that as time passed the repainted cars would lose their attractive appearance more rapidly than other BMW's. Moreover, we of course accept the Alabama courts' view that the state interest in protecting its citizens from deceptive trade practices justifies a sanction in addition to the recovery of compensatory damages. We cannot, however, accept the conclusion of the Alabama Supreme Court that BMW's conduct was sufficiently egregious to justify a punitive sanction that is tantamount to a severe criminal penalty.

The fact that BMW is a large corporation rather than an impecunious individual does not diminish its entitlement to fair notice of the demands that the several States impose on the conduct of its business. Indeed, its status as an active participant in the national economy implicates the federal interest in preventing individual States from imposing undue burdens on interstate commerce. While each State has ample power to protect its own consumers, none may use the punitive damages deterrent as a means of imposing its regulatory policies on the entire Nation.

As in Haslip, we are not prepared to draw a bright line marking the limits of a constitutionally acceptable punitive damages award. Unlike that case, however, we are fully convinced that the grossly excessive award imposed in this [586] case transcends the constitutional limit.^[42] Whether the appropriate remedy requires a new trial or merely an independent determination by the Alabama Supreme Court of the award necessary to vindicate the economic interests of Alabama consumers is a matter that should be addressed by the state court in the first instance.

The judgment is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.

It is so ordered.

Justice Breyer, with whom Justice O'Connor and Justice Souter join, concurring.

The Alabama state courts have assessed the defendant $2 million in "punitive damages" for having knowingly failed to tell a BMW automobile buyer that, at a cost of $600, it had repainted portions of his new $40,000 car, thereby lowering its potential resale value by about 10%. The Court's opinion, which I join, explains why we have concluded that this award, in this case, was "grossly excessive" in relation to legitimate punitive damages objectives, and hence an arbitrary deprivation of life, liberty, or property in violation of the Due Process Clause. See TXO Production Corp. v. Alliance Resources Corp., 509 U. S. 443, 453, 454 (1993) (A "grossly excessive" punitive award amounts to an "arbitrary deprivation of property without due process of law") (plurality opinion). Members of this Court have generally thought, however, that if "fair procedures were followed, a judgment that is a product of that process is entitled to a strong presumption [587] of validity." Id., at 457. See also Pacific Mut. Life Ins. Co. v. Haslip, 499 U. S. 1, 40-42 (1991) (Kennedy, J., concurring in judgment). And the Court also has found that punitive damages procedures very similar to those followed here were not, by themselves, fundamentally unfair. Id., at 15-24. Thus, I believe it important to explain why this presumption of validity is overcome in this instance.

The reason flows from the Court's emphasis in Haslip upon the constitutional importance of legal standards that provide "reasonable constraints" within which "discretion is exercised," that assure "meaningful and adequate review by the trial court whenever a jury has fixed the punitive damages," and permit "appellate review [that] makes certain that the punitive damages are reasonable in their amount and rational in light of their purpose to punish what has occurred and to deter its repetition." Id., at 20-21. See also id., at 18 ("[U]nlimited jury discretion—or unlimited judicial discretion for that matter—in the fixing of punitive damages may invite extreme results that jar one's constitutional sensibilities").

This constitutional concern, itself harkening back to the Magna Carta, arises out of the basic unfairness of depriving citizens of life, liberty, or property, through the application, not of law and legal processes, but of arbitrary coercion. Daniels v. Williams, 474 U. S. 327, 331 (1986); Dent v. West Virginia, 129 U. S. 114, 123 (1889). Requiring the application of law, rather than a decisionmaker's caprice, does more than simply provide citizens notice of what actions may subject them to punishment; it also helps to assure the uniform general treatment of similarly situated persons that is the essence of law itself. See Railway Express Agency, Inc. v. New York, 336 U. S. 106, 112 (1949) (Jackson, J., concurring) ("[T]here is no more effective practical guaranty against arbitrary and unreasonable government than to require that the principles of law which officials would impose upon a minority must be imposed generally").

[588] Legal standards need not be precise in order to satisfy this constitutional concern. See Haslip, supra, at 20 (comparing punitive damages standards to such legal standards as "reasonable care," "due diligence," and "best interests of the child") (internal quotation marks omitted). But they must offer some kind of constraint upon a jury or court's discretion, and thus protection against purely arbitrary behavior. The standards the Alabama courts applied here are vague and open ended to the point where they risk arbitrary results. In my view, although the vagueness of those standards does not, by itself, violate due process, see Haslip, supra, it does invite the kind of scrutiny the Court has given the particular verdict before us. See id., at 18 ("[C]oncerns of . . . adequate guidance from the court when the case is tried to a jury properly enter into the constitutional calculus"); TXO, supra, at 475 ("[I]t cannot be denied that the lack of clear guidance heightens the risk that arbitrariness, passion, or bias will replace dispassionate deliberation as the basis for the jury's verdict") (O'Connor, J., dissenting). This is because the standards, as the Alabama Supreme Court authoritatively interpreted them here, provided no significant constraints or protection against arbitrary results.

First, the Alabama statute that permits punitive damages does not itself contain a standard that readily distinguishes between conduct warranting very small, and conduct warranting very large, punitive damages awards. That statute permits punitive damages in cases of "oppression, fraud, wantonness, or malice." Ala. Code § 6-11-20(a) (1993). But the statute goes on to define those terms broadly, to encompass far more than the egregious conduct that those terms, at first reading, might seem to imply. An intentional misrepresentation, made through a statement or silence, can easily amount to "fraud" sufficient to warrant punitive damages. See § 6-11-20(b)(1) ("Fraud" includes "intentional . . . concealment of a material fact the concealing party had a [589] duty to disclose, which was gross, oppressive, or malicious and committed with the intention . . . of thereby depriving a person or entity of property") (emphasis added); § 6-11— 20(b)(2) ("Malice" includes any "wrongful act without just cause or excuse . . . [w]ith an intent to injure the . . . property of another") (emphasis added); § 6-11-20(b)(5) ("Oppression" includes "[s]ubjecting a person to . . . unjust hardship in conscious disregard of that person's rights"). The statute thereby authorizes punitive damages for the most serious kinds of misrepresentations, say, tricking the elderly out of their life savings, for much less serious conduct, such as the failure to disclose repainting a car, at issue here, and for a vast range of conduct in between.

Second, the Alabama courts, in this case, have applied the "factors" intended to constrain punitive damages awards in a way that belies that purpose. Green Oil Co. v. Hornsby, 539 So. 2d 218 (Ala. 1989), sets forth seven factors that appellate courts use to determine whether or not a jury award was "grossly excessive" and which, in principle, might make up for the lack of significant constraint in the statute. But, as the Alabama courts have authoritatively interpreted them, and as their application in this case illustrates, they impose little actual constraint.

(a) Green Oil requires that a punitive damages award "bear a reasonable relationship to the harm that is likely to occur from the defendant's conduct as well as to the harm that actually has occurred." Id., at 223. But this standard does little to guide a determination of what counts as a "reasonable" relationship, as this case illustrates. The record evidence of past, present, or likely future harm consists of (a) $4,000 of harm to Dr. Gore's BMW; (b) 13 other similar Alabama instances; and (c) references to about 1,000 similar instances in other States. The Alabama Supreme Court, disregarding BMW's failure to make relevant objection to the out-of-state instances at trial (as was the court's right), held that the last mentioned, out-of-state instances did not [590] count as relevant harm. It went on to find "a reasonable relationship" between the harm and the $2 million punitive damages award without "consider[ing] those acts that occurred in other jurisdictions. " 646 So. 2d 619, 628 (1994) (emphasis added). For reasons explored by the majority in greater depth, see ante, at 574-586, the relationship between this award and the underlying conduct seems well beyond the bounds of the "reasonable." To find a "reasonable relationship" between purely economic harm totaling $56,000, without significant evidence of future repetition, and a punitive award of $2 million is to empty the "reasonable relationship" test of meaningful content. As thus construed, it does not set forth a legal standard that could have significantly constrained the discretion of Alabama factfinders.

(b) Green Oil `s second factor is the "degree of reprehensibility" of the defendant's conduct. Green Oil, supra, at 223. Like the "reasonable relationship" test, this factor provides little guidance on how to relate culpability to the size of an award. The Alabama court, in considering this factor, found "reprehensible" that BMW followed a conscious policy of not disclosing repairs to new cars when the cost of repairs amounted to less than 3% of the car's value. Of course, any conscious policy of not disclosing a repair—where one knows the nondisclosure might cost the customer resale value—is "reprehensible" to some degree. But, for the reasons discussed by the majority, ante, at 575-580, I do not see how the Alabama courts could find conduct that (they assumed) caused $56,000 of relevant economic harm especially or unusually reprehensible enough to warrant $2 million in punitive damages, or a significant portion of that award. To find to the contrary, as the Alabama courts did, is not simply unreasonable; it is to make "reprehensibility" a concept without constraining force, i. e., to deprive the concept of its constraining power to protect against serious and capricious deprivations.

[591] (c) Green Oil `s third factor requires "punitive damages" to "remove the profit" of the illegal activity and "be in excess of the profit, so that the defendant recognizes a loss." Green Oil, 539 So. 2d, at 223. This factor has the ability to limit awards to a fixed, rational amount. But as applied, that concept's potential was not realized, for the court did not limit the award to anywhere near the $56,000 in profits evidenced in the record. Given the record's description of the conduct and its prevalence, this factor could not justify much of the $2 million award.

(d) Green Oil `s fourth factor is the "financial position" of the defendant. Ibid. Since a fixed dollar award will punish a poor person more than a wealthy one, one can understand the relevance of this factor to the State's interest in retribution (though not necessarily to its interest in deterrence, given the more distant relation between a defendant's wealth and its responses to economic incentives). See TXO, 509 U. S., at 462, and n. 28 (plurality opinion); id., at 469 (Kennedy, J., concurring in part and concurring in judgment); Haslip, 499 U. S., at 21-22; Browning-Ferris Industries of Vt., Inc. v. Kelco Disposal, Inc., 492 U. S. 257, 300 (1989) (O'Connor, J., concurring in part and dissenting in part). This factor, however, is not necessarily intended to act as a significant constraint on punitive awards. Rather, it provides an open-ended basis for inflating awards when the defendant is wealthy, as this case may illustrate. That does not make its use unlawful or inappropriate; it simply means that this factor cannot make up for the failure of other factors, such as "reprehensibility," to constrain significantly an award that purports to punish a defendant's conduct.

(e) Green Oil `s fifth factor is the "costs of litigation" and the State's desire "to encourage plaintiffs to bring wrongdoers to trial." 539 So. 2d, at 223. This standard provides meaningful constraint to the extent that the enhancement it authorized is linked to a fixed, ascertainable amount approximating actual costs, even when defined generously to reflect [592] the contingent nature of plaintiffs' victories. But as this case shows, the factor cannot operate as a constraint when an award much in excess of costs is approved for other reasons. An additional aspect of the standard—the need to "encourage plaintiffs to bring wrongdoers to trial"—is a factor that does not constrain, but enhances, discretionary power—especially when unsupported by evidence of a special need to encourage litigation (which the Alabama courts here did not mention).

(f) Green Oil `s sixth factor is whether or not "criminal sanctions have been imposed on the defendant for his conduct." Ibid. This factor did not apply here.

(g) Green Oil `s seventh factor requires that "other civil actions" filed "against the same defendant, based on the same conduct," be considered in mitigation. Id., at 224. That factor did not apply here.

Thus, the first, second, and third Green Oil factors, in principle, might sometimes act as constraints on arbitrary behavior. But as the Alabama courts interpreted those standards in this case, even taking those three factors together, they could not have significantly constrained the court system's ability to impose "grossly excessive" awards.

Third, the state courts neither referred to, nor made any effort to find, nor enunciated any other standard that either directly, or indirectly as background, might have supplied the constraining legal force that the statute and Green Oil standards (as interpreted here) lack. Dr. Gore did argue to the jury an economic theory based on the need to offset the totality of the harm that the defendant's conduct caused. Some theory of that general kind might have provided a significant constraint on arbitrary awards (at least where confined to the relevant harm-causing conduct, see ante, at 570-574). Some economists, for example, have argued for a standard that would deter illegal activity causing solely economic harm through the use of punitive damages awards that, as a whole, would take from a wrongdoer the total cost of the [593] harm caused. See, e. g., S. Shavell, Economic Analysis of Accident Law 162 (1987) ("If liability equals losses caused multiplied by . .. the inverse of the probability of suit, injurers will act optimally under liability rules despite the chance that they will escape suit"); Cooter, Punitive Damages for Deterrence: When and How Much, 40 Ala. L. Rev. 1143, 1146-1148 (1989). My understanding of the intuitive essence of some of those theories, which I put in crude form (leaving out various qualifications), is that they could permit juries to calculate punitive damages by making a rough estimate of global harm, dividing that estimate by a similarly rough estimate of the number of successful lawsuits that would likely be brought, and adding generous attorney's fees and other costs. Smaller damages would not sufficiently discourage firms from engaging in the harmful conduct, while larger damages would "over-deter" by leading potential defendants to spend more to prevent the activity that causes the economic harm, say, through employee training, than the cost of the harm itself. See Galligan, Augmented Awards: The Efficient Evolution of Punitive Damages, 51 La. L. Rev. 3, 17-20, 28-30 (1990). Larger damages might also "double count" by including in the punitive damages award some of the compensatory, or punitive, damages that subsequent plaintiffs would also recover.

The record before us, however, contains nothing suggesting that the Alabama Supreme Court, when determining the allowable award, applied any "economic" theory that might explain the $2 million recovery. Cf. Browning-Ferris, supra, at 300 (noting that the Constitution "does not incorporate the views of the Law and Economics School," nor does it "`require the States to subscribe to any particular economic theory' ") (O'Connor, J., concurring in part and dissenting in part) (quoting CTS Corp. v. Dynamics Corp. of America, 481 U. S. 69, 92 (1987)). And courts properly tend to judge the rationality of judicial actions in terms of the reasons that were given, and the facts that were before the court, cf. TXO, [594] 509 U. S., at 468 (Kennedy, J., concurring in part and concurring in judgment), not those that might have been given on the basis of some conceivable set of facts (unlike the rationality of economic statutes enacted by legislatures subject to the public's control through the ballot box, see, e. g., FCC v. Beach Communications, Inc., 508 U. S. 307, 315 (1993)). Therefore, reference to a constraining "economic" theory, which might have counseled more deferential review by this Court, is lacking in this case.

Fourth, I cannot find any community understanding or historic practice that this award might exemplify and which, therefore, would provide background standards constraining arbitrary behavior and excessive awards. A punitive damages award of $2 million for intentional misrepresentation causing $56,000 of harm is extraordinary by historical standards, and, as far as I am aware, finds no analogue until relatively recent times. Amici for Dr. Gore attempt to show that this is not true, pointing to various historical cases which, according to their calculations, represented roughly equivalent punitive awards for similarly culpable conduct. See Brief for James D. A. Boyle et al. as Amici Curiae 4-5 (hereinafter Legal Historians' Brief). Among others, they cite Wilkes v. Wood, Lofft 1, 98 Eng. Rep. 489 (C. P. 1763) (£1,000 said to be equivalent of $1.5 million, for warrantless search of papers); Huckle v. Money, 2 Wills. 205, 95 Eng. Rep. 768 (K. B. 1763) (£300, said to be $450,000, for 6-hour false imprisonment); Hewlett v. Cruchley, 5 Taunt. 277, 128 Eng. Rep. 696 (C. P. 1813) (£2,000, said to be $680,000, for malicious prosecution); Merest v. Harvey, 5 Taunt. 442, 128 Eng. Rep. 761 (C. P. 1814) (£500, said to be $165,000, for poaching). But amici apparently base their conversions on a mathematical assumption, namely, that inflation has progressed at a constant 3% rate of inflation. See Legal Historians' Brief 4. In fact, consistent, cumulative inflation is a modern phenomenon. See McCusker, How Much Is That in Real Money? A Historical Price Index for Use as a Deflator [595] of Money Values in the Economy of the United States, 101 Proceedings of American Antiquarian Society 297, 310, 323— 332 (1992). Estimates based on historical rates of valuation, while highly approximate, suggest that the ancient extraordinary awards are small compared to the $2 million here at issue, or other modern punitive damages figures. See Appendix to this opinion, infra, at 597-598 (suggesting that the modern equivalent of the awards in the above cases is something like $150,000, $45,000, $100,000, and $25,000, respectively). And, as the majority opinion makes clear, the record contains nothing to suggest that the extraordinary size of the award in this case is explained by the extraordinary wrongfulness of the defendant's behavior, measured by historical or community standards, rather than arbitrariness or caprice.

Fifth, there are no other legislative enactments here that classify awards and impose quantitative limits that would significantly cabin the fairly unbounded discretion created by the absence of constraining legal standards. Cf., e. g., Tex. Civ. Prac. & Rem. Code Ann. § 41.008 (Supp. 1996) (punitive damages generally limited to greater of double damages, or $200,000, except cap does not apply to suits arising from certain serious criminal acts enumerated in the statute); Conn. Gen. Stat. § 52-240b (1995) (punitive damages may not exceed double compensatory damages in product liability cases); Fla. Stat. § 768.73(1) (Supp. 1993) (punitive damages in certain actions limited to treble compensatory damages); Ga. Code Ann. § 51-12-5.1(g) (Supp. 1995) ($250,000 cap in certain actions).

The upshot is that the rules that purport to channel discretion in this kind of case, here did not do so in fact. That means that the award in this case was both (a) the product of a system of standards that did not significantly constrain a court's, and hence a jury's, discretion in making that award; and (b) grossly excessive in light of the State's legitimate punitive damages objectives.

[596] The first of these reasons has special importance where courts review a jury-determined punitive damages award. That is because one cannot expect to direct jurors like legislators through the ballot box; nor can one expect those jurors to interpret law like judges, who work within a discipline and hierarchical organization that normally promotes roughly uniform interpretation and application of the law. Yet here Alabama expects jurors to act, at least a little, like legislators or judges, for it permits them, to a certain extent, to create public policy and to apply that policy, not to compensate a victim, but to achieve a policy-related objective outside the confines of the particular case.

To the extent that neither clear legal principles nor fairly obvious historical or community-based standards (defining, say, especially egregious behavior) significantly constrain punitive damages awards, is there not a substantial risk of outcomes so arbitrary that they become difficult to square with the Constitution's assurance, to every citizen, of the law's protection? The standards here, as authoritatively interpreted, in my view, make this threat real and not theoretical. And, in these unusual circumstances, where legal standards offer virtually no constraint, I believe that this lack of constraining standards warrants this Court's detailed examination of the award.

The second reason—the severe disproportionality between the award and the legitimate punitive damages objectives— reflects a judgment about a matter of degree. I recognize that it is often difficult to determine just when a punitive award exceeds an amount reasonably related to a State's legitimate interests, or when that excess is so great as to amount to a matter of constitutional concern. Yet whatever the difficulties of drawing a precise line, once we examine the award in this case, it is not difficult to say that this award lies on the line's far side. The severe lack of proportionality between the size of the award and the underlying punitive damages objectives shows that the award falls into the category [597] of "gross excessiveness" set forth in this Court's prior cases.

These two reasons taken together overcome what would otherwise amount to a "strong presumption of validity." TXO, 509 U. S., at 457. And, for those two reasons, I conclude that the award in this unusual case violates the basic guarantee of nonarbitrary governmental behavior that the Due Process Clause provides.

APPENDIX TO OPINION OF BREYER, J.

Although I recognize that all estimates of historic rates of inflation are subject to dispute, including, I assume, the sources below, those sources suggest that the value of the 18th and 19th century judgments cited by amici is much less than the figures amici arrived at under their presumption of a constant 3% rate of inflation.

In 1763, £1 (Eng.) was worth £1.73 Pennsylvania currency. See U. S. Bureau of the Census, Historical Statistics of the United States: Colonial Times to 1970, Series Z-585, p. 1198 (Bicentennial ed. 1975). For the period 1766-1772, £1 (Penn.) was worth $45.99 (U. S. 1991). See McCusker, How Much Is That in Real Money? A Historical Price Index for Use as a Deflator of Money Values in the Economy of the United States, 101 American Antiquarian Society 297, 333 (1992). Thus, £1 (Eng. 1763) is worth about $79.56 (U. S. 1991). Accounting for the 12% inflation of the U. S. dollar between 1991 and 1995 (when amici filed their brief), see Economic Indicators, 104th Cong., 2d Sess., p. 23 (Feb. 1996), £1 (Eng. 1763) is worth about $89.11 (U. S. 1995).

Calculated another way, £1 (Eng. 1763) is worth about £72.84 (Eng. 1991). See McCusker, supra, at 312, 342, 350. And £1 (Eng. 1991) is worth $1.77 (U. S. 1991). See 78 Fed. Reserve Bulletin A68 (Feb. 1992). Thus, £1 (Eng. 1763) amounts to about $128.93 (U. S. 1991). Again, accounting for inflation between 1991 and 1995, this amounts to about $144.40 (U. S. 1995).

[598] Thus, the above sources suggest that the £1,000 award in Wilkes in 1763 roughly amounts to between $89,110 and $144,440 today, not $1.5 million. And the £300 award in Huckle that same year would seem to be worth between $26,733 and $43,320 today, not $450,000.

For the period of the Hewlett and Merest decisions, £1 (Eng. 1813) is worth about £25.3 (Eng. 1991). See McCusker, supra, at 344, 350. Using the 1991 exchange rate, £1 (Eng. 1813) is worth about $44.78 (U. S. 1991). Accounting for inflation between 1991 and 1995, this amounts to about $50.16 (U. S. 1995).

Thus, the £2,000 and £500 awards in Hewlett and Merest would seem to be closer to $100,320 and $25,080, respectively, than to amici's estimates of $680,000 and $165,000.

Justice Scalia, with whom Justice Thomas joins, dissenting.

Today we see the latest manifestation of this Court's recent and increasingly insistent "concern about punitive damages that `run wild.' " Pacific Mut. Life Ins. Co. v. Haslip, 499 U. S. 1, 18 (1991). Since the Constitution does not make that concern any of our business, the Court's activities in this area are an unjustified incursion into the province of state governments.

In earlier cases that were the prelude to this decision, I set forth my view that a state trial procedure that commits the decision whether to impose punitive damages, and the amount, to the discretion of the jury, subject to some judicial review for "reasonableness," furnishes a defendant with all the process that is "due." See TXO Production Corp. v. Alliance Resources Corp., 509 U. S. 443, 470 (1993) (Scalia, J., concurring in judgment); Haslip, supra, at 25-28 (Scalia, J., concurring in judgment); cf. Honda Motor Co. v. Oberg, 512 U. S. 415, 435-436 (1994) (Scalia, J., concurring). I do not regard the Fourteenth Amendment's Due Process Clause as a secret repository of substantive guarantees against [599] "unfairness"—neither the unfairness of an excessive civil compensatory award, nor the unfairness of an "unreasonable" punitive award. What the Fourteenth Amendment's procedural guarantee assures is an opportunity to contest the reasonableness of a damages judgment in state court; but there is no federal guarantee a damages award actually be reasonable. See TXO, supra, at 471 (Scalia, J., concurring in judgment).

This view, which adheres to the text of the Due Process Clause, has not prevailed in our punitive damages cases. See TXO, 509 U. S., at 453-462 (plurality opinion); id., at 478— 481 (O'Connor, J., dissenting); Haslip, supra, at 18. When, however, a constitutional doctrine adopted by the Court is not only mistaken but also insusceptible of principled application, I do not feel bound to give it stare decisis effect— indeed, I do not feel justified in doing so. See, e. g., Witte v. United States, 515 U. S. 389, 406 (1995) (Scalia, J., concurring in judgment); Walton v. Arizona, 497 U. S. 639, 673 (1990) (Scalia, J., concurring in judgment in part and dissenting in part). Our punitive damages jurisprudence compels such a response. The Constitution provides no warrant for federalizing yet another aspect of our Nation's legal culture (no matter how much in need of correction it may be), and the application of the Court's new rule of constitutional law is constrained by no principle other than the Justices' subjective assessment of the "reasonableness" of the award in relation to the conduct for which it was assessed.

Because today's judgment represents the first instance of this Court's invalidation of a state-court punitive assessment as simply unreasonably large, I think it a proper occasion to discuss these points at some length.

I

The most significant aspects of today's decision—the identification of a "substantive due process" right against a "grossly excessive" award, and the concomitant assumption [600] of ultimate authority to decide anew a matter of "reasonableness" resolved in lower court proceedings—are of course not new. Haslip and TXO revived the notion, moribund since its appearance in the first years of this century, that the measure of civil punishment poses a question of constitutional dimension to be answered by this Court. Neither of those cases, however, nor any of the precedents upon which they relied, actually took the step of declaring a punitive award unconstitutional simply because it was "too big."

At the time of adoption of the Fourteenth Amendment, it was well understood that punitive damages represent the assessment by the jury, as the voice of the community, of the measure of punishment the defendant deserved. See, e. g., Barry v. Edmunds, 116 U. S. 550, 565 (1886); Missouri Pacific R. Co. v. Humes, 115 U. S. 512, 521 (1885); Day v. Woodworth, 13 How. 363, 371 (1852). See generally Haslip, supra, at 25-27 (Scalia, J., concurring in judgment). Today's decision, though dressed up as a legal opinion, is really no more than a disagreement with the community's sense of indignation or outrage expressed in the punitive award of the Alabama jury, as reduced by the State Supreme Court. It reflects not merely, as the concurrence candidly acknowledges, "a judgment about a matter of degree," ante, at 596; but a judgment about the appropriate degree of indignation or outrage, which is hardly an analytical determination.

There is no precedential warrant for giving our judgment priority over the judgment of state courts and juries on this matter. The only support for the Court's position is to be found in a handful of errant federal cases, bunched within a few years of one other, which invented the notion that an unfairly severe civil sanction amounts to a violation of constitutional liberties. These were the decisions upon which the TXO plurality relied in pronouncing that the Due Process Clause "imposes substantive limits `beyond which penalties may not go,' " 509 U. S., at 454 (quoting Seaboard Air Line R. Co. v. Seegers, 207 U. S. 73, 78 (1907)); see also 509 U. S., [601] at 478-481 (O'Connor, J., dissenting); Haslip, supra, at 18. Although they are our precedents, they are themselves too shallowly rooted to justify the Court's recent undertaking. The only case relied upon in which the Court actually invalidated a civil sanction does not even support constitutional review for excessiveness, since it really concerned the validity, as a matter of procedural due process, of state legislation that imposed a significant penalty on a common carrier which lacked the means of determining the legality of its actions before the penalty was imposed. See Southwestern Telegraph & Telephone Co. v. Danaher, 238 U. S. 482, 489-491 (1915). The amount of the penalty was not a subject of independent scrutiny. As for the remaining cases, while the opinions do consider arguments that statutory penalties can, by reason of their excessiveness, violate due process, not a single one of these judgments invalidates a damages award. See Seaboard, supra, at 78-79; Waters-Pierce Oil Co. v. Texas (No. 1), 212 U. S. 86, 111-112 (1909); Standard Oil Co. of Ind. v. Missouri, 224 U. S. 270, 286, 290 (1912); St. Louis, I. M. & S. R. Co. v. Williams, 251 U. S. 63, 66-67 (1919).

More importantly, this latter group of cases—which again are the sole precedential foundation put forward for the rule of constitutional law espoused by today's Court—simply fabricated the "substantive due process" right at issue. Seaboard assigned no precedent to its bald assertion that the Constitution imposes "limits beyond which penalties may not go," 207 U. S., at 78. Waters-Pierce cited only Coffey v. County of Harlan, 204 U. S. 659 (1907), a case which inquired into the constitutionality of state procedure, id., at 662-663. Standard Oil simply cited Waters-Pierce, and St. Louis, I. M. & S. R. Co. offered in addition to these cases only Collins v. Johnston, 237 U. S. 502 (1915), which said nothing to support the notion of a "substantive due process" right against excessive civil penalties, but to the contrary asserted that the prescribing and imposing of criminal punishment were "functions peculiarly belonging to the several States," [602] id., at 509-510. Thus, the only authority for the Court's position is simply not authoritative. These cases fall far short of what is needed to supplant this country's longstanding practice regarding exemplary awards, see, e. g., Haslip, 499 U. S., at 15-18; id., at 25-28 (Scalia, J., concurring in judgment).

II

One might understand the Court's eagerness to enter this field, rather than leave it with the state legislatures, if it had something useful to say. In fact, however, its opinion provides virtually no guidance to legislatures, and to state and federal courts, as to what a "constitutionally proper" level of punitive damages might be.

We are instructed at the outset of Part II of the Court's opinion—the beginning of its substantive analysis—that "the federal excessiveness inquiry . . . begins with an identification of the state interests that a punitive award is designed to serve." Ante, at 568. On first reading this, one is faced with the prospect that federal punitive damages law (the new field created by today's decision) will be beset by the sort of "interest analysis" that has laid waste the formerly comprehensible field of conflict of laws. The thought that each assessment of punitive damages, as to each offense, must be examined to determine the precise "state interests" pursued, is most unsettling. Moreover, if those "interests" are the most fundamental determinant of an award, one would think that due process would require the assessing jury to be instructed about them.

It appears, however (and I certainly hope), that all this is a false alarm. As Part II of the Court's opinion unfolds, it turns out to be directed, not to the question "How much punishment is too much?" but rather to the question "Which acts can be punished?" "Alabama does not have the power," the Court says, "to punish BMW for conduct that was lawful where it occurred and that had no impact on Alabama or its residents." Ante, at 572-573. That may be true, though [603] only in the narrow sense that a person cannot be held liable to be punished on the basis of a lawful act. But if a person has been held subject to punishment because he committed an un lawful act, the degree of his punishment assuredly can be increased on the basis of any other conduct of his that displays his wickedness, unlawful or not. Criminal sentences can be computed, we have said, on the basis of "information concerning every aspect of a defendant's life," Williams v. New York, 337 U. S. 241, 250-252 (1949). The Court at one point seems to acknowledge this, observing that, although a sentencing court "[cannot] properly punish lawful conduct," it may in assessing the penalty "consider . . . lawful conduct that bears on the defendant's character." Ante, at 573, n. 19. That concession is quite incompatible, however, with the later assertion that, since "neither the jury nor the trial court was presented with evidence that any of BMW's out-of-state conduct was unlawful," the Alabama Supreme Court "therefore properly eschewed reliance on BMW's outof-state conduct, . . . and based its remitted award solely on conduct that occurred within Alabama." Ante, at 573-574. Why could the Supreme Court of Alabama not consider lawful (but disreputable) conduct, both inside and outside Alabama, for the purpose of assessing just how bad an actor BMW was?

The Court follows up its statement that "Alabama does not have the power . . . to punish BMW for conduct that was lawful where it occurred" with the statement: "Nor may Alabama impose sanctions on BMW in order to deter conduct that is lawful in other jurisdictions." Ante, at 572-573. The Court provides us no citation of authority to support this proposition—other than the barely analogous cases cited earlier in the opinion, see ante, at 571-572—and I know of none.

These significant issues pronounced upon by the Court are not remotely presented for resolution in the present case. There is no basis for believing that Alabama has sought to control conduct elsewhere. The statutes at issue merely [604] permit civil juries to treat conduct such as petitioner's as fraud, and authorize an award of appropriate punitive damages in the event the fraud is found to be "gross, oppressive, or malicious," Ala. Code § 6-11-20(b)(1) (1993). To be sure, respondent did invite the jury to consider out-of-state conduct in its calculation of damages, but any increase in the jury's initial award based on that consideration is not a component of the remitted judgment before us. As the Court several times recognizes, in computing the amount of the remitted award the Alabama Supreme Court—whether it was constitutionally required to or not—"expressly disclaimed any reliance on acts that occurred in other jurisdictions." Ante, at 567 (internal quotation marks omitted); see also ante, at 573-574.^[43] Thus, the only question presented by this case is whether that award, limited to petitioner's Alabama conduct and viewed in light of the factors identified as properly informing the inquiry, is excessive. The Court's sweeping (and largely unsupported) statements regarding the relationship of punitive awards to lawful or unlawful out-of-state conduct are the purest dicta.

III

In Part III of its opinion, the Court identifies "[t]hree guideposts" that lead it to the conclusion that the award in this case is excessive: degree of reprehensibility, ratio between punitive award and plaintiff's actual harm, and legislative [605] sanctions provided for comparable misconduct. Ante, at 574-585. The legal significance of these "guideposts" is nowhere explored, but their necessary effect is to establish federal standards governing the hitherto exclusively state law of damages. Apparently (though it is by no means clear) all three federal "guideposts" can be overridden if "necessary to deter future misconduct," ante, at 584—a loophole that will encourage state reviewing courts to uphold awards as necessary for the "adequat[e] protect[ion]" of state consumers, ibid. By effectively requiring state reviewing courts to concoct rationalizations—whether within the "guideposts" or through the loophole—to justify the intuitive punitive reactions of state juries, the Court accords neither category of institution the respect it deserves.

Of course it will not be easy for the States to comply with this new federal law of damages, no matter how willing they are to do so. In truth, the "guideposts" mark a road to nowhere; they provide no real guidance at all. As to "degree of reprehensibility" of the defendant's conduct, we learn that "`nonviolent crimes are less serious than crimes marked by violence or the threat of violence,' " ante, at 576 (quoting Solem v. Helm, 463 U. S. 277, 292-293 (1983)), and that "`trickery and deceit' " are "more reprehensible than negligence," ante, at 576. As to the ratio of punitive to compensatory damages, we are told that a "`general concer[n] of reasonableness . . . enter[s] into the constitutional calculus,' " ante, at 583 (quoting TXO, 509 U. S., at 458)—though even "a breathtaking 500 to 1" will not necessarily do anything more than "`raise a suspicious judicial eyebrow,' " ante, at 583 (quoting TXO, supra, at 481 (O'Connor, J., dissenting), an opinion which, when confronted with that "breathtaking" ratio, approved it). And as to legislative sanctions provided for comparable misconduct, they should be accorded "`substantial deference,' " ante, at 583 (quoting Browning-Ferris Industries of Vt., Inc. v. Kelco Disposal, Inc., 492 U. S. 257, 301 (1989) (O'Connor, J., concurring in part and dissenting [606] in part)). One expects the Court to conclude: "To thine own self be true."

These crisscrossing platitudes yield no real answers in no real cases. And it must be noted that the Court nowhere says that these three "guideposts" are the only guideposts; indeed, it makes very clear that they are not—explaining away the earlier opinions that do not really follow these "guideposts" on the basis of additional factors, thereby "reiterat[ing] our rejection of a categorical approach." Ante, at 582. In other words, even these utter platitudes, if they should ever happen to produce an answer, may be overridden by other unnamed considerations. The Court has constructed a framework that does not genuinely constrain, that does not inform state legislatures and lower courts—that does nothing at all except confer an artificial air of doctrinal analysis upon its essentially ad hoc determination that this particular award of punitive damages was not "fair."

The Court distinguishes today's result from Haslip and TXO partly on the ground that "the record in this case discloses no deliberate false statements, acts of affirmative misconduct, or concealment of evidence of improper motive, such as were present in Haslip and TXO. " Ante, at 579. This seemingly rejects the findings necessarily made by the jury—that petitioner had committed a fraud that was "gross, oppressive, or malicious," Ala. Code § 6-11-20(b)(1) (1993). Perhaps that rejection is intentional; the Court does not say.

