WASHINGTON—In an 8-0 decision, the U.S. Supreme Court reversed and remanded a $2.74 million damage award against Goodyear and two attorneys who represented the tire maker in a product liability lawsuit.
Two lower courts erred in ordering Goodyear and attorneys Basil J. Musnuff and Graeme Hancock to pay all of the Haeger family's legal fees, instead of only those that arose specifically from the tire maker's alleged misconduct, the high court ruled in its April 18 opinion.
The case began in 2003, when Leroy, Donna, Barry and Suzanne Haeger were injured in Arizona in the rollover crash of their Gulf Stream motor home.
The Haegers sued Goodyear in 2005, claiming that the accident was caused by the failure of a Goodyear G159 tire that was original equipment on the motor home. The tire, they alleged, was never meant to be mounted on that vehicle.
Goodyear settled with the Haegers in April 2010. However, the Haegers' attorney later learned of Goodyear tests disclosed in a subsequent lawsuit that the G159 tire got unusually hot at speeds of 55 to 65 mph.
The Haegers sued Goodyear, Hancock and Musnuff, claiming they deliberately withheld relevant evidence. In November 2012, a judge in the Arizona federal district court ordered Goodyear and the attorneys to pay $2.74 million in attorneys' fees and court costs.
In July 2015, the U.S. Court of Appeals for the Ninth Circuit upheld the district court 2-1. Musnuff appealed to the Supreme Court, which reversed and remanded the damages award April 18.
Writing for the full court, Justice Elena Kagan noted that Goodyear and the Haegers largely agreed on the law at hand, but disagreed on its interpretation. In any case, she said, the court unanimously decided that Goodyear was correct in asserting that the award should be vacated and sent back to the trial court.
"The Haegers' defense of the lower courts' reasoning is a non-starter," Kagan wrote. "Neither court used the correct legal standard."
The district and appeals courts erred in disclaiming a causal link between the award and what they claimed was "truly egregious" behavior on Goodyear's part, according to Kagan.
"A sanctioning court must determine which fees were incurred because of, and solely because of, the misconduct at issue, and no such finding lies behind the $2.7 million award made and affirmed below," she wrote.
Goodyear said it was pleased with the Supreme Court decision, but declined further comment.
Newly appointed Justice Neil Gorsuch did not participate in this case.