2014-09-26 memorandum of law in support of motion to add a punitive damages claim & amplify...
TRANSCRIPT
UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA
Jeffrey Paul Hinkemeyer,
Plaintiff,
v. Ford Motor Company,
Defendant.
Case No.: 0:13-cv-00739 (MJD-LIB) MEMORANDUM IN SUPPORT OF MOTION TO AMEND THE COMPLAINT TO ADD A PUNITIVE DAMAGES CLAIM AND AMPLIFY POST-SALE WARNING CLAIM
INTRODUCTION
We are before the Court on Plaintiff’s motion for an order granting Plaintiff
leave to amend his Complaint to add a claim for punitive damages against
Defendant Ford Motor Company (hereinafter “Ford”) and to address Ford’s
allegation that Plaintiff’s amended complaint failed to allege that Ford had a post-
sale/continuing duty to warn. Because there is an abundance of evidence of
Ford’s willful and deliberate disregard for the rights and safety of the motoring
public in general, and Plaintiff in particular, a claim for punitive damages should
be allowed. Because the same conduct which supports a punitive damages
claim against Ford also creates the “special circumstances” which support a
post-sale warning claim, and because of Ford refuses to acknowledge the
allegation it once tried to dismiss, “good cause” exists for amplification of
Plaintiff’s previously-pled post sale warning claim. Therefore, Plaintiff’s Motion to
Amend should be granted in its entirety.
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FACTS
This matter arises out of the May 30, 2009 Ford Pinto fire which resulted in
catastrophic burn injuries to Plaintiff Jeffrey Hinkemeyer. More specifically,
Plaintiff alleges the choices Ford utilized in designing the Ford Pinto caused an
explosive fire hazard, which Ford was well aware of but tried to hide. As a
consequence of Ford’s reprehensible conduct, Jeff Hinkemeyer was literally
incinerated in a post-collision fuel fed fire. Witnesses at the scene will testify that
Jeff’s skin looked like melting wax dripping off his body, and now Jeff is left
permanently disfigured and disabled. The May 30, 2009 Pinto fire was not an
isolated or unique event. Rather, the May 30, 2009 Pinto fire was simply the
latest in a long line of catastrophic burn injuries resulting from Ford’s indifference
to public safety.
A. Evidence Supporting Amendments
Discovery in this matter is continuing and incomplete. For example,
Plaintiff has been prevented from taking Ford’s Rule 30(b)(6) deposition, and
Ford has withheld numerous documents, including post-sale crash tests and
evidence relating to non-Pinto vehicles. As a result, despite the evidence
hereinafter cited, Plaintiff has been deprived of critical evidence to support his
claims.
However, an abundance of evidence exists to support the prima facie
showing required by Minn. Stat. § 549.191. Since the evidentiary record in this
matter is too voluminous to present in its entirety, Plaintiff presents the following
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non-exhaustive description of evidence supporting Plaintiff’s proposed Amended
Complaint.1
Leading up to Ford’s manufacture and sale of the subject 1979 Ford
Pinto2, Ford knew at least 600 (and perhaps as many as 3,500) burn deaths, and
countless injuries, were occurring every year as a result of post collision fuel fed
fires. 9/18/1973 Memorandum (Ex. 4), pages 1, 4, 6, 7. It knew “when
occupants are burned, the injuries tend to be quite serious”. Id. However, Ford
felt $200,000.00 per human life and $67,000.00 per burn injury was the “upper
bound” of the benefit it could achieve by protecting the motoring public from post-
collision fuel fed fires. Id. (arguing Federal crash fire standards were not cost
effective); see also 10/11/1973 Memorandum (Ex. 5), page 2 (stating costs of
rear impact requirement “are comparable to the most generously estimated
benefits, indicating marginal cost-effectiveness.” (emphasis added)).
1 All exhibits are attached to the 9/19/2014 Affidavit of Raymond Konz (“Konz Aff.”). Plaintiff’s proposed Second Amended Complaint is attached as Exhibit 1. A version of the proposed Second Amended Complaint with tracked-changes is attached as Exhibit 2. See LR 15-1. 2 Transcript of Testimony of Harley Copp in Grimshaw v. Ford Motor Co., Cal. Ct. Nos. 197 761; 197 397 (“Copp Trans.”) (Ex. 3), 10/20/1977, 25:15 - 19 (“I was Assistant Chief Engineer of Research, and there was another Assistant Chief Engineer of Research, and he was responsible for making the cost weight evaluations on what was known as the Phoenix, which was later the Special Maverick, and then the Pinto.” (emphasis added)). Cf. Fed. R. Evid. 804(b)(1); Fed. R. Evid. 801(d)(2)(D).
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Long before the Ford Pinto’s introduction, technical materials had warned
against locating a vehicle’s fuel tank “in the extreme rear . . . because of rear-end
collisions and the danger of its being punctured by sharp objects that may cause
explosions due to sparks.” See, e.g., M. Halsey, "The Relationship Between
Automobile Construction and Injury Accidents", SAE Paper No. 320056 (1932)
(Ex. 6), page 258. In 1968, on the basis of 55 mile-per-hour car-to-car crash
tests, using vehicles donated by Ford, one article concluded that:
Fuel tanks should not be located directly adjacent to the rear bumper or behind the rear wheels directly adjacent to the tender sheet metal as this location exposes them to rupture at very low speeds of impact. . . .
D. Severy et al., "Vehicle Design for Passenger Protection from High-Speed Rear
End Collisions," SAE Paper No. 680774 (1968) (Ex. 7) (recommending over-the-
axle fuel tank location as safest design); see also 3/27/1976 Memorandum (Ex.
8) (recognizing state-of-the-art design alternatives).
Rather than heed these warnings, Ford simply ignored them. In fact, none
of Ford’s General Product Assessment Specifications (“GPAS”) for fuel systems
addressed “fuel system integrity in rear end impacts . . . even remotely”.
4/26/1978 Memorandum (Ex. 9); Example “GPAS (Ex. 10). As a result of Ford’s
corporate indifference, it located the Ford Pinto’s fuel tank at the extreme rear,
directly adjacent to both the rear axle and the rear bumper. See 3/9/1978 Pinto
Rear Structure Study (Ex. 11); Representative Underbody Photograph (Ex. 12).
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Safety was not among Ford’s objectives for the Pinto, apparently because
it had other priorities. See, e.g., 12/9/1968 Memorandum (Ex. 13) (listing
“appearance” as an objective, but not safety).3 Rather, cost and weight seemed
to be Ford’s paramount concerns. See, e.g., 2/13/1969 Memorandum (Ex. 15),
page 2 (“cost and weight control of [the Pinto] program [was] critical to its
success”); 5/12/1969 Memorandum (Ex. 16) (“it is the E & F position that the
stock thickness increase [of the fuel tank] from .030” to .060” can not be
eliminated but may be reduced to .048”. This could reduce the $.75 penalty to
$.40.”); 11/11/1970 Memorandum (Ex. 17), page 1 (“Pinto-Type Cost Control
System . . . provides[s] the opportunity for substantial profit improvement . . .”).
In other words, evidence suggests Ford cut corners in order to increase its profit
margin for the Ford Pinto.
Rather than taking the time to do it right, the Ford Pinto’s “[f]inal rear end
arrangement including fuel tank, fuel filler, [rear leaf spring suspension], exhaust
system and rear rails” were “urgently” designed on a “crash basis”. 10/15/1968
Memorandum (Ex. 18). Despite the fact that the Ford Pinto was “a ‘new, new’
car from the ground up” (which presumably required at least the normal length
design time), in a rush to market Ford reduced the Pinto’s design schedule by
3 In contrast to the Pinto design process, Ford began incorporating safety “into basic planning procedure” in the early 1980s. 10/21/1980 Memorandum (Ex. 14) (Ford’s “future product safety requirements . . . provides guidance for the inclusion of . . . safety . . . into basic planning procedure . . .”); cf. Ford Motor Co. v. Zahn, 265 F.2d 729, 732 (8th Cir. 1959) (“[Ford’s quality control manager] testified: ‘safety of the automobile is a most important factor.’”).
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roughly 40% compared to the “standard” schedule. 6/2/1970 Engineering the
Pinto Outline (Ex. 19) 2d-3d, pages; see also 10/11/1968 Work Plan Chart (Ex.
20). Ford knew that an early introduction date would result in “defects that might
have been corrected or corrected with more appropriate fixes”. 1971 Special
Maverick Job #1 Timing Memorandum (Ex. 21), page 1. Its engineers expressed
concern that they would not be able to give the Pinto the “same degree of
attention that could be given” in a longer design process. 5/8/1969 Car Product
Planning Memorandum (Ex. 22). Ford knew, because the Pinto was “being
designed to minimum cost and weight levels”:
there [were] sure to be many areas that will be underdesigned and failures or inadequacies will show up during testing. If we were to take the safe route and overdesign the [Pinto] to preclude failures, we would not have a program because of excessive cost and weight. The current timing for Job # 1 is not compatible with the late changes that will be required due to the criteria of minimum cost and weight design.
4/18/1969 Memorandum (Ex. 23), page 2. Ford knew that it could only meet the
compressed design schedule “if there are no changes in program direction or
significant change to initial release drawings.” 10/29/1969 Memorandum (Ex.