The relationship between judicial application of the new "guideposts" and jury findings poses a real problem for the Court, since as a matter of logic there is no more justification for ignoring the jury's determination as to how reprehensible petitioner's conduct was (i. e., how much it deserves to be punished), than there is for ignoring its determination that it was reprehensible at all (i. e., that the wrong was willful and punitive damages are therefore recoverable). That the issue has been framed in terms of a constitutional right against unreasonably excessive awards should not obscure [607] the fact that the logical and necessary consequence of the Court's approach is the recognition of a constitutional right against unreasonably imposed awards as well. The elevation of "fairness" in punishment to a principle of "substantive due process" means that every punitive award unreasonably imposed is unconstitutional; such an award is by definition excessive, since it attaches a penalty to conduct undeserving of punishment. Indeed, if the Court is correct, it must be that every claim that a state jury's award of compensatory damages is "unreasonable" (because not supported by the evidence) amounts to an assertion of constitutional injury. See TXO, supra, at 471 (Scalia, J., concurring in judgment). And the same would be true for determinations of liability. By today's logic, every dispute as to evidentiary sufficiency in a state civil suit poses a question of constitutional moment, subject to review in this Court. That is a stupefying proposition.

For the foregoing reasons, I respectfully dissent.

Justice Ginsburg, with whom The Chief Justice joins, dissenting.

The Court, I am convinced, unnecessarily and unwisely ventures into territory traditionally within the States' domain, and does so in the face of reform measures recently adopted or currently under consideration in legislative arenas. The Alabama Supreme Court, in this case, endeavored to follow this Court's prior instructions; and, more recently, Alabama's highest court has installed further controls on awards of punitive damages (see infra, at 613-614, n. 6). I would therefore leave the state court's judgment undisturbed, and resist unnecessary intrusion into an area dominantly of state concern.

I

The respect due the Alabama Supreme Court requires that we strip from this case a false issue: No impermissible "extraterritoriality" infects the judgment before us; the excessiveness [608] of the award is the sole issue genuinely presented. The Court ultimately so recognizes, see ante, at 573-574, but further clarification is in order.

Dr. Gore's experience was not unprecedented among customers who bought BMW vehicles sold as flawless and brand-new. In addition to his own encounter, Gore showed, through paint repair orders introduced at trial, that on 983 other occasions since 1983, BMW had shipped new vehicles to dealers without disclosing paint repairs costing at least $300, Tr. 585-586; at least 14 of the repainted vehicles, the evidence also showed, were sold as new and undamaged to consumers in Alabama. 646 So. 2d 619, 623 (Ala. 1994). Sales nationwide, Alabama's Supreme Court said, were admissible "as to the issue of a `pattern and practice' of such acts." Id., at 627. There was "no error," the court reiterated, "in the admission of the evidence that showed how pervasive the nondisclosure policy was and the intent behind BMW NA's adoption of it." Id., at 628. That determination comports with this Court's expositions. See TXO Production Corp. v. Alliance Resources Corp., 509 U. S. 443, 462, and n. 28 (1993) (characterizing as "well-settled" the admissibility of "evidence of [defendant's] alleged wrongdoing in other parts of the country" and of defendant's "wealth"); see also Brief for Petitioner 22 (recognizing that similar acts, out-of-state, traditionally have been considered relevant "for the limited purpose of determining that the conduct before the [c]ourt was reprehensible because it was part of a pattern rather than an isolated incident").

Alabama's highest court next declared that the

"jury could not use the number of similar acts that a defendant has committed in other jurisdictions as a multiplier when determining the dollar amount of a punitive damages award. Such evidence may not be considered in setting the size of the civil penalty, because neither the jury nor the trial court had evidence before it showing in which states the conduct was wrongful." [609] 646 So. 2d, at 627 (emphasis in original) (footnote omitted).

Because the Alabama Supreme Court provided this clear statement of the State's law, the multiplier problem encountered in Gore's case is not likely to occur again. Now, as a matter of Alabama law, it is plainly impermissible to assess punitive damages by multiplication based on out-of-state events not shown to be unlawful. See, e. g., Independent Life and Accident Ins. Co. v. Harrington, 658 So. 2d 892, 902-903 (Ala. 1994) (under BMW v. Gore, trial court erred in relying on defendant insurance company's out-of-state insurance policies in determining harm caused by defendant's unlawful actions).

No Alabama authority, it bears emphasis—no statute, judicial decision, or trial judge instruction—ever countenanced the jury's multiplication of the $4,000 diminution in value estimated for each refinished car by the number of such cars (approximately 1,000) shown to have been sold nationwide. The sole prompt to the jury to use nationwide sales as a multiplier came from Gore's lawyer during summation. App. 31, Tr. 812-813. Notably, counsel for BMW failed to object to Gore's multiplication suggestion, even though BMW's counsel interrupted to make unrelated objections four other times during Gore's closing statement. Tr. 810— 811, 854-855, 858, 870-871. Nor did BMW's counsel request a charge instructing the jury not to consider out-of-state sales in calculating the punitive damages award. See Record 513-529 (listing all charges requested by counsel).

Following the verdict, BMW's counsel challenged the admission of the paint repair orders, but not, alternately, the jury's apparent use of the orders in a multiplication exercise. Curiously, during postverdict argument, BMW's counsel urged that if the repair orders were indeed admissible, then Gore would have a "full right" to suggest a multiplier-based disgorgement. Tr. 932.

[610] In brief, Gore's case is idiosyncratic. The jury's improper multiplication, tardily featured by petitioner, is unlikely to recur in Alabama and does not call for error correction by this Court.

Because the jury apparently (and erroneously) had used acts in other States as a multiplier to arrive at a $4 million sum for punitive damages, the Alabama Supreme Court itself determined "`the maximum amount that a properly functioning jury could have awarded.' " 646 So. 2d, at 630 (Houston, J., concurring specially) (quoting Big B, Inc. v. Cottingham, 634 So. 2d 999, 1006 (Ala. 1993)). The per curiam opinion emphasized that in arriving at $2 million as "the amount of punitive damages to be awarded in this case, [the court did] not consider those acts that occurred in other jurisdictions." 646 So. 2d, at 628 (emphasis in original). As this Court recognizes, the Alabama high court "properly eschewed reliance on BMW's out-of-state conduct and based its remitted award solely on conduct that occurred within Alabama." Ante, at 573-574 (citation omitted). In sum, the Alabama Supreme Court left standing the jury's decision that the facts warranted an award of punitive damages—a determination not contested in this Court—and the state court concluded that, considering only acts in Alabama, $2 million was "a constitutionally reasonable punitive damages award." 646 So. 2d, at 629.

II

A

Alabama's Supreme Court reports that it "thoroughly and painstakingly" reviewed the jury's award, ibid. , according to principles set out in its own pathmarking decisions and in this Court's opinions in TXO and Pacific Mut. Life Ins. Co. v. Haslip, 499 U. S. 1, 21 (1991). 646 So. 2d, at 621. The Alabama court said it gave weight to several factors, including BMW's deliberate ("reprehensible") presentation of refinished cars as new and undamaged, without disclosing that the value of those cars had been reduced by an estimated [611] 10%,^[44] the financial position of the defendant, and the costs of litigation. Id., at 625-626. These standards, we previously held, "impos[e] a sufficiently definite and meaningful constraint on the discretion of Alabama factfinders in awarding punitive damages." Haslip, 499 U. S., at 22; see also TXO, 509 U. S., at 462, n. 28. Alabama's highest court could have displayed its labor pains more visibly,^[45] but its judgment is nonetheless entitled to a presumption of legitimacy. See Rowan v. Runnels, 5 How. 134, 139 (1847) ("[T]his court will always feel itself bound to respect the decisions of the State courts, and from the time they are made will regard them as conclusive in all cases upon the construction of their own constitution and laws.").

We accept, of course, that Alabama's Supreme Court applied the State's own law correctly. Under that law, the State's objectives—"punishment and deterrence"—guide punitive damages awards. See Birmingham v. Benson, 631 So. 2d 902, 904 (Ala. 1994). Nor should we be quick to find a constitutional infirmity when the highest state court endeavored a corrective for one counsel's slip and the other's oversight—counsel for plaintiff's excess in summation, unobjected to by counsel for defendant, see supra, at 609—and when the state court did so intending to follow the process approved in our Haslip and TXO decisions.

B

The Court finds Alabama's $2 million award not simply excessive, but grossly so, and therefore unconstitutional. [612] The decision leads us further into territory traditionally within the States' domain,^[46] and commits the Court, now and again, to correct "misapplication of a properly stated rule of law." But cf. this Court's Rule 10 ("A petition for a writ of certiorari is rarely granted when the asserted error consists of erroneous factual findings or the misapplication of a properly stated rule of law.").^[47] The Court is not well equipped [613] for this mission. Tellingly, the Court repeats that it brings to the task no "mathematical formula," ante, at 582, no "categorical approach," ibid., no "bright line," ante, at 585. It has only a vague concept of substantive due process, a "raised eyebrow" test, see ante, at 583, as its ultimate guide.^[48]

In contrast to habeas corpus review under 28 U. S. C. § 2254, the Court will work at this business alone. It will not be aided by the federal district courts and courts of appeals. It will be the only federal court policing the area. The Court's readiness to superintend state-court punitive damages awards is all the more puzzling in view of the Court's longstanding reluctance to countenance review, even by courts of appeals, of the size of verdicts returned by juries in federal district court proceedings. See generally 11 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2820 (2d ed. 1995). And the reexamination prominent in state courts ^[49] and in legislative arenas, see Appendix, [614] infra this page, serves to underscore why the Court's enterprise is undue.

For the reasons stated, I dissent from this Court's disturbance of the judgment the Alabama Supreme Court has made.

APPENDIX TO OPINION OF GINSBURG, J.

State Legislative Activity Regarding Punitive Damages

State legislatures have in the hopper or have enacted a variety of measures to curtail awards of punitive damages. At least one state legislature has prohibited punitive damages altogether, unless explicitly provided by statute. See N. H. Rev. Stat. Ann. § 507:16 (1994). We set out in this appendix some of the several controls enacted or under consideration in the States. The measures surveyed are: (1) caps on awards; (2) provisions for payment of sums to state agencies rather than to plaintiffs; and (3) mandatory bifurcated trials with separate proceedings for punitive damages determinations.

[615] I. Caps on Punitive Damages Awards

• Colorado —Colo. Rev. Stat. §§ 13-21-102(1)(a) and (3) (1987) (as a main rule, caps punitive damages at amount of actual damages).

• Connecticut —Conn. Gen. Stat. § 52-240b (1995) (caps punitive damages at twice compensatory damages in products liability cases).

• Delaware —H. R. 237, 138th Gen. Ass. (introduced May 17, 1995) (would cap punitive damages at greater of three times compensatory damages, or $250,000).

• Florida —Fla. Stat. §§ 768.73(1)(a) and (b) (Supp. 1992) (in general, caps punitive damages at three times compensatory damages).

• Georgia —Ga. Code Ann. § 51-12-5.1 (Supp. 1995) (caps punitive damages at $250,000 in some tort actions; prohibits multiple awards stemming from the same predicate conduct in products liability actions).

• Illinois —H. 20, 89th Gen. Ass. 1995-1996 Reg. Sess. (enacted Mar. 9, 1995) (caps punitive damages at three times economic damages).

• Indiana —H. 1741, 109th Reg. Sess. (enacted Apr. 26, 1995) (caps punitive damages at greater of three times compensatory damages, or $50,000).

• Kansas —Kan. Stat. Ann. §§ 60-3701(e) and (f) (1994) (in general, caps punitive damages at lesser of defendant's annual gross income, or $5 million).

• Maryland —S. 187, 1995 Leg. Sess. (introduced Jan. 27, 1995) (in general, would cap punitive damages at four times compensatory damages).

• Minnesota —S. 489, 79th Leg. Sess., 1995 Reg. Sess. (introduced Feb. 16, 1995) (would require reasonable relationship between compensatory and punitive damages).

• Nevada —Nev. Rev. Stat. § 42.005(1) (1993) (caps punitive damages at three times compensatory damages if compensatory damages equal $100,000 or more, and at $300,000 if the compensatory damages are less than $100,000).

[616] • New Jersey —S. 1496, 206th Leg., 2d Ann. Sess. (1995) (caps punitive damages at greater of five times compensatory damages, or $350,000, in certain tort cases).

• North Dakota —N. D. Cent. Code § 32-03.2-11(4) (Supp. 1995) (caps punitive damages at greater of two times compensatory damages, or $250,000).

• Oklahoma —Okla. Stat., Tit. 23, §§ 9.1(B)—(D) (Supp. 1996) (caps punitive damages at greater of $100,000, or actual damages, if jury finds defendant guilty of reckless disregard; and at greatest of $500,000, twice actual damages, or the benefit accruing to defendant from the injury-causing conduct, if jury finds that defendant has acted intentionally and maliciously).

• Texas —S. 25, 74th Reg. Sess. (enacted Apr. 20, 1995) (caps punitive damages at twice economic damages, plus up to $750,000 additional noneconomic damages).

• Virginia —Va. Code Ann. § 8.01-38.1 (1992) (caps punitive damages at $350,000).

II. Allocation of Punitive Damages to State Agencies

• Arizona —H. R. 2279, 42d Leg., 1st Reg. Sess. (introduced Jan. 12, 1995) (would allocate punitive damages to a victims' assistance fund, in specified circumstances).

• Florida —Fla. Stat. §§ 768.73(2)(a)—(b) (Supp. 1992) (allocates 35% of punitive damages to General Revenue Fund or Public Medical Assistance Trust Fund); see Gordon v. State, 585 So. 2d 1033, 1035-1038 (Fla. App. 1991), aff'd, 608 So. 2d 800 (Fla. 1992) (upholding provision against due process challenge).

• Georgia —Ga. Code Ann. § 51-12-5.1(e)(2) (Supp. 1995) (allocates 75% of punitive damages, less a proportionate part of litigation costs, including counsel fees, to state treasury); see Mack Trucks, Inc. v. Conkle, 263 Ga. 539, 540-543, 436 S. E. 2d 635, 637-639 (Ga. 1993) (upholding provision against constitutional challenge).

[617] • Illinois —Ill. Comp. Stat., ch. 735, § 5/2-1207 (1994) (permits court to apportion punitive damages among plaintiff, plaintiff's attorney, and Illinois Department of Rehabilitation Services).

• Indiana —H. 1741, 109th Reg. Sess. (enacted Apr. 26, 1995) (subject to statutory exceptions, allocates 75% of punitive damages to a compensation fund for violent crime victims).

• Iowa —Iowa Code § 668A.1(2)(b) (1987) (in described circumstances, allocates 75% of punitive damages, after payment of costs and counsel fees, to a civil reparations trust fund); see Shepherd Components, Inc. v. Brice PetridesDonohue & Assoc., Inc., 473 N. W. 2d 612, 619 (Iowa 1991) (upholding provision against constitutional challenge).

• Kansas —Kan. Stat. Ann. § 60-3402(e) (1994) (allocates 50% of punitive damages in medical malpractice cases to state treasury).

• Missouri —Mo. Rev. Stat. § 537.675 (1994) (allocates 50% of punitive damages, after payment of expenses and counsel fees, to Tort Victims' Compensation Fund).

• Montana —H. 71, 54th Leg. Sess. (introduced Jan. 2, 1995) (would allocate 48% of punitive damages to state university system and 12% to school for the deaf and blind).

• New Jersey —S. 291, 206th Leg., 1994-1995 1st Reg. Sess. (introduced Jan. 18, 1994); A. 148, 206th Leg., 1994— 1995 1st Reg. Sess. (introduced Jan. 11, 1994) (would allocate 75% of punitive damages to New Jersey Health Care Trust Fund).

• New Mexico —H. 1017, 42d Leg., 1st Sess. (introduced Feb. 16, 1995) (would allocate punitive damages to LowIncome Attorney Services Fund).

• Oregon —S. 482, 68th Leg. Ass. (enacted July 19, 1995) (amending Ore. Rev. Stat. §§ 18.540 and 30.925, and repealing Ore. Rev. Stat. § 41.315) (allocates 60% of punitive damages to Criminal Injuries Compensation Account).

[618] • Utah —Utah Code Ann. § 78-18-1(3) (1992) (allocates 50% of punitive damages in excess of $20,000 to state treasury).

III. Mandatory Bifurcation of Liability and Punitive Damages Determinations

• California —Cal. Civ. Code Ann. § 3295(d) (West Supp. 1995) (requires bifurcation, on application of defendant, of liability and damages phases of trials in which punitive damages are requested).

• Delaware —H. R. 237, 138th Gen. Ass. (introduced May 17, 1995) (would require, at request of any party, a separate proceeding for determination of punitive damages).

• Georgia —Ga. Code Ann. § 51-12-5.1(d) (Supp. 1995) (in all cases in which punitive damages are claimed, liability for punitive damages is tried first, then amount of punitive damages).

• Illinois —H. 20, 89th Gen. Ass., 1995-1996 Reg. Sess. (enacted Mar. 9, 1995) (mandates, upon defendant's request, separate proceeding for determination of punitive damages).

• Kansas —Kan. Stat. Ann. §§ 60-3701(a) and (b) (1994) (trier of fact determines defendant's liability for punitive damages, then court determines amount of such damages).

• Missouri —Mo. Rev. Stat. §§ 510.263(1) and (3) (1994) (mandates bifurcated proceedings, on request of any party, for jury to determine first whether defendant is liable for punitive damages, then amount of punitive damages).

• Montana —Mont. Code Ann. § 27-1—221(7) (1995) (upon finding defendant liable for punitive damages, jury determines the amount in separate proceeding).

• Nevada —Nev. Rev. Stat. § 42.005(3) (1993) (if jury determines that punitive damages will be awarded, jury then determines amount in separate proceeding).

• New Jersey —N. J. Stat. Ann. §§ 2A:58C-5(b) and (d) (West 1987) (mandates separate proceedings for determination of compensatory and punitive damages).

[619] • North Dakota —N. D. Cent. Code § 32-03.2-11(2) (Supp. 1995) (upon request of either party, trier of fact determines whether compensatory damages will be awarded before determining punitive damages liability and amount).

• Oklahoma —Okla. Stat., Tit. 23, §§ 9.1(B)—(D) (Supp. 1995-1996) (requires separate jury proceedings for punitive damages); S. 443, 45th Leg., 1st Reg. Sess. (introduced Jan. 31, 1995) (would require courts to strike requests for punitive damages before trial, unless plaintiff presents prima facie evidence at least 30 days before trial to sustain such damages; provide for bifurcated jury trial on request of defendant; and permit punitive damages only if compensatory damages are awarded).

• Virginia —H. 1070, 1994-1995 Reg. Sess. (introduced Jan. 25, 1994) (would require separate proceedings in which court determines that punitive damages are appropriate and trier of fact determines amount of punitive damages).

[1] Briefs of amici curiae urging reversal were filed for the American Automobile Manufacturers Association et al. by Kenneth W. Starr, Paul T. Cappuccio, Christopher Landau, Richard A. Cordray, and Phillip D. Brady; for the American Council of Life Insurance et al. by Patricia A. Dunn, Stephen J. Goodman, Phillip E. Stano, and Theresa L. Sorota; for the American Tort Reform Association et al. by Victor E. Schwartz, Scott L. Winkelman, Sherman Joyce, and Fred J. Hiestand; for the Business Council of Alabama by Forrest S. Latta; for the Center for Claims Resolution by John D. Aldock and Frederick C. Schafrick; for the Chamber of Commerce of the United States of America by Timothy B. Dyk, Stephen A. Bokat, and Robin S. Conrad; for the Farmers Insurance Exchange et al. by Irving H. Greines, Robin Meadow, Barbara W. Ravitz, and Robert A. Olson; for the Life Insurance Company of Georgia et al. by Theodore B. Olson, Larry L. Simms, Theodore J. Boutrous, Jr., John K. Bush, Theodore J. Fischkin, and Marcus Bergh; for the National Association of Manufacturers by Carter G. Phillips and Jan Amundson; for the New England Council et al. by Stephen S. Ostrach; for Owens-Corning Fiberglas Corporation by Charles Fried, Michael W. Schwartz, and Karen I. Ward; for Owens-Illinois, Inc., by Griffin B. Bell and David L. Gray; for Pharmaceutical Research and Manufacturers of America by Andrew T. Berry; for the Product Liability Advisory Council, Inc., et al. by Malcolm E. Wheeler; for the TIG Insurance Company by Ellis J. Horvitz, Barry R. Levy, Frederic D. Cohen, and Mitchell C. Tilner; and for the Washington Legal Foundation et al. by Arvin Maskin, Steven Alan Reiss, Katherine Oberlies, Daniel J. Popeo, and Paul D. Kamenar.

Briefs of amici curiae urging affirmance were filed for the Alabama Trial Lawyers Association by Russell J. Drake; for the Association of Trial Lawyers of America by Jeffrey Robert White, Cheryl Flax-Davidson, and Larry S. Stewart; and for the National Association of Securities and Commercial Law Attorneys by Kevin P. Roddy, James P. Solimano, Steve W. Berman, and Jonathan W. Cuneo.

Briefs of amici curiae were filed for CBS, Inc., et al. by P. Cameron DeVore, Marshall J. Nelson, Douglas P. Jacobs, Jonathan E. Thackeray, John C. Fontaine, Cristina L. Mendoza, William A. Niese, Karlene Goller, Susan Weiner, Richard M. Schmidt, Jr., R. Bruce Rich, Slade R. Metcalf, Jane E. Kirtley, Bruce W. Sanford, and Henry S. Hoberman; for Trial Lawyers for Public Justice, P. C., by Leslie A. Brueckner and Arthur H. Bryant; for Richard L. Blatt et al. by Mr. Blatt, pro se, and Robert W. Hammesfahr, pro se; for James D. A. Boyle et al. by Arthur F. McEvoy III, pro se; and for Law and Economics Scholars et al. by Mark M. Hager, pro se.

[2] The top, hood, trunk, and quarter panels of Dr. Gore's car were repainted at BMW's vehicle preparation center in Brunswick, Georgia. The parties presumed that the damage was caused by exposure to acid rain during transit between the manufacturing plant in Germany and the preparation center.

[3] Dr. Gore also named the German manufacturer and the Birmingham dealership as defendants.

[4] Alabama codified its common-law cause of action for fraud in a 1907 statute that is still in effect. Hackmeyer v. Hackmeyer, 268 Ala. 329, 333, 106 So. 2d 245, 249 (1958). The statute provides: "Suppression of a material fact which the party is under an obligation to communicate constitutes fraud. The obligation to communicate may arise from the confidential relations of the parties or from the particular circumstances of the case." Ala. Code § 6-5-102 (1993); see Ala. Code § 4299 (1907).

[5] The dealer who testified to the reduction in value is the former owner of the Birmingham dealership sued in this action. He sold the dealership approximately one year before the trial.

[6] Dr. Gore did not explain the significance of the $300 cutoff.

[7] The jury also found the Birmingham dealership liable for Dr. Gore's compensatory damages and the German manufacturer liable for both the compensatory and punitive damages. The dealership did not appeal the judgment against it. The Alabama Supreme Court held that the trial court did not have jurisdiction over the German manufacturer and therefore reversed the judgment against that defendant.

[8] BMW acknowledged that a Georgia statute enacted after Dr. Gore purchased his car would require disclosure of similar repairs to a car before it was sold in Georgia. Ga. Code Ann. §§ 40-1-5(b)-(e) (1994).

[9] While awarding a comparable amount of compensatory damages, the Yates jury awarded no punitive damages at all. In Yates, the plaintiff also relied on the 1983 nondisclosure policy, but instead of offering evidence of 983 repairs costing more than $300 each, he introduced a bulk exhibit

[10] Prior to the lawsuits filed by Dr. Yates and Dr. Gore, BMW and various BMW dealers had been sued 14 times concerning presale paint or damage repair. Accordingto the testimony ofBMW's in-housecounselat the postjudgment hearing on damages, only one of the suits concerned a car repainted by BMW.

[11] The Alabama Supreme Court did not indicate whether the $2 million figure represented the court's independent assessment of the appropriate level of punitive damages, or its determination of the maximum amount that the jury could have awarded consistent with the Due Process Clause.

[12] Other than Yates v. BMW of North America, Inc., 642 So. 2d 937 (1993), in which no punitive damages were awarded, the Alabama Supreme Court cited no such cases. In another portion of its opinion, 646 So. 2d, at 629, the court did cite five Alabama cases, none of which involved either a dispute arising out of the purchase of an automobile or an award of punitive damages. G. M. Mosley Contractors, Inc. v. Phillips, 487 So. 2d 876, 879 (1986); Hollis v. Wyrosdick, 508 So. 2d 704 (1987); Campbell v. Burns, 512 So. 2d 1341, 1343 (1987); Ashbee v. Brock, 510 So. 2d 214 (1987); and Jawad v. Granade, 497 So. 2d 471 (1986). All of these cases support the proposition that appellate courts in Alabama presume that jury verdicts are correct. In light of the Alabama Supreme Court's conclusion that (1) the jury had computed its award by multiplying $4,000 by the number of refinished vehicles sold in the United States and (2) that the award should have been based on Alabama conduct, respect for the error-free portion of the jury verdict would seem to produce an award of $56,000 ($4,000 multiplied by 14, the number of repainted vehicles sold in Alabama).

[13] See, e. g., Rivers v. BMW of North America, Inc., 214 Ga. App. 880, 449 S. E. 2d 337 (1994) (nondisclosure of presale paint repairs that occurred before state disclosure statute enacted); Wedmore v. Jordan Motors, Inc., 589 N. E. 2d 1180 (Ind. App. 1992) (same).

[14] Four States require disclosure of vehicle repairs costing more than 3 percent of suggested retail price. Ariz. Rev. Stat. Ann. § 28-1304.03 (1989); N. C. Gen. Stat. § 20-305.1(d)(5a) (1995); S. C. Code § 56-32-20 (Supp. 1995); Va. Code Ann. § 46.2-1571(D) (Supp. 1995). An additional three States mandate disclosure when the cost of repairs exceeds 3 percent or $500, whichever is greater. Ala. Code § 8-19-5(22)(c) (1993); Cal. Veh. Code Ann. §§ 9990-9991 (West Supp. 1996); Okla. Stat., Tit. 47, § 1112.1 (1991). Indiana imposes a 4 percent disclosure threshold. Ind. Code §§ 9-23-4—4, 9-23-4—5 (1993). Minnesota requires disclosure of repairs costing more than 4 percent of suggested retail price or $500, whichever is greater. Minn. Stat. § 325F.664 (1994). New York requires disclosure when the cost of repairs exceeds 5 percent of suggested retail price. N. Y. Gen. Bus. Law §§ 396—p(5)(a), (d) (McKinney Supp. 1996). Vermont imposes a 5 percent disclosure threshold for the first $10,000 in repair costs and 2 percent thereafter. Vt. Stat. Ann., Tit. 9, § 4087(d) (1993). Eleven States mandate disclosure only of damage costing more than 6 percent of retail value to repair. Ark. Code Ann. § 23-112-705 (1992); Idaho Code § 49-1624 (1994); Ill. Comp. Stat., ch. 815, § 710/5 (1994); Ky. Rev. Stat. Ann. § 190.0491(5) (Baldwin 1988); La. Rev. Stat. Ann. § 32:1260 (West Supp. 1995); Miss. Motor Vehicle Comm'n, Regulation No. 1 (1992); N. H. Rev. Stat. Ann. § 357—C:5(III)(d) (1995); Ohio Rev. Code Ann. § 4517.61 (1994); R. I. Gen. Laws §§ 31-5.1-18(d), (f) (1995); Wis. Stat. § 218.01(2d)(a) (1994); Wyo. Stat. § 31-16-115 (1994). Two States require disclosure of repairs costing $3,000 or more. See Iowa Code Ann. § 321.69 (Supp. 1996); N. D. Admin. Code § 37-09-01-01 (1992). Georgia mandates disclosure of paint damage that costs more than $500 to repair. Ga. Code Ann. §§ 40-1— 5(b)—(e) (1994) (enacted after respondent purchased his car). Florida requires dealers to disclose paint repair costing more than $100 of which they have actual knowledge. Fla. Stat. § 320.27(9)(n) (1992). Oregon requires manufacturers to disclose all "postmanufacturing" damage and repairs. It is unclear whether this mandate would apply to repairs such as those at issue here. Ore. Rev. Stat. § 650.155 (1991).

Many, but not all, of the statutes exclude from the computation of repair cost the value of certain components—typically items such as glass, tires, wheels and bumpers—when they are replaced with identical manufacturer's original equipment. E. g., Cal. Veh. Code Ann. §§ 9990-9991 (West Supp. 1996); Ga. Code Ann. §§ 40-1—5(b)—(e) (1994); Ill. Comp. Stat., ch. 815, § 710/5 (1994); Ky. Rev. Stat. Ann. § 190.0491(5) (Baldwin 1988); Okla. Stat., Tit. 47, § 1112.1 (1991); Va. Code Ann. § 46.2-1571(D) (Supp. 1995); Vt. Stat. Ann., Tit. 9, § 4087(d) (1993).

[15] Also, a state legislature might plausibly conclude that the administrative costs associated with full disclosure would have the effect of raising car prices to the State's residents.

[16] Federal disclosure requirements are, of course, a familiar part of our law. See, e. g., the Federal Food, Drug, and Cosmetic Act, as added by the Nutrition Labeling and Education Act of 1990, 104 Stat. 2353, 21 U. S. C. § 343; the Truth In Lending Act, 82 Stat. 148, as amended, 15 U. S. C. § 1604; the Securities Exchange Act of 1934, 48 Stat. 892, 894, as amended, 15 U. S. C. §§ 78l—78m; Federal Cigarette Labeling and Advertising Act, 79 Stat. 283, as amended, 15 U. S. C. § 1333; Alcoholic Beverage Labeling Act of 1988, 102 Stat. 4519, 27 U. S. C. § 215.

[17] See also Bigelow v. Virginia, 421 U. S. 809, 824 (1975) ("A State does not acquire power or supervision over the internal affairs of another State merely because the welfare and health of its own citizens may be affected when they travel to that State"); New York Life Ins. Co. v. Head, 234 U. S. 149, 161 (1914) ("[I]t would be impossible to permit the statutes of Missouri to operate beyond the jurisdiction of that State . . . without throwing down the constitutional barriers by which all the States are restricted within the orbits of their lawful authority and upon the preservation of which the Government under the Constitution depends. This is so obviously the necessary result of the Constitution that it has rarely been called in question and hence authorities directly dealing with it do not abound"); Huntington v. Attrill, 146 U. S. 657, 669 (1892) ("Laws have no force of themselves beyond the jurisdiction of the State which enacts them, and can have extra-territorial effect only by the comity of other States").

[18] State power may be exercised as much by a jury's application of a state rule of law in a civil lawsuit as by a statute. See New York Times Co. v. Sullivan, 376 U. S. 254, 265 (1964) ("The test is not the form in which state power has been applied but, whatever the form, whether such power has in fact been exercised"); San Diego Building Trades Council v. Garmon, 359 U. S. 236, 247 (1959) ("[R]egulation can be as effectively exerted through an award of damages as through some form of preventive relief").

[19] Brief for Respondent 11-12, 23, 27-28; Tr. of Oral Arg. 50-54. Dr. Gore's interest in altering the nationwide policy stems from his concern that BMW would not (or could not) discontinue the policy in Alabama alone. Brief for Respondent 11. "If Alabama were limited to imposing punitive damages based only on BMW's gain from fraudulent sales in Alabama, the resulting award would have no prospect of protecting Alabama consumers from fraud, as it would provide no incentive for BMW to alter the unitary, national policy of nondisclosure which yielded BMW millions of dollars in profits." Id., at 23. The record discloses no basis for Dr. Gore's contention that BMW could not comply with Alabama's law without changing its nationwide policy.

[20] See Bordenkircher v. Hayes, 434 U. S. 357, 363 (1978) ("To punish a person because he has done what the law plainly allows him to do is a due process violation of the most basic sort"). Our cases concerning recidivist statutes are not to the contrary. Habitual offender statutes permit the sentencing court to enhance a defendant's punishment for a crime in light of prior convictions, including convictions in foreign jurisdictions. See e. g., Ala. Code § 13A-5-9 (1994); Cal. Penal Code Ann. §§ 667.5(f), 668 (West Supp. 1996); Ill. Comp. Stat., ch. 720, § 5/33B-1 (1994); N. Y. Penal Law §§ 70.04, 70.06, 70.08, 70.10 (McKinney 1987 and Supp. 1996); Tex. Penal Code Ann. § 12.42 (1994 and Supp. 1995-1996). A sentencing judge may even consider past criminal behavior which did not result in a conviction and lawful conduct that bears on the defendant's character and prospects for rehabilitation. Williams v. New York, 337 U. S. 241 (1949). But we have never held that a sentencing court could properly punish lawful conduct. This distinction is precisely the one we draw here. See n. 21, infra.

[21] Given that the verdict was based in part on out-of-state conduct that was lawful where it occurred, we need not consider whether one State may properly attempt to change a tortfeasor's unlawful conduct in another State.

[22] Of course, the fact that the Alabama Supreme Court correctly concluded that it was error for the jury to use the number of sales in other States as a multiplier in computing the amount of its punitive sanction does not mean that evidence describing out-of-state transactions is irrelevant in a case of this kind. To the contrary, as we stated in TXO Production Corp. v. Alliance Resources Corp., 509 U. S. 443, 462, n. 28 (1993), such evidence may be relevant to the determination of the degree of reprehensibility of the defendant's conduct.

[23] See Miller v. Florida, 482 U. S. 423 (1987) (Ex Post Facto Clause violated by retroactive imposition of revised sentencing guidelines that provided longer sentence for defendant's crime); Bouie v. City of Columbia, 378 U. S. 347 (1964) (retroactive application of new construction of statute violated due process); id., at 350-355 (citing cases); Lankford v. Idaho, 500 U. S. 110 (1991) (due process violated because defendant and his counsel did not have adequate notice that judge might impose death sentence). The strict constitutional safeguards afforded to criminal defendants are not applicable to civil cases, but the basic protection against "judgments without notice" afforded by the Due Process Clause, Shaffer v. Heitner, 433 U. S. 186, 217 (1977) (Stevens, J., concurring in judgment), is implicated by civil penalties.

[24] "The flagrancy of the misconduct is thought to be the primary consideration in determining the amount of punitive damages." Owen, A Punitive Damages Overview: Functions, Problems and Reform, 39 Vill. L. Rev. 363, 387 (1994).

[25] The principle that punishment should fit the crime "is deeply rooted and frequently repeated in common-law jurisprudence." Solem v. Helm, 463 U. S. 277, 284 (1983). See Burkett v. Lanata, 15 La. Ann. 337, 339 (1860) (punitive damages should be "commensurate to the nature of the offence"); Blanchard v. Morris, 15 Ill. 35, 36 (1853) ("[W]e cannot say [the exemplary damages] are excessive under the circumstances; for the proofs show that threats, violence, and imprisonment, were accompanied by mental fear, torture, and agony of mind"); Louisville & Northern R. Co. v. Brown, 127 Ky. 732, 749, 106 S. W. 795, 799 (1908) ("We are not aware of any case in which the court has sustained a verdict as large as this one unless the injuries were permanent").

[26] Pacific Mut. Life Ins. Co. v. Haslip, 499 U. S. 1, 22 (1991).

[27] The dissenters also recognized that "TXO's conduct was clearly wrongful, calculated, and improper . . . ." TXO, 509 U. S., at 482 (opinion of O'Connor, J.).

[28] In Jeter v. M & M Dodge, Inc., 634 So. 2d 1383 (La. App. 1994), a Louisiana Court of Appeals suggested that the Louisiana disclosure statute functions as a safe harbor. Finding that the cost of repairing presale damage to the plaintiff's car exceeded the statutory disclosure threshold, the court held that the disclosure statute did not provide a defense to the action. Id., at 1384.

