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FMG Law Blog Line

And the Hits Keep Coming for Fiat Chrysler America

Posted on: July 27th, 2015

By: Wayne S. Melnick

In March, Fiat Chrysler America (“FCA”) was hit with one of the largest tort verdicts in Georgia history when a Decatur County jury found it 99% liable for the death of a four-year-old that was burned to death in the back of a 1999 Jeep Grand Cherokee following a rear-end accident.  In that case, the jury determined the vehicle was defectively designed by having its gas tank behind the rear axle making the gas tank vulnerable in such a rear-end accident.  A motion for new trial or to reduce the verdict is currently pending before the trial court.  As of now, the parties still appear to be over $145M apart in what each considers to be a “fair” verdict.

However, even if that verdict is reduced significantly, FCA is still going to be reeling as a result of FCA’s vehicle design and the actions taken by FCA after questions regarding FCA vehicle safety started coming to light. Over the weekend, it was announced that FCA had agreed not only to a record $105M fine for “shortcomings in reporting defects and inadequate recall procedures” related to the Jeep Grand Cherokee (and similarly designed Jeep Liberty vehicles), but that FCA was also required to buy back a limited number of vehicles, offer incentives for owners to participate in recall repairs, and be subject to independent monitoring to ensure its safety program continues to meet minimum standards.  The new federal oversight will last a minimum of three years.

Of the $105M fine, FCA must pay a $70 million cash penalty — equal to the record $70 million civil penalty the agency imposed on Honda in January for an undercount that led to 1,729 deaths and injury claims not being reported to NHTSA over 11 years.  FCA must also spend at least $20 million on meeting performance requirements included in the Consent Order. Another $15 million could come due if the independent monitor discovers additional violations of the Safety Act or the Consent Order.

As a result of this action, it is clear that FCA’s headaches from the older model Jeep Liberty and Grand Cherokee models are far from over.  Due to the explosive nature of these claims, there is no doubt that there will be additional claims/law suits related to similar injuries and/or deaths.  Any attorney or claims representative involved in these claims can surely learn lessons on what not to do from the Georgia trial resulting in such a runaway verdict.

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