SAN FRANCISCO—The U.S. Court of Appeals for the Ninth Circuit has remanded a $2.7 million damage award against Goodyear and two attorneys who represented the tire maker in a product liability lawsuit.
In remanding the case to the U.S. District Court for the District of Arizona, the Ninth Circuit was under orders from the U.S. Supreme Court, which in April reversed and remanded the damage award on the grounds that the lower courts used faulty legal reasoning to grant it.
But Judge Milan Smith Jr. of the Ninth Circuit dissented from the June 8 remand, finding that the $2 million contingency award in the case obviated any further action by the Arizona court.
The case began in 2003, when Leroy, Donna, Suzanne and Barry Haeger were injured in Arizona in the rollover crash of their Gulf Stream motor home.
The Haegers sued Goodyear in 2005, claiming the accident was caused by the failure of a Goodyear G159 tire that was original equipment on the vehicle. The tire, they alleged, was never meant to be mounted on a Gulf Stream motor home.
Goodyear settled with the Haegers in April 2010. However, the Haegers' attorney later learned of Goodyear tests disclosed in a subsequent lawsuit that demonstrated the G159 tire grew unusually hot at speeds of 55 to 65 mph.
The Haegers sued Goodyear and attorneys Graeme Hancock and Basil J. Musnuff, claiming they deliberately withheld relevant information. In November 2012, Judge Roslyn O. Silver ordered Goodyear and the attorneys to pay the Haegers $2.74 million.
The Ninth Circuit upheld the Arizona court 2-1 in July 2015. Musnuff appealed to the Supreme Court, which reversed and remanded the lower courts 8-0 on April 18 of this year.
"The Haegers' defense of the lower courts' reasoning is a non-starter," said Justice Elena Kagan, writing for the court.
"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," Kagan wrote.
In his dissent in the Ninth Circuit remand, Smith said the basic matter was whether Goodyear waived any causation challenge to the Arizona court's $2 million contingency sanctions award.
"The Haegers specifically raised this theory of waiver when the case was first before us, and Goodyear responded," Smith wrote. "Accordingly, I would retain jurisdiction over this case and decide the waiver claim in the first instance."
Smith also noted Silver's stinging rebuke to Goodyear and the attorneys in her November 2012 decision, and made it plain he concurred.
"The deceit and dishonorable conduct of Graeme Hancock and Basil J. Musnuff in this case were unworthy of members of the bar, and their disgrace serves as an admonition to all members of the bar," Smith wrote.
Goodyear officials declined to comment, citing company policy that prohibits comments on matters with ongoing litigation.