During the pendency of this litigation, Alabama enacted a disclosure statute which defines "material" damage to a new car as damage requiring repairs costing in excess of 3 percent of suggested retail price or $500, whichever is greater. Ala. Code § 8-19-5(22) (1993). After its decision in this case, the Alabama Supreme Court stated in dicta that the remedies available under this section of its Deceptive Trade Practices Act did not displace or alter pre-existing remedies available under either the common law or other statutes. Hines v. Riverside Chevrolet-Olds, Inc., 655 So. 2d 909, 917, n. 2 (1994). It refused, however, to "recognize, or impose on automobile manufacturers, a general duty to disclose every repair of damage, however slight, incurred during the manufacturing process." Id., at 921. Instead, it held that whether a defendant has a duty to disclose is a question of fact "for the jury to determine." Id., at 918. In reaching that conclusion it overruled two earlier decisions that seemed to indicate that as a matter of law there was no disclosure obligation in cases comparable to this one. Id., at 920 (overruling Century 21-Reeves Realty, Inc. v. McConnell Cadillac, Inc., 626 So. 2d 1273 (1993), and Cobb v. Southeast Toyota Distributors, Inc., 569 So. 2d 395 (1990)).

[29] See also Ariz. Rev. Stat. Ann. § 28-1304.03 (1989) ("[I]f disclosure is not required under this section, a purchaser may not revoke or rescind a sales contract due solely to the fact that the new motor vehicle was damaged and repaired prior to completion of the sale"); Ind. Code § 9-23-4—5 (1993) (providing that "[r]epaired damage to a customer-ordered new motor vehicle not exceeding four percent (4%) of the manufacturer's suggested retail price does not need to be disclosed at the time of sale"); N. C. Gen. Stat. § 20-305.1(e) (1993) (requiring disclosure of repairs costing more than 5 percent of suggested retail price and prohibiting revocation or rescission of sales contract on the basis of less costly repairs); Okla. Stat., Tit. 47, § 1112.1 (1991) (defining "material" damage to a car as damage requiring repairs costing in excess of 3 percent of suggested retail price or $500, whichever is greater).

[30] Restatement (Second) of Torts § 538 (1977); W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on Law of Torts § 108 (5th ed. 1984).

[31] The Alabama Supreme Court has held that a car may be considered "new" as a matter of law even if its finish contains minor cosmetic flaws. Wilburn v. Larry Savage Chevrolet, Inc., 477 So. 2d 384 (1985). We note also that at trial respondent only introduced evidence of undisclosed paint damage to new cars repaired at a cost of $300 or more. This decision suggests that respondent believed that the jury might consider some repairs too de minimis to warrant disclosure.

[32] Before the verdict in this case, BMW had changed its policy with respect to Alabama and two other States. Five days after the jury award, BMW altered its nationwide policy to one of full disclosure.

[33] See, e. g., Grant v. McDonogh, 7 La. Ann. 447, 448 (1852) ("[E]xemplary damages allowed should bear some proportion to the real damage sustained"); Saunders v. Mullen, 66 Iowa 728, 729, 24 N. W. 529 (1885) ("When the actual damages are so small, the amount allowed as exemplary damages should not be so large"); Flannery v. Baltimore & Ohio R. Co., 15 D. C. 111, 125 (1885) (when punitive damages award "is out of all proportion to the injuries received, we feel it our duty to interfere"); Houston & Texas Central R. Co. v. Nichols, 9 Am. & Eng. R. R. Cas. 361, 365 (Tex. 1882) ("Exemplary damages, when allowed, should bear proportion to the actual damages sustained"); McCarthy v. Niskern, 22 Minn. 90, 91-92 (1875) (punitive damages "enormously in excess of what may justly be regarded as compensation" for the injury must be set aside "to prevent injustice").

[34] Owen, supra n. 23, at 368, and n. 23. One English statute, for example, provides that officers arresting persons out of their jurisdiction shall pay double damages. 3 Edw., I., ch. 35. Another directs that in an action for forcible entry or detainer, the plaintiff shall recover treble damages. 8 Hen. VI, ch. 9, § 6.

Present-day federal law allows or mandates imposition of multiple damages for a wide assortment of offenses, including violations of the antitrust laws, see § 4 of the Clayton Act, 38 Stat. 731, as amended, 15 U. S. C. § 15, and the Racketeer Influenced and Corrupt Organizations Act, see 18 U. S. C. § 1964, and certain breaches of the trademark laws, see § 35 of the Trademark Act of 1946, 60 Stat. 439, as amended, 15 U. S. C. § 1117, and the patent laws, see 66 Stat. 813, 35 U. S. C. § 284.

[35] "While petitioner stresses the shocking disparity between the punitive award and the compensatory award, that shock dissipates when one considers the potential loss to respondents, in terms of reduced or eliminated royalties payments, had petitioner succeeded in its illicit scheme. Thus, even if the actual value of the `potential harm' to respondents is not between $5 million and $8.3 million, but is closer to $4 million, or $2 million, or even $1 million, the disparity between the punitive award and the potential harm does not, in our view, `jar one's constitutional sensibilities.' " TXO, 509 U. S., at 462, quoting Haslip, 499 U. S., at 18.

[36] Even assuming each repainted BMW suffers a diminution in value of approximately $4,000, the award is 35 times greater than the total damages of all 14 Alabama consumers who purchased repainted BMW's.

[37] The ratio here is also dramatically greater than any award that would be permissible under the statutes and proposed statutes summarized in the appendix to Justice Ginsburg's dissenting opinion. Post, at 615-616.

[38] Conceivably the Alabama Supreme Court's selection of a 500-to-1 ratio was an application of Justice Scalia's identification of one possible reading of the plurality opinion in TXO: Any future due process challenge to a punitive damages award could be disposed of with the simple observation that "this is no worse than TXO. " 509 U. S., at 472 (Scalia, J., concurring in judgment). As we explain in the text, this award is significantly worse than the award in TXO.

[39] Although the Court did not address the size of the punitive damages award in Silkwood v. Kerr-McGee Corp., 464 U. S. 238 (1984), the dissenters commented on its excessive character, noting that the "$10 million [punitive damages award] that the jury imposed is 100 times greater than the maximum fine that may be imposed . . . for a single violation of federal standards" and "more than 10 times greater than the largest single fine that the Commission has ever imposed." Id., at 263 (Blackmun, J., dissenting). In New York Times Co. v. Sullivan, 376 U. S. 254 (1964), the Court observed that the punitive award for libel was "one thousand times greater than the maximum fine provided by the Alabama criminal statute," and concluded that the "fear of damage awards under a rule such as that invoked by the Alabama courts here may be markedly more inhibiting than the fear of prosecution under a criminal statute." Id., at 277.

[40] Ala. Code § 8-19-11(b) (1993).

[41] See, e. g., Ark. Code Ann. § 23-112-309(b) (1992) (up to $5,000 for violation of state Motor Vehicle Commission Act that would allow suspension of dealer's license; up to $10,000 for violation of Act that would allow revocation of dealer's license); Fla. Stat. § 320.27(12) (1992) (up to $1,000); Ga. Code Ann. §§ 40-1—5(g), 10-1—397(a) (1994 and Supp. 1996) (up to $2,000 administratively; up to $5,000 in superior court); Ind. Code § 9-23-6—4 (1993) ($50 to $1,000); N. H. Rev. Stat. Ann. §§ 357—C:15, 651:2 (1995 and Supp. 1995) (corporate fine of up to $20,000); N. Y. Gen. Bus. Law § 396—p(6) (McKinney Supp. 1995) ($50 for first offense; $250 for subsequent offenses).

[42] Justice Ginsburg expresses concern that we are "the only federal court policing" this limit. Post, at 613. The small number of punitive damages questions that we have reviewed in recent years, together with the fact that this is the first case in decades in which we have found that a punitive damages award exceeds the constitutional limit, indicates that this concern is at best premature. In any event, this consideration surely does not justify an abdication of our responsibility to enforce constitutional protections in an extraordinary case such as this one.

[43] The Alabama Supreme Court said:

"[W]e must conclude that the award of punitive damages was based in large part on conduct that happened in other jurisdictions. . . . Although evidence of similar acts in other jurisdictions is admissible as to the issue of `pattern and practice' of such acts, . . . this jury could not use the number of similar acts that a defendant has committed in other jurisdictions as a multiplier when determining the dollar amount of a punitive damages award. Such evidence may not be considered in setting the size of the civil penalty, because neither the jury nor the trial court had evidence before it showing in which states the conduct was wrongful." 646 So. 2d 619, 627 (1994).

[44] According to trial testimony, in late May 1992, BMW began redirecting refinished cars out of Alabama and two other States. Tr. 964. The jury returned its verdict in favor of Gore on June 12, 1992. Five days later, BMW changed its national policy to one of full disclosure. Id., at 1026.

[45] See, e. g., Brief for Law and Economics Scholars et al. as Amici Curiae 6-28 (economic analysis demonstrates that Alabama Supreme Court's judgment was not unreasonable); W. Landes & R. Posner, Economic Structure of Tort Law 160-163 (1987) (economic model for assessing propriety of punitive damages in certain tort cases).

[46] See ante, at 568 ("In our federal system, States necessarily have considerable flexibility in determining the level of punitive damages that they will allow in different classes of cases and in any particular case."); Browning-Ferris Industries of Vt., Inc. v. Kelco Disposal, Inc., 492 U. S. 257, 278 (1989) (In any "lawsuit where state law provides the basis of decision, the propriety of an award of punitive damages for the conduct in question, and the factors the jury may consider in determining their amount, are questions of state law."); Silkwood v. Kerr-McGee Corp., 464 U. S. 238, 255 (1984) ("Punitive damages have long been a part of traditional state tort law.").

[47] Petitioner invites the Court to address the question of multiple punitive damages awards stemming from the same alleged misconduct. The Court does not take up the invitation, and rightly so, in my judgment, for this case does not present the issue. For three reasons, the question of multiple awards is hypothetical, not real, in Gore's case. First, the punitive damages award in favor of Gore is the only such award yet entered against BMW on account of its nondisclosure policy.

Second, BMW did not raise the issue of multiple punitives below. Indeed, in its reply brief before the Alabama Supreme Court, BMW stated: "Gore confuses our point about fairness among plaintiffs. He treats this point as a premature `multiple punitive damages' argument. But, contrary to Gore's contention, we are not asking this Court to hold, as a matter of law, that a `constitutional violation occurs when a defendant is subjected to punitive damages in two separate cases.' " Reply Brief for Appellant in Nos. 1920324, 1920325 (Ala. Sup. Ct.), p. 48 (internal citations omitted).

Third, if BMW had already suffered a punitive damages judgment in connection with its nondisclosure policy, Alabama's highest court presumably would have taken that fact into consideration. In reviewing punitive damages awards attacked as excessive, the Alabama Supreme Court considers whether "there have been other civil actions against the same defendant, based on the same conduct." 646 So. 2d 619, 624 (1994) (quoting Green Oil Co. v. Hornsby, 539 So. 2d 218, 224 (Ala. 1989)). If so, "this should be taken into account in mitigation of the punitive damages award." 646 So. 2d, at 624. The Alabama court accordingly observed that Gore's counsel had filed 24 other actions against BMW in Alabama and Georgia, but that no other punitive damages award had so far resulted. Id., at 626.

[48] Justice Breyer's concurring opinion offers nothing more solid. Under Pacific Mut. Life Ins. Co. v. Haslip, 499 U. S. 1 (1991), he acknowledges, Alabama's standards for punitive damages, standing alone, do not violate due process. Ante, at 588. But they "invit[e] the kind of scrutiny the Court has given the particular verdict before us." Ibid. Pursuing that invitation, Justice Breyer concludes that, matching the particular facts of this case to Alabama's "legitimate punitive damages objectives," ante, at 596, the award was "`gross[ly] excessiv[e],' " ante, at 597. The exercise is engaging, but ultimately tells us only this: too big will be judged unfair. What is the Court's measure of too big? Not a cap of the kind a legislature could order, or a mathematical test this Court can divine and impose. Too big is, in the end, the amount at which five Members of the Court bridle.

[49] See, e. g., Distinctive Printing and Packaging Co. v. Cox, 232 Neb. 846, 857, 443 N. W. 2d 566, 574 (1989) (per curiam) ("[P]unitive, vindictive, or exemplary damages contravene Neb. Const. art. VII, § 5, and thus are not allowed in this jurisdiction."); Santana v. Registrars of Voters of Worcester, 398 Mass. 862, 502 N. E. 2d 132 (1986) (punitive damages are not permitted, unless expressly authorized by statute); Fisher Properties, Inc. v. Arden-Mayfair, Inc., 106 Wash. 2d 826, 852, 726 P. 2d 8, 23 (1986) (en banc) (same).

In Life Ins. Co. of Georgia v. Johnson, No. 1940357 (Nov. 17, 1995), the Alabama Supreme Court revised the State's regime for assessments of punitive damages. Henceforth, trials will be bifurcated. Initially, juries will be instructed to determine liability and the amount of compensatory damages, if any; also, the jury is to return a special verdict on the question whether a punitive damages award is warranted. If the jury answers yes to the punitive damages question, the trial will be resumed for the presentation of evidence and instructions relevant to the amount appropriate to award as punitive damages. After postverdict trial court review and subsequent appellate review, the amount of the final punitive damages judgment will be paid into the trial court. The trial court will then order payment of litigation expenses, including the plaintiff's attorney's fees, and instruct the clerk to divide the remainder equally between the plaintiff and the State General Fund. The provision for payment to the State General Fund is applicable to all judgments not yet satisfied, and therefore would apply to the judgment in Gore's case.

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Page 227

[573 P.2d 445] Frank S. Hills, San Francisco, for plaintiff and appellant.

        Siegfried Hesse, Peter F. Elkind, Jewel, Boxer & Elkind, Oakland, Robert E. Cartwright, San Francisco, Edward I. Pollock, Los Angeles, Leroy Hersh, San Francisco, Stephen I. Zetterberg, Claremont, Robert G. Beloud, Upland, Ned Good, Los Angeles, David B. Baum, Arne Werchick, San Francisco, and Leonard Sacks, Encino, as amici curiae on behalf of plaintiff and appellant.

        Shovlin & Babin, Norbert C. Babin, Bledsoe, Smith, Cathcart, Boyd & Eliot and Kenneth E. Nussbaum, San Francisco, for defendants and respondents.

        TOBRINER, Acting Chief Justice.

        In August 1970, plaintiff Ray Barker was injured at a construction site at the University of California at Santa [20 Cal.3d 417] Cruz while operating a high-lift loader manufactured by defendant Lull Engineering Co. and leased to plaintiff's employer by defendant George M. Philpott Co., Inc. Claiming that his injuries were proximately caused, inter alia, by the alleged defective design of the loader,

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[573 P.2d 446] Barker instituted the present tort action seeking to recover damages for his injuries. The jury returned a verdict in favor of defendants, and plaintiff appeals from the judgment entered upon that verdict, contending primarily that in view of this court's decision in Cronin v. J. B. E. Olson Corp. (1972) 8 Cal.3d 121, 104 Cal.Rptr. 433, 501 P.2d 1153, the trial court erred in instructing the jury "that strict liability for a defect in design of a product is based on a finding that the product was unreasonably dangerous for its intended use . . . ."

        As we explain, we agree with plaintiff's objection to the challenged instruction and conclude that the judgment must be reversed. In Cronin, we reviewed the development of the strict product liability doctrine in California at some length, and concluded that, for a variety of reasons, the "unreasonably dangerous" element which section 402A of the Restatement Second of Torts had introduced into the definition of a defective product should not be incorporated into a plaintiff's burden of proof in a product liability action in this state. Although defendants maintain that our Cronin decision should properly be interpreted as applying only to "manufacturing defects" and not to the alleged "design defects" at issue here, we shall point out that the Cronin decision itself refutes any such distinction. Consequently, we conclude that the instruction was erroneous and that the judgment in favor of defendants must be reversed.

        In addition, we take this opportunity to attempt to alleviate some confusion that our Cronin decision has apparently engendered in the lower courts. Although in Cronin we rejected the Restatement's "unreasonably dangerous" gloss on the defectiveness concept as potentially confusing and unduly restrictive, we shall explain that our Cronin decision did not dictate that the term "defect" be left undefined in jury instructions given in all product liability cases.

        As Cronin acknowledged, in the past decade and a half California courts have frequently recognized that the defectiveness concept defies a simple, uniform definition applicable to all sectors of the diverse product liability domain. Although in many instances as when one machine in a million contains a cracked or broken part the meaning of the term "defect" will require little or no elaboration, in other instances, as when [20 Cal.3d 418] a product is claimed to be defective because of an unsafe design or an inadequate warning, the contours of the defect concept may not be self-evident. In such a case a trial judge may find it necessary to explain more fully to the jury the legal meaning of "defect" or "defective." We shall explain that Cronin in no way precluded such elucidation of the defect concept, but rather contemplated that, in typical common law fashion, the accumulating body of product liability authorities would give guidance for the formulation of a definition.

        As numerous recent judicial decisions and academic commentaries have recognized, the formulation of a satisfactory definition of "design defect" has proven a formidable task; trial judges have repeatedly confronted difficulties in attempting to devise accurate and helpful instructions in design defect cases. Aware of these problems, we have undertaken a review of the past California decisions which have grappled with the design defect issue, and have measured their conclusions against the fundamental policies which underlie the entire strict product liability doctrine.

        As we explain in more detail below, we have concluded from this review that a product is defective in design either (1) if the product has failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner, or (2) if, in light of the relevant factors discussed below, the benefits of the challenged design outweigh the risk of danger inherent in such design. In addition, we explain how the burden of proof with respect to the latter "risk-benefit" standard should be allocated.

        This dual standard for design defect assures an injured plaintiff protection from products that either fall below ordinary

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[573 P.2d 447] consumer expectations as to safety, or that, on balance, are not as safely designed as they should be. At the same time, the standard permits a manufacturer who has marketed a product which satisfies ordinary consumer expectations to demonstrate the relative complexity of design decisions and the trade-offs that are frequently required in the adoption of alternative designs. Finally, this test reflects our continued adherence to the principle that, in a product liability action, the trier of fact must focus on the product, not on the manufacturer's conduct, and that the plaintiff need not prove that the manufacturer acted unreasonably or negligently in order to prevail in such an action.

[20 Cal.3d 419] 1. The facts of the present case

        Plaintiff Barker sustained serious injuries as a result of an accident which occurred while he was operating a Lull High-Lift Loader at a construction site. The loader, manufactured in 1967, is a piece of heavy construction equipment designed to lift loads of up to 5,000 pounds to a maximum height of 32 feet. The loader is 23 feet long, 8 feet wide and weighs 17,050 pounds; it sits on four large rubber tires which are about the height of a person's chest, and is equipped with four-wheel drive, an automatic transmission with no park position and a hand brake. Loads are lift by forks similar to the forks of a forklift.

        The loader is designed so that the load can be kept level even when the loader is being operated on sloping terrain. The leveling of the load is controlled by a lever located near the steering column, and positioned between the operator's legs. The lever is equipped with a manual lock that can be engaged to prevent accidental slipping of the load level during lifting.

        The loader was not equipped with seat belts or a roll bar. A wire and pipe cage over the driver's seat afforded the driver some protection from falling objects. The cab of the loader was located at least nine feet behind the lifting forks.

        On the day of the accident the regular operator of the loader, Bill Dalton, did not report for work, and plaintiff, who had received only limited instruction on the operation of the loader from Dalton and who had operated the loader on only a few occasions, was assigned to run the loader in Dalton's place. The accident occurred while plaintiff was attempting to lift a load of lumber to a height of approximately 18 to 20 feet and to place the load on the second story of a building under construction. The lift was a particularly difficult one because the terrain on which the loader rested sloped sharply in several directions.

        Witnesses testified that plaintiff approached the structure with the loader, leveled the forks to compensate for the sloping ground and lifted the load to a height variously estimated between 10 and 18 feet. During the course of the lift plaintiff felt some vibration, and, when it appeared to several coworkers that the load was beginning to tip, the workers shouted to plaintiff to jump from the loader. Plaintiff heeded these warnings and leaped from the loader, but while scrambling away he was struck by a piece of falling lumber and suffered serious injury.

        [20 Cal.3d 420] Although the above facts were generally not in dispute, the parties differed markedly in identifying the responsible causes for the accident. Plaintiff contended, inter alia, that the accident was attributable to one or more design defects of the loader. ¹ Defendant, in turn, denied that the loader was defective in any respect, and claimed that the accident resulted either from plaintiff's lack of skill or from his misuse of its product. We briefly review the conflicting evidence.

        Plaintiff's principal expert witness initially testified that by reason of its relatively narrow base the loader was unstable and had a tendency to roll over when lifting

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[573 P.2d 448] loads to considerable heights; the witness surmised that this instability caused the load to tip in the instant case. The expert declared that to compensate for its instability, the loader should have been equipped with "outriggers," mechanical arms extending out from the sides of the machine, two in front and two in back, each of which could be operated independently and placed on the ground to lend stability to the loader. Evidence at trial revealed that cranes and some high lift loader models are either regularly equipped with outriggers or offer outriggers as optional equipment. Plaintiff's expert testified that the availability of outriggers would probably have averted the present accident.

        The expert additionally testified that the loader was defective in that it was not equipped with a roll bar or seat belts. He stated that such safety devices were essential to protect the operator in the event that the machine rolled over. Plaintiff theorized that the lack of such safety equipment was a proximate cause of his injuries because in the absence of such devices he had no reasonable choice but to leap from the loader as it began to tip. If a seat belt and roll bar had been provided, plaintiff argued, he could have remained in the loader and would not have been struck by the falling lumber.

        In addition, plaintiff's witnesses suggested that the accident may have been caused by the defective design of the loader's leveling mechanism. Several witnesses testified that both the absence of an automatic locking device on the leveling lever, and the placement of the leveling lever in a position in which it was extremely vulnerable to inadvertent bumping by the operator of the loader in the course of a lift, were defects which may [20 Cal.3d 421] have produced the accident and injuries in question. Finally, plaintiff's expects testified that the absence of a "park" position on the loader's transmission, that could have been utilized to avoid the possibility of the loader's movement during a lift, constituted a further defect in design which may have caused the accident.

        Defendants, in response, presented evidence which attempted to refute plaintiff's claims that the loader was defective or that the loader's condition was the cause of the accident. Defendants' experts testified that the loader was not unstable when utilized on the terrain for which it was intended, and that if the accident did occur because of the tipping of the loader it was only because plaintiff had misused the equipment by operating it on steep terrain for which the loader was unsuited. ² In answer to the claim that the high-lift loader was defective because of a lack of outriggers, defendants' expert testified that outriggers were not necessary when the loader was used for its intended purpose and that no competitive loaders with similar height lifting capacity were equipped with outriggers; the expert conceded, however, that a competitor did offer outriggers as optional equipment on a high-lift loader which was capable of lifting loads to 40, as compared to 32, feet. The expert also testified that the addition of outriggers would simply have given the loader the functional capability of a crane, which was designed for use on all terrain, and that an experienced user of a high-lift loader should recognize that such a loader was not intended as a substitute for a crane.

        The defense experts further testified that a roll bar was unnecessary because in view of the bulk of the loader it would not roll completely over. The witnesses also maintained that seat belts would have increased the danger of the loader by impairing the operator's ability to leave the vehicle quickly in case of an emergency. With respect to the claimed defects of the leveling device,

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[573 P.2d 449] the defense experts testified that the positioning of the lever was the safest and most convenient for the operator and that the manual lock on the leveling device provided completely adequate protection. Finally, defendants asserted that the absence of a "park" position on the transmission should not be [20 Cal.3d 422] considered a defect because none of the transmissions that were manufactured for this type of vehicle included a park position.

        In addition to disputing plaintiff's contention as to the defectiveness of the loader, defendants' witnesses testified that the accident probably was caused by the plaintiff's own inexperience and consequent dangerous actions. Defendants maintained that if the lumber had begun to fall during the lift it did so only because plaintiff had failed to lock the leveling device prior to the lift. Defendants alternatively suggested that although the workers thought they saw the lumber begin to tip during the lift, this tipping was actually only the plaintiff's leveling of the load during the lift. Defendants hypothesized that the lumber actually fell off the loader only after plaintiff had leaped from the machine and that plaintiff was responsible for his own injuries because he had failed to set the hand brake, thereby permitting the loader to roll backwards.

        After considering the sharply conflicting testimony reviewed above, the jury by a 10 to 2 vote returned a general verdict in favor of defendants. Plaintiff appeals from the judgment entered upon that verdict. ³

2. The trial court erred in instructing the jurors that "strict liability for a defect in design . . . is based on a finding that the product was unreasonably dangerous for its intended use."

        Plaintiff principally contends that the trial court committed prejudicial error in instructing the jury "that strict liability for a defect in design of a product is based on a finding that the product was unreasonably dangerous for its intended use. . . ." ⁴ Plaintiff maintains that this instruction conflicts directly with this court's decision in Cronin, decided [20 Cal.3d 423] subsequently to the instant trial, and mandates a reversal of the judgment. Defendants argue, in response, that our Cronin decision should not be applied to product liability actions which involve "design defects" as distinguished from "manufacturing defects."

        The plaintiff in Cronin, a driver of a bread delivery truck, was seriously injured when, during an accident, a metal hasp which held the truck's bread trays in place broke, permitting the trays to slide forward and propel plaintiff through the truck's windshield. Plaintiff brought a strict liability action against the seller, contending that his injuries were proximately caused by the defective condition of the truck. Evidence at trial established that the metal hasp broke during the accident "because it was extremely porous and had a significantly lower tolerance to force than a non-flawed aluminum hasp would have had" (8 Cal.3d at p. 124, 104 Cal.Rptr. at p. 436, 501 P.2d at p. 1156), and, on the basis of this evidence, the jury returned a verdict in favor of plaintiff.

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        [573 P.2d 450] On appeal, defendant in Cronin argued that the trial court had erred "by submitting a definition of strict liability which failed to include, as defendant requested, the element that the defect found in the product be 'unreasonably dangerous.' " (8 Cal.3d at pp. 127-128, 104 Cal.Rptr. at p. 438, 501 P.2d at p. 1158 (fns. omitted).) Relying upon section 402A of the Restatement Second of Torts ⁵ and a number of California decisions which had utilized the "unreasonably dangerous" terminology in the product liability context, ⁶ the defendant in Cronin maintained that a product's "unreasonable dangerousness" was an essential element that a plaintiff must establish in any product liability action.

        After undertaking a thorough review of the origins and development of both California product liability doctrine and the Restatement's "unreasonably dangerous" criterion, we rejected the defendant's contention, concluding "that to require an injured plaintiff to prove not only that the product contained a defect but also that such defect made the product unreasonably dangerous to the user or consumer would place a considerably greater burden upon him than that articulated in Greenman [20 Cal.3d 424] (v. Yuba Power Products, Inc. (1963) 59 Cal.2d 57, 27 Cal.Rptr. 697, 377 P.2d 897, California's seminal product liability decision) . . . . We are not persuaded to the contrary by the formulation of section 402A which inserts the factor of an 'unreasonably dangerous' condition into the equation of products liability." (8 Cal.3d pp. 134-135, 104 Cal.Rptr. at p. 443, 501 P.2d at p. 1163.)

        Plaintiff contends that the clear import of this language in Cronin is that the "unreasonably dangerous" terminology of the Restatement should not be utilized in defining defect in product liability actions, and that the trial court consequently erred in submitting an instruction which defined a design defect by reference to the "unreasonably dangerous" standard.

        In attempting to escape the apparent force of Cronin 's explicit language, defendants observe that the flawed hasp which rendered the truck defective in Cronin represented a manufacturing defect rather than a design defect, and they argue that Cronin 's disapproval of the Restatement's "unreasonably dangerous" standard should be limited to the manufacturing defect context. Defendants point out that one of the bases for our rejection of the "unreasonably dangerous" criterion in Cronin was our concern that such language, when used in conjunction with the "defective product" terminology, was susceptible to an interpretation which would place a dual burden on an injured plaintiff to prove, first, that a product was defective and, second, that it was additionally unreasonably dangerous. (8 Cal.3d at p. 133, 104 Cal.Rptr. 433, 501 P.2d 1153.) Defendants contend that the "dual burden" problem is present only in a manufacturing defect context and not in a design defect case.

        In elaborating this contention, defendants explain that in a manufacturing defect case, a jury may find a product defective because it deviates from the manufacturer's intended result, but may still decline to impose liability under the Restatement test on the ground that such defect did not render the product unreasonably dangerous. In a design defect case, by contrast, defendants assert that a defect is defined by reference to the "unreasonably dangerous" standard and, since the two are equivalent, no danger of a dual burden exists. In essence, defendants argue that under the instruction which the trial court gave in the instant case, plaintiff was not required to prove both that the loader was defective and that such defect made the loader unreasonably dangerous, but only that the loader was defectively designed by virtue of its unreasonable dangerousness.

        [20 Cal.3d 425]

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[573 P.2d 451] Although defendants may be correct, at least theoretically, in asserting that the so-called "dual burden" problem is averted when the "unreasonably dangerous" terminology is used in a design defect case simply as a definition of "defective condition" or "defect," defendants overlook the fact that our objection to the "unreasonably dangerous" terminology in Cronin went beyond the "dual burden" issue, and was based, more fundamentally, on a substantive determination that the Restatement's "unreasonably dangerous" formulation represented an undue restriction on the application of strict liability principles.

        As we noted in Cronin, the Restatement draftsmen adopted the "unreasonably dangerous" language primarily as a means of confining the application of strict tort liability to an article which is "dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics." (Rest.2d Torts, § 402A, com. i.) In Cronin, however, we flatly rejected the suggestion that recovery in a products liability action should be permitted only if a product is more dangerous than contemplated by the average consumer, refusing to permit the low esteem in which the public might hold a dangerous product to diminish the manufacturer's responsibility for injuries caused by that product. As we pointedly noted in Cronin, even if the "ordinary consumer" may have contemplated that Shopsmith lathes posed a risk of loosening their grip and letting a piece of wood strike the operator, "another Greenman" should not be denied recovery. (8 Cal.3d at p. 133, 104 Cal.Rptr. 433, 501 P.2d 1153.) Indeed, our decision in Luque v. McLean (1972) 8 Cal.3d 136, 104 Cal.Rptr. 443, 501 P.2d 1163 decided the same day as Cronin aptly reflects our disagreement with the restrictive implications of the Restatement formulation, for in Luque we held that a power rotary lawn mower with an unguarded hole could properly be found defective, in spite of the fact that the defect in the product was patent and hence in all probability within the reasonable contemplation of the ordinary consumer.

        Thus, our rejection of the use of the "unreasonably dangerous" terminology in Cronin rested in part on a concern that a jury might interpret such an instruction, as the Restatement draftsman had indeed intended, as shielding a defendant from liability so long as the product did not fall below the ordinary consumer's expectations as to the product's safety. ⁷ As Luque demonstrates, the dangers posed by such a [20 Cal.3d 426] misconception by the jury extend to cases involving design defects as well as to actions involving manufacturing defects: indeed, the danger of confusion is perhaps more pronounced in design cases in which the manufacturer could frequently argue that its product satisfied ordinary consumer expectations since it was identical to other items of the same product line with which the consumer may well have been familiar.

        Accordingly, contrary to defendants' contention, the reasoning of Cronin does not dictate that that decision be confined to the manufacturing defect context. Indeed, in Cronin itself we expressly stated that our holding applied to design defects as well as to manufacturing defects (8 Cal.3d at pp. 134-135, 104 Cal.Rptr. 433, 501 P.2d 1153), and in Henderson v. Harnischfeger Corp. (1974) 12 Cal.3d 663, 670, 117 Cal.Rptr. 1, 527 P.2d 353, we subsequently confirmed the impropriety of instructing a jury in the language of the "unreasonably dangerous" standard in a design defect case. (See also Foglio v. Western Auto Supply (1976) 56

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[573 P.2d 452] Cal.App.3d 470, 475, 128 Cal.Rptr. 545.) ⁸ Consequently, we conclude that the design defect instruction given in the instant case was erroneous. ⁹

3. A trial court may properly formulate instructions to elucidate the "defect" concept in varying circumstances. In particular, in design defect cases, a court may properly instruct a jury that a product is defective in design if (1) the plaintiff proves that the product failed to [20 Cal.3d 427] perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner, or (2) the plaintiff proves that the product's design proximately caused injury and the defendant fails to prove, in light of the relevant factors, that on balance the benefits of the challenged design outweigh the risk of danger inherent in such design.

        Defendants contend, however, that if Cronin is interpreted as precluding the use of the "unreasonably dangerous" language in defining a design defect, the jury in all such cases will inevitably be left without any guidance whatsoever in determining whether a product is defective in design or not. (See Beron v. Kramer-Trenton Co. (E.D.Pa.1975) 402 F.Supp. 1268, 1275-1276, affd. (3d Cir. 1976) 538 F.2d 318.) Amicus California Trial Lawyer Association (CTLA) on behalf of the plaintiff responds by suggesting that the precise intent of our Cronin decision was to preclude a trial court from formulating any definition of "defect" in a product liability case, thus always leaving the definition of defect, as well as the application of such definition, to the jury. As we explain, neither of these contentions represents an accurate portrayal of the intent or effect of our Cronin decision.

        In Cronin, we reaffirmed the basic formulation of strict tort liability doctrine set forth in Greenman : "A manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being. . . ." (8 Cal.3d at p. 130, 104 Cal.Rptr. at p. 439, 501 P.2d at p. 1159 (quoting 59 Cal.2d at p. 62, 27 Cal.Rptr. 697, 377 P.2d 897).) We held in Cronin that a plaintiff satisfies his burden of proof under Greenman, in both a "manufacturing defect" and "design defect" context, when he proves the existence of a "defect" and that such defect was a proximate cause of his injuries. (8 Cal.3d at pp. 133-134, 104 Cal.Rptr. 433, 501 P.2d 1153.) In reaching this conclusion, however, Cronin did not purport to hold that the term "defect" must remain undefined in all contexts (see Baker v. Chrysler Corp. (1976) 55 Cal.App.3d 710, 715, 127 Cal.Rptr. 745), and did not preclude a trial court from framing a definition of defect, appropriate to the circumstances of a particular case, to guide the jury as to the standard to be applied in determining whether a product is defective or not.

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        [573 P.2d 453] As this court has recognized on numerous occasions, the term defect as utilized in the strict liability context is neither self-defining nor susceptible to a single definition applicable in all contexts. In Jiminez v. Sears, Roebuck and Co., supra, 4 Cal.3d 379, 383, 93 Cal.Rptr. 769, 772, 482 P.2d 681, 684, for example, we stated: "A defect may be variously defined, and as yet no definition has been [20 Cal.3d 428] formulated that would resolve all cases or that is universally agreed upon." Indeed, in Cronin itself, we expressly recognized "the difficulties inherent in giving content to the defectiveness standard" and suggested that the problem could best be resolved by resort to the "cluster of useful precedents" which have been developed in the product liability field in the past decade and a half. (8 Cal.3d at p. 134, fn. 16, 104 Cal.Rptr. at p. 442, 501 P.2d at p. 1162 (citing Traynor, The Ways and Meanings of Defective Products and Strict Liability (1965) 32 Tenn.L.Rev. 363, 373).)

