C

$$ ASE $2\mathrm{.}1$: Grimshaw v$.$ Ford Motor Company, $119$ Cal. App. $3$d $757,174$ Cal. Rptr$.348(1981)$

FACT SUMMARY

This was a personal injury tort case decided in Orange County, California, in $1978$ and affirmed by a California appellate court in $1981.$ The lawsuit involved the safety of the design of the Ford Pinto automobile, manufactured by the Ford Motor Company. The jury awarded plaintiffs $$127\mathrm{.}8$ million in damages, one of the largest ever granted at the time for a product liability and personal injury case.

During discovery, it was ascertained that Ford managers learned a troubling fact during crash tests involving the Pinto. They learned that the vehicle might, under certain conditions, explode due to a design flaw involving the positioning of the fuel tank. The explosion would likely cause deaths and serious burn injuries. Ford's managers considered the costs of fixing the design flaw and used a cost$-$benefit analysis to decide to go ahead with the flawed design. They set upon this course of action reasoning that it would cost less to pay injury claims than to redesign the vehicle.

The trial involved an accident where a $1972$ Pinto sustained a rear$-$end impact and caught fire. This resulted in the death of the driver, Lily Gray, and severe injury to the passenger, Richard Grimshaw. The jury in the case awarded $$125$ million in punitive damages.

The images below represent the figures used in Ford's cost$-$benefit analysis and the design work$-$around that would have corrected the defect.