Remember the case of the Virginia man who sued Northwest Arkansas Mercedes-Benz for damages over undisclosed problems with a used Ferrari he’d purchased?
The 8th U.S. Circuit Court of Appeals today affirmed a decision in Fayetteville by federal Judge P.K. Holmes that upheld a jury’s award of $20,201 in compensatory and incidental damages, but reduced the jury’s whopping $5.8 million punitive damages award to $500,000. Silverstar Automotive, corporate parent of the dealership, appealed, contending the damages should be set aside. The plaintiff, Hamid Adeli, argued for reinstatment of the $5.8 million punitive damages.
The 8th Circuit affirmed Holmes. It said case law put dealers on notice of potentially steep punitive damages for defrauding customers and a $500,000 penalty was not “grossly excessive.” It said Adeli’s argument about potentially catastrophnic consequences from problems in the car’s exhaust system was “too speculative” to justify a bigger punitive award.
Adeli bought the 2007 Ferrari F430 in 2016 for $90,000.