BMW of North America, Inc. v. Gore

517 U.S. 559 (1996)

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BMW of North America, Inc. v. Gore

United States Supreme Court
517 U.S. 559 (1996)

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Facts

An Alabama dealer for BMW of North America (BMW) (defendant) sold Ira Gore (plaintiff) what he thought was a brand-new car for $40,000. Nine months later, Gore took the car into a shop to embellish the car’s paint. The shop noticed that the car had been repainted. Gore sued BMW in Alabama state court for fraud. At trial, BMW admitted that it had a nationwide policy of repairing and selling cars damaged during the manufacturing or transportation process. If the repair costs were more than 3 percent of the car’s retail value, BMW sold the repaired car as used. If the repair costs were less than 3 percent of the car’s retail value, BMW sold the repaired car as new without disclosing the repairs. BMW had repainted Gore’s car for 1.5 percent of the car’s retail value and, therefore, sold it as new. The jury awarded Gore $4,000 in compensatory or actual damages for his car’s diminished value. Gore also asked for punitive damages to persuade BMW to change its nationwide policy. BMW had sold nearly 1,000 repainted cars as new. The jury determined that BMW had committed gross fraud nationwide and imposed punitive damages of $4 million. The Alabama Supreme Court reduced the award to $2 million, basing it solely on BMW’s conduct within Alabama. The United States Supreme Court granted certiorari.

Rule of Law

Issue

Holding and Reasoning (Stevens, J.)

Concurrence (Breyer, J.)

Dissent (Ginsburg, J.)

Dissent (Scalia, J.)

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