24), page 1. Despite listing rear impact testing as “problem area” requiring
managerial attention, Ford pressed forward with its compressed design schedule.
1/15/1970 Memorandum (Ex. 25); cf. 4/22/1971 Memorandum (Ex. 26), page 4
(longer design schedule “would let us do a fundamentally better job of
incorporating” safety and flexibility into body design). The result was the basic
flawed design Ford utilized in all 1971-1980 Ford Pintos. 10/15/1982 Affidavit of
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Robert Pautsch (Ex. 27), ¶ 35 (“As an engineer . . . there is absolutely no basis
whatsoever to distinguish between the [1977-1980] Ford Pinto vehicles on one
hand and all other Pinto vehicles manufactured by [Ford] since 1971 on the
other.”).
Even before the Ford Pinto was introduced, Ford knew the Pinto suffered
from poor fuel system integrity. See, e.g., 5/8/1969 Advanced Vehicles
Memorandum (Ex. 27), page 2 (“There are a number of current design problems
. . . [including] Fuel Tank – Front and rear crash protection appears to be
inadequate.”). Early in the design process, Ford’s engineers “expressed concern
about the fuel tank location because of rear/side impacts.” 1/23/1969
Memorandum (Ex. 29), page 2. In contrast to the design actually chosen by Ford
(locating the Ford Pinto’s fuel tank in the crush-zone), Ford knew that that the
“safest” (i.e. “Optimum”) location for a fuel tank is “directly above the rear axle . . .
[where it] is above and forward of vehicle components likely to crush during the
collision or deform it”. 1/23/1970 Memorandum (Ex. 30), page 1; see also
7/26/1976 Memorandum (Ex. 31), 3d page (“Ostensibly, [the over-the-axle]
location offers the optimum place for maintaining fuel system integrity during car
to car collisions . . .”); cf. 7/7/1971 List (Ex. 32), page 2 (disadvantage of behind-
axle fuel tank location is “Tank volume may decrease during impact due to
deformation”). In fact, Ford considered relocating the Ford Pinto’s fuel tank over-
the-rear axle, but abandoned the proposal “[d]ue to the undesirable luggage
space attained with these proposals”. 1/31/1969 Memorandum (Ex. 33), 2d
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page; see also Transcript of Testimony of Harold MacDonald in Yarborough v.
Ford Motor Co., Tx. No 80-CI-409 (Ex. 34), 11/19/1980, 877:5-11 (“[the over-the-
axle tank location] didn’t enhance the luggage compartment so we never got to
the safety aspects of it.” (emphasis added)). Indeed, Ford’s explanation for the
locating the Ford Pinto’s fuel tank “aft-of-axle [is] it was a practical and feasible
location for the fuel tank.” Def.’s Answer Pl.’s Interrog. 7 (Ex. 36), 3d page; cf.
7/15/1970 Corporate Safety Position Paper (Ex. 35) (“Gas Tank Location[:]
Believed minimal consideration”).
Rather than fix the Ford Pinto’s fuel leakage problem, Ford decided that
“[a]ny changes to the rear body structure to meet rear impact safety requirements
will be established at a later date”. See 2/3/1969 Memorandum (Ex. 37), page 3.
By delaying design changes necessary for the Ford Pinto to survive a rear-
impact crash test, Ford anticipated savings of “$1.2 million for car”. 10/3/1971
Memorandum (Ex. 38), page 3; Fuel System Integrity Program Financial Review
(Ex. 40), page 2 (“Based on these estimates, it is recommended that the addition
of the ‘flak’ suit to all unitized cars be delayed until 1976 . . . A design cost
savings of $7.4 million can be realized by this delay.”); cf. 5/3/1971 Memorandum
(Ex. 39), page 1 (“The tank over axle location showed a significant margin of
safety when tested [but this direction was subsequently cancelled because of
conflict with the 3-door package requirements and cost ($12.65 penalty)].”).
Perhaps unsurprisingly, considering Ford’s lack of concern for safety, each
of Ford’s four pre-production rear-end Pinto crash tests resulted in fuel leakage,
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as did the first post-introduction crash test. Copp Trans. (Ex. 3), 10/26/1977,
18:4-20:7, 21:26-22:2, 31:4-32:23 (Ford employee stated “We are going to have
more damn lawsuits on our hands than you can shake a fist at.”). Despite its
knowledge that Ford Pinto occupants would be subjected to a risk of severe burn
injury at speeds as low as 17.8 miles per hour, Ford released the Pinto for
production anyway. Crash Test 1360 Report (Ex. 41).
At the time the Ford Pinto was introduced, there was no Federal Motor
Vehicle Safety Standard governing fuel leakage in rear-end collisions. Rather,
the “minimum” rear-impact fuel leakage standard did not go into effect until
September 1, 1976. 49 C.F.R. 571.301 (“FVMSS 301”); cf. Pokorny v. Ford Motor
Co., 902 F.2d 1116, 1122 (3d Cir. 1990) (“the Safety Act’s purpose was ‘to
reduce traffic accidents and deaths and injuries to persons resulting from traffic
accidents.’”).
Once the minimum Federal Motor Vehicle Safety standard was adopted,
rather than strive to save Pinto occupants from needless burn injury, Ford’s
“objective [was] to satisfy the 1977 Safety Requirements at minimum cost . . .”
6/4/1975 Memorandum (Ex. 42), page 2. Ford’s goal was, “[w]here minimum
performance requirement must be met, it must be exceeded only by the amount
of possible laboratory inaccuracy to assure compliance . . .” See 6/14/1973
Memorandum (Ex. 43), page 2. In fact, Ford adopted a policy of not making
modifications to improve fuel system integrity “until required by law”, suggesting
Ford was not concerned with preventing needless burn injuries, but was
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concerned, instead, only with keeping the government off its back. 4/26/1971
Memorandum (Ex. 44).
Ford’s “minimum” safety design approach was criticized even within Ford
Motor Company. As one Ford engineer observed:
Chassis Research Department suggests that the proposed “minimal design change approach” to meet a low test-severity target does not adequately meet the objective of a substantial reduction in fire hazard which is the intent of the Government’s proposed amendment to FMVSS 301.
12/1/1970 D.G. Younger Memorandum (Ex. 45), page 1. As observed by
another Ford employee:
From a Public Affairs standpoint, there is serious question as to whether sufficient measures are being taken to comply with present and proposed safety and damageability requirements.
12/1/1970 T.H. Mecke Memorandum (Ex. 46) (emphasis added); see also Pinto
Fuel Tanks Corporate Requirements Handwritten Notes (Ex. 47) (identifying
concern that Ford engineering organizations “simply did not take [safety
standards] seriously”).
“The Pinto/Mustang vehicles present[ed] a major challenge since their . . .
design d[id] not provide sufficient protection to the fuel tank itself . . .” 3/31/1975
Memorandum (Ex. 48), page 1; see also 2/25/1975 Memorandum (Ex. 49), page
1 (“[the] P[into]/M[ustang] . . . are disasters so far.”); 2/28/1975 Memorandum
(Ex. 50) (Ford was “rapidly coming to a real crisis on Pinto and Mustang.”). Ford
knew that “[d]ata from crash testing as of this date indicate that while problems
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exist, solutions are known for the problem, all cars can pass these requirements.”
4/30/1975 Memorandum (Ex. 51), 4th page.
However, the costs for major problems (Mustang/Pinto . . .) do exceed current objectives. Major efforts are being expended to develop lower cost alternative solutions.
Id. (emphasis added); see also Memorandum from T.H. Cooke et al. (Ex. 52)
(significant changes to the Ford Pinto “would seriously jeopardize containment of
associated costs with the present cycle plan expenditure levels.”).
In just tweaking the design of the Ford Pinto to get it to pass the minimum
federal standard, Ford utilized what even it described as a “patchwork” approach.
5/5/1978 Draft Response to NHTSA Inquiry (Ex. 53), page 6 (“The patchwork
concept was ultimately incorporated into the vehicle”). As Ford itself recognized,
“[t]he ‘Patchwork’ restructure concept . . . was developed to minimize investment
cost,” not for the purpose of maximizing passenger safety. 10/28/1975
Memorandum (Ex. 54); see also 4/7/1975 Design Transmittal (Ex. 55), page 2
(the approach to “’patch up the current structure’ . . . [was] the most cost effective
solution.”); 9/3/1975 Memorandum (Ex. 56), page 1 (“A vehicle with the
maximum cost reduction proposal patchwork structure (bare bones) was tested
8-1-75 (crash test number 3139).”). However, as Ford knew, none of the
“patchwork” changes addressed the Pinto’s real problem.
Ford itself identified the unique and particular defect with the Ford Pinto
design:
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1. The Pinto had the least rear overhang, meaning Ford located the fuel tank in an area with less crush space than other vehicles.
2. The “Pinto’s tank is more exposed and not as well protected”
as other vehicles; and
3. The Pinto’s leaf springs could cause the rear end of the Pinto to lift upwards during rear-end impact, encouraging underride, and further exposing the fuel tank to the risk of crushing impact.4
11/17/1977 Memorandum (Ex. 58); see also 4/7/1972 Memorandum (Ex. 59)
(“The gasoline tank is too close to the rear end of the car.”); Pinto Design Effects
Diagram (Ex. 60) (“‘exposed’ fuel tank vulnerable to direct impact, crushing, and
puncturing in rear-impact collisions”).
