We previously discussed a terrible wrongful death case, Walden v. Chrysler Group, LLC, in which a 4-year-old Georgia child died after his aunt’s Jeep Grand Cherokee exploded in a rear-end collision. The impact caused the Jeep’s rear-mounted fuel tank to explode, setting the child on fire. Following a trial, a jury held the Jeep’s manufacturer, Chrysler, 99% responsible for the child’s death and awarded the family $150 million in damages. Although the judge reduced that award to $40 million, Chrysler still appealed.
Is a CEO’s Salary Relevant to a Wrongful Death Claim Against his Company?
The Georgia Supreme Court recently affirmed the modified verdict after reviewing and rejecting Chrysler’s challenge to some of the evidence presented at trial. Specifically, Chrysler argued that it was unduly prejudiced by the plaintiff’s introduction of evidence related to the salary of the company’s chief executive officer.
Here is what happened during the trial. The plaintiffs introduced evidence that Chrysler’s CEO attempted to influence officials at the National Highway Traffic Safety Administration (NHTSA) to remove the Jeep model at issue in this case from a list of recalled vehicles. The NHTSA had previously concluded that a number of vehicles with rear-mounted gas tanks were dangerous.
During cross-examination of another Chrysler executive–the company’s chief operating officer–the plaintiffs’ attorneys asked about the CEO’s annual compensation. The COO replied that the CEO earned about $68 million from the company. Chrysler’s attorneys objected to the relevance of this information, but the judge overruled the objection. Later, during closing arguments, plaintiffs’ counsel again referred to the CEO’s compensation, noting the $120 million in damages they sought equaled “less than two years” of what the CEO earned.
Under traditional common-law rules in Georgia, one party in litigation may not reference the other party’s wealth. This was to ensure juries ruled on the merits of the underlying personal injury claim and were not simply punishing a wealthy defendant. But Georgia adopted a new Evidence Code around the time of the Chrysler trial that largely displaced the common-law rules.
Under the new Georgia Rule 403, which is modeled on a similar rule used in federal courts, a trial judge may exclude otherwise relevant evidence “if its probative value is substantially outweighed by the danger of unfair prejudice.” Before the Georgia Supreme Court, Chrysler argued that the COO’s testimony regarding the CEO’s salary created “unfair prejudice” to its case and thus violated Rule 403.
The problem, however, was that Chrysler did not specifically raise a Rule 403 objection at trial. Instead, it objected to the relevance of the CEO’s salary information. Given this, the Supreme Court could only review the company’s Rule 403 objection for “plain error” on the part of the trial judge. There was no such error here, the Court said. For one thing, the traditional prohibition against admitting evidence of a party’s wealth did not apply here, as the CEO himself was not a party. While the Supreme Court said it did not believe that a company executive or employee’s salary would always be admissible as evidence, it could be deemed relevant “to show bias…depending on the facts of the case.”