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Damages Ruling

June 02, 1996

* Consumers lost when the U.S. Supreme Court overturned the $2-million punitive damages award against BMW (May 21). After the company sold damaged, repainted cars at full market value, without disclosing the damage or repainting to their customers, an Alabama jury hit it with $4 million in punitive damages--the amount of profit BMW earned through its deceit. The amount was reduced, but the purpose remained: to punish past behavior and deter future conduct.

It worked. As Justice John Paul Stevens noted in his ruling, "When the $4-million verdict was returned in this case, BMW promptly instituted a nationwide policy of full disclosure of all repairs, no matter how minor."

Large punitive damages are rare; but they force big corporations to stop fraudulent--or even dangerous--business practices. If the court's ruling makes such damages even rarer, big business may cheer, but consumers should start worrying.

DEBORAH DAVID

President-elect

Consumer Attorneys Assn.

of Los Angeles

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