None of these problems were rectified by changes Ford made to 1977-
1980 Pintos. See 3/9/1978 Pinto Rear Structure Study (Ex. 11).5 The result of
Ford’s design choices, as explained in an internal Ford memorandum titled “Fuel
Tank Explosion (Pinto)”, is:
The design of the Pinto fuel tank is such that it . . . . is virtually a pressurized bomb waiting for a device for ignition. When it is compressed to the point of rupture it will then spew its contents in an
4 Underride/override is a crash condition in which the bumper of a vehicle colliding into another vehicle slips over or under the impacted vehicle’s rear bumper. M. Appleby et al. “Injuries in Underride-Override Collisions – A Clinical Study”, SAE 700483, (1970) (Ex. 57) pages 1708-09. 5 The fact that Ford considered extending a plastic shield to the back of the tank suggests its knowledge that the bumper of a vehicle colliding into the back of a Ford Pinto could impact the Pinto’s fuel tank. The fact that it chose not to incorporate this proposal suggests that it cared more about profits and reputation than it did about passenger safety.
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atomized vapor in all direction (hydraulically)6 a condition which only needs the spark of static electricity that all vehicles produce (tires prevent its discharge) or a spark from metal rubbing metal and/or metal rubbing concrete. . .
7/25/1978 Tafoya Memorandum (Ex. 61) (emphasis added) (“The fuel tank must
rupture in its current design if it is going to be crushed, a pressure relief valve
would prevent this by venting its internal pressures into an orificed ballooned
device of an appropriate design.”); see also 9/24/1974 Memorandum (Ex. 62),
page 2-3 (acknowledging the Ford Pinto’s “peculiar” susceptibility to hydrostatic
rupture in rear end impacts).
Ford’s response to Mr. Tafoya’s concerns indicates Ford’s callous
indifference to the explosion risk.7 Rather than encourage efforts to protect Pinto
occupants, Ford management sat Mr. Tafoya down and reminded him that the
government had not identified Mr. Tafoya’s concern. 8/10/1978 Memo-to-File
(Ex. 64). As a result of management’s intervention, “Mr. Tafoya suggested he
would take no further action” to protect Pinto occupants from the risk that the
Pinto’s “pressurized bomb” would severely burn and/or kill them. Id.
6 This condition is sometimes referred to as “hydrostatic rupture”. See https://www.youtube.com/watch?v=6Qbi-YtrjFI. 7 Cf. 4/27/1971 Nixon tapes (Ex.63), page 26 (Ford complains to President Nixon about safety and emissions standards, complaining that “[t]he citizens of the US must be protected from their own idiocy”).
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While the “patchwork” approach allowed the Ford Pinto to pass the
minimum federal standard’s flat barrier crash test, Ford consciously tried to
suppress evidence that the patchwork Pinto was not safer in the real world.
Ford’s Body Testing Department had the “somewhat questionable procedure” of
not issuing a crash test report if the tested vehicle failed to meet FMVSS
requirements. 11/27/1972 Memorandum (Ex. 65), page 2; cf. Copp Trans. (Ex.
3) 11/3/1977, 333:9-335:10 (describing Ford’s “us” and “them” computer system
whereby Ford hid violations of emissions standards from the government,
destroying records in the process).
Ford restricted the scope of its “1977 FMVSS production validation tests
from a full scale program involving approximately 30 vehicles . . . to [just] three
vehicles”. 9/26/1976 Memorandum (Ex. 66) (tentatively dropping Pinto sedan
from test plans). Only two non-prototype sedan/hatchback patchwork Pintos
were tested. 19[7]7-1980 Pinto/Bobcat CRTS Listing (Ex 67) (listing tests 3335
and 3763). Further, Ford’s procedures for prototype testing had been “adopted
as an emergency method” which “resulted in considerable problems in building
representative prototypes . . .” 8/16/1976 Memorandum (Ex. 68). Cf. Randall v.
Goodrich-Gamble Co., 70 N.W.2d 261, 264 (Minn. 1955) (“Dr. Ole Gisvold,
qualified as an expert, testified that Roehrich's experiment was erroneously
conducted and did not include a sufficient number of tests to produce
scientifically accurate results.”).
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Ford knew that, even where a vehicle could pass a controlled moving
barrier crash test8 like the one utilized by the federal standard, “because of broad
load distribution, car-to-car impacts [can result in] a definite vulnerability of the
fuel tank which will cause fires and loss of human life.” 9/2/1970 Memorandum
(Ex. 70); see also 11/19/1979 Memorandum (Ex. 71), page 1 (“From a
comparison of rear (sic) world accident damage vs. barrier test damage, it is
obvious that the real world is more extensive due to the under-ride/over-ride
condition . . .”). Ford knew car-to-car testing is important in assessing real-world
safety, as evidenced by its later implementation of a 50 mile-per-hour car-to-car
crash test criteria for the Ford Escort. 8/11/1982 Car Program Direction Letter
(Ex. 72). Yet, Ford has produced only one 1977-1980 Pinto car-to-car crash test,
conducted at a “moderate” speed of only 26 miles-per-hour. 19[7]7-1980
Pinto/Bobcat CRTS Listing (Ex 67). In that single car-to-car crash test, the
bumper of the bullet vehicle slid underneath the Pinto’s rear bumper and directly
impacted the Pinto’s fuel tank. Report from Crash Test 3763 (Ex. 73). Following
this test, in an apparent effort to protect those tests from public scrutiny, Ford
conducted all of its 1977-1980 Pinto car-to-car crash tests under the cover of its
Office of General Counsel. Cf. Pl.’s Mem. Supp. Mot. Compel (Doc. 81), page 22
8 A moving barrier test consists of a flat wall mounted to a rolling cart which impacts the rear end of a parked vehicle at a certain speed. Because the barrier is flat and rigid, no part of the flat wall can go underneath the tested vehicle’s rear bumper to impact the fuel tank directly. Rather, the collision forces are equally distributed across and through the rear bumper of the car only, unlike real-world car to car collisions. See Frames from Crash Test 4250 Video (Ex. 69).
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(“Ford cannot negate Plaintiff’s warning claim by channeling factual crash test
results through its in-house legal department.”).
Ford also intentionally disregarded real world evidence. In 1979, Ford
conducted a “junk yard survey” “[t]o determine the performance of Ford and
comparative cars in severe accident damage situations.” 10/13/1985 Deposition
of Elmer Rohn (Ex. 74), 7:24-8:3, 9:8-11. When the survey revealed that fuel
tanks located over-the-axle were “seldom disturbed” in rear-end accidents, Ford
abruptly terminated the survey prior to its planned conclusion, presumably
because it did not want to deal with real world proof that alternative designs
were, indeed, safer. Id. 26:13-27:23 (deponent uncertain why junk-yard survey
halted); id. 32:16-24; Photograph of Rohn Exhibit 4 (Ex. 75).9
Moreover, Ford internally conceded that the Ford Pinto was implicated in
more rear-end, fire-accompanied fatalities than Toyota Corollas (over-axle tank),
Volkswagen Rabbits (mid-ship tank), or other vehicles. 11/2/1978 Memorandum
(Ex. 76); see also 12/11/1974 Memorandum (Ex. 77), page 1 (noting the
Corvette’s bladder tank withstood 40-50 psi of hydrostatic pressure, survived
41.1 mph crash test); 3/6/1978 Policy Review Request (Ex. 78), 2d page (1981
9 When Plaintiff traveled to Michigan to review Ford’s “storage box documents”, Plaintiff took the attached photograph of the “March L.A. Salvage Lot Survey Observations” document. As the photograph shows, the document had an “Exhibit Rohn #4” sticker attached to it. However, the version of this document Ford has actually produced, through Xerox, does not have the deposition sticker on it. This discrepancy has not been resolved. Konz Aff. ¶ 99.
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FWD Pinto/Bobcat Replacement Program’s “Fuel tank packaging in front of rear
axle on FWD gives better safety potential.”).
Indeed, in answer to its own internal question “[h]as the problem been
eliminated from the 1979 [Pinto] and forward?”, Ford answered:
The 1979 cars, as in our previous offerings, will meet the federal standard for fuel system integrity. However, unique test conditions which are more severe than those required by the federal standards on certain accident situations can produce fuel system damage sufficient to cause leakage.
6/26/1978 Memorandum (Ex. 79), 6th page. Ford’s qualified answer suggests its
knew that the 1979 Ford Pinto was safe only in the event that it was impacted by
a flat wall moving at 30 miles-per-hour, and not in real world “car-to-car”
collisions. See also 9/25/1974 Memorandum (Ex. 80), page 2 (“CEO feels that
the cost involved in designing to 5 mph above a legislated level [of 30 mph]
would be prohibitive.”). Similarly, Ford’s evasive answer to the question “Did
[Ford] knowingly sell Pintos with unsafe fuel tanks?” suggests it did, in fact, know
that the Pinto was unsafe. 7/13/1978 Memorandum (Ex. 81), page 1 (noting
1977 Pinto models met Federal safety standards, earlier Pintos recalled, and two
barrier tests were successful, but not denying knowledge of the Pinto’s unsafe
tank).
Ford considered making further improvements to the 1979 Ford Pinto.
