BMW of North America, Inc. v. Gore
United States Supreme Court
517 U.S. 559 (1996)
Gore (plaintiff) bought a new BMW that, unknown to him, had been repainted before sale under a nationwide BMW policy of not disclosing pre-sale repairs costing less than three percent of a car's retail price. When an independent detailer noticed the repaint, Gore sued BMW of North America (defendant) in Alabama state court for failing to disclose the repair. The jury awarded $4,000 in compensatory damages, finding a repainted car worth less than a new one, and $4 million in punitive damages based on BMW's nondisclosure policy. The Alabama Supreme Court upheld the due-process challenge to punitive damages generally but reduced the award to $2 million. The U.S. Supreme Court granted certiorari.
Whether a $2 million punitive damages award against a seller that failed to disclose a minor pre-sale repair is grossly excessive in violation of the Due Process Clause of the Fourteenth Amendment.