        Resort to the numerous product liability precedents in California demonstrates that the defect or defectiveness concept has embraced a great variety of injury-producing deficiencies, ranging from products that cause injury because they deviate from the manufacturer's intended result (e. g., the one soda bottle in ten thousand that explodes without explanation (Escola v. Coca Cola Bottling Co. (1944) 24 Cal.2d 453, 150 P.2d 436)), to products which, though "perfectly" manufactured, are unsafe because of the absence of a safety device (e. g., a paydozer without rear view mirrors (Pike v. Frank G. Hough Co., supra, 2 Cal.3d 465, 85 Cal.Rptr. 629, 467 P.2d 229), and including products that are dangerous because they lack adequate warnings or instructions (e. g., a telescope that contains inadequate instructions for assembling a "sun filter" attachment (Midgley v. S. S. Kresge Co. (1976) 55 Cal.App.3d 67, 127 Cal.Rptr. 217)).

        Commentators have pointed out that in view of the diversity of product deficiencies to which the defect rubric has been applied, an instruction which requires a plaintiff to prove the existence of a product defect, but which fails to elaborate on the meaning of defect in a particular context, may in some situations prove more misleading than helpful. As Professor Wade has written: "(The) natural application (of the term 'defective') would be limited to the situation in which something went wrong in the manufacturing process, so that the article was defective in the sense that the manufacturer had not intended it to be in that condition. To apply (the term 'defective') also to the case in which a warning is not attached to the chattel or the design turns out to be a bad one or the product is likely to be injurious in its normal condition . . . (and) (t)o use it without defining it to the jury is almost to ensure that they will be misled." (Wade, On the Nature of Strict Tort Liability for Products, supra, 44 Miss.L.J. 825, 831-832 (fns. omitted); see also Keeton, Product Liability and the Meaning of Defect (1973) 5 St. Mary's L.J. 30, 32; Hoenig, Product Designs and Strict Tort Liability: Is There a Better Approach? (1976) 8 Sw.U.L.Rev. 108, 118; Note (1973) 49 Wash.L.Rev. 231, 250.)

        [20 Cal.3d 429] Our decision in Cronin did not mandate such confusion. Instead, by observing that the problem in defining defect might be alleviated by reference to the "cluster of useful precedents," we intended to suggest that in drafting and evaluating instructions on this issue in a particular case, trial and appellate courts would be well advised to consider prior authorities involving similar defective product claims.

        Since the rendition of our decision in Cronin, a number of thoughtful Court of Appeal decisions have wrestled with the problem of devising a comprehensive definition of design defect in light of existing authorities. (See, e. g., Hyman v. Gordon (1973) 35 Cal.App.3d 769, 111 Cal.Rptr. 262; Self v. General Motors Corp. (1974) 42 Cal.App.3d 1, 116 Cal.Rptr. 575; Baker v. Chrysler Corp., supra, 55 Cal.App.3d 710, 127 Cal.Rptr. 745; Buccery v. General Motors Corp. (1976) 60 Cal.App.3d 533, 132 Cal.Rptr. 605.) As these decisions demonstrate, the concept of defect raises considerably more difficulties in the design defect context than it

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[573 P.2d 454] does in the manufacturing or production defect context.

        In general, a manufacturing or production defect is readily identifiable because a defective product is one that differs from the manufacturer's intended result or from other ostensibly identical units of the same product line. For example, when a product comes off the assembly line in a substandard condition it has incurred a manufacturing defect. (E. g., Lewis v. American Hoist & Derrick Co. (1971) 20 Cal.App.3d 570, 580, 97 Cal.Rptr. 798.) A design defect, by contrast, cannot be identified simply by comparing the injury-producing product with the manufacturer's plans or with other units of the same product line, since by definition the plans and all such units will reflect the same design. Rather than applying any sort of deviation-from-the-norm test in determining whether a product is defective in design for strict liability purposes, our cases have employed two alternative criteria in ascertaining, in Justice Traynor's words, whether there is something "wrong, if not in the manufacturer's manner of production, at least in his product." (Traynor, The Ways and Meanings of Defective Products and Strict Liability, supra, 32 Tenn.L.Rev. 363, 366.)

        First, our cases establish that a product may be found defective in design if the plaintiff demonstrates that the product failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner. This initial standard, somewhat analogous to the Uniform Commercial Code's warranty of fitness and merchantability (Cal.U.Com.Code, § 2314), reflects the warranty [20 Cal.3d 430] heritage upon which California product liability doctrine in part rests. As we noted in Greenman, "implicit in (a product's) presence on the market . . . (is) a representation that it (will) safely do the jobs for which it was built." (59 Cal.2d at p. 64, 27 Cal.Rptr. at p. 701, 377 P.2d at p. 901.) When a product fails to satisfy such ordinary consumer expectations as to safety in its intended or reasonably foreseeable operation, a manufacturer is strictly liable for resulting injuries. (Greenman, supra; Pike v. Frank G. Hough Co., supra, 2 Cal.3d 465, 477, 85 Cal.Rptr. 629, 467 P.2d 229; Hauter v. Zogarts (1975) 14 Cal.3d 104, 121, 120 Cal.Rptr. 681, 534 P.2d 377; Self v. General Motors Corp., supra, 42 Cal.App.3d 1, 6, 116 Cal.Rptr. 575; Culpepper v. Volkswagen of America, Inc. (1973) 33 Cal.App.3d 510, 517-518, 109 Cal.Rptr. 110; Van Zee v. Bayview Hardware Store (1968) 268 Cal.App.2d 351, 361, 74 Cal.Rptr. 21.) Under this standard, an injured plaintiff will frequently be able to demonstrate the defectiveness of a product by resort to circumstantial evidence, even when the accident itself precludes identification of the specific defect at fault. (Vandermark v. Ford Motor Co (1964) 61 Cal.2d 256, 260, 37 Cal.Rptr. 896, 391 P.2d 168; Culpepper v. Volkswagen of America, Inc., supra, 33 Cal.App.3d at p. 518, 109 Cal.Rptr. 110; Elmore v. American Motors Corp., supra, 70 Cal.2d 578, 580-584, 75 Cal.Rptr. 652, 451 P.2d 84.)

        As Professor Wade has pointed out, however, the expectations of the ordinary consumer cannot be viewed as the exclusive yardstick for evaluating design defectiveness because "(i)n many situations . . . the consumer would not know what to expect, because he would have no idea how safe the product could be made." (Wade, On the Nature of Strict Tort Liability for Products, supra, 44 Miss.L.J. 825, 829.) Numerous California decisions have implicitly recognized this fact and have made clear, through varying linguistic formulations, that a product may be found defective in design, even if it satisfies ordinary consumer expectations, if through hindsight the jury determines that the product's design embodies "excessive preventable danger," or, in other words, if the jury finds that the risk of danger inherent in the challenged design outweighs the benefits of such design. (E. g., Self v. General Motors Corp., supra, 42 Cal.App.3d at p. 6, 116 Cal.Rptr. 575; Hyman v. Gordon, supra, 35 Cal.App.3d at p. 773, 111 Cal.Rptr. 262; Buccery

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[573 P.2d 455] v. General Motors Corp., supra, 60 Cal.App.3d at p. 547, 132 Cal.Rptr. 605.) ¹⁰

        [20 Cal.3d 431] A review of past cases indicates that in evaluating the adequacy of a product's design pursuant to this latter standard, a jury may consider, among other relevant factors, the gravity of the danger posed by the challenged design, the likelihood that such danger would occur, the mechanical feasibility of a safer alternative design, the financial cost of an improved design, and the adverse consequences to the product and to the consumer that would result from an alternative design. (See, e. g., Horn v. General Motors Corp. (1976) 17 Cal.3d 359, 367, 131 Cal.Rptr. 78, 551 P.2d 398; Henderson v. Harnishchfeger Corp., supra, 12 Cal.3d 663, 667-668, 117 Cal.Rptr. 1, 527 P.2d 353; Luque v. McLean, supra, 8 Cal.3d 136, 140, 147-149, 104 Cal.Rptr. 443, 501 P.2d 1163; Heap v. General Motors Corp. (1977) 66 Cal.App.3d 824, 831, 136 Cal.Rptr. 304; Buccery v. General Motors Corp., supra, 60 Cal.App.3d 533, 547, 132 Cal.Rptr. 605; Baker v. Chrysler Corp., supra, 55 Cal.App.3d 710, 716, 127 Cal.Rptr. 745; Self v. General Motors Corp., supra, 42 Cal.App.3d 1, 6-8, 116 Cal.Rptr. 575; Garcia v. Halsett (1970) 3 Cal.App.3d 319, 323, 326, 82 Cal.Rptr. 420.)

        Although our cases have thus recognized a variety of considerations that may be relevant to the determination of the adequacy of a product's design, past authorities have generally not devoted much attention to the appropriate allocation of the burden of proof with respect to these matters. (Compare Self v. General Motors Corp., supra, 42 Cal.App.3d at p. 8, 116 Cal.Rptr. 575 with Baker v. Chrysler Corp., supra, 55 Cal.App.3d at p. 716, 127 Cal.Rptr. 745.) The allocation of such burden is particularly significant in this context inasmuch as this court's product liability decisions, from Greenman to Cronin, have repeatedly emphasized that one of the principal purposes behind the strict product liability doctrine is to relieve an injured plaintiff of many of the onerous evidentiary burdens inherent in a negligence cause of action. Because most of the evidentiary matters which may be relevant to the determination of the adequacy of a product's design under the "risk-benefit" standard e. g., the feasibility and cost of alternative designs are similar to issues typically presented in a negligent design case and involve technical matters peculiarly within the knowledge of the manufacturer, we conclude that once the plaintiff makes a prima facie showing that the injury was proximately caused by the product's design, the burden should appropriately shift to the defendant to prove, in light of the relevant factors, that the product is not defective. Moreover, inasmuch as this conclusion flows from our determination that the fundamental public policies embraced in Greenman dictate that a manufacturer who seeks to escape liability for an injury proximately caused by its product's design on a risk-benefit theory should bear the burden of persuading the trier of fact that its product [20 Cal.3d 432] should not be judged defective, the defendant's burden is one affecting the burden of proof, rather than simply the burden of producing evidence. (See Evid.Code, § 605; cf. Harris v. Irish Truck Lines (1974) 11 Cal.3d 373, 378, 113 Cal.Rptr. 489, 521 P.2d 481; Estate of Gelonese (1974) 36 Cal.App.3d 854, 862, 111 Cal.Rptr. 833; Perales v. Dept. of Human Resources Dev. (1973) 32 Cal.App.3d 332, 108 Cal.Rptr. 167; Rebmann v. Major (1970) 5 Cal.App.3d 684, 688, 85 Cal.Rptr. 399.)

        Thus, to reiterate, a product may be found defective in design, so as to subject a manufacturer to strict liability for resulting injuries, under either of two alternative tests. First, a product may be found defective in design if the plaintiff establishes that the product failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably

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[573 P.2d 456] foreseeable manner. Second, a product may alternatively be found defective in design if the plaintiff demonstrates that the product's design proximately caused his injury and the defendant fails to establish, in light of the relevant factors, that, on balance, the benefits of the challenged design outweigh the risk of danger inherent in such design.

        Although past California decisions have not explicitly articulated the two-pronged definition of design defect which we have elaborated above, other jurisdictions have adopted a somewhat similar, though not identical, dual approach in attempting to devise instructions to guide the jury in design defect cases. (See, e. g., Henderson v. Ford Motor Co. (Tex.1974) 519 S.W.2d 87, 92; Welch v. Outboard Marine Corp. (5th Cir. 1973) 481 F.2d 252, 254.) As we have indicated, we believe that the test for defective design set out above is appropriate in light of the rationale and limits of the strict liability doctrine, for it subjects a manufacturer to liability whenever there is something "wrong" with its product's design either because the product fails to meet ordinary consumer expectations as to safety or because, on balance, the design is not as safe as it should be while stopping short of making the manufacturer an insurer for all injuries which may result from the use of its product. This test, moreover, explicitly focuses the trier of fact's attention on the adequacy of the product itself, rather than on the manufacturer's conduct, and places the burden on the manufacturer, rather than the plaintiff, to establish that because of the complexity of, and trade-offs implicit in, the design process, an injury-producing product should nevertheless not be found defective.

        [20 Cal.3d 433] Amicus CTLA on behalf of the plaintiff, anticipating to some extent the latter half of the design defect standard articulated above, contends that any instruction which directs the jury to "weigh" or "balance" a number of factors, or which sets forth a list of completing considerations for the jury to evaluate in determining the existence of a design defect, introduces an element which "rings of negligence" into the determination of defect, and consequently is inconsistent with our decision in Cronin. (Cf. 8 Cal.3d at p. 132, 104 Cal.Rptr. 433, 501 P.2d 1153.) As amicus interprets the decision, Cronin broadly precludes any consideration of "reasonableness" or "balancing" in a product liability action.

        In the first place, however, in Cronin our principal concern was that the "unreasonably dangerous" language of the Restatement test had "burdened the injured plaintiff with proof of an element which rings of negligence" (italics added) (8 Cal.3d at p. 132, 104 Cal.Rptr. at p. 442, 501 P.2d at p. 1162) and had consequently placed "a considerably greater burden upon (the injured plaintiff) than that articulated in Greenman.'' (8 Cal.3d at pp. 134-135, 104 Cal.Rptr. at p. 443, 501 P.2d at p. 1163.) By shifting the burden of proof to the manufacturer to demonstrate that an injury-producing product is not defective in design, the above standard should lighten the plaintiff's burden in conformity with out Greenman and Cronin decisions.

        Secondly, past design defect decisions demonstrate that, as a practical matter, in many instances it is simply impossible to eliminate the balancing or weighing of competing considerations in determining whether a product is defectively designed or not. In Self v. General Motors Corp., supra, 42 Cal.App.3d 1, 116 Cal.Rptr. 575, for example, an automobile passenger, injured when the car in which she was riding exploded during an accident, brought suit against the manufacturer claiming that the car was defective in that the fuel tank had been placed in a particularly vulnerable position in the left rear bumper. One issue in the case, of course, was whether it was technically feasible to locate the fuel tank in a different position which would have averted the explosion in question. But, as the Self court recognized, feasibility was not the sole issue, for another relevant consideration was whether an alternative design of the car, while averting the particular accident, would have created a greater risk of injury in other, more common situations. (See 42 Cal.App.3d at pp. 7-8, 116 Cal.Rptr. 575.)

        [20 Cal.3d 434]

Page 239

[573 P.2d 457] In similar fashion, weighing the extent of the risks and the advantages posed by alternative designs is inevitable in many design defect cases. As the Self court stated: "(W)e appreciate the need to balance one consideration against another in designing a complicated product so as to achieve reasonable and practical safety under a multitude of varying conditions." (42 Cal.App.3d at p. 7, 116 Cal.Rptr. at p. 579.) Inasmuch as the weighing of competing considerations is implicit in many design defect determinations, an instruction which appears to preclude such a weighing process under all circumstances may mislead the jury.

        Finally, contrary to the suggestion of amicus CTLA, an instruction which advises the jury that it may evaluate the adequacy of a product's design by weighing the benefits of the challenged design against the risk of danger inherent in such design is not simply the equivalent of an instruction which requires the jury to determine whether the manufacturer was negligent in designing the product. (See, e. g., Wade, On the Nature of Strict Tort Liability for Products, supra, 44 Miss.L.J. 825, 835.) It is true, of course, that in many cases proof that a product is defective in design may also demonstrate that the manufacturer was negligent in choosing such a design. As we have indicated, however, in a strict liability case, as contrasted with a negligent design action, the jury's focus is properly directed to the condition of the product itself, and not to the reasonableness of the manufacturer's conduct. (See, e. g., Ault v. International Harvester (1974) 13 Cal.3d 113, 121, 117 Cal.Rptr. 812, 528 P.2d 1148; Escola v. Coca Cola Bottling Co., supra, 24 Cal.2d 453, 462, 150 P.2d 436 (Traynor, J. concurring).)

        Thus, the fact that the manufacturer took reasonable precautions in an attempt to design a safe product or otherwise acted as a reasonably prudent manufacturer would have under the circumstances, while perhaps absolving the manufacturer of liability under a negligence theory, will not preclude the imposition of liability under strict liability principles if, upon hindsight, the trier of fact concludes that the product's design is unsafe to consumers, users, or bystanders. (See Foglio v. Western Auto Supply, supra, 56 Cal.App.3d 470, 477, 128 Cal.Rptr. 545.)

4. Conclusion

        The technological revolution has created a society that contains dangers to the individual never before contemplated. The individual [20 Cal.3d 435] must face the threat to life and limb not only from the car on the street or highway but from a massive array of hazardous mechanisms and products. The radical change from a comparatively safe, largely agricultural, society to this industrial unsafe one has been reflected in the decisions that formerly tied liability to the fault of a tortfeasor but now are more concerned with the safety of the individual who suffers the loss. As Dean Keeton has written, "The change in the substantive law as regards the liability of makers of products and other sellers in the marketing chain has been from fault to defect. The plaintiff is no longer required to impugn the maker, but he is required to impugn the product." (Keeton, Product Liability and the Meaning of Defect (1973) 5 St. Mary's L.J. 30, 33.)

        If a jury in determining liability for a defect in design is instructed only that it should decide whether or not there is "a defective design," it may reach to the extreme conclusion that the plaintiff, having suffered injury, should without further showing, recover; on the other hand, it may go to the opposite extreme and conclude that because the product matches the intended design the plaintiff, under no conceivable circumstance, could recover. The submitted definition eschews both extremes and attempts a balanced approach.

        We hold that a trial judge may properly instruct the jury that a product is defective in design (1) if the plaintiff demonstrates that the product failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner, or (2) if the plaintiff proves that the product's design proximately caused his injury and the defendant fails

Page 240

[573 P.2d 458] to prove, in light of the relevant factors discussed above, that on balance the benefits of the challenged design outweigh the risk of danger inherent in such design.

        Because the jury may have interpreted the erroneous instruction given in the instant case as requiring plaintiff to prove that the high-lift loader was ultrahazardous or more dangerous than the average consumer contemplated, and because the instruction additionally misinformed the jury that the defectiveness of the product must be evaluated in light of the product's "intended use" rather than its "reasonably foreseeable use" (see fn. 9, ante ), we cannot find that the error was harmless on the facts of this case. In light of this conclusion, we need not address plaintiff's additional claims of error, for such issues may not arise on retrial.

        [20 Cal.3d 436] The judgment in favor of defendants is reversed.

        MOSK, CLARK, RICHARDSON, WRIGHT (Retired Chief Justice of California assigned by the Acting Chairperson of the Judicial Council), and SULLIVAN (Retired Associate Justice of the Supreme Court sitting under assignment by the Chairperson of the Judicial Council), JJ., concur.

---------------

1 Plaintiff additionally contended that his injuries were proximately caused by the absence of adequate warnings and instructions relating to the safe use of the loader. Because the warning issue is not relevant to the issues raised on this appeal, we describe only the facts material to the design defect issue.

2 In support of this claim, defendants presented the testimony of Bill Dalton, the regular operator of the loader, who testified that he called in sick on the day of the accident because he knew that the loader was not designed to make the lifts scheduled for that day, and he was frightened to make lifts in the area where the accident occurred because of the danger involved. Dalton testified that he informed his supervisor that a crane, rather than a high-lift loader, was required for lifts on such sloping ground, but that the supervisor had not agreed to obtain a crane for such lifts.

3 Plaintiff also appealed from the order denying his motion for judgment notwithstanding the verdict, but inasmuch as he has not briefed this issue we assume that he has abandoned any claim of error in this regard. (See generally 6 Witkin, Cal.Procedure (2d ed. 1971) Appeal, § 425, pp. 4391-4393 and cases cited.)

4 The challenged instruction reads in full: "I instruct you that strict liability for the defect in design of a product is based on a finding that the product was unreasonably dangerous for its intended use, and in turn the unreasonableness of the danger must necessarily be derived from the state of the art at the time of the design. The manufacturer or lessor are not insurers of their products. However, an industry cannot set its own standards."

Plaintiff's challenge is limited to the portion of the instruction which provides that "strict liability for the defect in design of a product is based on a finding that the product was unreasonably dangerous for its intended use," and accordingly we express no opinion as to the propriety of the remaining portions of the instruction.

5 Section 402A provides, inter alia, that one is strictly liable in tort if he "sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property. . . ."

6 See, e. g., Jiminez v. Sears, Roebuck & Co. (1971) 4 Cal.3d 379, 384, 93 Cal.Rptr. 769, 482 P.2d 681; Pike v. Frank G. Hough Co. (1970) 2 Cal.3d 465, 475-477, 85 Cal.Rptr. 629, 467 P.2d 229; Putensen v. Clay Adams, Inc. (1970) 12 Cal.App.3d 1062, 1072, 91 Cal.Rptr. 319.

7 This is not to say that the expectations of the ordinary consumer are irrelevant to the determination of whether a product is defective, for as we point out below we believe that ordinary consumer expectations are frequently of direct significance to the defectiveness issue. The flaw in the Restatement's analysis, in our view, is that it treats such consumer expectations as a "ceiling" on a manufacturer's responsibility under strict liability principles, rather than as a "floor." As we shall explain, past California decisions establish that at a minimum a product must meet ordinary consumer expectations as to safety to avoid being found defective.

8 One commentator has observed that, in addition to the deficiencies in the "unreasonably dangerous" terminology noted in Cronin, the Restatement's language is potentially misleading because "(i)t may suggest an idea like ultrahazardous, or abnormally dangerous, and thus give rise to the impression that the plaintiff must prove that the product was unusually or extremely dangerous." (Wade, On the Nature of Strict Tort Liability for Products (1973) 44 Miss.L.J. 825, 832.) We agree with this criticism and believe it constitutes a further reason for refraining from utilizing the "unreasonably dangerous" terminology in defining a defective product.

9 Indeed, the challenged instruction (see fn. 4, ante ) was additionally erroneous because it suggested that in evaluating defectiveness, only the "intended use" of the product is relevant, rather than the product's "reasonably foreseeable use." In Cronin, we specifically held that the adequacy of a product must be determined in light of its reasonably foreseeable use, declaring that "(t)he design and manufacture of products should not be carried out in an industrial vacuum but with recognition of the realities of their everyday use." (8 Cal.3d at p. 126, 104 Cal.Rptr. at p. 437, 501 P.2d at p. 1157.)

Because, in the instant case, the jury may have concluded that the use of the loader by a relatively inexperienced worker was not an "intended use" of the loader, but was a "reasonably foreseeable use," this aspect of the instruction may well have prejudiced the plaintiff.

10 In the instant case we have no occasion to determine whether a product which entails a substantial risk of harm may be found defective even if no safer alternative design is feasible. As we noted in Jiminez v. Sears, Roebuck & Co., supra, 4 Cal.3d 379, 383, 93 Cal.Rptr. 769, 772, 482 P.2d 681, 684, Justice Traynor has "suggested that liability might be imposed as to products whose norm is danger." (Citing Traynor, The Ways and Meaning of Defective Products and Strict Liability, supra, 32 Tenn.L.Rev. 363, 367 et seq.)

Page 348

        [119 Cal.App.3d 771]

Page 358

McCutchen, Black, Verleger & Shea, G. Richard Doty, Robert G. Damus, Judd L. Jordan and Harrington, Foxx, Dubrow & Canter, Los Angeles, for defendant and appellant Ford Motor Company.

        Hews, Munoz & Howard, Inc., Arthur N. Hews, Santa Ana, Horvitz, Greines & Poster, Ellis J. Horvitz, Michelle Van Cleave, Encino, and Gerald H. B. Kane, Jr., Redondo Beach, for plaintiff and appellant Richard Grimshaw.

        Rose, Klein & Marias, Byron M. Rabin, Los Angeles, and Leonard Sacks, Northridge, for plaintiffs and appellants Carmen, Cauleen and Challie Gray.

        TAMURA, Acting Presiding Justice.

        A 1972 Ford Pinto hatchback automobile unexpectedly stalled on a freeway, erupting into flames when it was rear ended by a car proceeding in the same direction. Mrs. Lilly Gray, the driver of the Pinto, suffered fatal burns and 13-year-old Richard Grimshaw, a passenger in the Pinto, suffered severe and permanently disfiguring burns on his face and entire body. Grimshaw and the heirs of Mrs. Gray (Grays) sued Ford Motor Company and others. Following a six-month jury trial, verdicts were returned in favor of plaintiffs against Ford Motor Company. Grimshaw was awarded $2,516,000 compensatory damages and $125 million punitive damages; the Grays [119 Cal.App.3d 772] were awarded $559,680 in compensatory damages. ¹ On Ford's motion for a new trial, Grimshaw was required to remit all but $3 1/2 million of the punitive award as a condition of denial of the motion.

        Ford appeals from the judgment and from an order denying its motion for a judgment notwithstanding the verdict as to punitive damages. Grimshaw appeals from the order granting the conditional new trial and from the amended judgment entered pursuant to the order. The Grays have cross-appealed from the judgment and from an order denying leave to amend their complaint to seek punitive damages.

        Ford assails the judgment as a whole, assigning a multitude of errors and irregularities, including misconduct of counsel, but the primary thrust of its appeal is directed against the punitive damage award. Ford contends that the punitive award was statutorily unauthorized and constitutionally invalid. In addition, it maintains that

Page 359

the evidence was insufficient to support a finding of malice or corporate responsibility for malice. Grimshaw's cross-appeal challenges the validity of the new trial order and the conditional reduction of the punitive damage award. The Grays' cross-appeal goes to the validity of an order denying them leave to amend their wrongful death complaint to seek punitive damages.

        Since sufficiency of the evidence is in issue only regarding the punitive damage award, we make no attempt to review the evidence bearing on all of the litigated issues. Subject to amplification when we deal with specific issues, we shall set out the basic facts pertinent to these appeals in accordance with established principles of appellate review: We will view the evidence in the light most favorable to the parties prevailing below, resolving all conflicts in their favor, and indulging all reasonable inferences favorable to them. (Aceves v. Regal Pale Brewing Co., 24 Cal.3d 502, 507, 156 Cal.Rptr. 41, 595 P.2d 619; Nestle v. City of Santa Monica, 6 Cal.3d 920, 925, 101 Cal.Rptr. 568, 496 P.2d 480.)

[119 Cal.App.3d 773] The Accident:

        In November 1971, the Grays purchased a new 1972 Pinto hatchback manufactured by Ford in October 1971. The Grays had trouble with the car from the outset. During the first few months of ownership, they had to return the car to the dealer for repairs a number of times. Their car problems included excessive gas and oil consumption, down shifting of the automatic transmission, lack of power, and occasional stalling. It was later learned that the stalling and excessive fuel consumption were caused by a heavy carburetor float.

        On May 28, 1972, Mrs. Gray, accompanied by 13-year-old Richard Grimshaw, set out in the Pinto from Anaheim for Barstow to meet Mr. Gray. The Pinto was then six months old and had been driven approximately 3,000 miles. Mrs. Gray stopped in San Bernardino for gasoline, got back onto the freeway (Interstate 15) and proceeded toward her destination at 60-65 miles per hour. As she approached the Route 30 off-ramp where traffic was congested, she moved from the outer fast lane to the middle lane of the freeway. Shortly after this lane change, the Pinto suddenly stalled and coasted to a halt in the middle lane. It was later established that the carburetor float had become so saturated with gasoline that it suddenly sank, opening the float chamber and causing the engine to flood and stall. A car traveling immediately behind the Pinto was able to swerve and pass it but the driver of a 1962 Ford Galaxie was unable to avoid colliding with the Pinto. The Galaxie had been traveling from 50 to 55 miles per hour but before the impact had been braked to a speed of from 28 to 37 miles per hour.

        At the moment of impact, the Pinto caught fire and its interior was engulfed in flames. According to plaintiffs' expert, the impact of the Galaxie had driven the Pinto's gas tank forward and caused it to be punctured by the flange or one of the bolts on the differential housing so that fuel sprayed from the punctured tank and entered the passenger compartment through gaps resulting from the separation of the rear wheel well sections from the floor pan. By the time the Pinto came to rest after the collision, both occupants had sustained serious burns. When they emerged from the vehicle, their clothing was almost completely burned off. Mrs. Gray died a few days later of congestive heart failure as a result of the burns. Grimshaw managed to survive but only through heroic medical measures. He has undergone numerous and extensive surgeries and skin grafts and must undergo additional surgeries over the next 10 years. He lost portions of several fingers on his left [119 Cal.App.3d 774] hand and portions of his left ear, while his face required many skin grafts from various portions of his body. Because Ford does not contest the amount of compensatory damages awarded to Grimshaw and the Grays, no purpose would be served by further description of the injuries suffered by Grimshaw or the damages sustained by the Grays.

Design of the Pinto Fuel System:

        In 1968, Ford began designing a new subcompact automobile which ultimately

Page 360

became the Pinto. Mr. Iacocca, then a Ford Vice President, conceived the project and was its moving force. Ford's objective was to build a car at or below 2,000 pounds to sell for no more than $2,000.

        Ordinarily marketing surveys and preliminary engineering studies precede the styling of a new automobile line. Pinto, however, was a rush project, so that styling preceded engineering and dictated engineering design to a greater degree than usual. Among the engineering decisions dictated by styling was the placement of the fuel tank. It was then the preferred practice in Europe and Japan to locate the gas tank over the rear axle in subcompacts because a small vehicle has less "crush space" between the rear axle and the bumper than larger cars. The Pinto's styling, however, required the tank to be placed behind the rear axle leaving only 9 or 10 inches of "crush space" far less than in any other American automobile or Ford overseas subcompact. In addition, the Pinto was designed so that its bumper was little more than a chrome strip, less substantial than the bumper of any other American car produced then or later. The Pinto's rear structure also lacked reinforcing members known as "hat sections" (2 longitudinal side members) and horizontal cross-members running between them such as were found in cars of larger unitized construction and in all automobiles produced by Ford's overseas operations. The absence of the reinforcing members rendered the Pinto less crush resistant than other vehicles. Finally, the differential housing selected for the Pinto had an exposed flange and a line of exposed bolt heads. These protrusions were sufficient to puncture a gas tank driven forward against the differential upon rear impact.

Crash Tests:

        During the development of the Pinto, prototypes were built and tested. Some were "mechanical prototypes" which duplicated mechanical features of the design but not its appearance while others, referred [119 Cal.App.3d 775] to as "engineering prototypes," were true duplicates of the design car. These prototypes as well as two production Pintos were crash tested by Ford to determine, among other things, the integrity of the fuel system in rear-end accidents. Ford also conducted the tests to see if the Pinto as designed would meet a proposed federal regulation requiring all automobiles manufactured in 1972 to be able to withstand a 20-mile-per-hour fixed barrier impact without significant fuel spillage and all automobiles manufactured after January 1, 1973, to withstand a 30-mile-per-hour fixed barrier impact without significant fuel spillage.

        The crash tests revealed that the Pinto's fuel system as designed could not meet the 20-mile-per-hour proposed standard. Mechanical prototypes struck from the rear with a moving barrier at 21-miles-per-hour caused the fuel tank to be driven forward and to be punctured, causing fuel leakage in excess of the standard prescribed by the proposed regulation. A production Pinto crash tested at 21-miles-per-hour into a fixed barrier caused the fuel neck to be torn from the gas tank and the tank to be punctured by a bolt head on the differential housing. In at least one test, spilled fuel entered the driver's compartment through gaps resulting from the separation of the seams joining the real wheel wells to the floor pan. The seam separation was occasioned by the lack of reinforcement in the rear structure and insufficient welds of the wheel wells to the floor pan.

        Tests conducted by Ford on other vehicles, including modified or reinforced mechanical Pinto prototypes, proved safe at speeds at which the Pinto failed. Where rubber bladders had been installed in the tank, crash tests into fixed barriers at 21-miles-per-hour withstood leakage from punctures in the gas tank. Vehicles with fuel tanks installed above rather than behind the rear axle passed the fuel system integrity test at 31-miles-per-hour fixed barrier. A Pinto with two longitudinal hat sections added to firm up the rear structure passed a 20-mile-per-hour rear impact fixed barrier test with no fuel leakage.

The Cost To Remedy Design Deficiencies:

        When a prototype failed the fuel system integrity test, the standard of care for engineers

Page 361

in the industry was to redesign and retest it. The vulnerability of the production Pinto's fuel tank at speeds of 20 and 30-miles-per-hour fixed barrier tests could have been remedied by inexpensive "fixes," but Ford produced and sold the Pinto to the public without doing anything to remedy the defects. Design changes that [119 Cal.App.3d 776] would have enhanced the integrity of the fuel tank system at relatively little cost per car included the following: Longitudinal side members and cross members at $2.40 and $1.80, respectively; a single shock absorbent "flak suit" to protect the tank at $4; a tank within a tank and placement of the tank over the axle at $5.08 to.$5.79; a nylon bladder within the tank at $5.25 to $8; placement of the tank over the axle surrounded with a protective barrier at a cost of $9.95 per car; substitution of a rear axle with a smooth differential housing at a cost of $2.10; imposition of a protective shield between the differential housing and the tank at $2.35; improvement and reenforcement of the bumper at $2.60; addition of eight inches of crush space a cost of $6.40. Equipping the car with a reinforced rear structure, smooth axle, improved bumper and additional crush space at a total cost of $15.30 would have made the fuel tank safe in a 34 to 38-mile-per-hour rear end collision by a vehicle the size of the Ford Galaxie. If, in addition to the foregoing, a bladder or tank within a tank were used or if the tank were protected with a shield, it would have been safe in a 40 to 45-mile-per-hour rear impact. If the tank had been located over the rear axle, it would have been safe in a rear impact at 50 miles per hour or more.

Management's Decision To Go Forward With Knowledge Of Defects:

        The idea for the Pinto, as has been noted, was conceived by Mr. Iacocca, then Executive Vice President of Ford. The feasibility study was conducted under the supervision of Mr. Robert Alexander, Vice President of Car Engineering. Ford's Product Planning Committee, whose members included Mr. Iacocca, Mr. Robert Alexander, and Mr. Harold MacDonald, Ford's Group Vice President of Car Engineering, approved the Pinto's concept and made the decision to go forward with the project. During the course of the project, regular product review meetings were held which were chaired by Mr. MacDonald and attended by Mr. Alexander. As the project approached actual production, the engineers responsible for the components of the project "signed off" to their immediate supervisors who in turn "signed off" to their superiors and so on up the chain of command until the entire project was approved for public release by Vice Presidents Alexander and MacDonald and ultimately by Mr. Iacocca. The Pinto crash tests results had been forwarded up the chain of command to the ultimate decision-makers and were known to the Ford officials who decided to go forward with production.

        [119 Cal.App.3d 777] Harley Copp, a former Ford engineer and executive in charge of the crash testing program, testified that the highest level of Ford's management made the decision to go forward with the production of the Pinto, knowing that the gas tank was vulnerable to puncture and rupture at low rear impact speeds creating a significant risk of death or injury from fire and knowing that "fixes" were feasible at nominal cost. He testified that management's decision was based on the cost savings which would inure from omitting or delaying the "fixes."

        Mr. Copp's testimony concerning management's awareness of the crash tests results and the vulnerability of the Pinto fuel system was corroborated by other evidence. At an April 1971 product review meeting chaired by Mr. MacDonald, those present received and discussed a report (Exhibit 125) prepared by Ford engineers pertaining to the financial impact of a proposed federal standard on fuel system integrity and the cost savings which would accrue from deferring even minimal "fixes." ² The report refers to crash tests of the integrity of the fuel system of Ford vehicles and design changes needed to meet anticipated federal standards. Also in evidence was a September

Page 362

23, 1970, report (Exhibit 124) by Ford's "Chassis Design Office" concerning a program "to establish a corporate (Ford) position and reply to the government" on the proposed federal fuel system integrity standard which included zero fuel spillage at 20 miles per hour fixed barrier crash by January 1, 1972, and 30 miles per hour by January 1, 1973. The report states in part: "The 20 and 30 mph rear fixed barrier crashes will probably require repackaging the fuel tanks in a protected area such as above the rear axle. This is based on moving barrier crash tests of a Chevelle and a Ford at 30 mph and other Ford products at 20 mph. (P) Currently there are no plans for forward models to repackage the fuel tanks. Tests must be conducted to prove that repackaged tanks will live without significantly strengthening rear structure for added protection." The report also notes that the Pinto was the "(s)mallest car line with most difficulty in achieving compliance." It is reasonable to infer that the report was prepared for and known to Ford officials in policy-making positions.