However, Ford’s concern for its profit margin overrode any concern it had for the
safety of 1979 Ford Pinto occupants:
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We have a dilemma relative to taking design action to upgrade the Pinto either for future models (1979) or to past models (field fix) because the way such action could be construed to further increase our liability. We will continue to monitor the situation carefully, however, at this time we are not inclined to take any specific action for either production or the field.
3/6/1978 Memorandum (82), page 3 (emphasis added).
In keeping with its practice of concealment, Ford provided no warning
about the 1979 Ford Pinto’s susceptibility to fuel fed fires, nor did it share any of
its knowledge regarding the Pinto’s dangerousness. In contrast, it appears Ford
“launch[ed] a program, designed to convince dealers and customers that current-
model Pintos (and Bobcats) are not involved in the fire problem”. 7/7/1978 Draft
Presentation to the Board (Ex. 83), 7th page; see also; 1979 Pinto Ad (“Of
course, all ’79 model Pintos, like the ‘77s and ‘78s before it, have redesigned fuel
system features, including a longer filler pipe, plus gas tank shield”). Moreover,
Ford publically represented that it would spare no expense in fixing the Pinto’s
fire defect. “Ford: Road Ahead” article (Ex. 85), page 42 (“The lawyers would
shoot me for saying this, but I think there’s some cause for the concern about the
car. I don’t even listen to the cost figures – we’ve got to fix it.” (emphasis
added)).
At the same time, Ford famously recalled the 1971-1976 Ford Pinto. See
6/6/1978 Memorandum (Ex. 86), pages 1-3 (noting Ford’s own tests yielded
similar results to those supporting the Government’s defect determination and
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describing longer filler pipe and plastic shield to be used in recall). However, as
at least one ex-Ford employee noted:
The shield used in the recall campaign was basically to prevent bolt puncture from the differential in certain crash conditions. It was probably effective in preventing bolt puncture in crash tests with speeds a few mph over the required 30 and would be ineffective against hydrostatic produced failure.
11/14/1980 Dewey Younger Affidavit (Ex. 87), page 2-3: see also 8/17/1992
Deposition of Thomas Feaheny (Ex. 88) 110:3-14 (“[The shield] actually
decreased the crush space for the tank by taking up some of the space of the
shield to a very minor degree, but actually it reduced the hydrostatic rupture
resistance and deteriorated it . . I regarded the fix as marginal and mostly
cosmetic to meet the public relations concerns about the allegation against the
Pinto.”). Indeed, while the public was led to believe that the recall made the Ford
Pinto safer, “[a]n implied concern . . . with nearly everyone [Ford] talked to [within
Ford] is the effectiveness of the fix!” Cover Note on 7/11/1978 Memorandum
(Ex. 89); see also 7/18/1978 NHTSA Letter (Ex. 90) (“We are disappointed to
learn that Ford was prepared to go ahead with the recall and correction based
solely upon a single barrier crash test . . .”). As Plaintiff Jeff Hinkemeyer
observed:
I seen that they recalled the earlier models and fixed whatever that issue was so they wouldn’t explode like they did before . . . So whatever problem they had from blowing up I thought that it was fixed because why else do you recall a car? You fix whatever problem it had. . . . I just trusted what Ford said and I guess I was – whatever they fixed, their little fix or whatever they really even were, didn’t work . . . . [because it] still blew up.
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August 14, 2014 Deposition of Plaintiff Jeffrey Hinkemeyer (Ex. 91), 85:9-86:13.
In fact, in the decades leading up to the May 30, 2009 Pinto fire, Ford
received repeated and renewed notice that Pinto occupants were still being
preventably incinerated. See, e.g., Def.’s Ans. Pl.’s Interrog. 11 (Ex. 36), 9th-
14th page (listing 244 other Pinto fire victims). As the May 30, 2009 Pinto fire
grew closer and closer, Ford conducted further crash tests under the guise of
attorney work product which (presumably) reaffirmed and further established the
dangerousness of the Ford Pinto’s design.
This would not be the first Ford Pinto case in which punitive damages were
alleged. As the Court in Grimshaw v. Ford Motor Company addressed:
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. . . There was testimony10 . . . that Harold Johnson, an Assistant Chief Engineer of Research, and Mr. Max Jurosek, Chief Chassis Engineer. . . admitted awareness of the defects but told [Harley Copp] they were powerless to change the rear-end design of the
10 See Copp Trans. (Ex. 3), 27:4-28:16 (“[Ford engineer Harold Johnson] told me the design problems on the Pinto . . . and he specially mentioned the rear end. He said ‘it’s the same old story. The car is styled, and we have to package everything in it,’ and . . . I asked about the fuel tank and spare tire arrangement. That’s always a problem on a car of this type. He said, ‘Well, we have got one, but it’s not very good,’ . . . ‘What can I do? You know how it is, Harry.”)
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Pinto. It may be inferred from the testimony . . . that the two engineers had approached management about redesigning the Pinto or that, being aware of management's attitude, they decided to do nothing. . . .
119 Cal.App.3d 757, 813-14 (Cal.Ct.App. 1981) (“While much of the evidence
was necessarily circumstantial, there was substantial evidence from which the
jury could reasonably find that Ford’s conduct . . . . constitute[d] corporate
malice.”).
B. Procedural Posture in this Matter
Plaintiff’s original Complaint contained a continuing duty to warn claim.
Complaint (Doc. 1), ¶¶ 26 (“At all times material hereto, Defendant Ford had a
duty to warn of any safety hazard in the Pinto.”), 33 (“Defendant Ford breached
its duty to warn of safety hazards presented in the Pinto.”). Ford then moved to
dismiss the entire Complaint, including Plaintiff’s continuing duty to warn claim.
Def.’s Mot. Dismiss (Doc. 8); see also Def.’s Mem. Supp. Mot. Dismiss (Doc. 10)
(“Equally troubling, by alleging that Ford’s duty to warn extends to ‘all times
material hereto,’ Plaintiff appears to allege that Ford owed certain post-sale
duties to warn.”). In response, Plaintiff pointed out that:
The only question before the court is whether Plaintiff's warning claim is factually plausible. Considering: (1) Defendant has had more than 35 years' worth of actual or constructive knowledge of the Ford Pinto's defects, (2) the hidden nature of the Ford Pinto's defect, (3) the seriousness of injuries, and likelihood of death, associated with fuel fed fires, (4) that Defendant continues in the same line of business and continued selling Ford Pintos even after selling Plaintiff's Ford Pinto, and (5) that Ford voluntarily undertook an ineffectual Ford Pinto recall campaign, Plaintiff's warning claims are more than factually plausible.
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Pl.’s Mem. Opp. Def.’s Mot. Dismiss (Doc. 15), pages 31-33; cf. Hodder v.
Goodyear Tire & Rubber Co., 426 N.W.2d 826, 833 (Minn. 1988). Plaintiff also
filed and served an Amended Complaint. (Doc. 14); see id. ¶¶ 35, 73, 84, 86. In
response, Ford abandoned its efforts to dismiss Plaintiff’s continuing duty to
warn claim. See Def.’s Notice No Reply (Doc. 18) (“On May 24, 2013, Ford’s
counsel spoke with Plaintiff’s counsel and notified him that Ford agreed with
Plaintiff that filing of the Amended Complaint had rendered Ford’s Motion to
Dismiss Plaintiff’s Complaint moot and that Ford would be filing an Answer to
Plaintiff’s Amended Complaint.”). Thus, until recently, it appeared from the
record that the parties’ agreed regarding the sufficiency of Plaintiff’s claims as set
forth in Plaintiff’s Amended Complaint.
As discovery proceeded,11 Plaintiff learned of evidence relating to Ford’s
knowledge and ability to provide warnings, including post-sale warnings. Among
this evidence were the withheld “litigation” crash test materials which were the
subject of Plaintiff’s Motion to Compel Production of Crash Test Materials
Withheld by Ford (Doc. 79). See id., page 2 (“As alleged by Plaintiff,
notwithstanding its actual and/or constructive knowledge, Ford ‘failed to warn or
otherwise advise the public’ of the risk, despite its continuing duty to warn.”).
When it filed its response, Ford did not claim Plaintiff failed to allege a
11 Plaintiff’s Rule 26(a)(1) Initial Disclosures advised Ford that “Plaintiff intends to assert a claim for punitive damages, in accordance with Minn. Stat. §§ 549.191 and 549.20.” Pl.’s Initial Discl. (Ex. 96), page 9.
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continuing duty to warn. Cf. Def.’s Mem. Opp. Pl.’s Mot. Compel (Doc. 89). It
was not until August 1, 2014 430 days after it had abandoned its efforts to
dismiss Plaintiff’s continuing duty to warn claim that Ford, in a transparent
effort to limit Plaintiff’s discovery, proffered the duplicitous argument that Plaintiff
had failed to allege the claim Ford earlier tried to dismiss. Def.’s Objection (Doc.
102), page 14.
The original Scheduling Order set December 15, 2013 as the deadline for
motions to amend the complaint, except with regard to the deadline to seek leave
to add punitive damages. (Doc. 83); see also Second Am. Sched. Order (Doc.
139) (setting August 1, 2015 as deadline for motion to add punitive damages). At
no time leading up to December 15, 2013 did Ford allege (despite earlier trying to
dismiss it) that Plaintiff had not pled a continuing duty to warn.
