No. 94-

OCTOBER TERM, 1994

BMW OF NORTH AMERICA, INC.,

PETITIONER

V.

IRA GORE, JR., RESPONDENT

3. The Events Leading Up To This Case. In January 1990, Ira Gore, a medical doctor specializing in oncology, purchased a 1990 BMW 535i from German Auto in Birmingham, Alabama, for $40,750.88. App., infra, 3a. Dr. Gore drove his car for approximately nine months before taking it to Slick Finish, an independent automobile detailing shop. Ibid. He was not dissatisfied with the car's overall appearance; nor had he noticed any problems with, or flaws in, the car's paint. Ibid. He simply wanted to make the car look snazzier than it normally would appear. Ibid.  The proprietor of the detailing shop, Leonard Slick, informed Dr. Gore that his car had been repainted. Ibid.

It turned out that the automobile purchased by Dr. Gore had sustained superficial paint damage (presumed by the parties to be the result of acid rain) and that the horizontal surfaces had been refinished at the VPC in Brunswick, Georgia. App., infra, 3a; R. 526, 554. In keeping with its nationwide policy, BMW had not disclosed the repairs to German Auto because the cost of those repairs — $601 — was substantially less than 3% of the MSRP for the vehicle. App., infra, 3a.

4. Proceedings Below. Dr. Gore never contacted BMW to complain about the refinishing or to ask for any kind of recompense.  R. 357, 375-376. Instead, he simply filed suit in Alabama state court. The complaint alleged that BMW's failure to disclose to Dr. Gore that it had performed some refinishing on his vehicle prior to selling it to German Auto constituted fraud, suppression, and breach of contract. 

At trial, it was undisputed that the only flaw in the refinishing of Dr. Gore's car was a three or four-inch tape line on the rear fender that the technicians inadvertently had failed to remove. R. 657.  There was no evidence that the paint had faded, chipped, or bubbled or that it was likely to do so in the future. The colors of the refinished surfaces matched the colors of the rest of the car. There was no unusual film build-up and the gloss was exactly what would be expected of a vehicle that had come straight off the assembly line.  R. 786-790. In short, with the exception of the tape line, which could have been buffed out without damage to the car (R. 657-659, 745-746), Dr. Gore's vehicle was indistinguishable from one that had not undergone refinishing. Although these facts raised serious doubt about the materiality of the non-disclosure, the case was submitted to the jury on the strength of the uncorroborated testimony of the former owner of German Auto that even perfectly refinished vehicles suffer a 10% diminution in value (R. 279-280, 336-337).

During his closing statement, Dr. Gore's counsel requested compensatory damages of $4,000 — representing 10% of the approximately $40,000 purchase price of Dr. Gore's car — and punitive damages of $4 million. The closing statement made clear that the latter figure represented a penalty of $4,000 per car for each of the approximately 1,000 cars that BMW had refinished at a cost of over $300 and sold anywhere in the United States over a ten-year period (R. 812-813):4

They've taken advantage of nine hundred other people on those cars that were worth more — the damage was more than three hundred dollars. If what Mr. Cox said is true, they have profited some four million dollars on those automobiles. Four million dollars in profits that they have made that were wrongfully taken from people. That's wrong, ladies and gentlemen. They ought not be permitted to keep that. You ought to do something about it.