        [119 Cal.App.3d 778] The fact that two of the crash tests were run at the request of the Ford Chassis and Vehicle Engineering Department for the specific purpose of demonstrating the advisability of moving the fuel tank over the axle as a possible "fix" further corroborated Mr. Copp's testimony that management knew the results of the crash tests. Mr. Kennedy, who succeeded Mr. Copp as the engineer in charge of Ford's crash testing program, admitted that the test results had been forwarded up the chain of command to his superiors.

        Finally, Mr. Copp testified to conversations in late 1968 or early 1969 with the chief assistant research engineer in charge of cost-weight evaluation of the Pinto, and to a later conversation with the chief chassis engineer who was then in charge of crash testing the early prototype. In these conversations, both men expressed concern about the integrity of the Pinto's fuel system and complained about management's unwillingness to deviate from the design if the change would cost money.

[119 Cal.App.3d 779] The Action:

        Grimshaw (by his guardian ad litem) and the Grays sued Ford and others. Grimshaw

Page 363

was permitted to amend his complaint to seek punitive damages but the Grays' motion to amend their complaint for a like purpose was denied. The cases were thereafter consolidated for trial. ³ Grimshaw's case was submitted to the jury on theories of negligence and strict liability; the Grays' case went to the jury only on the strict liability theory.

FORD'S APPEAL

        Ford seeks reversal of the judgment as a whole on the following grounds: (1) Erroneous rulings relating to Mr. Copp's testimony; (2) other erroneous evidentiary rulings; (3) prejudicial misconduct by plaintiffs' counsel; (4) instructional errors; and (5) jury misconduct. On the issue of punitive damages, Ford contends that its motion for judgment notwithstanding the verdict should have been granted because the punitive award was statutorily unauthorized and constitutionally invalid and on the further ground that the evidence was insufficient to support a finding of malice or corporate responsibility for malice. Ford also seeks reversal of the punitive award for claimed instructional errors on malice and proof of malice as well as on the numerous grounds addressed to the judgment as a whole. Finally, Ford maintains that even if punitive damages were appropriate in this case, the amount of the award was so excessive as to require a new trial or further remittitur of the award.

        In the ensuing analysis (ad nauseam) of Ford's wideranging assault on the judgment, we have concluded that Ford has failed to demonstrate that any errors or irregularities occurred during the trial which resulted in a miscarriage of justice requiring reversal.

        Mr. Harley Copp, a former Ford engineering executive, was plaintiffs' principal witness on the subject of defects in the design, placement, and protection of the Pinto's gas tank and on Ford management's[119 Cal.App.3d 780] decision to place the car on the market with knowledge of the defects. Ford assails Mr. Copp's testimony on three basic grounds: (1) He should not have been permitted to testify at all because plaintiffs failed to disclose his identity before trial and because Ford was denied the opportunity to depose him; (2) he should not have been allowed to testify during direct examination to the reason for his termination by Ford; and (3) he should not have been permitted to testify on direct examination concerning the contents of reports, studies, and tests on which he relied in forming his opinions.

(1) Rulings Pertaining To Copp's Identity And Requests To Depose Him:

        After trial had been under way for a month, defense counsel made an oral motion for the disclosure of the identity of "any disgruntled Ford employee or former employee" whom plaintiffs intended to call as a witness and for the opportunity to depose him before he was called as a witness. Plaintiffs objected on the ground that Ford had the opportunity in the course of pretrial discovery to seek the identity of plaintiffs' experts and to depose them and that to permit depositions to be taken at that stage of the proceedings would interrupt the trial unduly. Plaintiff's counsel (Mr. Hews) stated that he intended to call a former Ford employee but declined to reveal his identity except to the court outside the presence of defense counsel. The judge conducted an unreported in camera inquiry of plaintiffs' counsel following which the judge dictated an account of the proceedings and ordered the transcript sealed. Thereafter, the court denied Ford's motion, stating: (1) That the witness whom plaintiffs intended to call was contacted after plaintiffs had responded to defendants' last request for a list of plaintiffs' expert witnesses;

Page 364

(2) defendants had ample opportunity to learn the witness' name and to depose him through pretrial discovery procedure; and (3) that to permit a deposition at that stage of the trial would interrupt the progress of the trial unduly. Ford did not object to the in camera proceedings or request disclosure of the matters revealed to the judge, did not ask for an opportunity to rebut anything that might have been said, and did not object to the court's consideration of matters disclosed during the in camera proceeding in making its ultimate ruling. ⁴

        [119 Cal.App.3d 781] After plaintiffs called Mr. Copp as a witness (without objection) and during the course of his direct examination, Ford twice moved orally to depose Mr. Copp before he continued with his testimony. The court denied the motions as untimely and on the further ground that Ford would not be prejudiced by lack of prior opportunity to depose the witness in light of its broad power to cross-examine him.

        Ford contends that the court should have barred Mr. Copp from testifying because of plaintiffs' failure to disclose his identity during pretrial discovery or, at the very least, that the court abused its discretion in denying Ford's motion to depose him before he testified. The contentions lack merit.

        A party can be compelled to identify the experts whom he contemplates calling as witnesses and such experts may, upon good cause shown, be deposed by the other party. (Bolles v. Superior Court, 15 Cal.App.3d 962, 963, 93 Cal.Rptr. 719; Scotsman Mfg. Co. v. Superior Court, 242 Cal.App.2d 527, 530-532, 51 Cal.Rptr. 511; Swartzman v. Superior Court, 231 Cal.App.2d 195, 204, 41 Cal.Rptr. 721; Louisell & Walley, Modern Cal. Discovery (2d ed.) § 5.12, p. 337.) A party can also be compelled at an appropriate stage of the proceedings before trial to elect whether or not he will call as a witness an expert with whom he has consulted in trial preparation and to disclose his election to his adversary. (Sanders v. Superior Court, 34 Cal.App.3d 270, 279-280, 109 Cal.Rptr. 770.) If the party elects to call the expert as a witness, the opposing party should be granted a reasonable time within which to conduct appropriate additional discovery. (Id., at p. 279, 109 Cal.Rptr. 770.)

        Willful failure to disclose the identity of an expert whom the party intends to call as a witness may justify exclusion of his testimony. (Thoren v. Johnston & Washer, 29 Cal.App.3d 270, 274-275, 105 Cal.Rptr. 276; Code Civ.Proc., § 2019, subd. (b), § 2034, subd. [119 Cal.App.3d 782] (b).) However, where it appears that a decision to call a new and different expert is made after the response to a compelled election and was not willfully delayed in violation of the spirit of the discovery rules, the failure to exclude such expert's testimony is not an abuse of discretion. (Rangel v. Graybar Electric Co., 70 Cal.App.3d 943, 948, 139 Cal.Rptr. 191; see Deyo v. Kilbourne, 84 Cal.App.3d 771, 780, fn. 4, 149 Cal.Rptr. 499; Powers, A Guide to Interrogatories in California Practice, 48 So.Cal.L.Rev. 1221, 1256-1257.) It has been said that interrogatories should not be permitted to be used as a trap "pinning a party for all times to an answer intended to reflect

Page 365

only that party's knowledge as of the date of the answer." (Id., 70 Cal.App.3d at p. 949, 139 Cal.Rptr. 191; see Singer v. Superior Court, 54 Cal.2d 318, 324-326, 5 Cal.Rptr. 697, 353 P.2d 305; Powers, supra.)

        In the present case, the evidence discloses the following chronology of events respecting identification of plaintiff's expert witnesses. Plaintiffs' responses to Ford's demand for the names of the experts and to codefendant Wilson-Ford's motion to compel election were filed before January 10, 1977. The responses listed the experts and added: "Plaintiff is presently engaging in trial preparation which includes extensive additional investigation into Ford Pinto, which may lead to additional expert witnesses." Plaintiffs' counsel met Mr. Copp for the first time on January 18, 1977, and learned of his potential availability as a witness.

        Whether there has been a willful failure to disclose the identity of an expert witness is a matter to be determined by the trial court and its finding will not be disturbed unless it is so lacking in evidentiary support or is so arbitrary as to constitute an abuse of discretion. (Rangel v. Graybar Electric Co., supra, 70 Cal.App.3d 943, 948, 139 Cal.Rptr. 191; see also Fairfield v. Superior Court, 246 Cal.App.2d 113, 118-121, 54 Cal.Rptr. 721.) The trial court found that plaintiffs' responses to Ford's demand for a list of the expert witnesses and to codefendant's motion for election contained a full, accurate, and complete list of persons then known to plaintiffs who would be called; that the person whose identity Ford was seeking was "acquired" by plaintiffs after defendant's last request for a list of experts; and that Ford had ample opportunity through pretrial discovery to learn the name of plaintiffs' additional expert and to depose him. As we explain below, there is substantial evidentiary support for those findings.

        That the first contact between plaintiffs' attorneys and Mr. Copp occurred on January 18, 1977, was confirmed by Mr. Copp's testimony [119 Cal.App.3d 783] and was and is unchallenged by Ford. Plaintiffs' response made it clear to defendant that the experts listed were those then known to plaintiffs, that plaintiffs were continuing a nationwide investigation and that other experts might be discovered. Thus, defendant can be said to have been on notice that plaintiffs' investigatory work might uncover additional witnesses. Defendant's brief suggests that plaintiffs had a burden to give them notice of any expert witnesses found after the election had been made. However, because defendant's interrogatories were not continuing, plaintiffs had no obligation under the then existing law to update the list as additional experts were found who might be called as witnesses. ⁵ There was also evidence that early disclosure of the witness' identity might have subjected him to harassment and rendered him unavailable to plaintiffs. There was thus ample evidentiary support for the implied finding that there had been no willful suppression of Mr. Copp's identity as a potential expert witness. There was also evidence to support the finding that defendants had ample opportunity through pretrial discovery to ascertain Mr. Copp's identity and to depose him. There was indication that Ford's counsel knew as early as June 1977 that Mr. Copp might be a witness for plaintiffs.

Page 366

That Ford's oral motion was for the disclosure of any former "disgruntled" Ford employee who might be called as plaintiffs' witness and that Ford's motion was made only after and in apparent response to one made by plaintiffs for the disclosure of a possible Ford witness suggest that Ford knew the identity of the witness. ⁶

        [119 Cal.App.3d 784] Ford complains that, because the trial court's ruling was based on evidence taken at the in camera proceeding from which Ford was excluded, the ruling violated Ford's due process right and constituted reversible error per se. No authorities are cited to support this contention and we find none. By its failure to object to the in camera proceeding, or to the court's consideration of matters revealed in camera, or to request an opportunity to respond thereto, Ford waived its right to assert that the proceedings were improper. Procedural irregularities or erroneous rulings in connection with the relief sought or defenses asserted will not be considered on appeal where a timely objection could have been made but was not made in the court below. (Bardessono v. Michels, 3 Cal.3d 780, 794, 91 Cal.Rptr. 760, 478 P.2d 480; Nanny v. Ruby Lighting Corp., 108 Cal.App.2d 856, 859, 239 P.2d 885. 6 Witkin, Cal. Procedure (2d ed.) Appeal., § 276, pp. 4264-4265.) The rationale for this rule was aptly explained in Sommer v. Martin, 55 Cal.App. 603 at page 610, 204 P. 33 (quoting the following passage from 1 Hayne on New Trial & Appeal, § 103): " 'In the hurry of the trial many things may be, and are, overlooked which would readily have been rectified had attention been called to them. The law casts upon the party the duty of looking after his legal rights and of calling the judge's attention to any infringement of them. If any other rule were to obtain, the party would in most cases be careful to be silent as to his objections until it would be too late to obviate them, and the result would be that few judgments would stand the test of an appeal.' "

        Turning to Ford's motions to depose Mr. Copp before he continued with his direct testimony, we find no abuse of discretion in the court's rulings. The right to conduct discovery "within 30 days before trial" is within the sound discretion of the trial court and in exercising its discretion the court is required to take into consideration the necessity and reasons for such discovery, the diligence or lack of diligence of the party seeking such discovery and his reasons for not having completed[119 Cal.App.3d 785] his discovery prior to 30 days before trial, whether permitting such discovery will prevent the case from going to trial on the day set or otherwise interfere with the trial calendar or result in prejudice to any party, and any other matter relevant to the request. (Cal. Rules of Court, rule 222; 4 Witkin, Cal. Procedure (2d ed.) Trial, § 49, p. 2889.) The court was justified in denying Ford's motions for its failure to exercise due diligence and because the granting of the motions would have caused an undue interruption in the orderly progression of the trial.)

(2) Copp's Testimony Concerning The Reasons For His Termination By Ford:

        On direct examination, Mr. Copp testified to his employment history with Ford, including positions he held with the company in the United States and England and the date on which he left Ford. He testified he

Page 367

was forced to take an early retirement and, over defendant's objection, was permitted to explain that this was because he spoke out on matters of safety. The court ruled that evidence of the circumstances under which Mr. Copp left Ford was admissible because it bore upon his credibility and was necessary to enable the jury to understand and evaluate his testimony.

        Ford maintains that the evidence was inadmissible on direct examination because the witness' credibility had not yet been challenged and that Ford was prejudiced by the erroneous ruling because it was compelled to cross-examine Mr. Copp concerning the reasons for his termination, in turn enabling plaintiffs to introduce prejudicial rehabilitation testimony not otherwise admissible. Ford relies on the general proposition that evidence to support the credibility of a witness is inadmissible until there has been an attempt to impeach; that until a witness' credibility has been attacked, there is nothing to rehabilitate. (People v. Sweeney, 55 Cal.2d 27, 39, 9 Cal.Rptr. 793, 357 P.2d 1049; Witkin, Cal. Evidence, § 1276, p. 1180; Jefferson, Cal. Evidence Benchbook, § 28.14, pp. 488-489, 492-493. See Evid.Code, §§ 790, 791.)

        If the court's ruling was proper under any theory, however, it must be upheld. A ruling correct in law will not be disturbed on appeal simply because given for a wrong reason; if right on any applicable theory of law, it must be sustained. (D'Amico v. Board of Medical Examiners,[119 Cal.App.3d 786] 11 Cal.3d 1, 19, 112 Cal.Rptr. 786, 520 P.2d 10.) The principle applies to evidentiary rulings. (Wilcox v. Berry, 32 Cal.2d 189, 192, 195 P.2d 414; Davey v. Southern Pacific Co., 116 Cal. 325, 329, 48 P. 117; Southers v. Savage, 191 Cal.App.2d 100, 105, 12 Cal.Rptr. 470.) Assuming that enhancing the witness' credibility was not a valid independent basis for the court's ruling, the evidence was nevertheless admissible (1) because it went to the witness' qualification as an expert and (2) because it was relevant to the issue of malice on Grimshaw's claim for punitive damages.

        A party offering an expert witness is entitled to examine him "as to his qualifications and experience so that the full weight to be accorded his testimony will become apparent." (Moore v. Belt, 34 Cal.2d 525, 532, 212 P.2d 509; Salmon v. Rathjens, 152 Cal. 290, 299, 92 P. 733.) Such examination "should not be limited by narrow and stringent rules." (Eble v. Peluso, 80 Cal.App.2d 154, 156-157, 181 P.2d 680.) It was therefore within the court's discretion to permit plaintiffs to elicit from Mr. Copp testimony as to when he left Ford and why. Evidence as to why he left Ford was part of the background information concerning the witness' professional experience which would assist the fact finder in determining the weight to be given to his testimony. While the evidence may also have tended to enhance the witness' credibility, the purpose of permitting a party producing an expert to question him as to his educational background, training, and experience in his area of expertise is not only to establish "the competency of the witness to the satisfaction of the court, but also for the purpose of making plain the strength of the witness's (sic) grounds of knowledge and the reason for trusting his belief." (Salmon v. Rathjens, supra, 152 Cal. 290, 299, 92 P. 733; 2 Wigmore, Evidence (Chadbourne Rev. 1979) §§ 562(2), 655, pp. 759-760, 884-886.) Therefore, the fact that the evidence may have enhanced the witness' credibility did not render it inadmissible.

        Additionally, the circumstances surrounding Mr. Copp's termination were relevant to the issue of malice on the claim for punitive damages. "(A) ll relevant evidence is admissible" except as otherwise provided by statute. (Evid.Code, § 351.) Relevant evidence means evidence "having any tendency in reason to prove or disprove any disputed fact that is of consequence to the determination of the action." (Evid.Code, § 210.) [119 Cal.App.3d 787] The general test of relevancy is whether the evidence tends logically, naturally and by reasonable inference to establish a material fact. (People v. Warner, 270 Cal.App.2d 900, 907, 76 Cal.Rptr. 160.) "Evidence tends 'in reason' to prove a

Page 368

fact when 'the evidence offered renders the desired inference more probable than it would be without the evidence.' (Citations.) Evidence is relevant not only when it tends to prove or disprove the precise fact in issue but when it tends to establish a fact from which the existence or nonexistence of the fact in issue can be directly inferred. (Citations.) The trial court is vested with wide discretion in deciding relevancy." (Id., at pp. 907-908, 76 Cal.Rptr. 160, emphasis deleted; People v. Green, 27 Cal.3d 1, 19, 164 Cal.Rptr. 1, 609 P.2d 468; Cramer v. Morrison, 88 Cal.App.3d 873, 879, 153 Cal.Rptr. 865.) Circumstantial evidence is admissible to establish motive, knowledge or state of mind since direct evidence on such facts is rarely available. (Neal v. Farmers Ins. Exchange, 21 Cal.3d 910, 923, fn. 6, 148 Cal.Rptr. 389, 582 P.2d 980; Bertero v. National General Corp., 13 Cal.3d 43, 66, 118 Cal.Rptr. 184, 529 P.2d 608.) The fact that Ford fired a high ranking engineering executive for advocating automotive safety was indicative of Ford management's attitude towards safety in automobile production and was thus relevant to the issue of malice. It had a tendency in reason to prove that Ford's failure to correct the Pinto's fuel system design defects, despite knowledge of their existence, was deliberate and calculated. Ford's argument that firing Mr. Copp in 1976 for speaking out on safety does not reasonably tend to show that Ford disregarded safety in designing the Pinto some five years earlier lacks merit. The evidence was not that Mr. Copp first took his stand on safety in 1976; he testified that he had been outspoken on auto safety during all the many years he worked for Ford.

        Ford complains that since Mr. Copp was permitted to testify to the circumstances surrounding his termination, Ford was compelled to cross-examine him to show that the reason for his dismissal was unexplained absences from work and unsatisfactory work performance; that if the court had not permitted Mr. Copp to give his version of the reason for termination, Ford would have had little or no reason to examine him about his retirement and plaintiffs would not have been able to adduce rehabilitation testimony highly prejudicial to Ford. The record discloses that Mr. Copp testified only briefly concerning the circumstances of his early retirement from Ford but that on cross-examination [119 Cal.App.3d 788] Ford engaged in extensive questioning to show that the reason for his termination was not his safety views but unsatisfactory work and absenteeism. Plaintiffs thereafter introduced rehabilitating testimony. Mr. Copp was permitted to testify to his campaign for automotive safety during his entire period of employment with Ford, including a conversation he had with Henry Ford II on the subject, his testimony before a United States Senate Committee concerning the Chevrolet Corvair's unsafe design and his role in exposing Ford's conduct in connection with the emission control program. Ford argues that but for the court's erroneous initial ruling and its consequent cross-examination on the reason for Mr. Copp's retirement, the damaging rehabilitation evidence would not have come in. Since we find no error in the court's initial ruling and since Ford has not advanced any independent reason why the rehabilitating evidence should have been excluded, Ford's complaint concerning the prejudicial nature of that evidence must be rejected.

(3) Mr. Copp's Testimony Concerning Matters Relied Upon In Forming His Opinion:

        Ford complains that the court erroneously permitted Mr. Copp to testify on direct examination to the contents of the literature, reports and tests on which he relied in forming his opinions. Ford cites five such instances: Testimony concerning examples of vehicles meeting a 50-mile-per-hour moving barrier test without fuel tank rupture and fire; testimony that field reports proved over-the-axle fuel tank position to be superior in design; testimony about a proposal United States Steel Co. made to Ford concerning a bladder within a tank; testimony that he based his opinion that a bladder within a tank was feasible in 1969 and 1970 on the fact that Ford had started

Page 369

testing such a device in 1967 and that United States Steel had successfully built such a tank that withstood up to 30-miles-per-hour fixed barrier crash tests without puncturing; and testimony that during his career he had seen the results of several hundred over-the-axle tests published in journals and that there was not one reported fuel tank failure in any of them regardless of the speed of the tests. Ford contends that in the cited instances Mr. Copp was permitted to testify concerning details of the hearsay matters on which he relied in forming his opinion.

        While an expert may state on direct examination the matters on which he relied in forming his opinion, he may not testify as to the [119 Cal.App.3d 789] details of such matters if they are otherwise inadmissible. (People v. La Macchia, 41 Cal.2d 738, 744-745, 264 P.2d 15, overruled on other grounds in County of Los Angeles v. Faus, 48 Cal.2d 672, 680, 312 P.2d 680; Baily v. Kreutzmann, 141 Cal. 519, 521-522, 75 P. 104; Intoximeters, Inc. v. Younger, 53 Cal.App.3d 262, 273, 125 Cal.Rptr. 864; Furtado v. Montecello Unified Sch. Dist., 206 Cal.App.2d 72, 79-80, 23 Cal.Rptr. 476; People v. Nahabedian, 171 Cal.App.2d 302, 310-311, 340 P.2d 1053.) The rule rests on the rationale that while an expert may give reasons on direct examination for his opinions, including the matters he considered in forming them, he may not under the guise of reasons bring before the jury incompetent hearsay evidence. (People v. La Macchia, supra, 41 Cal.2d 738, 264 P.2d 15.) Ordinarily, the use of a limiting instruction that matters on which an expert based his opinion are admitted only to show the basis of the opinion and not for the truth of the matter cures any hearsay problem involved but in aggravated situations, where hearsay evidence is recited in detail, a limiting instruction may not remedy the problem. (Evid.Code, §§ 352, 355; see Conservatorship of Buchanan, 78 Cal.App.3d 281, 289, 144 Cal.Rptr. 241; Kelley v. Bailey, 189 Cal.App.2d 728, 738, 11 Cal.Rptr. 448; see also Adkins v. Brett, 184 Cal. 252, 258, 193 P. 251.) The court is not required to give such limiting instructions sua sponte. (Evid.Code, § 355; Kelley v. Bailey, supra, 189 Cal.App.2d 728, 738, 11 Cal.Rptr. 448; see e. g., People v. Richards, 17 Cal.3d 614, 618-619, 131 Cal.Rptr. 537, 552 P.2d 97.) Mr. Copp was not permitted to testify concerning the details of the hearsay matters on which he relied in forming his opinion.

        In the instant case, the record shows that in at least three of the instances cited by Ford, it made no objection on the ground now asserted on appeal. In addition, most of the matters to which Mr. Copp referred were within his personal knowledge and experience. When Mr. Copp was permitted to testify to the matters on which he based his opinion that the bladder within a tank was feasible, the judge gave the jury a proper limiting instruction at Ford's request. Ford would have been entitled to like limiting instructions in other instances had it made such requests but it did not do so. Finally, in no instance was Mr. Copp permitted to read the reports or documents to which he referred or relate their contents in specific detail. In light of these circumstances, we conclude that the court did not commit reversible error in the cited instances where the expert was permitted to testify to the matters he considered in forming his opinions.

[119 Cal.App.3d 790]

II

        Ford contends that the court erroneously admitted irrelevant documentary evidence highly prejudicial to Ford. We find the contention to be without merit.

(1) Exhibit No. 125:

        Exhibit No. 125 was a report presented at a Ford production review meeting in April 1971, recommending action to be taken in anticipation of the promulgation of federal standards on fuel system integrity. The report recommended, inter alia, deferral from 1974 to 1976 of the adoption of "flak suits" or "bladders" in all Ford cars, including the Pinto, in order to realize a savings of $20.9 million. The report stated that the cost of the flak suit or

Page 370

bladder would be $4 to $8 per car. The meeting at which the report was presented was chaired by Vice President Harold MacDonald and attended by Vice President Robert Alexander and occurred sometime before the 1972 Pinto was placed on the market. A reasonable inference may be drawn from the evidence that despite management's knowledge that the Pinto's fuel system could be made safe at a cost of but $4 to $8 per car, it decided to defer corrective measures to save money and enhance profits. The evidence was thus highly relevant and properly received. (See Evid.Code §§ 210, 351.)

        Ford's contention appears to be addressed not so much to the admissibility of Exhibit No. 125 but to the use which Grimshaw's counsel made of it in his argument to the jury. Ford complains that while Exhibit No. 125 recommended "that $100 million dollars be spent," Grimshaw's counsel argued that the report showed $100 million would be saved and urged the jury to award that sum as punitive damages. It is not clear that Exhibit No. 125 recommended that "$100 million be spent"; it states that over the period 1973 to 1976 the cost estimates to meet the federal standards would be $100 million. Nor is the record clear that Grimshaw's counsel was referring to Exhibit No. 125 when he urged the jury to award punitive damages in the sum of $100 million. In any event, Ford failed to object to counsel's argument as a misstatement of the evidence. In the absence of an objection and a request for admonition where an admonition would have cured the harm, the issue may not be raised on appeal. (Horn v. Atchison, T. & S.F. Ry. Co., 61 [119 Cal.App.3d 791] Cal.2d 602, 610, 39 Cal.Rptr. 721, 394 P.2d 561, cert. den. Atchison T. & S.F. Ry. Co. v. Horn, 380 U.S. 909, 85 S.Ct. 892, 13 L.Ed.2d 796; Brokopp v. Ford Motor Co., 71 Cal.App.3d 841, 859-860, 139 Cal.Rptr. 888.)

(2) Exhibits Nos. 95 and 122 :

        Ford urges that a report (Exhibit No. 95) and a motion picture depicting Ford's crash test No. 1616 (Exhibit No. 122) should have been excluded because they were irrelevant and highly prejudicial to Ford in that they showed that in a 21.5-mile-per-hour crash of a 1971 Pinto prototype into a fixed barrier the filler neck of the fuel tank separated allowing fluid to spill from the tank, whereas no such filler neck separation occurred in the Gray vehicle. Under the test for ascertaining relevancy of evidence to which we have previously alluded, we find no abuse of discretion in the court's ruling. Not only did the filler neck separation show the vulnerability of the Pinto fuel system in a 21.5-mile-per-hour fixed barrier test, but crash test No. 1616, as Ford conceded, resulted in a puncture of the fuel tank from the exposed bolt heads on the differential housing. Thus, the exhibits showed the defect in the Pinto's gas tank location and design, the hazard created by the protrusions on the differential housing, and, in addition, they served as evidence of Ford's awareness of those defects. Exhibits Nos. 95 and 122 were properly received in evidence.

(3) Exhibit No. 82 :

        Ford contends admission into evidence over its objection of a report known as the "Chiara memorandum" (Plaintiffs' Exhibit No. 82) was error. The report, dated February 1971, was a Ford engineering study of the costs of a proposal for a fuel tank over the axle and a tank within a tank for a Ford-Mercury automobile. Ford argues that the study was irrelevant because it pertained to an entirely different car to be built four years later. Mr. Copp testified, however, that the information in the study could be applied equally to the Pinto. The study showed that the cost of placing the gas tank over the axle with protective shield was about $10 and that a tank within a tank with polyurethane foam between tanks would have cost about $5. Whether the probative value of the evidence was outweighed by the danger of undue prejudice was a matter for the trial judge. (Evid.Code, § 352; e. g., Cramer v. Morrison, supra, 88 Cal.App.3d 873, 884-885, 153 Cal.Rptr. 865; Celli v. Sports Car Club of America, Inc., 29 Cal.App.3d 511,

Page 371

522, 105 [119 Cal.App.3d 792] Cal.Rptr. 904.) In the circumstances, we find no abuse of discretion in the judge's determination.

(4) Exclusion Of Evidence Proffered By Ford :

        Ford contends that two items which it attempted to introduce into evidence were erroneously excluded. One was a statistical study from an accident data bank maintained by the state patrol of the State of Washington. Ford sought to introduce the evidence to show that proportionately the Pinto produced no greater chance of injury or death from fire than other vehicles. The court sustained plaintiff's objections to the evidence on the ground its probative value was at best minimal whereas the prejudicial effect was substantial. In addition, the court felt that the admission of the evidence would confuse the jury and would result in undue consumption of time. (See Evid.Code, § 352; Cramer v. Morrison, supra, 88 Cal.App.3d 873, 884-885, 153 Cal.Rptr. 865; Celli v. Sports Car Club of America, Inc., supra, 29 Cal.App.3d 511, 522, 105 Cal.Rptr. 904.) We fail to find an abuse of discretion in the court's ruling.

        First, the excluded study encompassed only a small number of collisions which resulted in Pinto fires, thus rendering the sampling open to misleading inferences. Furthermore, the reliability of the field reports from which the data were extracted and fed into the computer was questionable both because of the lack of adequate instruction concerning the information requested as well as the absence of any check on the accuracy of the information provided. Finally, the report and statistics covered the period 1970-1976. Inasmuch as the Pinto underwent substantial modifications during 1973 and thereafter, the reports may not have given a true picture of the earlier versions of the Pinto.

        Ford also contends that its offer to prove that Mr. Freers, Ford's chief light car engineer, purchased a Pinto for his family when the Pinto first went on the market was erroneously refused. The record, however, fails to reflect any such offer of proof and Ford does not contend otherwise. This court is limited to reviewing matters appearing of record. (Bardessono v. Michels, supra, 3 Cal.3d 780, 784, 91 Cal.Rptr. 760, 478 P.2d 480; Nanny v. Ruby Lighting Corp., supra, 108 Cal.App.2d 856, 859, 239 P.2d 885; 6 Witkin, Cal. Procedure (2d ed.) supra, pp. 4264-4265.) Furthermore, even if an offer of proof had been made and the court had erroneously denied it, the error would not have resulted in a miscarriage of justice compelling reversal. (See 6 Witkin, Cal. Procedure (2d ed.) Appeal, § 34, p. 4287.)

[119 Cal.App.3d 793]

III

        Ford recites a litany of alleged misconduct by plaintiffs' counsel which, it urges, effectively denied it a fair trial. The charges range from alleged violations of orders in limine, to asking questions suggesting Ford had been guilty of criminal conduct in an unrelated matter, framing questions containing factual assumptions not supported by the record, to misconduct in arguments to the jury.

(1) Alleged Violations Of An Order In Limine :

        At the commencement of trial the court, on Ford's motion, made an order in limine that counsel not mention any other Pinto fires without first approaching the bench and obtaining a ruling. Ford contends that plaintiffs' counsel violated that order on two occasions and that the court erred in denying Ford's motion for a mistrial for those violations.

        The first instance pertained to a question propounded by the Grays' counsel to a highway patrol officer who investigated the accident as to whether he had ever seen a Pinto involved in an accident with a standard sized automobile and whether the Pinto burned. Ford objected and moved for a mistrial. The judge sustained Ford's objection, denied the motion for mistrial, and admonished the jury that the question was not evidence and that both question and answer should be disregarded.

Page 372

        The second instance of a charged violation of the order in limine arose out of a question Grimshaw's counsel asked Ford's engineer, Mr. Kennedy. The witness was being examined on the Pinto's vulnerability in rear-end collisions and had testified that based on performance, the Pinto had performed better than "the general population in this particular respect." Pressed for the source of his information, Mr. Kennedy admitted he was relying upon a Ford press release which he said was based on government statistics and field performance. Plaintiffs' counsel thereupon asked the witness whether he acknowledged that the following statement appeared in a governmental report: "On each occasion the Ford Pinto gas tank buckled and gas spewed forth. Fire totally gutted the vehicle. Statistics ... (record unclear) ... indicate that three such conflagrations were experienced by one rental agency in a six month period, demonstrating a clear and present hazard to all Pinto owners." Ford objected and immediately moved for a mistrial on the [119 Cal.App.3d 794] ground that the question violated the order in limine and that the subject matter of the question was prejudicial to its case. Plaintiffs' counsel argued that the question was proper because the witness had interjected statistics reportedly based on field performances and government reports to defend Pinto's performance but conceded he should have approached the bench and obtained a ruling before he asked the question. The court denied the motion for a mistrial but admonished plaintiffs' counsel that it would not hesitate to grant a mistrial if counsel did not "proceed with utmost care." In open court the judge sustained Ford's objection and admonished the jury to disregard the question and to draw no inferences from it.

        As to the first alleged violation, the record is not entirely clear concerning the intended scope of the initial in limine order. In ruling on the motion for mistrial, the judge recalled that the order was made before counsel's opening statements and was to the effect that no reference be made in the opening statements to other Pinto fires without first approaching the bench. In any event, the question could not have affected the verdict in view of the prompt admonition to the jury to disregard the question and in view of the judge's frequent admonitions throughout the trial that counsel's questions were not evidence and that no inferences were to be drawn from them. (See 4 Witkin, Cal. Procedure (2d ed.) Trial, § 164, pp. 2984-2985, and cases cited therein.)

        As to the second alleged misconduct relating to the order in limine, the question arguably may have been within the scope of proper cross-examination of the adverse expert witness but there is no doubt that failure to approach the bench before asking the question violated the ground rule which had been clarified after the first incident. The trial court, however, was in the best position to evaluate the effect of the misconduct. It made that assessment in ruling on the motion for a mistrial and later in passing on Ford's motion for a new trial in which one of the grounds was the asserted misconduct of counsel in violating the order in limine. In denying both motions, the trial judge impliedly determined that the misconduct did not result in prejudice and that the verdict was not the result, in whole or in part, of the charged misconduct. Such determinations by the trial court may not be disturbed on appeal unless they are patently wrong. (Stevens v. Parke, Davis & Co., 9 Cal.3d 51, 72, 107 Cal.Rptr. 45, 507 P.2d 653; Cope v. Davison, 30 Cal.2d 193, 203, 180 P.2d 873.) We cannot say that the trial judge's implied[119 Cal.App.3d 795] assessment of the effect of the charged misconduct on the verdict was manifestly wrong.

(2) Questions Relating To Ford's Compliance With Federal Emission Standards :

        Ford contends that plaintiffs' counsel was guilty of misconduct in attempting to get before the jury the fact that Ford had doctored its records to show compliance with federal emission standards, a subject which Ford says was irrelevant to the integrity of the Pinto's fuel system. The

Page 373

matter first came up during redirect-examination of Mr. Copp. When asked about his position relative to Ford's compliance with the federal emission standards, Mr. Copp responded that Ford maintained two computer printouts, one of which was doctored to show compliance and was used to report that fact to the government, and that he had investigated this "fraud" and called it to the attention of Ford executives. He was then asked whether this situation resulted in criminal charges against Ford. Ford objected and moved for a mistrial. The objection was sustained but the motion for mistrial was denied and the jury was admonished to disregard the question. The second time the matter came up was during plaintiff's cross-examination of Mr. Tubben, Ford's engineering expert, concerning Ford's procedure in certifying compliance with federal regulations. He was asked whether Ford kept two files in order to pass federal emission standards. Objection and a motion for mistrial ensued. The court sustained the objection but denied the mistrial.