LAW
“[T]he complaint merely serves to put the defendant on notice and is to be
freely amended or constructively amended as the case develops, so long as
amendments do not unfairly surprise or prejudice the defendant.” Toth v. USX
Corp., 883 F.2d 1297, 1298 (7th Cir. 1989) cert. denied 493 U.S. 994; see also
Fed. R. Civ. P. 15.
“The goal of [the amendment rules] is to promote the objective of deciding
cases on the merits rather than on the relative pleading skills of counsel.” Am.
Family Mut. Ins. Co. v. Hollander, 705 F.3d 339, 348 (8th Cir. 2013) (citing
Foman v. Davis, 178, 181-82 (1962)); see also McHenry v. Ford Motor Co., 269
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F.2d 18, 25 (6th Cir. 1959) (“The courts give rules [regarding amendment of
pleadings] a liberal construction, always trying where possible to see that cases
are decided on their merits.”).
If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.—the leave sought should, as the rules require, be “freely given.” Of course, the grant or denial of an opportunity to amend is within the discretion of the District Court, but outright refusal to grant the leave without any justifying reason appearing for the denial is not an exercise of discretion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules.
Foman, 271 U.S. at 181-82 (emphasis added). Where a party makes a
“colorable showing” in support of its amendment, and the amendment is not
frivolous the court should permit amendment of the pleadings. See Karl’s Inc. v.
Sunrise Computers, Inc., 901 F.2d 657, 660 (8th Cir. 1990). “[D]elay alone is not
reason in and of itself to deny leave to amend. . . The delay must have resulted
in unfair prejudice to the party opposing amendment.” Sanders v. Clemco Indus.,
823 F.2d 214, 217 (8th Cir. 1987) (citations omitted).
In analyzing [a party’s] Motion to Amend, [courts] apply the constraints of Rule 12(b)(6), Federal Rules of Civil Procedure, and accept as true, in a hypothetical sense, all of the factual allegations contained in the proposed amendments, and view those allegations in a light most favorable to [the moving party].
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Upsher-Smith Lab., Inc. v. Mylan Lab., Inc., 944 F.Supp. 1411, 1442 (D.Minn.
1996) (emphasis added); see also Air Prod. and Chem., Inc. v. Eaton Metal
Prod., Co., 256 F.Supp.2d 329, 332 (E.D.Penn. 2003) (“the proposed
amendment . . . should not be rejected unless it is clear that the plaintiff is not
entitled to any relief thereunder.”); Becker v. Univ. of Nebraska at Omaha, 191
F.3d 904, 908 (8th Cir. 1999) (“Likelihood of success on the new claim or
defenses is not a consideration for denying leave to amend unless the clearly
frivolous.”).
“The burden is on the party opposing the amendment to show such
prejudice.” Beeck v. Aquaslide “N’ Dive Corp., 562 F.2d 537, 540 (8th Cir. 1977);
see also Buder v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 644 F.2d 690, 694
(8th Cir. 1981) (“[E]ven where some prejudice to the adverse party would result if
the motion to amend were granted, that prejudice must be balanced against the
hardship to the moving party if it is denied.”).
“A court abuses its discretion when it denies a motion to amend a
complaint unless there exists undue delay, bad faith, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice to the non-
moving party, or futility of the amendment.” Popoalii v. Correctional Med. Serv.,
512 F.3d 488, 497 (8th Cir. 2008); see also Hanson v. M & I Marshall and Ilsley
Bank, 737 F.Supp.2d 988, 990 (D.Minn. 2010) (“[D]enial of leave to amend
pleadings is appropriate only in those limited circumstances . . .” (quoting
Roberson v. Hayti Police Dep’t, 241 F.3d 992, 995 (8th Cir. 2001)).
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A. Minnesota’s Two-Step Process for Obtaining Award of Punitive Damages
“Punitive damages are intended to serve as a disincentive to corporations
that might be tempted to sacrifice public safety for profits.” M. Dennison & W.
Freedman, Punitive Damages in Products Liability Litigation, 54 Am. Jur. Trials
443 (May 2014) § 6 (citing Gryc v. Dayton-Hudson Corp., 297 N.W.2d 727, 740
(Minn. 1980) (“the decision not to use flame-retardant cotton flannelette was
merely an economic one for the benefit of [the defendant].”)); see also Ulrich v.
City of Crosby, 848 F. Supp. 861, 867 (D. Minn. 1994) (“Punitive damages are
intended to . . . make an example of a defendant’s wrongdoing . . .”).
Minnesota imposes a two-step process for obtaining an award for punitive
damages. Minnesota law does not allow plaintiffs to plead a claim for punitive
damages in the initial complaint. Minn. Stat. § 549.191. Rather, after suit is
commenced, a party may bring a motion to amend the complaint to add a
punitive damages claim. Id. The second step is actually proving, to the trier of
fact, that punitive damages are warranted. Minn. Stat. § 549.20, Subd. 4.
1. The Standard for Allowing Punitive Damages in the Complaint
The standard for allowing punitive damages in the complaint requires only
a prima facie showing of a deliberate disregard for the rights or safety of others.
Minn. Stat. § 549.191.
On a motion to amend the complaint to assert a claim for punitive damages, however, “[a] plaintiff need not demonstrate an entitlement to punitive damages per se, but only an entitlement to allege such damages.” [Berczyk v. Emerson Tool Co., 291
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F.Supp.2d 1004, 1008 (D.Minn. 2003)]. At this stage, [a plaintiff] need only offer evidence which, if unrebutted, would constitute clear and convincing evidence of deliberate disregard for the rights or safety of others. Swanlund v. Shimano Indus. Corp., Ltd., 459 N.W.2d 151, 154 (Minn.Ct.App.1990). “[A] prima facie case simply means one that prevails in the absence of evidence invalidating it.” Tousignant v. St. Louis Cnty., 615 N.W.2d 53, 59 (Minn.2000) (citation omitted). In evaluating [a plaintiff]'s motion, “the Court makes no credibility rulings, and does not consider any challenge, by cross-examination or otherwise, to the plaintiff's proof.” Berczyk, 291 F.Supp.2d at 1008 n. 3.
In re Lavaquin Prod. Liab. Litig., MDL No08-1943, 2010 WL 7852346, at *6
(D.Minn. Nov. 9, 2010) (distinguishing Berczyk, where motion supported only by
“argument, rhetorical invective, conclusory surmise, and hearsay stacked upon
hearsay”); see also Olson v. Snap Prod. Inc., 29 F.Supp.2d 1027, 1033 (D.Minn.
1998). (In ruling upon the propriety of a claim for punitive damages, Court does
not act as fact finder, but only determines whether the Plaintiff’s evidence, if
unrebutted, would support an award of punitive damages in his favor); Gamma-
10 Plastics, Inc. v. Am. President Lines, Ltd., 32 F.3d 1244, 1256-57 (8th Cir.
1994) (applying Minnesota law and holding denial of leave to add punitive
damages was abuse of discretion where trial court weighed evidence, claim not
clearly frivolous, and defendant on notice of intent to pursue punitive damages)
cert. denied 513 U.S. 1198 (1995).
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2. The Standard for Proving Punitive Damages at Trial
After plaintiffs have been allowed to amend their complaint to add a claim
for punitive damages, they must show at trial “clear and convincing evidence that
the acts of the defendant show deliberate disregard for the rights or safety of
others.” Minn. Stat. § 549.20, Subd. 1. The “clear and convincing” requirement
is met where “the evidence is sufficient to permit the Jury to conclude that it is
‘highly probable’ that the defendant acted with deliberate disregard to the rights
or safety of others”. Ulrich, 848 F. Supp. at 868 (applying Minnesota law) (citing
Becker v. Alloy Hardfacing & Eng’g Co., 401 N.W.2d 655, 659 (Minn. 1987)). A
defendant has acted with deliberate disregard for the rights or safety of others if
the defendant has knowledge of facts or intentionally disregards facts that create
a high probability of injury to the rights or safety of others and: (1) deliberately
proceeds to act in conscious or intentional disregard of the high degree of
probability of injury to the rights or safety of others; or (2) deliberately proceeds to
act with indifference to the high probability of injury to the rights or safety of
others. Minn. Stat. § 549.20(b)(1) and (2).
3. Punitive Damages in Products Liability Cases
Punitive damages are commonly pled in products liability cases, as the
following examples show:
Snap Prod. Inc., 29 F.Supp.2d at 1039 (leave to add punitive damages warranted where prima facie evidence demonstrated “[The Defendant] continued to market a product which was mislabeled so as to mislead the public into believing that no explosive hazard was present.”).
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Order, Anderson v. General Motors, Case No. BC116926 (Supp. Ct.
Cal. (Super. Ct. Cal. Aug. 26, 1999) (Exhibit 92) (reducing punitive damage award to $1,090,000.00 where “defendant’s fuel tank was placed behind the axle on automobiles of the make and model involved here, in order to maximize profits, to the disregard of public safety.”).
Ford Motor Co. v. Sasser, 618 S.E.2d 47, 56-59 (W.V.Ct.App. 2005)
(evidence sufficient to show “entire want of care”, supporting punitive damages, where test failures put Ford on notice of numerous pre-production problems, left unresolved, where Ford chose not to send warnings or adopt system to alert drivers of problem).
