Court Awards 8 Million Dollar Default Judgment Against Hyundai as Discovery Sanction
Multinational businesses sued in US beware. Ignoring litigation obligations can have serious financial consequences. The Supreme Court of Washington upheld a $ 8 million dollar default judgment against Hyundai imposed as a discovery sanction.
On February 15, 1997 Jesse Magaña was a passenger in a 1996 Hyundai Accent, two-door hatchback driven by Ricky Smith. As they drove over a hill they saw an oncoming truck driven by Dennis Nylander that appeared to be in their lane. Smith swerved the Accent to avoid the truck, causing his car to veer off the road. The car hit several trees and spun violently. Magaña was thrown out of the rear window and landed about 50 to 100 feet away from where the car eventually stopped. He was rendered a paraplegic due to the accident.
Magaña filed suit on February 8, 2000 in Clark County Superior Court, Washington, against Hyundai Motor America and Hyundai Motor Company (collectively Hyundai) and the drivers of both vehicles.
Fast forwarding through a detailed procedural history, the trial court found that Hyundai had willfully violated the discovery rules , its discovery abuses had substantially prejudiced Magaña in preparing for trial and it had spoiled and lost evidence. The trial court imposed an $ 8 million dollar default judgment against Hyundai as a discovery sanction. The Washington Court of Appeals reversed in a two-to-one decision and remanded for a new trial.
However, in November, 2009 the Supreme Court found that trial courts need not tolerate deliberate and willful discovery abuse, that given the unique facts and circumstances of this case, the trial court appropriately diagnosed Hyundai's willful efforts to frustrate and undermine truthful pretrial discovery efforts by striking its pleadings and rendering an $8,000,000 default judgment plus reasonable attorney fees. This result appropriately compensates the other party, punishes Hyundai, and hopefully educates and deters others so inclined.
This decision should serve as a reminder to large companies, both domestic and foreign, that US courts will not tolerate playing games in producing evidence during the pretrial process.
