Question

Plaintiff purchased an automobile from a dealer in Alabama for $40,750.88. The national distributor of such automobiles did not inform the dealer that the car had been repainted before delivery. The policy of the national distributor is not to inform dealers of repairs costing less than three percent of the retail price of the car.

The policy was legal in many states. Plaintiff noticed no flaws in the appearance of the automobile at the time of purchase. Nine months later, however, the plaintiff took the car to a detailer who told him that the sedan appears to have been repainted. Plaintiff brought suit against the defendant national distributor for actual and punitive damages.

To support his claim for punitive damages the plaintiff introduced evidence that since 1983 the defendant had without disclosure sold 983 refinished cars as new, including 14 in Alabama. Using $4,000 per vehicle as actual damages, the plaintiff argued that an appropriate punitive damages award would be $4 million for the approximately 1,000 vehicles sold for more than they were worth. The jury at trial awarded compensatory damages of $4,000 and punitive damages of $4,000.000.

1. Highlight the pertinent facts;

2. Identify the issue of law posed by the case problem;

3. What should be the decision in the case?

4. The reasoning for such a decision.