Ford Motor Co. v. Ammerman, 705 N.E.2d 539, 555-75 (Ind.Ct.App. 1999) (government report declining further investigation did not preclude punitive damages where Ford withheld damning test results).
Leichtamer v. Am. Motors Corp., 424 N.E.2d 568, 580 (Ohio 1981) (“[p]unitive damages . . . may be awarded where the manufacturer’s testing and examination procedures were so inadequate as to manifest a flagrant indifference to the possibility that the product might expose consumers to unreasonable risks of harm.”).
Wangen v. Ford Motor Co., 294 N.W.2d 437, 462 (Wisc. 1980) (facts sufficient to support punitive damages claim where Ford knew of defects in 1967 Ford Mustang’s fuel system but “deliberately chose not . . . to disclose the defect to the public by issuance of warnings because Ford wanted to avoid paying the costs . . . and wanted to avoid the accompanying bad publicity.” (emphasis added)).
Romo v. Ford Motor Co., 99 Cal.App.4th 1115, 1145 (Cal.Ct.App. 2002) (“In light of this credible evidence, it is frivolous to contend, based on [Ford]’s excerpts from the record, that ‘Ford’s [design decision] – was not, as a matter of law, a “vile” or “loathsome” act that can support an award of punitive damages.’”).
Gen. Motors Corp. v, Moseley, 447 S.E.2d 302, 311-12 (Ga.Ct.App. 1994) (“The evidence of a knowing endangerment of all who may come in contact with one of the 5,000,000 GM full-size trucks still on the road [which GM knew could leak fuel on impact], motivated by
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economic benefit, was sufficient to support an award of punitive damages.”) abrogated on other grounds by Webster v. Boyett, 496 S.E.2d 459 (Ga. 1998).
Buell-Wilson v. Ford Motor Co., 141 Cal.App.4th 525, 559-60 (Cal.Ct.App. 2006) (“The jury rejected the testimony of Ford’s experts, as it was entitled to do . . . Ford’s assertion that punitive damages are not allowed unless all experts agree there was improper design decisions is unavailing. If such an assertion were true, punitive damages would never be allowed in cases where the defendant simply had an expert who disagreed with the plaintiff’s expert.”) remanded for further consideration 550 U.S. 931.
Fravel v. Ford Motor Co., 937 F.Supp.2d 651, 656 (W.D.Virg. 2013)
(“Fravel has alleged that Ford had actual knowledge of a design defect; specifically, the propensity of vehicle equipped with the ETS system to experience unintended acceleration. Fravel further alleges that, despite knowledge of this risk of substantial harm, Ford consciously chose to equip and sell the vehicle without any brake override system or warning to the consumer public. If such facts are true, that would be sufficient to find that Ford acted with the requisite reckless indifference or conscious disregard to the injury it was aware would probably result from its conduct. As such . . . Fravel has plead the facts . . . with sufficient particularity to state a plausible claim for [willful or wanton negligence].” (emphasis added)).
B. Amendment to Amplify Claims
1. Procedure
Except where an amendment is made early in the case, a party may
amend its pleadings only with the opposing party’s written consent or the Court’s
leave, and “[t]he court should freely give leave when justice so requires.” Fed. R.
Civ. P. 15(a). When a motion to amend a complaint is made “after the deadline
for amending pleadings expired, the ‘good cause’ standard of Rule 16(b)
applies”. Birchwood Lab., Inc. v. Battenfeld Tech., Inc., 762 F.Supp.2d 1152,
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1154 (D.Minn. 2011) (finding good cause where party diligently prepared claims
and pursued discovery to uncover and confirm facts necessary to satisfy
heightened pleadings standard); but see Fragola v. City of Saint Paul, Civil No.
10-4718 ADM/TNL, 2012 WL 28120, at *2-3 (D.Minn. Jan. 5, 2012) (despite fact
plaintiff “offered no ‘good cause’” to amend complaint, but was unaware of
pleading defect until defendant’s motion for summary judgment, leave granted
because “courts are required to ‘freely give leave [to amend] when justice so
requires’”).
“The good cause standard is not applied to an untimely motion to amend
out of a devotion to formalism; rather, it is designed to foster timely and efficient
resolution of disputes and ensure accessibility to the courts.” Target Corp. v.
LCH Pavement Consultants, LLC, 960 F.Supp.2d 999, 1006 (D.Minn. 2013)
(denying motion to amend where moving party “has made no argument as to
good cause whatsoever.”).
“[G]ood cause exists and the motion to amend should be granted where,
as here, discovery is still open and no dispositive motions have been filed.”
Birchwood Lab., 762 F.Supp.2d at 1156 (“Any claim of prejudice based on the
need for additional discovery is greatly diminished where the claim to be added
overlaps with some of the claims already pled, as is the case here.”); see also
Wuchko v. Storlie, Civil No. 09-1236 (MJD/AJB), 2010 WL 5652292, at *3
(D.Minn. Dec. 1, 2010) (good cause to amend where (1) while complaint did not
use “requisite language”, was nevertheless suggestive, (2) defendant anticipated
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amended claim, (3) no prejudice, and (4) amendment permitted adjudication on
merits); In re Lutheran Broth. Variable Ins. Prod. Co. Sales Prac. Litig., No. 99-
MD-1309 (MAP), 2002 WL 31371945, at *6 (D.Minn. Oct. 7, 2002) (plaintiff acted
“swiftly and diligently” in wake of unforeseen litigation developments, thereby
demonstrating good cause to amend complaint); E.E.O.C. v. Hibbing Taconite
Co., 266 F.R.D. 260 (D.Minn. 2009) (finding good cause to amend where
defendant realized, after reviewing plaintiff’s disclosures, that additional defenses
justified); Silva v. Metro. Life Ins. Co., No. 13-2233, 2014 WL 3896156, at *6-7
(8th Cir. Aug. 7, 2014) (good cause shown where plaintiff “received additional
information” regarding issue of notice).
An amended complaint that “merely amplifies” a parties claims should be
allowed. See Kim v. Nash Finch Co., 123 F.3d 1046, 1063 (8th Cir. 1997)
(quoting Gamma 10 Plastics, 32 F.3d at 1256). Where an omission from the
pleadings was an innocent mistake, amendment of the pleadings should be
allowed. See Cambridge Mut. Ins. Co. v. Patriot Mut. Ins. Co., 323 F.Supp.2d
108, 110 (D.Me. 2004); (mistaken interpretation of Stipulation of Dismissal
warranted amended third-party complaint despite “distinct imposition on the
Court and opposing counsel”).
2. Law on Post-Sale Warning Claims
“When a manufacturer of a mass produced, widely distributed product
becomes aware that there is a danger associated with the product creating a risk
of serious injury or death, the manufacturer may have a duty to take reasonable
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steps to notify users of that danger.” McDaniel v. Bieffe USA, Inc., 35 F.Supp.2d
735, 742-43 (D.Minn. 1999) (“That the potentially ineffective product at issue
here was one designed and used specifically to protect the cyclist's life compels
this Court to conclude that ‘special’ circumstances are present in this case which
justify the imposition of a duty to warn. Thus, assuming it had adequate notice of
the alleged danger, Bieffe had a duty to take reasonable steps to alert the public
of the risks associated with misuse of the velcro strip.”); see also Gardner v.
Brillion Iron Works, Inc., Civil No. 11-3528 (JRT/LIB), 2014 WL 639960, *11-12
(D.Minn., Feb. 19, 2014) (where defendant knew of hidden danger of explosion
causing serious injury, continued to sell product, and “understood the ‘right’ thing
to do was to attempt to inform all owners and users” of the danger, summary
judgment on post-sale warning claim properly denied); T.H.S. Northstar Assoc. v.
W.R. Grace and Co., 66 F.3d 173, 177 (8th Cir. 1995) (under Minnesota law,
continuing duty to warn existed where manufacturer insisted product safe to use,
became aware over time of likelihood of serious injury, continued to sell related
products, and undertook duty to warn users of post-sale hazards).
In Hodder v. Goodyear Tire & Rubber Co., 426 N.W.2d 826, 833 (Minn. 1988), cert. denied, 492 U.S. 926, 109 S.Ct. 3265, 106 L.Ed.2d 610 (1989), the supreme court stated that the “continuing duty to warn arises only in special cases.” The important factors in Hodder were as follows: (1) the seller either knows or reasonably should know that the product poses a substantial risk of harm; (2) the product creates a serious risk of injury or death; (3) the company remains in the business, even if it does not continue to sell the specific product in question; and (4) the company undertook a duty to warn of the dangers presented by the product. 426 N.W.2d at 833. While these factors are specific to Hodder, there may be
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other “special circumstances” that will justify a post-sale failure to warn instruction.
4 Minn. Prac., Jury Instr. Guides – Civil CIVJIG 75.40 (5th ed.) (emphasis
added).
ANALYSIS
A. Evidence of Ford’s Disregard for the Safety of Ford Pinto Occupants Supports a Claim for Punitive Damages and Justifies Amendment of the Complaint
Although Plaintiff need only make a prima facie showing of Ford’s
disregard for Pinto occupants’ rights and personal safety in order to establish the
right to plead punitive damages in the Complaint, the record in the instant case
shows there is overwhelming evidence to support Plaintiff’s punitive damages
claim.