        The questions were arguably proper in both of the above-described instances. Mr. Copp's testimony concerning the emission control matter tended to rebut Ford's evidence that Mr. Copp was fired for absenteeism and unsatisfactory performance. Cross-examination of Mr. Tubben on the subject of compliance with federal emission controls tended to impeach his testimony that the Pinto met all federal regulations. The court nevertheless sustained Ford's objections to the questions, presumably on the basis that the prejudicial effect of the evidence outweighed its probative value, but denied the mistrial motions. We find no abuse of discretion in the court's ruling denying a mistrial. There were sufficient bases for the court's implied determination that the questions were not asked in bad faith and that the admonitions to the jury would avoid the harmful effect of the questions. (See e. g., Tobler v. Chapman, 31 Cal.App.3d 568, 576-577, 107 Cal.Rptr. 614; Tellefsen v. Key System Transit Lines, 158 Cal.App.2d 243, 246-247, 322 [119 Cal.App.3d 796] P.2d 469; 4 Witkin, Cal. Procedure (2d ed.) supra, pp. 2984-2986.)

(3) The Form Of Questions Propounded By Plaintiffs' Counsel :

        Ford contends that Grimshaw's counsel repeatedly asked questions containing factual assertions not supported by the record and that this constituted misconduct requiring reversal. Ford cites questions propounded during cross-examination of Mr. Kennedy, Mr. Tubben and Ford's carburetor expert. In many of the examples cited, Ford interposed no objections; in others, the court sustained Ford's objections. More importantly, most of the questions of which Ford now complains were properly asked on cross-examination of Ford's experts. It is well established that wide latitude should be allowed in cross-examining experts on their qualifications and on the reasons given for the opinions expressed. (Evid.Code § 721; Dillenbeck v. City of Los Angeles, 69 Cal.2d 472, 482, 72 Cal.Rptr. 321, 446 P.2d 129; Laird v. T. W. Mather, Inc., 51 Cal.2d 210, 219, 331 P.2d 617; Hope v. Arrowhead & Puritas Waters, Inc., 174 Cal.App.2d 222, 230, 344 P.2d 428.) ⁷ Finally,

Page 374

in none of the instances did Ford even suggest that plaintiff's counsel was guilty of misconduct in asking the questions; it did not cite counsel for misconduct or request an admonishment. A claim of misconduct is entitled to no consideration on appeal unless the record shows a timely and proper objection and request that the jury be admonished. (E. g., Sabella v. Southern Pac. Co., 70 Cal.2d 311, 318, 74 Cal.Rptr. 534, 449 P.2d 750, cert. den. in Southern Pacific Co. v. California, 395 U.S. 960, 89 S.Ct. 2100, 23 L.Ed.2d [119 Cal.App.3d 797] 746; Horn v. Atchison, T. & S. F. Ry. Co., supra, 61 Cal.2d 602, 610, 39 Cal.Rptr. 721, 394 P.2d 561.)

        In light of the length of the trial, the thousands of questions which were asked and the complexity of the factual issues in this case, it was inevitable that some of the questions might assume facts not then in evidence. The few instances in which this may have occurred cannot be characterized as a pervasive course of misconduct. The able trial judge in the instant case did not permit the trial to degenerate into a free-for-all. He exercised firm and fair control over the conduct of the trial, made prompt evenhanded rulings on objections, admonished counsel when necessary, and constantly reminded the jury that what counsel said was not evidence. We find no misconduct of counsel or miscarriage of justice resulting from the form of the questions propounded by plaintiffs' counsel. We find nothing approaching the egregious conduct of counsel or lack of courtroom control by the judge that occurred in Love v. Wolf, 226 Cal.App.2d 378, 38 Cal.Rptr. 183, cited by Ford to support its contentions.

(4) Arguments To The Jury :

        Ford contends that counsel for Grimshaw committed prejudicial misconduct during argument to the jury by arguing matters not supported by the evidence, exaggerating, mischaracterizing experts' testimony, arguing evidence which had been excluded, and arguing evidence admitted for a limited purpose as if it had been admitted for all purposes. Ford also complains that in rebuttal argument, Mr. Robinson, arguing for Grimshaw, suggested an improper means of fixing damages.

        It is settled that misconduct of counsel in argument to the jury may not be urged for the first time on appeal absent a timely objection and request for admonition in the trial court if timely objection and admonition would have cured the harm. (Sabella v. Southern Pac. Co., supra, 70 Cal.2d 311, 318, 74 Cal.Rptr. 534, 449 P.2d 750; Horn v. Atchison, T. & S. F. Ry. Co., supra, 61 Cal.2d 602, 610, 39 Cal.Rptr. 721, 394 P.2d 561; Brokopp v. Ford Motor Co., supra, 71 Cal.App.3d 841, 859-860, 139 Cal.Rptr. 888.) Misconduct of counsel during argument may not be raised on appeal where the complaining party's counsel sat silently by during the argument, allowed the alleged improprieties to accumulate without objection, and simply made a motion for a mistrial at the conclusion of the argument. (Horn v. Atchison, T. & S. F. Ry. Co., supra, 61 Cal.2d 602, 610-611, 39 Cal.Rptr. 721, 394 P.2d 561; Brokopp v. Ford Motor Co., supra, 71 Cal.App.3d 841, 860, 139 Cal.Rptr. 888.) Recently, our high court in People v. Green, supra,[119 Cal.App.3d 798] 27 Cal.3d 1, 164 Cal.Rptr. 1, 609 P.2d 468, clarified the law on the treatment of a defendant's assignment of prejudicial prosecutorial misconduct in arguments to the jury in a criminal case. The court stated that "the initial question to be decided in all cases in which a defendant complains of prosecutorial misconduct for the first time on appeal is whether a timely objection and admonition would have cured the harm. If it would, the contention must be rejected (citation); if it would not, the court must then and only then reach the issue whether on the whole record the harm resulted in a miscarriage of justice within the meaning of the Constitution." (Id., at p. 34, 164 Cal.Rptr. 1, 609 P.2d 468. Those precepts perforce are applicable to a civil case.

Page 375

        In the case at bench, Ford failed to object to any of the matters of which it now complains during plaintiffs' arguments to the jury. During Mr. Hews' closing argument on behalf of plaintiff Grimshaw, which covers 100 pages of the Reporter's Transcript, Ford did not interpose a single objection. Nor did Ford make any objection during Mr. Rabin's closing argument on behalf of the Grays. During a recess Ford moved for a mistrial complaining of two matters to which Mr. Hews had referred during his argument: His reference to Ford's knowledge that death would result from defective and negligent design of the Pinto and his reference to a document prepared by Mr. Copp purporting to depict the "crush area" of the Pinto. The court denied the motion, noting that the reference to the document prepared by Mr. Copp but which had not been received in evidence was innocuous and that the reference to deaths as well as injuries was proper under the evidence. Significantly Ford does not now complain of the court's rulings in connection with its motion for a mistrial. Following Mr. Cox' argument on behalf of Ford, Mr. Robinson made the rebuttal argument for plaintiff Grimshaw. Ford made two objections to Robinson's argument. Ford does not assign either of these two remarks by Mr. Robinson as error or misconduct on this appeal. Thus, none of the matters of which Ford now complains were matters to which an objection was interposed and a request for admonition made in the court below. Ford is, therefore, precluded from raising the contentions of misconduct unless they were such as could not have been cured by an admonition.

        In assessing whether alleged misconduct could have been cured by admonition, a reviewing court must bear in mind the wide latitude accorded counsel in arguing his case to a jury. " ' "The right of counsel to discuss the merits of a case, both as to the law and facts, is very wide, and he has the right to state fully his views as to what the evidence[119 Cal.App.3d 799] shows, and as to the conclusions to be fairly drawn therefrom. The adverse party cannot complain if the reasoning be faulty and the deductions illogical, as such matters are ultimately for the consideration of the jury. " ' " (People v. Beivelman, 70 Cal.2d 60, 76-77, 73 Cal.Rptr. 521, 447 P.2d 913, overruled on other grounds in People v. Green, supra, 27 Cal.3d 1, 33, 164 Cal.Rptr. 1, 609 P.2d 468, quoting People v. Eggers, 30 Cal.2d 676, 693, 185 P.2d 1, and People v. Sieber, 201 Cal. 341, 355-356, 257 P. 64, disapproved on other grounds in People v. Marsh, 58 Cal.2d 732, 746, 26 Cal.Rptr. 300, 376 P.2d 300.) "Counsel may vigorously argue his case and is not limited to 'Chesterfieldian politeness.' '' (People v. Bandhauer, 66 Cal.2d 524, 529, 58 Cal.Rptr. 332, 426 P.2d 900, cert. den. in Bandhauer v. California, 389 U.S. 878, 88 S.Ct. 178, 19 L.Ed.2d 167, quoting Ballard v. United States (9th Cir. 1945) 152 F.2d 941, 943, revd. on other grounds, 329 U.S. 187, 67 S.Ct. 261, 91 L.Ed. 181.) "An attorney is permitted to argue all reasonable inferences from the evidence, ..." (Brokopp v. Ford Motor Co, supra, 71 Cal.App.3d 841, 860-861, 139 Cal.Rptr. 888.) "Only the most persuasive reasons justify handcuffing attorneys in the exercise of their advocacy within the bounds of propriety." (Beagle v. Vasold, 65 Cal.2d 166, 181-182, 53 Cal.Rptr. 129, 417 P.2d 673.)

        Ford contends that Grimshaw's counsel committed prejudicial misconduct in referring to Ford's executives meeting in the "glass house" and deciding to approve the Pinto's fuel tank design with knowledge that it was unsafe and would result in the loss of many lives. Ford argues that although there was evidence that the corporate headquarters of Ford was referred to as the "glass house" there was no evidence of management meetings held there in connection with the Pinto design. The record contains substantial evidence from which it reasonably may be inferred that Ford's management knew that the Pinto was unsafe but nevertheless decided not to alleviate the problem because of cost considerations, and thus that those decisions were made in Ford's corporate headquarters.

        Ford contends that Grimshaw's counsel improperly stated, contrary to the evidence,

Page 376

that certain facts were "undisputed" or had been "admitted." For example, Ford argues that Grimshaw's counsel misstated the evidence when he said that basically everyone who had witnessed the accident estimated the speed of the Ford Galaxie which struck the Pinto at about 30 to 40 miles-per-hour at impact. We find no unfairness or impropriety in counsel's statement. While Grimshaw thought that [119 Cal.App.3d 800] the Galaxie had been traveling faster than that before the collision, he testified that before the impact he looked forward and did not actually observe the Galaxie when it struck the Pinto. A witness who avoided colliding with the Gray vehicle testified that the Galaxie car was traveling at a higher speed at impact but he only saw the accident in his rear-view mirror. Counsel discussed that witness' testimony before making the statement of which Ford complains.

        Ford further contends that Grimshaw's counsel argued evidence that had been excluded and argued evidence received for a limited purpose as though it had been received for all purposes. It refers to Mr. Hews' statement that Mr. Copp testified that Ford engaged in cost-benefit analyses and that there was "plenty of documentation for it." Ford argues that the documentation referred to by Mr. Copp the "Grush-Saunby Report" was excluded from evidence so that the statement was improper. However, there was other documentation which illustrated the fact that cost considerations caused Ford to delay incorporating safety features in the fuel tank system of its cars despite the knowledge that there was a need for such improvements. Furthermore, Mr. Copp was permitted to testify that Ford did in fact engage in cost-benefit analyses which balanced life and limb against corporate savings and profits.

        Ford assigns a number of other remarks by Grimshaw's counsel as misstatements of the evidence or exaggerations or mischaracterization of testimony. No useful purpose would be served by detailing them. We have examined the record and find that in each of the instances of which Ford complains, the argument was within the bounds of propriety. More importantly, having failed to object below, it was incumbent upon Ford to demonstrate that the claimed improprieties were such that a prompt objection and admonition to the jury would not have corrected the error. Ford has utterly failed to show that in any of the specific instances of claimed misconduct, that an objection and admonition would not have remedied the situation.

        Ford complains of instructional errors on design defect and superseding cause.

[119 Cal.App.3d 801] (1) Design Defects :

        Some two weeks before this case went to the jury, the Supreme Court in Barker v. Lull Engineering Co., 20 Cal.3d 413, 143 Cal.Rptr. 225, 573 P.2d 443, formulated the following "two-pronged" definition of design defect, embodying the "consumer expectation" standard and "risk-benefit" test: "First, a product may be found defective in design if the plaintiff establishes that the product failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner. Second, a product may alternatively be found defective in design if the plaintiff demonstrates that the product's design proximately caused his injury and the defendant fails to establish, in light of the relevant factors, that, on balance, the benefits of the challenged design outweigh the risk of danger inherent in such design." (Id., at p. 432, 143 Cal.Rptr. 225, 573, P.2d 443.) The "relevant factors" which a jury may consider in applying the Barker "risk-benefit" standard include "the gravity of the danger posed by the challenged design, the likelihood that such danger would occur, the mechanical feasibility of a safer alternative design, the financial cost of an improved design, and the adverse consequences to the product and to the consumer that would result from an alternative design." (Id., at p. 431, 143 Cal.Rptr. 225, 573 P.2d 443.) Under the risk-benefit test, once the plaintiff makes a prima facie showing

Page 377

that the injury was proximately caused by the product's design, the burden shifts "to the defendant to prove, in light of the relevant factors, that the product is not defective." (Id., at p. 431, 143 Cal.Rptr. 225, 573 P.2d 443.)

        Ford requested two instructions purporting to set out the Barker tests for design defect, ⁸ but the court gave only the following instruction: "A product is defective in design if the product has failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner." Ford complains that the failure to give the balance of the other requested instruction constituted [119 Cal.App.3d 802] prejudicial error. For the reasons set out below, we conclude that the contention lacks merit.

        Initially, Barker does not mandate a jury instruction on both prongs of the tests in a design defect case. The Barker court referred to the two standards for evaluating design defect as "alternative tests" and in its suggested instruction phrased the tests in the disjunctive. ⁹ (Id., at p. 435, 143 Cal.Rptr. 225, 573 P.2d 443.) The court stated that the alternative risk-benefit prong of the Barker test was designed to aid the injured party in establishing design defects because " '(i)n many situations ... the consumer would not know what to expect, because he would have no idea how safe the product could be made.' " (Barker v. Lull Engineering Co., supra, 20 Cal.3d 413, 430, 143 Cal.Rptr. 225, 573 P.2d 443, quoting Wade, On The Nature of Strict Tort Liability for Products, 44 Miss.L.J. 825, 829; Levy & Ursin, Tort Law in California: At the Crossroads, 67 Cal.L.Rev. 497, 503.) The court referred to the fact that numerous California decisions have recognized this fact by making it clear "(t)hat a product may be found defective in design even if it satisfies ordinary consumer expectations, if through hindsight the jury determines that the product's design embodies 'excessive preventable danger,' or, in other words, if the jury finds that the risk of danger inherent in the challenged design outweighs the benefits of such design." (Id., at p. 430, 143 Cal.Rptr. 225, 573 P.2d 443.) Thus, the risk-benefit test was formulated primarily to aid injured persons. The instant case was submitted solely on the consumer expectation standard because the trial had been virtually completed before the Barker decision was rendered in which our high court for the first time articulated the risk-benefit standard of design defect.

        Ford therefore cannot complain of the failure to instruct on the risk-benefit test. Indeed, had the risk-benefit prong of the design defect instruction as formulated in Barker been given, Ford would have been entitled to complain of prejudice. The instruction provides that a product is defective in design if "plaintiff proves that the product's design proximately caused his injury and the defendant fails to prove, ...

Page 378

that [119 Cal.App.3d 803] on balance the benefits of the challenged design outweigh the risk of danger inherent in such design." (Id., at p. 435, 143 Cal.Rptr. 225, 573 P.2d 443, emphasis supplied.) Had the jury been so instructed, Ford could have justifiably claimed prejudice because the case had not been tried on the assumption that under a risk-benefit analysis Ford had the burden of proving that the product was not defective.

        Finally, even had it been proper to instruct on the risk-benefit test, Ford's requested version of the standard was defective in two important respects. First it omitted the crucial element of the manufacturer's burden of proof in the risk-benefit posture. Nor did Ford offer a separate instruction covering the subject of the burden of proof. Second, the proposed instruction erroneously included among the "relevant factors," "the extent to which its (Pinto's) design and manufacture matched the average quality of other automobiles and the extent to which its design and manufacture deviated from the norm for automobiles designed and manufactured at the same point in time." In a strict products liability case, industry custom or usage is irrelevant to the issue of defect. (Titus v. Bethlehem Steel Corp., 91 Cal.App.3d 372, 154 Cal.Rptr. 122; Foglio v. Western Auto Supply, 56 Cal.App.3d 470, 477, 128 Cal.Rptr. 545; see Cronin v. J. B. E. Olson Corp., 8 Cal.3d 121, 133-134, 104 Cal.Rptr. 433, 501 P.2d 1153.) The Barker court's enumeration of factors which may be considered under the risk-benefit test not only fails to mention custom or usage in the industry, the court otherwise makes clear by implication that they are inappropriate considerations. Barker contrasts the risk-benefit strict liability test with a negligent design action, stating that "the jury's focus is properly directed to the condition of the product itself, and not to the reasonableness of the manufacturer's conduct. (Citations.) (P) Thus, (the court explains) the fact that the manufacturer took reasonable precautions in an attempt to design a safe product or otherwise acted as a reasonably prudent manufacturer would have under the circumstances, while perhaps absolving the manufacturer of liability under a negligence theory, will not preclude the imposition of liability under strict liability principles if, upon hindsight, the trier of fact concludes that the product's design is unsafe to consumers, users, or bystanders. (See Foglio v. Western Auto Supply, supra, 56 Cal.App.3d 470, 477, 128 Cal.Rptr. 545.)" (Barker v. Lull Engineering Co., supra, 20 Cal.3d 413, 434, 143 Cal.Rptr. 225, 573 P.2d 443.) In Foglio, we held that an instruction permitting the jury in a strict products liability case to consider industry custom or practice in determining whether a design defect existed constituted error.

        [119 Cal.App.3d 804] For the reasons stated above, the other instructions Ford requested which would have permitted the jury to consider custom or usage in the trade in determining whether a design defect existed were also properly refused. ¹⁰

(2) Superseding Causes :

        Ford requested the following instruction on superseding cause: "If you find that the gasoline tank in the 1972 Pinto automobile was improperly located or protected but that the fire would have occurred even if the tank had been properly located or protected, its location or protection was not a substantial factor in bringing about the fire

Page 379

and was, therefore, not a contributing cause thereof." Instead, the court gave the following instruction: "If you find that the defects alleged to exist in the 1972 Pinto did in fact exist but that the fire and resulting injuries would have occurred even if the defects did not exist, the defects were not a substantial factor in bringing about the fire and therefore were not contributing factors to the resulting injuries." Ford assigns the refusal of its instruction and the giving of the other instruction as error.

        Ford contends that one of its defenses to the claims based on the design of the fuel tank and its location and protection was that the impact speed was so great that the fuel tank rupture and fire would have occurred without regard to the location and protection of the fuel tank. It concedes that defense would have been of no avail as to compensatory damages had the jury found that the Pinto stalled on the freeway because of a carburetor defect but that it could have been a defense to punitive damages because that claim rested entirely on Ford's conduct with respect to the fuel tank's design, position and protection. Ford argues that its proffered instruction was "accurate and complete" and tailored to fit its defense based on the fuel tank location and protection [119 Cal.App.3d 805] and that the instruction given by the court, using the word "defects" instead of the precise claimed defects pertaining to the fuel tank, effectively eliminated Ford's superseding cause defense as to the fuel tank. It argues that under the instruction as given if the jury found only that the carburetor was defective and was a substantial cause of the fire, then it could conclude that all of the claimed defects were substantial causes of the fire and that no superseding cause had intervened. We find no merit in the contentions.

        Initially, we note that Ford's proffered instruction was not "accurate and complete." One of the major defects which plaintiffs claimed caused the fire in the interior of the vehicle was the susceptibility of the rear wheel wells to separate from the floor pan. There was substantial evidence to support a finding that such defect existed. Ford's instruction failed completely to take this major defect into account. Second, Ford's argument that use of the word "defect" in the instruction given by the court permitted the jury to conclude that if it found that a defective carburetor was a substantial factor in causing the fire, the other alleged defects relating to location of the fuel tank and the rear structure of the car were then also substantial causes of the fire is such a strained and obscure interpretation that it could not have been indulged by any reasonable juror. None of the attorneys attempted to interpret the instruction in the manner now suggested by Ford. Indeed, argument of counsel on both sides made it clear that the only "defects" referred to in the instruction on superseding cause were those involving the gasoline tank and rear structure of the vehicle, not the carburetor.

        Ford's reliance on Self v. General Motors Corp., 42 Cal.App.3d 1, 116 Cal.Rptr. 575, for its contention that the court's instruction was inadequate is misplaced. In Self, the trial court failed to give any instruction on superseding cause and the reviewing court held that the failure to give the superseding cause instruction proffered by the defendant was error. (Id., at pp. 10-11, 116 Cal.Rptr. 575.) Here the court refused Ford's version of a superseding cause instruction but gave its own which adequately covered the subject. A party has the right to have the jury instructed on his theory of the case but does not have the right to require his phraseology; the court may modify an instruction or give an instruction of its own in lieu of the one offered provided it correctly instructs the jury on the issue. (Johns v. Ward, 170 Cal.App.2d 780, 789, 339 P.2d 926; 4 Witkin, Cal. Procedure (2d ed.) Trial, § 193, p. 3013, and cases cited therein.)

[119 Cal.App.3d 806]

V

        Ford contends that the judgment should be reversed for jury misconduct. This was one of Ford's grounds for a motion

Page 380

for new trial. It filed declarations by its attorneys, Juror Irene Miller, her husband, Juror Goldie Woods and Juror Wilford Colmar. Jurors Woods and Colmar had been excused during trial. The misconduct charged by Juror Miller, her husband and Juror Woods was directed against Juror Dorothy Canfield. The declaration of Juror Colemar stated that he had possibly mentioned to other jurors that he had seen severe burns in World War II and thought that viewing slides of Grimshaw's burns would not bother him but that he was wrong. The declarations by Ford's attorneys said they had interviewed Juror Canfield and that the interview corroborated the charges made by Juror Irene Miller. Plaintiffs filed declarations by Juror Canfield, her husband and 10 other jurors and alternates refuting the charges made in the declarations filed by Ford. We have reviewed all of the declarations and find that the opposing declarations controvert the substance of all of the charges of misconduct, either specifically or by reasonable inferences which may be drawn from the facts alleged in the declarations. As to Juror Colemar's declaration, we fail to see how Ford was prejudiced by his statement that he had seen burn victims during World War II or by his statement that he did not think he would be affected by viewing the Grimshaw slides but was apparently mistaken. The ghastly nature of the burns suffered by Grimshaw was graphically demonstrated by the evidence and was apparent to all the jurors.

        In denying Ford's motion for a new trial, the trial court impliedly resolved all conflicts in the declarations in favor of plaintiffs. (Weathers v. Kaiser Foundation Hospitals, 5 Cal.3d 98, 108, 95 Cal.Rptr. 516, 485 P.2d 1132.) " 'When an issue is tried on affidavits ... and where there is substantial conflict in the facts stated, a determination of the controverted facts by the trial court will not be disturbed.' " (Id., at p. 108, 95 Cal.Rptr. 516, 485 P.2d 1132, quoting Lynch v. Spilman, 67 Cal.2d 251, 259, 62 Cal.Rptr. 12, 431 P.2d 636.) It is not our function as a reviewing court to reweigh the evidence, resolve conflicting evidence and inferences, or to judge the credibility of the witnesses. (Aceves v. Regal Pale Brewing Co., supra, 24 Cal.3d 502, 507, 156 Cal.Rptr. 41, 595 P.2d 619; Nestle v. City of Santa Monica, supra, 6 Cal.3d 920, 925, 101 Cal.Rptr. 568, 496 P.2d 480.) We find no merit in Ford's jury misconduct contention.

[119 Cal.App.3d 807]

VI

        Ford contends that it was entitled to a judgment notwithstanding the verdict on the issue of punitive damages on two grounds: First, punitive damages are statutorily and constitutionally impermissible in a design defect case; second, there was no evidentiary support for a finding of malice or of corporate responsibility for malice. In any event, Ford maintains that the punitive damage award must be reversed because of erroneous instructions and excessiveness of the award.

(1) "Malice" Under Civil Code Section 3294:

        The concept of punitive damages is rooted in the English common law and is a settled principle of the common law of this country. (Owen, Punitive Damages in Products Liability Litigation, 74 Mich.L.Rev. 1258, 1262-1263 (hereafter Owen); Mallor & Roberts, Punitive Damages, Towards A Principled Approach, 31 Hastings L.J. 639, 642-643 (hereafter Mallor & Roberts); note, Exemplary Damages in the Law of Torts, 70 Harv.L.Rev. 517, 518-520.) The doctrine was a part of the common law of this state long before the Civil Code was adopted. (Mendelsohn v. Anaheim Lighter Co., 40 Cal. 657, 661; Nightingale v. Scannell, 18 Cal. 315, 325-326; Dorsey v. Manlove, 14 Cal. 553, 555-556; Wilson v. Middleton, 2 Cal. 54.) When our laws were codified in 1872, the doctrine was incorporated in Civil Code section 3294, which at the time of trial read: "In an action for the breach of an obligation not arising from contract, where the defendant has been guilty of oppression, fraud, or malice, express or implied, the plaintiff, in addition to the actual damages, may recover damages

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for the sake of example and by way of punishing the defendant." ¹¹

        [119 Cal.App.3d 808] Ford argues that "malice" as used in section 3294 and as interpreted by our Supreme Court in Davis v. Hearst, 160 Cal. 143, 116 P. 530, requires animus malus or evil motive an intention to injure the person harmed and that the term is therefore conceptually incompatible with an unintentional tort such as the manufacture and marketing of a defectively designed product. This contention runs counter to our decisional law. As this court recently noted, numerous California cases after Davis v. Hearst, supra, have interpreted the term "malice" as used in section 3294 to include, not only a malicious intention to injure the specific person harmed, but conduct evincing "a conscious disregard of the probability that the actor's conduct will result in injury to others." (Dawes v. Superior Court, 111 Cal.App.3d 82, 88, 168 Cal.Rptr. 319, hg. den. (Dec. 17, 1980); e. g., Taylor v. Superior Court, 24 Cal.3d 890, 895-896, 157 Cal.Rptr. 693, 598 P.2d 854; Neal v. Farmers Ins. Exchange, 21 Cal.3d 910, 922, 148 Cal.Rptr. 389, 582 P.2d 980; Schroeder v. Auto Driveaway Co., 11 Cal.3d 908, 922-923, 114 Cal.Rptr. 622, 523 P.2d 662; Silberg v. California Life Ins. Co., 11 Cal.3d 452, 462, 113 Cal.Rptr. 711, 521 P.2d 1103; Donnelly v. Southern Pacific Co., 18 Cal.2d 863, 869-870, 118 P.2d 465; Nolin v. National Convenience Stores, Inc., 95 Cal.App.3d 279, 285-286, 157 Cal.Rptr. 32; Seimon v. Southern Pac. Transportation Co., 67 Cal.App.3d 600, 607, 136 Cal.Rptr. 787; G. D. Searle & Co. v. Superior Court, 49 Cal.App.3d 22, 30-32, 122 Cal.Rptr. 218; Pease v. Beech Aircraft Corp., 38 Cal.App.3d 450, 465, 113 Cal.Rptr. 416; Barth v. B. F. Goodrich, 265 Cal.App.2d 228, 240-241, 71 Cal.Rptr. 306; Toole v. Richardson-Merrell Inc., 251 Cal.App.2d 689, 713-714, 60 Cal.Rptr. 398.) Pease, Barth and Toole were strict products liability cases.

        In Taylor v. Superior Court, supra, 24 Cal.3d 890, 157 Cal.Rptr. 693, 598 P.2d 854, our high court's most recent pronouncement on the subject of punitive damages, the [119 Cal.App.3d 809] court observed that the availability of punitive damages has not been limited to cases in which there is an actual intent to harm plaintiff or others. (Id., at p. 895, 157 Cal.Rptr. 693, 598 P.2d 854.) The court concurred with the Searle (G. D. Searle & Co. v. Superior Court, supra, 49 Cal.App.3d 22, 122 Cal.Rptr. 218) court's suggestion that conscious disregard of the safety of others is an appropriate description of the animus malus required by Civil Code section 3294, adding: "In order to justify an award of punitive damages on this basis, the plaintiff must establish that the defendant was aware of the probable dangerous consequences of his conduct, and that he wilfully and deliberately failed to avoid those consequences." (Id., 24 Cal.3d at pp. 895-896, 157 Cal.Rptr. 693, 598 P.2d 854.)

Page 382

        Ford attempts to minimize the precedential force of the foregoing decisions on the ground they failed to address the position now advanced by Ford that intent to harm a particular person or persons is required because that was what the lawmakers had in mind in 1872 when they adopted Civil Code section 3294. Ford argues that the Legislature was thinking in terms of traditional intentional torts, such as, libel, slander, assault and battery, malicious prosecution, trespass, etc., and could not have intended the statute to be applied to a products liability case arising out of a design defect in a mass produced automobile because neither strict products liability nor mass produced automobiles were known in 1872.

        A like argument was rejected in Li v. Yellow Cab Co., 13 Cal.3d 804, 119 Cal.Rptr. 858, 532 P.2d 1226, where the court held that in enacting section 1714 as part of the 1872 Civil Code, the Legislature did not intend to prevent judicial development of the common law concepts of negligence and contributory negligence. As the court noted, the code itself provides that insofar as its provisions are substantially the same as the common law, they should be construed as continuations thereof and not as new enactments (Civ.Code, §§ 4, 5), and thus the code has been imbued "with admirable flexibility from the standpoint of adaptation to changing circumstances and conditions." (Id., at p. 816, 119 Cal.Rptr. 858, 532 P.2d 1226.) In light of the common law heritage of the principle embodied in Civil Code section 3294, ¹² it must be construed[119 Cal.App.3d 810] as a "continuation" of the common law and liberally applied "with a view to effect its objects and to promote justice." (Civ.Code, §§ 4, 5.) To paraphrase Li v. Yellow Cab Co., supra, 13 Cal.3d 804, 119 Cal.Rptr. 858, 532 P.2d 1226, the applicable rules of construction "permit if not require that section (3294) be interpreted so as to give dynamic expression to the fundamental precepts which it summarizes." (Id., at p. 822, 119 Cal.Rptr. 858, 532 P.2d 1226.)

        The interpretation of the word "malice" as used in section 3294 to encompass conduct evincing callous and conscious disregard of public safety by those who manufacture and market mass produced articles is consonant with and furthers the objectives of punitive damages. The primary purposes of punitive damages are punishment and deterrence of like conduct by the wrongdoer and others. (Civ.Code, § 3294; Owen, supra, pp. 1277, 1279-1287; Mallor & Roberts, supra, pp. 648-650.) In the traditional noncommercial intentional tort, compensatory damages alone may serve as an effective deterrent against future wrongful conduct but in commerce related torts, the manufacturer may find it more profitable to treat compensatory damages as a part of the cost of doing business rather than to remedy the defect. (Owens, supra, p. 1291; Note, Mass Liability and Punitive Damages Overkill, 30 Hastings L.J. 1797, 1802.) Deterrence of such "objectionable corporate policies" serves one of the principal purposes of Civil Code section 3294. (Egan v. Mutual of Omaha Ins. Co., 24 Cal.3d 809, 820, 157 Cal.Rptr. 482, 598 P.2d 452, cert. den. and app. dismd. Mutual of Omaha Ins. Co. v. Egan, 445 U.S. 912, 100 S.Ct. 1271, 63 L.Ed.2d 597.) Governmental safety standards and the criminal law have failed to provide adequate consumer protection against the manufacture and distribution of defective products. (Owen, supra, pp. 1288-1289; Mallor & Roberts, supra, pp. 655-656; Developments in the Law: Corporate Crime, 92 Harvard L.Rev. 1227, 1369. See People v. Superior Court (Olson), 96 Cal.App.3d 181, 191, 196, 157 Cal.Rptr. 628, cert. den. Forest E. Olson, Inc. v. Superior Court of California, 446

Page 383

U.S. 935, 100 S.Ct. 2152, 64 L.Ed.2d 787.) Punitive damages thus remain as the most effective remedy for consumer protection against defectively designed mass produced articles. They provide a motive for private individuals to enforce rules of law and enable them to recoup the expenses of doing so which can be considerable and not otherwise recoverable.

        We find no statutory impediments to the application of Civil Code section 3294 to a strict products liability case based on design defect.

[119 Cal.App.3d 811] (2) Constitutional Attacks On Civil Code Section 3294:

        Ford's contention that the statute is unconstitutional has been repeatedly rejected. (Egan v. Mutual of Omaha Ins. Co., supra, 24 Cal.3d 809, 819, 157 Cal.Rptr. 482, 598 P.2d 452; Bertero v. National General Corp., 13 Cal.3d 43, 66, fn. 13, 118 Cal.Rptr. 184, 529 P.2d 608; Zhadan v. Downtown L. A. Motors, 66 Cal.App.3d 481, 502, 136 Cal.Rptr. 132; Wetherbee v. United Ins. Co. of America, 18 Cal.App.3d 266, 272, 95 Cal.Rptr. 678; Fletcher v. Western National Life Ins. Co., 10 Cal.App.3d 376, 404-405, 89 Cal.Rptr. 78.) Ford's argument that its due process rights were violated because it did not have "fair warning" that its conduct would render it liable for punitive damages under Civil Code section 3294 ignores the long line of decisions in this state beginning with Donnelly v. Southern Pacific Co. (1941) supra, 18 Cal.2d 863, 869-870, 118 P.2d 465, holding that punitive damages are recoverable in a nondeliberate or unintentional tort where the defendant's conduct constitutes a conscious disregard of the probability of injury to others. (See Dawes v. Superior Court, supra, 111 Cal.App.3d 82, 88, 168 Cal.Rptr. 319; Nolin v. National Convenience Stores, Inc., supra, 95 Cal.App.3d 279, 285-286, 157 Cal.Rptr. 32.) The related contention that application of Civil Code section 3294 to the instant case would violate the ex post facto prohibition of the federal Constitution because at the time it designed the 1972 Pinto Ford had no warning that its conduct could be punished under Civil Code section 3294 is equally without merit. This constitutional prohibition extends to criminal statutes and penalties, not to civil statutes. (E. g., In re Bray, 97 Cal.App.3d 506, 512, 158 Cal.Rptr. 745; Ellis v. Dept. of Motor Vehicles, 51 Cal.App.2d 753, 758, 125 P.2d 521.) Moreover, at the very least since Toole v. Richardson-Merrell Inc., supra, (1967) 251 Cal.App.2d 689, 60 Cal.Rptr. 398, it should have been clear that a manufacturer of a dangerous, defective product might be liable for punitive damages if it knowingly exposed others to the hazard.

        Equally without merit is the argument that the statute permits an unlawful delegation of legislative power because it fails to provide sufficient guidance to the judge and jury. As we have explained, the doctrine of punitive damages and its application are governed by common law principles. Judicial development of common law legal principles does not constitute an unlawful usurpation of legislative power; it is a proper exercise of a power traditionally exercised by the judiciary. The precise contention now advanced has been previously rejected. [119 Cal.App.3d 812] (Toole v. Richardson-Merrell Inc., supra, 251 Cal.App.2d 689, 60 Cal.Rptr. 398; see Bertero v. National General Corp., supra, 13 Cal.3d 43, 66 fn. 13, 118 Cal.Rptr. 184, 529 P.2d 608.)

