BMW of North America, Inc. v. Gore, 517 U.S. 559, 5 (1996)

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Cite as: 517 U. S. 559 (1996)

Opinion of the Court

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.1 Convinced that he had been cheated, Dr. Gore brought suit against petitioner BMW of North America (BMW), the American distributor of BMW automobiles.2 Dr. Gore alleged, inter alia, that the failure to disclose that the car had been repainted constituted suppression of a material fact.3 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 sug-1 The top, hood, trunk, and quarter panels of Dr. Gore's car were re-painted 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.

2 Dr. Gore also named the German manufacturer and the Birmingham dealership as defendants.

3 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).

563

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