The evidence shows that Ford did not want to take the time, or spend the
money, to make a safe product. Ford knew that its scheme for designing the
Pinto would result in preventable defects, and preventable injury. Rather than
encourage its engineers to protect the public, Ford engaged in efforts to
suppress their concerns, turning a blind eye to public welfare. Ford knew safer
fuel system designs would prevent needless burn injury. Knowledge in the field,
indeed Ford’s own engineers, warned Ford against using the design it employed
for the Pinto. Yet, the evidence shows that Ford ignored these exhortations. At
the expense of public safety, Ford rushed the Pinto’s unsafe design into
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production, despite its knowledge that fires could occur in collisions as low as
17.8 miles-per-hour.
When given the opportunity, in the face of FMVSS 301, to fix the problem,
Ford did the opposite, using the minimum federal standard as an excuse for
failing to take genuinely effective measures which would prevent needless injury
in real-world accidents. Rather than fix the problem, Ford only adopted
“cosmetic” design changes, leaving the Pinto’s fuel tank (i.e., “pressurized
bomb”) in a particularly vulnerable crush space. Ford’s use of the term
“patchwork” to describe changes it made to the Pinto demonstrates Ford’s
indifference to making the Pinto safe in the real world. Cf. 9/11/1974
Memorandum (Ex. 93) (“From a cost effectiveness standpoint, the analysis of
rear end collisions are really not worth much effort.”).
Ford adopted a policy of minimizing its efforts to comply with an already
minimal standard, lest it should protect the American citizens “from their own
idiocy.” Ford’s crash tests and internal documents reveal Ford’s knowledge that
the Pinto is not only susceptible to underride and resulting crush of the fuel tank
in real-world accidents, Ford’s design choices actually encourage such
susceptibility. Ford knew that its design changes meant little in any rear-end
collision scenario other than a flat wall colliding into a Pinto at 30-35 miles-per-
hour. Indeed, Ford has only produced one car-to-car crash test of a patchwork
Pinto. When crash test 3763 revealed just how vulnerable the patchwork Pinto’s
rear-mounted fuel tank is to direct impact when underride occurs, it is reasonable
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to infer Ford adopted a new policy of funneling patchwork Pinto car-to-car crash
tests through its legal department, to ensure secrecy of the results.
If its own crash tests and engineering judgment were not enough to put
Ford on notice of the high probability of injury, Ford’s actual knowledge that Pinto
passengers were in fact being burned alive in preventable post-collision fuel fed
fires certainly did. Indeed, Ford has disclosed a non-exhaustive list of 244
Pinto deaths and injuries, several of which occurred in 1977-1980 Pintos.
Throughout the 1970s, 1980s, 1990s, and 2000s, Ford knew, and was
repeatedly reminded, that Pinto fuel tanks would burst open in real-world
accidents, ejecting a cloud of volatile gasoline vapor around unsuspecting Pinto
occupants.
Every time a Pinto occupant was burned, regardless of the severity of the
accident, Ford was faced with notice that its design choices were, in fact,
dangerous. Each tragic burn injury presented Ford with the option of learning
from its mistakes and taking steps to prevent subsequent injuries or death. Each
post-collision fire presented Ford with the choice of either, 1) taking action to
prevent further harm or, 2) defending its defective design knowing full well that,
since Pintos remained on the road, other unsuspecting Pinto occupants would
surely be unnecessarily catastrophically injured. Each time, Ford did nothing
except try to avoid accountability. Ignoring all the crash tests, engineering
concerns, and other evidence, on at least two-hundred-forty-four separate
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occasions, Ford disregarded any concern that another preventable injury may
occur.12
When Ford went out into real world junk yards and determined over-axle
fuel tank designs were indeed safer, it closed its eyes to this evidence. When its
post-sale crash testing confirmed the dangerousness of the Pinto’s design, it
concealed them from public scrutiny under a claim of privilege. Indeed, based on
its privilege log, it is reasonable to infer that Ford funneled the most probative,
car-to-car crash tests through its legal department in a deliberate effort to avoid
accountability for the danger it knew the Pinto presented.
Internally, Ford knew “the problem” was not “eliminated from the 1979”
Pinto. Ford did not warn the public, or share its knowledge of the Pinto’s
dangerous lack of fuel system integrity. Quite the opposite, despite its
knowledge that its recall changes were ineffective, Ford willfully represented to
the public that it had fixed the problem, without any concern for cost. Knowing
12 It is anticipated that Ford will argue these other incidents are inadmissible, as Plaintiff cannot show substantial similarity to the May 30, 2009 Pinto fire. Cf. Berczyk, 291 F.Supp.2d at 1014. Any inability to show substantial similarity results from Ford’s withholding of contextual evidence regarding the 244 Pinto burn injuries Ford listed in response to Plaintiff’s Interrogatory 11 (Ex. 36). Moreover, the relevance of these other Pinto fires is not that they replicate the May 30, 2009 Pinto fire. Rather, the relevance is they show Ford repeatedly learned that Pintos explode in a variety of accident scenarios, yet Ford chose only to address the Pinto’s susceptibility to fuel leakage when impacted by a flat moving wall. Cf. Smith v. Ingersoll Rand Co., 214 F.3d 1235, 1249-50 (10th Cir. 2000) (“The other acts evidence allowed the jury to make the reasonable inference that Ingersoll-Rand persevered in its refusal to place mirrors on its machines despite numerous accidents potentially caused by poor visibility.”).
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that it would face civil liability for the Pinto’s dangerous design, it focused not on
eliminating the injuries which would lead to lawsuits, but rather, Ford focused its
attention on concealing the Pinto’s dangerousness. Simply stated, Ford not only
ignored the high probability of preventable burn injury, it actively covered up the
hazard. Indeed, Ford has been maintaining the cover-up for more than 35 years,
and continues to do so.
Ford’s motivation for its reprehensible conduct was its own exclusive
economic interest, to the physical and financial detriment of the public at large.
The evidence shows that Ford put a price-tag on safety, one it expected
everyone else to pay. Ford valued human life and limb at $200,000.00, at most,
and decided society should pay this expense for the sake of Ford’s profit margin.
In its callousness, Ford apparently determined it would be cheaper to pay off
litigants than to do the right thing. Cf. 3/8/1971 Memorandum (Ex. 94), 6th page
(advocating repeal of the Federal safety standards and replacement with a
scheme by which Ford would “pay a death benefit averaging $100,000.00 for any
person killed while a driver or passenger in [a Ford] vehicle during the first five
years or 50,000 miles whichever occurs first.”); see id., 8th page (“$100,000 per
life adds up to a formidable expenditure. If we pursue the program shouldn’t we
try to sell it at a lesser figure like $25,000 or $50,000?”). Indeed, the “only”
benefit of “safety expenditures”, in Ford’s eyes, was reduced insurance
premiums/costs. 11/22/1967 Memorandum (Ex. 95), page 1; see also id. page 3
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(internal agreement that Ford should determine the “economic value of safety
features” as a whole).
Knowing that Pinto occupants would continue to be incinerated, Ford
decided to let them burn. No moral society would ever condone such behavior.
A claim for punitive damages in this case presents the opportunity to put
manufacturers on notice that they may not hide the danger to which their choices
subject the public. It will put manufacturers on notice that they may not simply
ignore a known hazard in the hope that it will go away on its own, unremediated.
It will reaffirm the message laid down in cases like Grimshaw, that it is never
okay to needlessly endanger the public. In contrast, if a claim for punitive
damages is disallowed, the message will be that it is okay to bury the truth, for
the sake of profit and reputation, and at the expense of public safety. If Ford gets
away with incinerating Jeff Hinkemeyer in this case, even more people will likely
be preventably injured.
Plaintiff is not asking this Court to hold Ford liable for punitive damages.
Plaintiff merely asks the Court to permit the jury to determine whether Ford’s
disregard for public safety was deliberate, merely negligent, or somehow
reasonable. It is about letting the jury decide whether it is acceptable to put the
public at risk for the sake of profit. It is about letting the finder of fact confirm that
no manufacturer may gamble with citizens’ life and limb for its own gain.
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B. Allowing Plaintiff to Amplify His Post-Sale Warning Claim Will Ensure Trial on the Merits
1. Plaintiff’s Ongoing Duty to Warm is Viable
“One engaged in the business of selling or otherwise distributing products
is subject to liability for harm to persons or property caused by the seller’s failure
to provide a warning after the time of sale or distribution of a product when a
reasonable person in the seller’s position would provide such a warning.” 4A
Minn. Prac., Jury Instr. Guides – CIVJIG 75.40 (5th ed.) (quoting Restatement
(Third) of Torts: Production Liability § 10 (1997)).
Many of the same facts which support Plaintiff’s claim for punitive
damages also support Plaintiff’s post-sale warning claim. See Hammes v.