        The argument that application of Civil Code section 3294 violates the constitutional prohibition against double jeopardy is equally fallacious. This prohibition like the ex post facto concept is applicable only to criminal proceedings. (E. g., Helvering v. Mitchell, 303 U.S. 391, 399, 58 S.Ct. 630, 82 L.Ed. 917; Lemer v. Boise Cascade, Inc., 107 Cal.App.3d 1, 7, 165 Cal.Rptr. 555.)

        The related contention that the potential liability for punitive damages in other cases for the same design defect renders the imposition of such damages violative of Ford's due process rights also lacks merit. Followed to its logical conclusion, it would mean that punitive damages could never be assessed against a manufacturer of a mass produced article. No authorities are cited for such a proposition; indeed, as we have

Page 384

seen, the cases are to the contrary. We recognize the fact that multiplicity of awards may present a problem, but the mere possibility of a future award in a different case is not a ground for setting aside the award in this case, particularly as reduced by the trial judge. If Ford should be confronted with the possibility of an award in another case for the same conduct, it may raise the issue in that case. We add, moreover, that there is no necessary unfairness should the plaintiff in this case be rewarded to a greater extent than later plaintiffs. As Professor Owen has said in response to such a charge of unfairness: "This conception ignores the enormous diligence, imagination, and financial outlay required of initial plaintiffs to uncover and to prove the flagrant misconduct of a product manufacturer. In fact, subsequent plaintiffs will often ride to favorable verdicts and settlements on the coattails of the firstcomers." (Owen, supra, at p. 1325, fn. omitted.) That observation fits the instant case.

(3) Sufficiency Of The Evidence To Support The Finding Of Malice And Corporate Responsibility :

        Ford contends that its motion for judgment notwithstanding the verdict should have been granted because the evidence was insufficient to support a finding of malice or corporate responsibility for such malice. The record fails to support the contention.

        "The rules circumscribing the power of a trial judge to grant a motion for judgment notwithstanding the verdict are well established. [119 Cal.App.3d 813] The power to grant such a motion is identical to the power to grant a directed verdict; the judge cannot weigh the evidence or assess the credibility of witnesses; if the evidence is conflicting or if several reasonable inferences may be drawn, the motion should be denied; the motion may be granted ' " 'only if it appears from the evidence, viewed in the light most favorable to the party securing the verdict, that there is no substantial evidence to support the verdict.' " ' (Clemmer v. Hartford Insurance Co. (1978) 22 Cal.3d 865, 877-878, 151 Cal.Rptr. 285, 587 P.2d 1098; Brandenburg v. Pac. Gas & Elec. Co. (1946) 28 Cal.2d 282, 284, 169 P.2d 909, quoting Hauter v. Zogarts (1975) 14 Cal.3d 104, 110-111, 120 Cal.Rptr. 681, 534 P.2d 377, 74 A.L.R.3d 1282.)" (Castro v. State of California, 114 Cal.App.3d 503, 512, 170 Cal.Rptr. 734.) There was ample evidence to support a finding of malice and Ford's responsibility for malice.

        Through the results of the crash tests Ford knew that the Pinto's fuel tank and rear structure would expose consumers to serious injury or death in a 20 to 30 mile-per-hour collision. There was evidence that Ford could have corrected the hazardous design defects at minimal cost but decided to defer correction of the shortcomings by engaging in a cost-benefit analysis balancing human lives and limbs against corporate profits. Ford's institutional mentality was shown to be one of callous indifference to public safety. There was substantial evidence that Ford's conduct constituted "conscious disregard" of the probability of injury to members of the consuming public.

        Ford's argument that there can be no liability for punitive damages because there was no evidence of corporate ratification of malicious misconduct is equally without merit. California follows the Restatement rule that punitive damages can be awarded against a principal because of an action of an agent if, but only if, " '(a) the principal authorized the doing and the manner of the act, or (b) the agent was unfit and the principal was reckless in employing him, or (c) the agent was employed in a managerial capacity and was acting in the scope of employment, or (d) the principal or a managerial agent of the principal ratified or approved the act.' (Rest.2d Torts (Tent. Draft No. 19, 1973) § 909.)" (Egan v. Mutual of Omaha Ins. Co., supra, 24 Cal.3d 809, 822, 157 Cal.Rptr. 482, 598 P.2d 452; Merlo v. Standard Life & Acc. Ins. Co, 59 Cal.App.3d 5, 18, 130 Cal.Rptr. 416.) The present case comes within one or both of the categories described in subdivisions (c) and (d).

        [119 Cal.App.3d 814]

Page 385

There is substantial evidence that management was aware of the crash tests showing the vulnerability of the Pinto's fuel tank to rupture at low speed rear impacts with consequent significant risk of injury or death of the occupants by fire. There was testimony from several sources that the test results were forwarded up the chain of command; Vice President Robert Alexander admitted to Mr. Copp that he was aware of the test results; Vice President Harold MacDonald, who chaired the product review meetings, was present at one of those meetings at which a report on the crash tests was considered and a decision was made to defer corrective action; and it may be inferred that Mr. Alexander, a regular attender of the product review meetings, was also present at that meeting. MacDonald and Alexander were manifestly managerial employees possessing the discretion to make "decisions that will ultimately determine corporate policy." (Egan v. Mutual of Omaha Ins. Co., supra, 24 Cal.3d 809, 823, 157 Cal.Rptr. 482, 598 P.2d 452.) There was also evidence that Harold Johnson, an Assistant Chief Engineer of Research, and Mr. Max Jurosek, Chief Chassis Engineer, were aware of the results of the crash tests and the defects in the Pinto's fuel tank system. Ford contends those two individuals did not occupy managerial positions because Mr. Copp testified that they admitted awareness of the defects but told him they were powerless to change the rear-end design of the Pinto. It may be inferred from the testimony, however, that the two engineers had approached management about redesigning the Pinto or that, being aware of management's attitude, they decided to do nothing. In either case the decision not to take corrective action was made by persons exercising managerial authority. Whether an employee acts in a "managerial capacity" does not necessarily depend on his "level" in the corporate hierarchy. (Id., at p. 822, 157 Cal.Rptr. 482, 598 P.2d 452.) As the Egan court said: " 'Defendant should not be allowed to insulate itself from liability by giving an employee a nonmanagerial title and relegating to him crucial policy decisions.' " (Id., at p. 823, 157 Cal.Rptr. 482, 598 P.2d 452, quoting concurring and dissenting opinion in Merlo v. Standard Life & Acc. Ins. Co., supra, 59 Cal.App.3d at p. 25, 130 Cal.Rptr. 416.)

        While much of the evidence was necessarily circumstantial, there was substantial evidence from which the jury could reasonably find that Ford's management decided to proceed with the production of the Pinto with knowledge of test results revealing design defects which rendered the fuel tank extremely vulnerable on rear impact at low speeds and endangered the safety and lives of the occupants. Such conduct constitutes corporate malice. (See Toole v. Richardson-Merrell, Inc., supra, 251 Cal.App.2d 689, 713, 60 Cal.Rptr. 398.)

[119 Cal.App.3d 815] (4) Instructions On Malice :

        In its instructions to the jury, the trial court defined malice as follows: " 'Malice' means a motive and willingness to vex, harass, annoy or injure another person. Malice may be inferred from acts and conduct, such as by showing that the defendant's conduct was wilful, intentional, and done in conscious disregard of its possible results." The court also instructed the jury that plaintiff Grimshaw had the burden of proving "(t)hat the defendant acted with malice which may be inferred from defendant's conduct if the conduct was wilful, intentional and done in conscious disregard of its possible result."

        On appeal, Ford contends that the phrase "conscious disregard of its possible results" used in the two instructions would permit a plaintiff to impugn almost every design decision as made in conscious disregard of some perceivable risk because safer alternative designs are almost always a possibility. Ford argues that to instruct the jury so that they might find "malice" if any such "possibility" existed was erroneous; it maintains that an instruction on "malice" in products liability must contain the phrase "conscious disregard of (the probability/a high probability) of injury to others," in order to preclude prejudicial error. Ford cites Dawes v. Superior Court, supra, 111 Cal.App.3d 82, 168 Cal.Rptr. 319, recently decided by this court, for its authority.

Page 386

        The instruction on malice as given by the court was former BAJI 14.71 with a one-word modification. BAJI 14.71 then read in pertinent part: " 'Malice' means a motive and willingness to vex, harass, annoy or injure another person. Malice ... may be inferred from acts and conduct such as by showing that the defendants' conduct, was wilful, intentional, and done in reckless disregard of its possible results." The instruction as given merely substituted the word "conscious" for the word "reckless." ¹³ The phrase "wilful, intentional and done in reckless disregard of its possible results" used in former BAJI 14.71 seems to have made its first appearance in Toole v. Richardson-Merrell Inc., supra, 251 Cal.App.2d 689, 713, 60 Cal.Rptr. 398. The Toole formulation has been repeated since in a number of decisions, e. g., Trammell v. Western [119 Cal.App.3d 816] Union Tel. Co., 57 Cal.App.3d 538, 557; Black v. Shearson, Hammill & Co., 266 Cal.App.2d 362, 369, 72 Cal.Rptr. 157, and Schroeder v. Auto Driveaway Co., supra, (1974) 11 Cal.3d 908, 923, 114 Cal.Rptr. 622, 523 P.2d 662. In Schroeder, the Supreme Court approved the Toole expression of the kind of behavior which would support a punitive award, stating: "But 'intent,' in the law of torts, denotes not only those results the actor desires, but also those consequences which he knows are substantially certain to result from his conduct. (Rest.2d Torts, § 8a; Prosser, Torts (4th ed. 1971) pp. 31-32) The jury in the present case could reasonably infer that defendants acted in callous disregard of plaintiffs' rights, knowing that their conduct was substantially certain to vex, annoy, and injure plaintiffs. Such behavior justifies the award of punitive damages. As stated in Toole v. Richardson-Merrell Inc. (1967) 251 Cal.App.2d 689, 713, 60 Cal.Rptr. 398, 29 A.L.R.3d 988: 'malice in fact, sufficient to support an award of punitive damages ... may be established by a showing that the defendant's wrongful conduct was wilful, intentional, and done in reckless disregard of its possible results.' (Citation.)" (Schroeder v. Auto Driveaway Co., supra, 11 Cal.3d 908, 922, 114 Cal.Rptr. 622, 523 P.2d 662; fns. omitted.)

        In Dawes v. Superior Court, supra, 111 Cal.App.3d 82, 88, 168 Cal.Rptr. 319, this court noted that "since 1974 at the latest, and probably since a much earlier date, the term 'malice' as used in Civil Code section 3294 has been interpreted as including a conscious disregard of the probability that the actor's conduct will result in injury to others." (Emphasis supplied.) Our use of the term "probability" was not intended to effect a change in the law as set forth in Toole, Schroeder, and the other cases which have echoed the Toole formulation. Rather, it was meant to reflect correctly what the cases have been stating, albeit in varying ways, as an essential ingredient of the concept of malice in unintentional torts (Taylor v. Superior Court, supra, 24 Cal.3d 890, 895-896, 157 Cal.Rptr. 693, 598 P.2d 854; Schroeder v. Auto Driveaway Co., supra, 11 Cal.3d 908, 922, 114 Cal.Rptr. 622, 523 P.2d 662; Donnelly v. Southern Pacific Co., supra, 18 Cal.2d 863, 869-870, 118 P.2d 465; Nolin v. National Convenience Stores Inc., supra, 95 Cal.App.3d 279, 285-287, 157 Cal.Rptr. 32), and to express this essential ingredient in the most precise manner possible. Although the Toole formulation of the rule used the expression "possible results," those words were preceded by the pejoratives "wilful," "intentional" and "reckless disregard." Taking the statement as a whole, it is our view that probability that the conduct will result in injury to another is implicit in Toole. This was also apparently how the Supreme Court viewed it in Schroeder. We agree with Ford, however, that to be as accurate as possible, the rule should be expressed in terms of probability [119 Cal.App.3d 817] of injury rather than possibility. Viewed in this way, the salient question for this appeal becomes whether the instruction given by the court resulted in a miscarriage of

Page 387

justice because it failed to use "probability." As we explain below, we are convinced that it did not.

        A judgment may not be set aside on the ground the jury was misdirected unless reviewing court, after an examination of the entire cause, including the evidence, shall be of the opinion that the error resulted in a miscarriage of justice. (Cal.Const., art. 6, § 13; Cucinella v. Western Biscuit Co., 42 Cal.2d 71, 82, 265 P.2d 513; Popejoy v. Hannon, 37 Cal.2d 159, 168-169, 231 P.2d 484; Kostecky v. Henry, 113 Cal.App.3d 362, 374, 170 Cal.Rptr. 197.) Prejudice from an erroneous instruction is never presumed; it must be effectively demonstrated by the appellant. (Kostecky v. Henry, supra, 113 Cal.App.3d 362, 374, 170 Cal.Rptr. 197; Brokopp v. Ford Motor Co., supra, 71 Cal.App.3d 841, 853-854, 139 Cal.Rptr. 888.) One of the factors to be considered in measuring the effect of an erroneous instruction is whether a party's argument to the jury may have given the instruction a misleading effect. (LeMons v. Regents of Univ. of Cal., 21 Cal.3d 869, 876, 148 Cal.Rptr. 355, 582 P.2d 946; Kostecky v. Henry, supra, 113 Cal.App.3d 362, 374-375, 170 Cal.Rptr. 197.) Finally, an instruction should be interpreted in a manner that will support rather than defeat a judgment if it is reasonably susceptible to such an interpretation. (Kostecky v. Henry, supra, 113 Cal.App.3d 362, 375, 170 Cal.Rptr. 197; Merlo v. Standard Life & Acc. Ins. Co., supra, 59 Cal.App.3d 5, 14, 130 Cal.Rptr. 416; Rupp v. Summerfield, 161 Cal.App.2d 657, 667, 326 P.2d 912.)

        Applying the above precepts to the instant case, Ford has failed to demonstrate prejudice from the claimed defect in the instructions on malice. When the instructions are read as a whole, the jury could not possibly have interpreted the words "conscious disregard of its possible results" to extend to the innocent conduct depicted by Ford. The term "motive and willingness ... to injure" and the words "wilful," "intentional," and "conscious disregard" signify animus malus or evil motive. As the Searle court explained, the term "conscious disregard" itself denotes a "highly culpable state of mind." (49 Cal.App.3d 32, 122 Cal.Rptr. 218.) The jury was instructed that Ford was not required under the law to produce either the safest possible vehicle or one which was incapable of producing injury. The instructions on malice manifestly referred to conduct constituting conscious and callous disregard of a substantial likelihood of injury to others and not to innocent conduct by the manufacturer. Further, plaintiffs made no attempt in their arguments[119 Cal.App.3d 818] to the jury to give the instructions on malice the interpretation to which Ford says they are susceptible. Plaintiffs did not argue possibility of injury; they argued that injury was a virtual certainty and that Ford's management knew it from the results of the crash tests. Thus, the instructions on malice, even assuming them to have been erroneous because the word "possible" was used instead of "probable," did not constitute prejudicial error.

(5) Burden Of Proof On Issue of Malice :

        Ford argues that the jury should have been instructed that plaintiff had the burden of proving "malice" by "clear and convincing evidence." Ford's request for such an instruction was denied. Ford relies on cases involving the personal liberty of an individual (Addington v. Texas, 441 U.S. 418, 99 S.Ct. 1804, 60 L.Ed.2d 323; In re Winship, 397 U.S. 358, 90 S.Ct. 1068, 25 L.Ed.2d 368; People v. Thomas, 19 Cal.3d 630, 139 Cal.Rptr. 594, 566 P.2d 228; People v. Burnick, 14 Cal.3d 306, 121 Cal.Rptr. 488, 535 P.2d 352) which are manifestly inapposite. A similar contention was rejected in Toole v. Richardson-Merrell Inc., supra, 251 Cal.App.2d 689, 716, 60 Cal.Rptr. 398, where the court refused to give an instruction that a defendant against whom punitive damages are sought is entitled to the presumption of innocence. Furthermore the Supreme Court has recently rejected the clear and convincing test in a punitive damage case based upon fraud. (Liodas v. Sahadi, 19 Cal.3d 278, 286-293, 137 Cal.Rptr. 635, 562 P.2d 316.) The requested instruction on the burden of proof was properly denied.

Page 388

(6) Amount of Punitive Damage Award :

        Ford's final contention is that the amount of punitive damages awarded, even as reduced by the trial court, was so excessive that a new trial on that issue must be granted. Ford argues that its conduct was less reprehensible than those for which punitive damages have been awarded in California in the past; that the 3 1/2 million dollar award is many times over the highest award for such damages ever upheld in California; and that the award exceeds maximum civil penalties that may be enforced under federal or state statutes against a manufacturer for marketing a defective automobile. We are unpersuaded.

        In determining whether an award of punitive damages is excessive, comparison of the amount awarded with other awards in other [119 Cal.App.3d 819] cases is not a valid consideration. (Bertero v. National General Corp., supra, 13 Cal.3d 43, 65, fn. 12, 118 Cal.Rptr. 184, 529 P.2d 608; Leming v. Oilfields Trucking Co., supra, 44 Cal.2d 343, 355-356, 282 P.2d 23; Crane v. Smith, 23 Cal.2d 288, 302, 144 P.2d 356.) Nor does "(t)he fact that an award may set a precedent by its size" in and of itself render it suspect; whether the award was excessive must be assessed by examining the circumstances of the particular case. (Rodriguez v. McDonnell Douglas Corp., 87 Cal.App.3d 626, 654-655, 151 Cal.Rptr. 399; see Niles v. City of San Rafeal, 42 Cal.App.3d 230, 241, 116 Cal.Rptr. 733.) In deciding whether an award is excessive as a matter of law or was so grossly disproportionate as to raise the presumption that it was the product of passion or prejudice, the following factors should be weighed: The degree of reprehensibility of defendant's conduct, the wealth of the defendant, the amount of compensatory damages, and an amount which would serve as a deterrent effect on like conduct by defendant and others who may be so inclined. (Neal v. Farmers Ins. Exchange, supra, 21 Cal.3d 910, 928, 148 Cal.Rptr. 389, 582 P.2d 980; Rosener v. Sears, Roebuck & Co., 110 Cal.App.3d 740, 750-751, 168 Cal.Rptr. 237.) Applying the foregoing criteria to the instant case, the punitive damage award as reduced by the trial court was well within reason. ¹⁴

        In assessing the propriety of a punitive damage award, as in assessing the propriety of any other judicial ruling based upon factual determinations, the evidence must be viewed in the light most favorable to the judgment. (Neal v. Farmers Ins. Co., supra, 21 Cal.3d 910, 922, 148 Cal.Rptr. 389, 582 P.2d 980.) Viewing the record thusly in the instant case, the conduct of Ford's management was reprehensible in the extreme. It exhibited a conscious and callous disregard of public safety in order to maximize corporate profits. Ford's self-evaluation of its conduct is based on a review of the evidence most favorable to it instead of on the basis of the evidence most favorable to the judgment. Unlike malicious conduct directed[119 Cal.App.3d 820] toward a single specific individual, Ford's tortious conduct endangered the lives of thousands of Pinto purchasers. Weighed against the factor of reprehensibility, the punitive damage award as reduced by the trial judge was not excessive.

        Nor was the reduced award excessive taking into account defendant's wealth and the size of the compensatory award. Ford's net worth was 7.7 billion dollars and its income after taxes for 1976 was over 983 million dollars. The punitive award was

Page 389

approximately .005% of Ford's net worth and approximately .03% of its 1976 net income. The ratio of the punitive damages to compensatory damages was approximately 1.4 to one. Significantly, Ford does not quarrel with the amount of the compensatory award to Grimshaw.

        Nor was the size of the award excessive in light of its deterrent purpose. An award which is so small that it can be simply written off as a part of the cost of doing business would have no deterrent effect. An award which affects the company's pricing of its product and thereby affects its competitive advantage would serve as a deterrent. (See Neal v. Farmers Ins. Exchange, supra, 21 Cal.3d 910, 929, fn. 14, 148 Cal.Rptr. 389, 582 P.2d 980.) The award in question was far from excessive as a deterrent against future wrongful conduct by Ford and others.

        Ford complains that the punitive award is far greater than the maximum penalty that may be imposed under California or federal law prohibiting the sale of defective automobiles or other products. For example, Ford notes that California statutes provide a maximum fine of only $50 for the first offense and $100 for a second offense for a dealer who sells an automobile that fails to conform to federal safety laws or is not equipped with required lights or brakes (Veh.Code, §§ 24007, 24250 et seq.; 26300 et seq., 42000; 42001); that a manufacturer who sells brake fluid in this state failing to meet statutory standards is subject to a maximum of only $50 (Bus. & Prof.Code, § 13800 et seq.); and that the maximum penalty that may be imposed under federal law for violation of automobile safety standards is $1,000 per vehicle up to a maximum of $800,000 for any related series of offenses (15 U.S.C. §§ 1397-1398). It is precisely because monetary penalties under government regulations prescribing business standards or the criminal law are so inadequate and ineffective as deterrents against a manufacturer and distributor of mass produced defective products that punitive damages must be of sufficient amount to discourage such practices. Instead of showing that the punitive damage award was excessive, the comparison [119 Cal.App.3d 821] between the award and the maximum penalties under state and federal statutes and regulations governing automotive safety demonstrates the propriety of the amount of punitive damages awarded.

GRIMSHAW'S APPEAL

        Grimshaw has appealed from the order conditionally granting Ford a new trial on the issue of punitive damages and from the amended judgment entered pursuant to that order. ¹⁵

        Grimshaw contends that the new trial order is erroneous because (1) the punitive damages awarded by the jury were not excessive as a matter of law, (2) the specification of reasons was inadequate; and (3) the court abused its discretion in cutting the award so drastically. For reasons to be stated, we have concluded that the contentions lack merit.

        The court prefaced its specification of reasons with a recitation of the judicially established guidelines ¹⁶ for determining whether a punitive award is excessive. The court then observed that there was evidence in the record (referring to Exhibit 125) which might provide a possible rational basis for the 125 million dollar jury verdict which would dispel any presumption of passion

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or prejudice, ¹⁷ adding, however, that the court was not suggesting that the amount was warranted "or that the jury did utilize Exhibit 125, or any other exhibits, and if they did, that they were justified in so doing." The court then noted, based on the fact that Ford's net worth was 7.7 billion and its profits during the last quarter of the year referred to in the financial statement introduced into evidence were more than twice the punitive award, that the award was not disproportionate to Ford's net assets or to its profit generating capacity. The court noted, however, that the amount of the punitive award was 44 times the compensatory award, the court stated that while it did not [119 Cal.App.3d 822] consider that ratio alone to be controlling because aggravating circumstances may justify a ratio as high as the one represented by the jury verdict, it reasoned that the ratio coupled with the amount by which the punitive exceeded the compensatory damages (over 122 million dollars) rendered the jury's punitive award excessive as a matter of law.

        Grimshaw contends that the court erred in determining that the ratio of punitive to compensatory damages rendered the punitive excessive as a matter of law. The trial court, however, did not base its decision solely on the ratio of punitive to compensatory. It took into account the ratio, the "aggravating circumstances" (the degree of reprehensibility), the wealth of the defendant and its profit generating capacity, the magnitude of the punitive award, including the amount by which it exceeded the compensatory. Those were proper considerations for determining whether the award was excessive as a matter of law. (Egan v. Mutual of Omaha Ins. Co., supra, 24 Cal.3d 809, 824, 157 Cal.Rptr. 482, 598 P.2d 452; Neal v. Farmers Ins. Exchange, supra, 21 Cal.3d 910, 927-928, 148 Cal.Rptr. 389, 582 P.2d 980; Rosener v. Sears, Roebuck & Co., supra, 110 Cal.App.3d 740, 752-754, 168 Cal.Rptr. 237; Little v. Sturyvesant Life Ins. Co., 67 Cal.App.3d 451, 469-470, 136 Cal.Rptr. 653.) When a trial court grants a new trial for excessive damages, either conditionally or outright, a presumption of correctness attaches to the order and it will not be reversed unless it plainly appears that the judge abused his discretion. (Neal v. Farmers Ins. Exchange, supra, 21 Cal.3d 910, 933, 148 Cal.Rptr. 389, 582 P.2d 980; Doolin v. Omnibus Cable Co., 125 Cal. 141, 144-145, 57 P. 774.) In the case at bench, we find no abuse of discretion.

        Grimshaw also contends that the order granting a new trial was invalid for lack of adequate specification of reasons. We find that contention equally lacking in merit. When a motion for new trial is granted for excessive damages the specification of reasons should indicate the respects in which the evidence dictated a smaller verdict but, as the court observed in Neal (Neal v. Farmers Ins. Exchange, supra, 21 Cal.3d 910, 148 Cal.Rptr. 389, 582 P.2d 980), different considerations bear upon the adequacy of the reasons where the amount of punitive rather than compensatory damages is the primary concern. (Id., at p. 932, 148 Cal.Rptr. 389, 582 P.2d 980.) In such cases the specification is adequate if it reveals how the court applied the decisional guidelines for assessing the propriety of the amount of the punitive damage award to the evidence in the particular case. This the trial court did in the instant case. Its specification of reasons adequately enables a reviewing court to determine whether there is a substantial basis in law and fact for the order granting the conditional new trial.

        [119 Cal.App.3d 823] Finally, Grimshaw contends the court abused its discretion in reducing the award to 3 1/2 million dollars as a condition of its new trial order and urges this court to restore the jury award or at least require a remittitur of substantially less than that required by the trial court.

        In ruling on a motion for new trial for excessive damages, the trial court does

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not sit "in an appellate capacity but as an independent trier of fact." (Neal v. Farmers Ins. Exchange, supra, 21 Cal.3d 910, 933, 148 Cal.Rptr. 389, 582 P.2d 980.) This role as a fact finder is conferred on the trial court by Code of Civil Procedure section 662.5 which provides that if a new trial limited to the issue of damages would be proper after a jury trial, "the trial court may in its discretion: ... (b) If the ground for granting a new trial is excessive damages, make its order granting the new trial subject to the condition that the motion for a new trial is denied if the party in whose favor the verdict has been rendered consents to a reduction of so much thereof as the court in its independent judgment determines from the evidence to be fair and reasonable." (Emphasis supplied.) In addition, Code of Civil Procedure section 657 provides that an order granting a new trial for excessive damages shall be reversed "only if there is no substantial basis in the record for" the reasons stated in the judge's specification of reasons. An appellate court may reverse the order granting the new trial only when the reasons given by the trial judge reflect a manifest and unmistakable abuse of discretion. (Delos v. Farmers Ins. Group, 93 Cal.App.3d 642, 663, 155 Cal.Rptr. 843; Weathers v. Kaiser Foundation Hospitals, 5 Cal.3d 98, 109, 95 Cal.Rptr. 516, 485 P.2d 1132; Mazzotta v. Los Angeles Ry. Corp., 25 Cal.2d 165, 169, 153 P.2d 338.)

        Here, the judge, exercising his independent judgment on the evidence, determined that a punitive award of 3 1/2 million dollars was "fair and reasonable." Evidence pertaining to Ford's conduct, its wealth and the savings it realized in deferring design modifications in the Pinto's fuel system might have persuaded a different fact finder that a larger award should have been allowed to stand. Our role, however, is limited to determining whether the trial judge's action constituted a manifest and unmistakable abuse of discretion. Here, the judge referred to the evidence bearing on those factors in his new trial order and obviously weighed it in deciding what was a "fair and reasonable" award. We cannot say that the judge abused the discretion vested in him by Code of Civil Procedure section 662.5 or that there is "no substantial basis in the record" for the reasons given for the order. Finally, while the trial judge may not have taken into account Ford's potential liability for punitive[119 Cal.App.3d 824] damages in other cases involving the same tortious conduct in reducing the award, it is a factor we may consider in passing on the request to increase the award. Considering such potential liability, we find the amount as reduced by the trial judge to be reasonable and just. We therefore decline the invitation to modify the judgment by reducing the amount of the remittitur.

        In Richard Grimshaw v. Ford Motor Company, the judgment, the conditional new trial order, and the order denying Ford's motion for judgment notwithstanding the verdict on the issue of punitive damages are affirmed.

THE GRAYS' CASE

FORD'S APPEAL

        Ford has filed a single appellant's opening brief on its appeal from the Grimshaw and Grays judgments and has advanced the same contentions for the reversal of both judgments except that Ford's contentions respecting punitive damages only pertain to the Grimshaw judgment. Ford does not attack the sufficiency of the evidence to establish its liability to the Grays or to support the amount of compensatory damages awarded to them. ¹⁸

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        For all of the reasons stated in our opinion on Ford's appeal from the Grimshaw judgment, Ford's attacks upon the Grays' judgment must fail. Ford has failed to demonstrate in either appeal that any errors or irregularities that may have occurred during the trial resulted in a miscarriage of justice.

THE GRAYS' CROSS-APPEAL

        The Grays have cross-appealed from the judgment to the extent that they were precluded from seeking punitive damages. ¹⁹ The Grays' [119 Cal.App.3d 825] motion to amend their complaint to add allegations seeking punitive damages was denied on the ground such damages are not recoverable in a wrongful death action. The issue is whether the Grays should have been granted leave to amend.

        The Grays advance three theories on which they predicate their arguments that denial of leave to amend constituted prejudicial error: (1) Because the executor or administrator of Mrs. Gray's estate could have sought punitive damages in an action under Probate Code section 573, the fact that the heirs, rather than the personal representative, were attempting to recover punitive damages was merely a technical irregularity which should have been disregarded in the interest of justice; (2) the California rule barring recovery of punitive damages in wrongful death actions is the product of an erroneous interpretation of the pertinent statutes; and (3) to the extent that the California statute prohibits heirs from recovering punitive damages, it is violative of the equal protection clauses of the state and federal Constitutions. In the ensuing analysis we have concluded that none of the theories advanced by the Grays support their contention that denial of leave to amend their complaint to seek punitive damages constituted error. We have concluded: (1) The rationale of Klopstock v. Superior Court, 17 Cal.2d 13, 108 P.2d 906, cited in support of the first theory is inapplicable; (2) the California rule on punitive damages in wrongful death actions did not arise out of statutory misinterpretation; and (3) denying heirs the right to seek punitive damages in a wrongful death action where such right survived the decedent and could have been asserted by the personal representative of the decedent's estate under Probate Code section 573 does not offend the equal protection clauses of the state and federal Constitutions.

        Preliminarily, we undertake a brief review of the history of our wrongful death statute insofar as it is pertinent to the contentions advanced by the Grays.

        California's first wrongful death statute (Stats. 1862, ch. 330, §§ 1, 3, pp. 447-448) which was patterned closely after Lord Campbell's Act [119 Cal.App.3d 826] (see Holdsworth, A History of English Law, Vol. 15, p. 220) provided that "in every such action, the jury may give such damages, pecuniary and exemplary, as they shall deem fair and just, ..." (Stats. 1862, ch. 330, § 3, p. 448.) When the statute was codified in 1872, the damage provision read: "In every such action, the jury may give such damages, pecuniary or exemplary, as under all the circumstances of the case, may to them seem just." (See Deering's Cal.Codes, Annot., C.C.P.A., §§ 339-419, p. 237.)

        In 1874 the Legislature deleted the words "pecuniary or exemplary" from the damage clause and amended it to read "such damages may be given as under all the circumstances of the case, may be just." (Id.) Our Supreme Court's pronouncement in

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Lange v. Schoettler (1896) 115 Cal. 388, 391-392, 47 P. 139, concerning the intended effect of the 1874 amendment led to the accepted rule in this state that punitive damages are not recoverable in a wrongful death action. The court stated that the purpose of the 1874 amendment "must have been to take away the right to exemplary damages, and to make the rule accord with the general rule elsewhere" so that damages could not include "any grievance personal to the deceased, or any damage allowed in the interest of the people as punishment." In support of these conclusions, the court cited several of its earlier cases: Pepper v. Southern Pacific Co., 105 Cal. 389, 38 P. 974; Morgan v. Southern Pacific Co., 95 Cal. 510, 30 P. 603; and Munro v. Dredging etc. Co., 84 Cal. 515, 24 P. 303. Munro held that the California statute, like those of other jurisdictions, allowed damages for pecuniary loss to designated relatives, including deprivation of "comfort, society, support, and protection," but excluded mental suffering and "exemplary or vindictive damages." (Id., at p. 527, 24 P. 303.) ²⁰

        [119 Cal.App.3d 827] The statute remained virtually unchanged until 1949 when the Legislature, in the wake of Hunt v. Authier, 28 Cal.2d 288, 169 P.2d 913, enacted Civil Code section 956 providing for survival of personal injury causes of action. ²¹ Contemporaneously, the Legislature amended Code of Civil Procedure section 377 (the wrongful death statute) to provide that damages that may be awarded under that section shall not include those recoverable under Civil Code section 956 and for the joinder of actions under Civil Code section 956 with wrongful death actions and for their consolidation for trial if separately filed. ²² (Stats.1949, ch.

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1380, p. 2400.) The survival statute provided that where the person entitled to maintain the action "dies before judgment," the damages recoverable "shall be limited to loss of earnings and expenses sustained or incurred as a result of the injury by the deceased prior to his death, and shall not include damages for pain, suffering or disfigurement, nor punitive or exemplary damages, ..." (Emphasis supplied.)

        [119 Cal.App.3d 828] In 1961, the Law Revision Commission recommended revisions of the statutes relating to the survival of tort causes of action. (See 3 Cal.Law.Rev.Com. F-1 (1961).) It recommended adoption of Probate Code section 573, ²³ which expressly provided for the survival of a cause of action for punitive or exemplary damages. ²⁴ (Id., at p. F-7.) In recommending survival of a claim for exemplary damages, the Commission stated: "The provision in the 1949 legislation that the right to recover punitive or exemplary damages is extinguished by the death of the (injured party) should not be continued. There are no valid reasons for this limitation. True, such damages are in a sense a windfall to the plaintiff's heirs or devisees, but since these damages are not compensatory in nature, they would have constituted a windfall to the decedent as well. The object of awarding such damages being to punish the wrongdoer, it would be particularly inappropriate to permit him to escape such punishment in a case in which he killed rather than only injured his victim." (Id.) The Commission did not recommend any changes in the wrongful death statute (Code Civ.Proc., § 377) except that the reference to Civil Code section 956 be changed to Probate Code section 573. (Id., at p. F-9.) The Legislature enacted Probate Code section 573 and amended Code of Civil Procedure section 377 as recommended by the Commission.

        [119 Cal.App.3d 829] Since the 1961 amendments to the survival and wrongful death statutes, our courts have reaffirmed the long-standing view that the wrongful death statute does not permit recovery of exemplary damages. (Cortez v. Macias, 110 Cal.App.3d 640, 657, 167 Cal.Rptr. 905, hg. den. (Nov. 26, 1980); Umansky v. Urquhart, 84 Cal.App.3d 368, 372, 148 Cal.Rptr. 547; Stencel Aero Engineering Corp. v. Superior Court, supra, 56 Cal.App.3d 978, 983, 128 Cal.Rptr. 691; Pease v. Beech Aircraft Corp., supra, 38 Cal.App.3d 450, 461-462, 113 Cal.Rptr. 416; Doak v. Superior Court, 257 Cal.App.2d 825,

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65 Cal.Rptr. 193.) In Pease v. Beech Aircraft Corp., supra, the court based its decision on Lange v. Schoettler and its progeny and on the further ground that the 1961 legislation made damages recoverable under the survival and wrongful death statutes "mutually exclusive." Finally, in Tarasoff v. Regents of University of California, 17 Cal.3d 425, 450, 131 Cal.Rptr. 14, 551 P.2d 334, our Supreme Court declared: "The California statutes and decisions ... have been interpreted to bar the recovery of punitive damages in a wrongful death action. (See Pease v. Beech Aircraft Corp. (1974) 38 Cal.App.3d 450, 460-462, 113 Cal.Rptr. 416 and authorities cited there.)"

