Several years ago, during the lead up to the great recession and financial
meltdown, a well-known U.S. car manufacturer filed bankruptcy. At the
time, the bankruptcy and financial help the company received from the
government made headlines on a daily basis. The story was so controversial
that it became part of the political discussion in the country in the
In the end, the company was restructured, declared bankruptcy, and received
government help so it could continue building cars. One of the hopes was
that the company could shed its old obligations and liabilities and move
forward with a clean slate. But a
recent decision by a New York bankruptcy judge has changed that outlook.
The judge’s ruling overturned the perception that the pre-bankruptcy
company would not be held liable for the punitive damages it caused. The
judge’s new ruling could mean that the company will be forced to
pay millions and millions of dollars in settlements and jury verdicts
in the coming months and years.
Background and Facts
This case came about from a faulty and defective product that the company
produced over a long period of time. Reportedly, the ignition on certain
models manufactured by this company had a tendency to unlock and turn
off power to the vehicle. This would leave the car without power steering,
airbags, and other necessary car functions.
As a result of this faulty product, many people have sued the company for
wrongful death and negligence. But it was at this time that the company
filed bankruptcy and received so much government aid. The question was
left of whether the company would still be liable for the cases that had
been and would be filed against them.
In his landmark ruling, the judge made the decision that the company could be held liable for
the actions it took prior to bankruptcy. The judge’s reasoning was
based on the fact that many of the lawyers, officers, accountants, and
other employees who could have known about the faulty ignition were still
at the company. Therefore that knowledge would transfer to the post-bankruptcy company.
Punitive Damages and Their Impact
This ruling brings to bear the importance that punitive damages have in
our legal system. The purpose of punitive damages in a case is to punish
a wrongdoer for actions they know are wrong and that will hurt their victims.
The idea is that if a person or company is punished enough, they will
not act that way again. An additional benefit to them is that others will
see the cost of acting that way and not commit the same negligent acts.
Like all other states, Florida recognizes and embraces punitive damages
in our justice system. At
The Pittman Firm our professional team looks at each case and analyzes whether that case
contains a claim for punitive damages or not. If you have been injured
in an accident or in some other way,
contact us. We look forward to going over your case with you and providing you with
your legal options.
See related blog posts:
Florida Supreme Court Rules: Product Liability for Manufacturers;
Tragic Event Leads to Lawsuit.