Yamaha Motor Corp., Civil File No. 03-6456 (MJD/JSM), 2006 WL 1195907, at
*13 (D.Minn. May 4, 2006) (“The Hodder factors all turn on direct indifference to
a known problem and to serious bodily injury.”); Target Corp., 960 F.Supp.2d at
1011 (granting leave to amend to add punitive damages claim “based on its
fraud claim alleged in its Second Amended Complaint”). As Plaintiff’s proposed
Amended Complaint clarifies and alleges, (1) the risks caused by Ford’s failure
to warn are serious and devastating, (2) Ford’s pre and post-sale activities gave
it unique knowledge of the Pinto’s hidden hazard (3) Ford concealed its
knowledge for more than 35 years, (4) Ford kept selling automobiles, including
Pintos, after the subject 1979 Pinto left its control, (5) Ford maintained channels
through which it could have provided warnings and/or otherwise shared its
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knowledge regarding the Pinto’s dangerousness, (6) Ford made inaccurate
representations about the safety of Ford Pintos, including an ineffectual recall
campaign and misleading advertisements, thereby undertaking a duty to warn,
but (7) Ford failed to exercise its power to save Jeff Hinkemeyer from injury,
thereby breaching its duty to the occupants entrusted to its care. See Pl.’s
Proposed Second Am. Complaint (Ex. 1) page 19-25.
While Minnesota recognizes a continuing duty to warn only in “special
cases”, Ford’s active and ongoing concealment of a deadly hidden hazard
undoubtedly gave rise to such a duty. Therefore, Plaintiff’s claim is not clearly
futile, and Plaintiff should be allowed to amplify his claim.
2. Good Cause Exists to Amplify the Post-Sale Warning Claim, as Ford’s Duplicitous About-Face Created an Extraordinary Circumstance
The meaning of “good cause” can be exemplified by Ford’s July 30, 2014
request for an upward departure from Local Rule 72.2(c)(1)’s 3500 word limit
(Doc. 99). The only “good cause” showing made by Ford therein was the vague
and conclusory statement:
[t]he Order presents numerous questions of important legal significance bearing on the work product doctrine and attorney-client privilege which cannot be adequately addressed in 3500 words. Good cause exists for this request in light of the complexity and number of issues to be presented.
Id.; see also 8/1/2014 Order Granting Additional Word Count (Doc. 100).
Plaintiff’s proposed post-sale warning amendments are of “important legal
significance”. These claims stand for the proposition that Ford could not conceal
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its knowledge of the Pinto’s unreasonable dangerousness from the unsuspecting
public. The post-sale warning claim was inherent to the Court’s July 18, 2014
Order compelling production of withheld “litigation” crash tests which (as the
Gibson court found) were relevant to Ford’s failure to provide post-sale warnings.
Indeed, the fact that Ford made its new-found ‘not pleaded’ argument in the
context of a heated discovery dispute suggests the proposed amendments are of
“important legal significance” to the scope of ongoing discovery. Indeed, Ford
has still not produced a 30(b)(6) deposition designee or the withheld “litigation”
crash tests. The Complaint should be amended for the “good cause” purposes of
both preventing Ford’s continued discovery evasion and ensuring Plaintiff has the
opportunity to present evidence supporting the claim to the jury. Cf. Pl.’s Mot.
Stay Expert Discl. (Doc. 125).
The post-sale warning claim is clearly complex and requires “a number of
issues to be presented”. While issues of proof go beyond the scope of notice
pleadings, Ford has made the implicit and new-found accusation that the post-
sale warnings claims are not ‘adequately addressed’ in the current Complaint.
Thus, by Ford’s own version of the “good cause” standard, leave to amend
should be granted.
Further, Ford’s duplicitous contention that a claim it previously tried to
dismiss was actually never alleged in the first place is sufficient “cause” for
Plaintiff’s request for leave to amplify his post-sale warning claims. By agreeing
(more than a year and a half ago) that its effort to dismiss Plaintiff’s post-sale
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warning claim was “moot”, Ford invited Plaintiff to make no further changes to his
ongoing warnings allegations. Deviously, Ford waited until after the deadline to
amend the Complaint to make the new accusation that the Complaint does not
give notice of the claim Ford had previously attempted to dismiss. Cf. Fabio v.
Credit Bureau of Hutchinson, Inc., 210 F.R.D. 688, 691 (D.Minn. 2002) (finding
good cause where plaintiff’s counsel relied on Magistrate Judge’s contradictory
statement in previous case that deadline did not apply to motion to amend to add
punitive damages). Thus, by blind-siding Plaintiff with an argument which is
contradicted by the record, Ford created an “extraordinary circumstance”
necessitating further amendment of the Complaint.
Plaintiff has been diligently preparing his claims and pursuing discovery to
uncover and confirm facts necessary to satisfy his burden of proving an
uncommon and fact-intensive warning claim. Cf. Morlock v. West Cent. Educ.
Dist., 46 F.Supp.2d 892, 912-13 (D.Minn. 1999) (student allowed to amend
complaint, even though more than one year passed since deadline, where no
bad motive or dilatory tactics, proposed amendment only marginally altered
theory of case, and defendant already aware of need to address issues). Plaintiff
has repeatedly cited the post-sale warning claim as a basis for discovery Ford
has attempted to evade, and is making this Motion expediently after Ford
reinitiated its efforts to avoid plaintiff’s claims on pleading technicalities. Simply
stated, “good cause” exists to amplify Plaintiff’s post-sale warning claims, as
amendment will ensure trial on the merits. Indeed, there is “good cause” to
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ensure that the discovery process is not derailed by any further disagreement of
whether a post-sale warning claim is actually alleged.
3. While Ford Will Not be Prejudiced by Amendment, Plaintiff Will be Severely Prejudiced by Denial
The purpose of pleadings is simply to give defendants notice of the claims
against them. See Fed. R. Civ. P. 8. “The purpose of allowing amendment is to
permit a final decision on the merits, and not on technicalities.” Reaves v. Sielaff,
382 F.Supp. 472, 474 (E.D.Penn. 1974) (“The problem in this case is not the
general right to amend, but whether amendment will serve the ends of justice.”).
“[T]he policy of the Federal courts, as exhorted by the Federal Rules, is to . . .
avoid an approach that would relegate the process ‘to a game of skill in which
one misstep by counsel [might] be decisive to the outcome.’” Cook v. Greyhound
Lines, Inc., 847 F.Supp. 725, 731 (D.Minn. 1994) (quoting Foman, 371 U.S. at
381-82).
“Narrow pleading rules should not be applied to foil an honest plaintiff’s
efforts to gain redress [by amendment of his complaint].” Middle Atl. Util. Co. v.
S.M.W. Development Corp., 392 F.2d 380, 384 (2d Cir. 1968) (overruling denial
of leave to amend complaint where three year delay caused by unexpected
circumstances and resulted in no prejudice).
There is no risk of prejudice to Ford. Indeed, to the extent pleadings are
intended to provide further notice to Ford regarding Plaintiff’s claims and their
factual support, Ford will benefit from amendment of the Complaint. Ford has
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been on notice of Plaintiff’s continuing duty to warn claim since day one. Cf.
Dunham v. Innerst, 50 F.R.D. 372, 373 (M.D.Penn. 1970) (“if the party [resisting
amendment] received notice, he has not been prejudiced, and it is the interest of
justice to permit the amendment.”). No unique or new discovery is necessary,
other than the production of the discovery Ford has been evading. Indeed, the
evidence necessary for Plaintiff’s post-sale warning claim tracks the evidence
which will substantiate Plaintiff’s punitive damages claim. No trial date has been
set, and no dispositive motions have been filed. Pursuant to Local Rule 16.3,
Plaintiff’s proposed amendments are not the cause for delays in the scheduling
order deadlines. Rather, it is Ford’s discovery evasion which has caused the
need to change the Scheduling Order. In any event, this Court recently amended
the Scheduling Order, pushing the discovery deadline out to August 1, 2015.
(Doc. 139). .
In contrast, if the Motion to amplify the post-sale warning claims is denied,
Plaintiff will be prejudiced. The denial would invite Ford to further attempt to
evade the merits of Plaintiff’s claims. Denial would encourage Ford to withhold
evidence based on pleading technicalities, depriving Plaintiff, and the finder of
fact, of probative evidence of Ford’s unreasonable conduct. Denial could
potentially jeopardize Plaintiff’s post-sale warning claim (as well as his punitive
damages and other claims), depriving Plaintiff of his day in court on core
elements of his case. Simply said, denial of the Motion to amplify the ongoing
warning claim would reduce trial from a determination of truth to a game of skill,
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in which Ford would be rewarded for tactical evasion of truth. Therefore, the
Motion to amplify the post-sale warning claim should be granted.
CONCLUSION
Pleadings do more than put the defendant on notice. Indeed, a defendant
is often the only one which knows exactly what it did. Pleadings force a
defendant to answer the charges levied against it in an open and public forum,
for all to consider.
After more than 35 years of evasion, it is time for Ford to account for itself,
for what it did, and for the harm it caused. It is time to put automobile
manufacturers on notice that profits are less important than public safety.
Because Plaintiff’s punitive and post-sale warning claims are viable, and the only
prejudice to Ford is the scrutiny the allegations deserve, Plaintiff’s Motion to
Amend the Complaint should be granted.
Dated: September 26, 2014 HALL LAW, P.A.
By: s/Raymond J. Konz. L. Michael Hall (#39792) [email protected] L. Michael Hall, III (#0306988) [email protected] Raymond J. Konz (#0391236) [email protected] 1010 W. St. Germain Street, Suite 100 St. Cloud, Minnesota 56301 Tel: (320) 255-1000 Fax (320) 255-5450 ATTORNEYS FOR PLAINTIFF
JEFFREY PAUL HINKEMEYER
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