        Punitive damages are, however, recoverable in an action under Probate Code section 573 by the personal representative of the decedent's estate if the decedent survived the accident, however briefly, or if the property of the decedent was damaged or lost before death. (Stencel Aero Engineering Corp. v. Superior Court, supra, 56 Cal.App.3d 978, 987-988, 128 Cal.Rptr. 691; see Pease v. Beech Aircraft Corp., supra, 38 Cal.App.3d 450, 459-460, 113 Cal.Rptr. 416.) There need not be a pending action at the time of death; it is sufficient that the claim arose before death. (Dunwoody v. Trapnell, 47 Cal.App.3d 367, 369-370, 120 Cal.Rptr. 859.)

        We address the Grays' various contentions in light of the foregoing legislative and decisional background.

        The premise of the Grays' first argument is that because Mrs. Gray survived the accident for three days, her personal representative would have been entitled to seek punitive damages in an action under Probate Code section 573. It is urged therefore that the fact the heirs, rather than the personal representative, were the ones seeking to recover punitive damages was a technical irregularity which should have been [119 Cal.App.3d 830] disregarded in the interest of justice, citing Klopstock v. Superior Court, supra, 17 Cal.2d 13, 108 P.2d 906.

        The contention mistakes the significance of Klopstock, supra, 17 Cal.2d 13, 108 P.2d 906. In that case, the personal representative of an heir of decedent brought an action to enforce a claim which could only be enforced by the personal representative of decedent's estate. ²⁵ Defendants demurred on the ground the action was not brought by the real party in interest but the demurrer was overruled and the case went to trial resulting in a plaintiff's judgment. On defendants' appeal, the judgment was reversed on the ground the action had not been prosecuted by the real party in interest, i. e., by the personal representative of the estate of the deceased. (Samter v. Klopstock Realty Co., supra, 31 Cal.App.2d 532, 535, 88 P.2d 250.) On remand, plaintiff moved to file an amended complaint naming the personal representative of the estate as the party plaintiff. Defendants responded with a motion to dismiss the action on the ground the jurisdictional

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defect could not be cured by an amendment. The court denied the motion to dismiss and granted leave to file the amended complaint. Defendants thereupon sought a writ of mandate in the reviewing court to compel the superior court to dismiss the action. The Supreme Court held that while the power to permit amendments is not unlimited and an amendment that introduces a wholly new cause of action is impermissible, "the test is whether an attempt is made to state facts which give rise to a wholly distinct and different legal obligation against the defendant. The power to permit amendment is denied only if a change is made in the liability sought to be enforced against the defendant." (Klopstock v. Superior Court, supra,[119 Cal.App.3d 831] 17 Cal.2d 13, 20, 108 P.2d 906.) The court concluded that inasmuch as the action was brought to enforce the same obligation which the substituted plaintiff was seeking to enforce, the amendment was properly allowed in furtherance of justice.

        In the case at bench the Grays never attempted to allege a cause of action under Probate Code section 573, nor did the personal representative attempt to join as a party plaintiff for the purpose of pleading such a cause of action. The heirs simply moved to amend their wrongful death cause of action to seek punitive damages. A cause of action under the survival statute is separate and distinct from a cause of action for wrongful death under Code of Civil Procedure section 377. (Larcher v. Wanless, 18 Cal.3d 646, 656-657, 135 Cal.Rptr. 75, 557 P.2d 507; Earley v. Pacific Electric Ry. Co., 176 Cal. 79, 80-81, 167 P. 513; see Lewis v. City & County of San Francisco, 21 Cal.App.3d 339, 341, 98 Cal.Rptr. 407.) Thus, the Klopstock rationale is inapposite to the validity of the trial court's order denying the Grays' motion to amend the wrongful death cause of action to seek punitive damages.

        The Grays next maintain that the California rule barring punitive damages in a wrongful death case is predicated on an erroneous interpretation of the relevant statutes. They argue that the 1961 amendments to the survival statute reflect a shift in state policy concerning the right of heirs to recover exemplary damages in wrongful death cases.

        While the 1961 amendments to the survival statute may have created an arguable statutory ambiguity concerning the right to seek punitive damages in a wrongful death action, we cannot ascribe to the enactment of the amendments a legislative intent to so provide. ²⁶ It is [119 Cal.App.3d 832] a generally accepted principle that in adopting or amending statutes, the Legislature is presumed to have acted with knowledge of existing domestic judicial decisions and to have enacted or amended statutes in light of such decisions as have a direct bearing on the legislative action taken. (Estate of McDill, 14 Cal.3d 831, 839, 122 Cal.Rptr. 754, 537 P.2d 874; Alter v. Michael, 64 Cal.2d 480, 482-483, 50 Cal.Rptr. 553, 413 P.2d 153, disapproved on other grounds, Neel v. Magana, Olney, Levy, Cathcart & Gelfand, 6 Cal.3d 176, 190-191, 98 Cal.Rptr. 837, 491 P.2d 421; Buckley v. Chadwick, 45 Cal.2d 183, 200, 288 P.2d 12.) When the Legislature enacted Probate Code section 573 in 1961, it must be presumed to have been aware of the long-standing judicial interpretation of our wrongful death statute

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with respect to punitive damages, with the result that had it intended to allow recovery of such damages in wrongful death actions, it would have expressly amended Code of Civil Procedure section 377 so to provide. Continued adherence after 1961 to the view that our wrongful death statute does not permit recovery of punitive damages is not the product of statutory misinterpretation.

        Finally, the Grays contend, to the extent that our wrongful death statute precludes recovery of punitive damages, it is violative of the equal protection provisions of the federal and state Constitutions. ²⁷ The Grays argue that the wrongful death and survival statutes establish arbitrary and unreasonable distinctions having no discernibly rational basis. They urge that there is no reasonable basis for treating heirs in a wrongful death action differently from a personal representative asserting a right of action under the survival statute and, in a broader context, for denying heirs a right given to all other victims of a wrongdoer's malicious conduct.

        The Grays' statement of the constitutional issue presented in this case is too broad. The question before us is not whether our wrongful death statute offends equal protection guarantees because it denies heirs generally the right to seek punitive damages in a wrongful death action. [119 Cal.App.3d 833] The question is whether the statute is discriminatory because it denies the right to seek such damages to the class of heirs of which the Grays are members.

        The anomaly of a wrongdoer being subject to punitive damages if he causes injury but not if he causes death was substantially ameliorated by the 1961 legislation providing for survival of punitive damage claims. Under the statute, the claim survives if decedent had a cause of action under Probate Code section 573 at the time of death. If an interval of time, however brief, elapses between injury to the person or to his or her property and death, the claim survives; but a claim for punitive damages will not lie if death occurs simultaneously with the infliction of the injury. ²⁸ (See Stencel Aero Engineering Corp. v. Superior Court, supra, 56 Cal.App.3d 978, 987-988, 128 Cal.Rptr. 691; Pease v. Beech Aircraft Corp., supra, 38 Cal.App.3d 450, 459-460, 113 Cal.Rptr. 416.) The 1961 legislation thus created two classes of heirs in wrongful death actions: (1) Heirs whose decedent had a claim for punitive damages at death and (2) heirs whose decedent died without a surviving claim for such damages. Because this classification was the result of legislative action, it is an appropriate classification for equal protection analyses. (See Brown v. Merlo, 8 Cal.3d 855, 862, 106 Cal.Rptr. 388, 506 P.2d 212.) Moreover, because Mrs. Gray survived for three days after the accident, her heirs are members of the first class.

        Two recent decisions, one by a state Court of Appeal and the other by the United States Court of Appeals for the Ninth Circuit have rejected equal protection challenges to the preclusion of punitive damages under our wrongful death statute. (Georgie Boy Manufacturing Inc. v. Superior Court, 115 Cal.App.3d 217, 171 Cal.Rptr. 382; In re Paris Air Crash, 622 F.2d 1315, cert. den. Kalinsky v. General Dynamics Corp., --- U.S. ----, 101 S.Ct. 387, 66 L.Ed.2d 237.) The United States Ninth Circuit Court of Appeals found what it considered to be several rational bases for the legislative classification. Georgie Boy determined that legislative concern for the danger of excessive punitive damage awards in cases involving death provided a

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sufficient discernable legislative purpose. The court was also of the view that the unbroken line of cases for some 90 years holding that punitive damages are not recoverable in wrongful death cases imports tacit and [119 Cal.App.3d 834] implied approval of the constitutionality of Code of Civil Procedure section 377. The foregoing considerations together with the In re Paris Air Crash decision persuaded the court to rule in favor of constitutionality.

        Neither case, however, analyzes the constitutional issue in terms of the classes of heirs affected by the statutory bar against recovery of punitive damages in wrongful death actions. A statutory scheme which would punish a tortfeasor if he inflicts death-causing injury which does not result in simultaneous death but would not punish if death occurs instantaneously is difficult to explain on the basis of any conceivable, realistic, rational legislative purpose. ²⁹ However, resolution of the equal protection issue presented in this case does not require us to determine whether a rational basis can be found to explain the anomaly. The question before us is whether a law which denies to heirs of a decedent who died with a claim for punitive damages extant the right to recover such damages in a wrongful death action violates equal protection guarantees. Resolution of this issue does not turn on whether heirs of the other class are entitled to seek such damages in a wrongful death action.

        [119 Cal.App.3d 835] The equal protection test in the present context is the "traditional," "rational basis," or "restraint" standard of review. (Steed v. Imperial Airlines, 12 Cal.3d 115, 123-124, 115 Cal.Rptr. 329, 524 P.2d 801; see Justus v. Atchison, 19 Cal.3d 564, 580-581, 139 Cal.Rptr. 97, 565 P.2d 122.) Our Supreme Court has refrained from selecting a linguistic formulation from among the various alternatives for expressing this standard, declaring that they all require " 'the court to conduct a serious and genuine judicial inquiry into the correspondence between a classification and the legislative goals.' " (Cooper v. Bray, supra, 21 Cal.3d 841, 848, 148 Cal.Rptr. 148, 582 P.2d 604, quoting Newland v. Board of Governors, 19 Cal.3d 705, 711, 139 Cal.Rptr. 620, 566 P.2d 254, italics deleted.) The test is not whether

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there is a theoretically conceivable state purpose that would support the classification but whether "there is a realistically conceivable legislative purpose which rationally justifies the disparate treatment...." (Cooper v. Bray, supra, 21 Cal.3d 841, 851, 148 Cal.Rptr. 148, 582 P.2d 604; Brown v. Merlo, supra, 8 Cal.3d 855, 865, fn. 7, 106 Cal.Rptr. 388, 506 P.2d 212.)

        Given that the primary purposes of punitive damages are punishment and deterrence of like conduct by the wrongdoer and others, a rational justification exists for the legislative denial of the right to seek punitive damages to the class of persons who are heirs of a decedent whose claim for such damages survived and was enforceable by the personal representative. Where such claim survives and is recoverable in an action by the personal representative of the decedent (Dunwoody v. Trapnell, supra, 47 Cal.App.3d 367, 369, 120 Cal.Rptr. 859), to grant the heirs an additional, separate and independent right to recover punitive damages in a wrongful death action would permit double punishment for the same tortious conduct and could also lead to double recovery of punitive damages by the heirs. The purpose of punishment and deterrence will have been served by the enforcement of the punitive damage claim that survived the decedent. ³⁰ There is a likelihood that the heirs would share in the personal representative's recovery of such damages.

        [119 Cal.App.3d 836] We conclude that whether or not it would be a denial of equal protection to preclude heirs of a decedent who died without a surviving claim for punitive damages from seeking such recovery, the class of heirs of which the Grays are members has not suffered a denial of equal protection by being barred from seeking punitive damages in a wrongful death action.

        The judgment in Carmen Gray, et al. v. Ford Motor Company is affirmed.

        McDANIEL, J., concurs.

        KAUFMAN, Associate Justice, concurring.

        Although I agree with the ultimate disposition of each issue, I am unable to subscribe en toto to those portions of the opinion relating to Copp's testimony concerning the reasons for his termination by Ford, the alleged violations of the order in limine, and the design defect instructions. Accordingly, I concur in the judgments and in the opinion except as to those portions.

---------------

1 The jury actually awarded Grimshaw $2,841,000 compensatory damages and $125 million punitive damages and the Grays $659,680 compensatory damages. Pursuant to stipulation that sums previously received by plaintiffs from others should be deducted from the amounts awarded by the jury, the judgment was modified to reflect compensatory damages in favor of Grimshaw for $2,516,000 and in favor of the Grays for $559,680.

2 The "FUEL SYSTEM INTEGRITY PROGRAM FINANCIAL REVIEW" report included the following:

"PRODUCT ASSUMPTIONS

"To meet 20 mph movable barrier requirements in 1973, fuel filler neck modifications to provide breakaway capability and minor upgrading of structure are required.

"To meet 30 mph movable barrier requirements, original fuel system integrity program assumptions provided for relocation of the fuel tanks to over the axle on all car lines beginning in 1974. Major tearup of rear and center floor pans, added rear end structure, and new fuel tanks were believed necessary for all car lines. These engineering assumptions were developed from limited vehicle crash test data and design and development work.

"Since these original assumptions, seven vehicle crash tests have been run which now indicate fuel tank relocation is probably not required. Although still based heavily on judgment, Chassis Engineering currently estimates that the 30 mph movable barrier requirement is achievable with a reduced level of rear end tearup.

"In addition to added rear-end structure, Chassis Engineering believes that either rubber 'flak' suits (similar to a tire carcass), or alternatively, a bladder lining within the fuel tank may be required on all cars with flat fuel tanks located under the luggage compartment floor (all cars, except Ford/Mercury/Lincoln and Torino/Montego station wagons). Although further crash tests may show that added structure alone is adequate to meet the 30 mph movable barrier requirement, provisions for flak suits or bladders must be provided. The design cost of a single flak suit, located between the fuel tank and the axle, is currently estimated at $(4) per vehicle. If two flak suits (second located at the rear of the fuel tank), or a bladder are required, the design cost is estimated at $(8) per vehicle. Based on these estimates, it is recommended that the addition of the flak suit/bladder be delayed on all affected cars until 1976. However, package provision for both the flak suits and the bladder should be included when other changes are made to incorporate 30 mph movable barrier capability. A design cost savings $10.9 million (1974-1975) can be realized by this delay. Although a design cost provision of $(8) per affected vehicle has been made in 1976 program levels to cover contingencies, it is hoped that cost reductions can be achieved, or the need for any flak suit or bladder eliminated after further engineering development.

"Current assumptions indicate that fuel system integrity modifications and 1973 bumper improvement requirements are nearly independent. However, bumper requirements for 1974 and beyond may require additional rear end structure which could benefit fuel system integrity programs."

3 Plaintiffs settled with the other defendants before and during trial; the case went to verdict only against Ford Motor Company.

4 The judge's account of the in camera inquiry of plaintiffs' counsel (Mr. Hews, Mr. Robinson, Mr. Rubin) was in substance as follows: Mr. Hews represented to the court that since Ford's last request for a list of plaintiffs' expert witnesses, he had come upon three (or four) individuals, two (or three) of whom were employees of Ford dealers and the other a retired Ford employee who had been active in design. Mr. Hews told the judge that the retired Ford employee reported that he had been subject to surveillance, that he suspected his phone had been tapped, and that a pension to which he was entitled had been delayed. Mr. Hews expressed fear that if the names of the witnesses were revealed they might not be available as plaintiffs' witneses. He further stated that defense counsel was aware in early July 1977 of plaintiffs' contact with the retired design engineer. Mr. Robinson, one of the attorneys for plaintiffs, stated that if Ford's motion were to be granted, plaintiffs would as a matter of fairness seek the names of witnesses and experts acquired by Ford after the last exchange of information and depose such witnesses, all of which would result in undue delay of the trial.

5 Whether continuing interrogatories were then even proper in California appears to have been an open question. (Rangel v. Graybar Electric Co., supra, 70 Cal.App.3d 943, 950, 139 Cal.Rptr. 191; Kenney v. Superior Court, 255 Cal.App.2d 106, 112, fn. 5, 63 Cal.Rptr. 84; Smith v. Superior Court, 189 Cal.App.2d 6, 11, 11 Cal.Rptr. 165; Cal. Discovery Practice (Cont. Ed. Bar Supp. Oct. 1979) § 8.22, p. 47.)

After the initiation of trial, the Legislature added a new article to title 3, part 4, chapter 3 of the Code of Civil Procedure (Code Civ.Proc., § 2037 et seq.) pertaining to discovery of expert witnesses. Section 2037.4 provides: "A party who is required to exchange lists of witnesses shall diligently give notice to the parties upon whom his list was served if, after service of his list he determines to call an expert witness not included in his list, and a party shall make available for deposition such expert witnesses as he has determined to call."

Under the federal rules, interrogatories concerning experts are "continuing interrogatories." (Federal Rule 26(e)(1); Louisell/Wally, Modern Cal. Discovery, § 5.12, p. 338.)

6 The record reveals that Ford's motion to require plaintiffs to disclose the identity of any "disgruntled" former Ford employee whom they intended to call was triggered by plaintiffs' motion for the identity of the person who developed a federal governmental report on which Ford purported to base a press release concerning the safety of the Pinto. The press release had just been issued at time of trial and was receiving wide media coverage. Ford agreed to disclose the identity of the person who developed the report and to permit him to be deposed if it decided to call him as a witness and the court so ordered. It was then that Ford made its motion to require "as a matter of reciprocity" that plaintiffs disclose the identity of any "disgruntled" former Ford employee they intended to call. After the court ruled on Ford's motion, Ford again alluded to plaintiffs' motion, pointing out that the government report it intended to use was equally available to both parties. The court then indicated it would modify its earlier order to require only that Ford disclose the identity of the person who developed the report. At this point plaintiffs' counsel withdrew their motion for disclosure.

7 Evidence Code section 721, subdivision (a), provides:

"(a) Subject to subdivision (b), a witness testifying as an expert may be cross-examined to the same extent as any other witness and, in addition, may be fully cross-examined as to (1) his qualifications, (2) the subject to which his expert testimony relates, and (3) the matter upon which his opinion is based and the reasons for his opinion."

The Law Revision Commission comment to section 721 reads in part:

"Under Section 721, a witness who testifies as an expert may, of course, be cross-examined to the same extent as any other witness. See Chapter 5 (commencing with Section 760). But, under subdivision (a) of Section 721, as under existing law, the expert witness is also subject to a somewhat broader cross-examination: 'Once an expert offers his opinion, however, he exposes himself to the kind of inquiry which ordinarily would have no place in the cross-examination of the factual witness. The expert invites investigation into the extent of his knowledge, the reasons for his opinion including facts and other matters upon which it is based (Code Civ.Proc., § 1872), and which he took into consideration; and he may be " subjected to the most rigid cross examination" concerning his qualifications, and his opinion and its sources (citation omitted).' Hope v. Arrowhead & Puritas Waters, Inc., 174 Cal.App.2d 222, 230, 344 P.2d 428, 433 (1959)." (29B West's Ann.Evid.Code, p. 56.)

8 The two requested instructions on design defect read:

"A product is defective in design if the product has failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner."

"In determining whether or not the Pinto automobile was defectively designed, you may consider, among other relevant factors, the gravity of the danger posed by the challenged design, the likelihood that such danger would occur, the mechanical feasibility of a safer alternative design, the financial cost of an improved design, the adverse consequences to the product and to the consumer that would result from an alternative design, the extent to which its design and manufacture matched the average quality of other automobiles and the extent to which its design and manufacture deviated from the norm for automobiles designed and manufactured at the same point in time."

9 The Barker court held "that a trial judge may properly instruct the jury that a product is defective in design (1) if the plaintiff demonstrates that the product failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner, or (2) if the plaintiff proves that the product's design proximately caused his injury and the defendant fails to prove, in light of the relevant factors discussed above, that on balance the benefits of the challenged design outweigh the risk of danger inherent in such design." (Barker v. Lull Engineering Co., supra, 20 Cal.3d 413, 435, 143 Cal.Rptr. 225, 573 P.2d 443; emphasis supplied.)

10 Ford offered the following instructions on custom or usage in the trade:

"In determining whether the automobile involved in this case was defective, you may consider (the extent to which) (whether) its design and manufacture conformed to the state of the art or the custom of the trade at the time of its design and manufacture."

"The term, 'state of the art,' as used in the previous instruction, means the practice usually and customarily engaged in by automobile manufacture(r)s in the United States at the time of the design and manufacture of the automobile in this case."

"In determining whether the automobile involved in this case was defective, you may consider (the extent to which) (whether) its design and manufacture matched the average quality of other and (the extent to which) (whether) its design and manufacture deviated from the norm for automobiles designed and manufactured at the same point in time."

11 Section 3294 was amended in 1980 (Stats.1980, ch. 1242, § 1, p. ---, eff. Jan. 1, 1981) to read:

"(a) In an action for the breach of an obligation not arising from contract, where the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.

"(b) An employer shall not be liable for damages pursuant to subdivision (a), based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice. With respect to a corporate employer, the advance knowledge, ratification, or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.

"(c) As used in this section, the following definitions shall apply:

"(1) 'Malice' means conduct which is intended by the defendant to cause injury to the plaintiff or conduct which is carried on by the defendant with a conscious disregard of the rights or safety of others.

"(2) 'Oppression' means subjecting a person to cruel and unjust hardship in conscious disregard of that person's rights.

"(3) 'Fraud' means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury."

12 The doctrine was expressed in Dorsey v. Manlove, supra, 14 Cal. 553, as follows: "But where the trespass is committed from wanton or malicious motives, or a reckless disregard of the rights of others, or under circumstances of great hardship or oppression, the rule of compensation is not adhered to, and the measure and amount of damages are matters for the jury alone. In these cases the jury are not confined to the loss or injury sustained, but may go further and award punitive or exemplary damages, as a punishment for the act, or as a warning to others." (Id., at p. 556.)

13 The 1980 revision of BAJI uses the expression "conscious disregard of the plaintiff's rights." The trial court's substitution in the instant case was apparently in response to G. D. Searle & Co. v. Superior Court, supra, (1975) 49 Cal.App.3d 22, 29-32, 122 Cal.Rptr. 218, which criticized the use of the term "reckless" in defining malice and suggested that "conscious disregard" would be a more accurate expression of the required state of mind.

14 A quantitative formula whereby the amount of punitive damages can be determined in a given case with mathematical certainty is manifestly impossible as well as undesirable. (Mallor & Roberts, supra, 31 Hastings L.J. 639, 666-667, 670.) The authors advocate abandonment of the rule that a reasonable relationship must exist between punitive damages and actual damages. They suggest that courts balance society's interest against defendant's interest by focusing on the following factors: Severity of threatened harm; degree of reprehensibility of defendant's conduct, profitability of the conduct, wealth of defendant, amount of compensatory damages (whether it was high in relation to injury), cost of litigation, potential criminal sanctions and other civil actions against defendant based on same conduct. (Id., at pp. 667-669.) In the present case, the amount of the award as reduced by the judge was reasonable under the suggested factors, including the factor of any other potential liability, civil or criminal.

15 A consent to a reduction in the judgment dos not preclude a plaintiff from filing a cross-appeal where the opposing party appeals despite the consent to a remittitur. (Neal v. Farmers Ins. Exchange, supra, 21 Cal.3d 910, 918, fn. 1, 148 Cal.Rptr. 389, 582 P.2d 980; Miller v. National American Life Ins. Co., 54 Cal.App.3d 331, 341-345, 126 Cal.Rptr. 731.)

16 The court stated that "the principles by which the propriety of the amount of punitive damages awarded will be judged are threefold: (1) Is the sum so large as to raise a presumption that the award was the result of passion and prejudice and therefore excessive as a matter of law; (2) Does the award bear a reasonable relationship to the net assets of the defendant; and (3) Does the award bear a reasonable relationship to the compensatory damages awarded."

17 Exhibit 125 was the report by Ford engineers showing savings which would be realized by deferring design changes to the fuel system of Ford automobiles to meet the proposed governmental standards on the integrity of the fuel systems.

18 Ford makes a bare assertion that damages in the Grays case were "extremely high." The award was $659,680. Plaintiffs were the surviving husband and two minor daughters, ages 12 and 13, who had been adopted by the couple at birth. At the time of her death, Mrs. Gray was 51. She had worked full time and had been earning at least $20,000 a year as of the date of trial. Evidence of the economic loss alone resulting from her death was approximately $260,000. In addition, the surviving heirs lost the comfort and society of a devoted wife and mother. The verdict was by no means excessive as a matter of law and Ford does not so contend.

19 The Grays also purport to appeal from an order denying their motion for leave to amend their complaint to seek punitive damages. Such an order is nonappealable and the appeal therefrom must be dismissed. (Tu-Vu Drive-In Corp. v. Davies, 66 Cal.2d 435, 436, fn.2, 58 Cal.Rptr. 105, 426 P.2d 505.) The order, however, is reviewable on an appeal from the final judgment in the action. (Schaefer v. Berinstein, 180 Cal.App.2d 107, 114, 4 Cal.Rptr. 236, disapproved on other grounds, Jefferson v. J. E. French Co., 54 Cal.2d 717, 719, 720, 7 Cal.Rptr. 899, 355 P.2d 643; Fuss v. City of Los Angeles, 162 Cal.App.2d 643, 646, 328 P.2d 831.)

20 Lange v. Schoettler, supra, 115 Cal. 388, 47 P. 139, gave no explanation for the deletion of the word "pecuniary" as well as "exemplary." A commentator has noted that under the Lange rationale, it could have been said that the Legislature must have intended to deny "pecuniary," as well as exemplary, damages in wrongful death cases. (McClelland & Truett, Survival of Punitive Damages in Wrongful Death Cases, 8 Univ.S.F.Law.Rev. 585, 605.) Despite the amendment, however, subsequent decisional law developed a theory that damages for wrongful death were recoverable only for the "pecuniary" loss suffered by the heirs. (E. g., Valente v. Sierra Railway Co., 158 Cal. 412, 418-419, 111 P. 95; Hale v. San Bernardino etc. Co., 156 Cal. 713, 718, 106 P. 83.) Nevertheless, as our Supreme Court recently noted in Krouse v. Graham, 19 Cal.3d 59, 67, 137 Cal.Rptr. 863, 562 P.2d 1022, courts have uniformly allowed recovery for the "pecuniary value" of the loss of the society, comfort, care and protection offered by the deceased. Were the question one of first impression, it might be argued that the 1874 amendment deleting the words "pecuniary and exemplary" was intended to broaden rather than restrict recoverable damages in a wrongful death action.

21 Former Civil Code section 956 provided:

"A thing in action arising out of a wrong which results in physical injury to the person or out of a statute imposing liability for such injury shall not abate by reason of the death of the wrongdoer or any other person liable for damages for such injury, nor by reason of the death of the person injured or of any other person who owns any such thing in action. When the person entitled to maintain such an action dies before judgment, the damages recoverable for such injury shall be limited to loss of earnings and expenses sustained or incurred as a result of the injury by the deceased prior to his death, and shall not include damages for pain, suffering or disfigurement, nor punitive or exemplary damages, nor prospective profits or earnings after the date of death. The damages recovered shall form part of the estate of the deceased. Nothing in this article shall be construed as making such a thing in action assignable."

22 As amended in 1949, Code of Civil Procedure section 377 read:

"When the death of a person not being a minor, or when the death of a minor person who leaves surviving him either a husband or wife or child or children or father or mother, is caused by the wrongful act or neglect of another, his heirs or personal representatives may maintain an action for damages against the person causing the death, or in the case of the death of such wrongdoer, against the personal representative of such wrongdoer, whether the wrongdoer dies before or after the death of the person injured. If any other person is responsible for any such wrongful act or neglect, the action may also be maintained against such other person, or in case of his death, his personal representatives. In every action under this section, such damages may be given as under all the circumstances of the case, may be just, but shall not include damages recoverable under Section 956 of the Civil Code. The respective rights of the heirs in any award shall be determined by the court. Any action brought by the personal representatives of the decedent pursuant to the provisions of Section 956 of the Civil Code may be joined with an action arising out of the same wrongful act or neglect brought pursuant to the provisions of this section. If an action be brought pursuant to the provisions of this section and a separate action arising out of the same wrongful act or neglect be brought pursuant to the provisions of Section 956 of the Civil Code, such actions shall be consolidated for trial on the motion of any interested party." (See Stats.1949, ch. 1380, pp. 2401-2402.)

23 Included in Probate Code section 573 were matters formerly covered by Civil Code section 956 and Probate Code section 574.

Probate Code section 573 provides:

"Except as provided in this section no cause of action shall be lost by reason of the death of any person but may be maintained by or against his executor or administrator.

"In an action brought under this section against an executor or administrator all damages may be awarded which might have been recovered against the decedent had he lived except damages awardable under Section 3294 of the Civil Code or other damages imposed primarily for the sake of example and by way of punishing the defendant.

"When a person having a cause of action dies before judgment, the damages recoverable by his executor or administrator are limited to such loss or damage as the decedent sustained or incurred prior to his death, including any penalties or punitive or exemplary damages that the decedent would have been entitled to recover had he lived, and shall not include damages for pain, suffering or disfigurement.

"This section is applicable where a loss or damage occurs simultaneously with or after the death of a person who would have been liable therefor if his death had not preceded or occurred simultaneously with the loss or damage.

"Nothing in this section shall be construed as making assignable things in action which are of such a nature as not to have been assignable prior to the enactment of the 1961 amendment to this section."

24 The commission also recommended that damages for pain and suffering and disfigurement be allowed under section 573, but the Legislature decided to continue to exclude such damages. (3 Cal.Law Rev.Com., supra, F-1, F-7.)

25 The rationale for the rule that only the personal representative of the deceased can maintain certain types of actions is explained in Holland v. McCarthy, 177 Cal. 507, 509-510, 171 P. 421:

"To permit ... (an heir) to maintain an action of any character affecting (decedent's) property, whether for the direct recovery thereof or to determine an adverse right thereto, is well calculated to lead to inevitable confusion and inconvenience. There might be legatees under a will, or heirs other than the one suing, or creditors of the decedent entitled to ... money in payment of their claims, none of whom would be affected by the judgment. Assuming that in the case at bar and upon issue joined upon all the allegations of the complaint, judgment had been rendered for the defendants, such judgment would be ineffectual as a plea in bar to an action against the same defendants for the same property brought by the administrator of the estate. One having possession of money or property of a decedent at the time of the latter's death should not, at the suit of an heir, be called upon at his peril to deliver or pay it over unless he can conclusively establish for all time that there was no will, no legatees, no creditors of the estate, and no other heirs, without all of which he could not be exempt from liability, nor unless a judgment therein rendered in his favor would protect him in subsequent litigation for the same property by other heirs or the personal representatives of the deceased."

26 Were it not for the long history of decisional law interpreting our wrongful death statute and the rule that the Legislature is presumed to be aware of judicial decisions interpreting a statute when it amends the statute, a persuasive argument might be made that Probate Code section 573 as adopted in 1961, when read in conjunction with Code of Civil Procedure section 377, was meant to allow punitive damages to be recovered in wrongful death actions; that in prohibiting recovery in wrongful death actions of damages which are "recoverable" in survival actions, the Legislature intended only to prevent "double recovery" of damages when two suits are filed involving the same death. (See McClelland & Truett, 8 Univ.S.F.Law Rev., supra, 585, 595, fn. 49.) The anomaly of allowing punitive damages if a victim lived even a few moments after injury, while denying them if the victim died instantaneously would be avoided by so interpreting the statutes.

27 Article 1, section 7 of the California Constitution provides in part:

"(a) A person may not be deprived of life, liberty, or property without due process of law or denied equal protection of the laws; ..."

Article 4, section 16, subdivision (a), of the California Constitution provides:

"(a) All laws of a general nature have uniform operation."

28 When life ends, as well as when it begins, has long been a controversial subject in legal and medical circles. It may well be a medical rarity for death to occur simultaneously with the infliction of a death-causing injury.

29 Both Georgie Boy Manufacturing, Inc. v. Superior Court, supra, 115 Cal.App.3d 217, 171 Cal.Rptr. 382, and In re Paris Air Crash, supra, 622 F.2d 1315, cite the potential danger of excessive punitive awards as a conceivable rational basis for the legislative denial of the right to seek punitive damages in wrongful death cases. Neither decision, however, seems to have taken into account the fact that courts not only have the power but that it is their duty to set aside or modify "excessive" damage awards. In addition, as the Georgie Boy court candidly noted, there are no empirical data which would support the fears of large verdicts should punitive damages be recoverable in wrongful death cases. (Georgie Boy Manufacturing, Inc. v. Superior Court, supra, at p. 225, fn. 4, 171 Cal.Rptr. 382.) Finally, the rationale of danger of excessive punitive damages is difficult to square with the legislation providing for survival of a punitive damage claim enforceable by the personal representative and the joinder of such action with a wrongful death action or consolidation of the actions under the two statutes if they were separately filed.

In In re Paris Air Crash, supra, at page 1321, the court distinguished Brown v. Merlo, supra, 8 Cal.3d 855, 106 Cal.Rptr. 388, 506 P.2d 212, on the ground that the guest's cause of action was of common law origin where as the wrongful death cause of action is statutory. It is true that our Supreme Court in Justus v. Atchison, 19 Cal.3d 564, 571-575, 139 Cal.Rptr. 97, 565 P.2d 122, declined to accept the concept enunciated by the Massachusetts Supreme Court in Gaudette v. Webb (1972) 362 Mass. 60, 284 N.E.2d 222, 229, that the right to recover for wrongful death is of common law origin. However, we believe that in the present context at least, there is much to be said for the view expressed by Justice Tobriner in his concurring opinion in Justus that a right which was originally statutory in origin may now serve as a source of common law. (19 Cal.3d at p. 586, 139 Cal.Rptr. 97, 565 P.2d 122.)

The Ninth Circuit also advanced as one of the justifications for precluding punitive damages in wrongful death cases the rationale that punishment and deterrence is most effective when payment is required to be made by the tortfeasor directly to the victim. (622 F.2d at p. 1323.) The observance of the suggested ritual is about as meaningful to the law of punitive damages as the common law ritual of livery of seisin is to modern conveyancing. It is even less persuasive than the arguments rejected in Brown v. Merlo, supra, 8 Cal.3d 855, 865, 878, 106 Cal.Rptr. 388, 506 P.2d 212, that a rational basis for the guest statute was the protection of a generous host from an ungrateful guest or the prevention of collusive lawsuits.

30 It might be argued that the amount of exemplary damages recoverable by the personal representative in an action under Probate Code section 573 might not be large enough to serve as punishment and deterrence if the amount of compensatory damages recoverable in such action is small. The ratio of exemplary to compensatory damages, however, is only one of the many factors to be considered in determining the reasonableness of an award of exemplary damages. Indeed, as we noted in the Grimshaw section of this opinion, commentators have criticized use of the ratio of exemplary to compensatory damages as a factor for consideration in assessing the propriety of an exemplary damage award and have recommended its abandonment. (Fn. 15, ante.) We agree with the commentators; the focus should be on the severity of the threatened harm, reprehensibility of the conduct, wealth of defendant, and profitability of the conduct.