In 2001, a drunken Darwin Ray Ellison took a Terrible Herbst truck and went cruising through downtown Las Vegas. Rosa Delegado, a 58-year-old grandmother, was stepping into her car on Fremont Street, her back turned to the careening vehicle, when the truck ran her over and killed her.
Mrs. Delegado's family suffered a tremendous, tragic loss as a result of the accident, and thankfully, they received some modicum of justice. Ellison pleaded guilty to felony drunken driving causing death and was sentenced to between 5 1/2 and 20 years in prison. In exchange for the guilty plea, prosecutors agreed to drop a felony auto theft charge.
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But that wasn't the finale. Mrs. Delegado's family decided to chase the deep pockets of Terrible Herbst's convenience store, gas station, auto maintenance and neighborhood gaming empire.
You see, Ellison was a temporary employee of Terrible Herbst. Although Ellison gave his bosses reason to believe he was a hard drinker away from work, his employer had no record of him abusing alcohol on the job. And during a civil trial in Clark County District Court this month, the company established that Ellison took the truck without permission on that fateful day in 2001.
Nonetheless, on Saturday, a jury ordered Terrible Herbst companies to pay Mrs. Delegado's family an astounding $4.1 million in compensatory damages and preposterously high $10 million in punitive damages.
These awards should scare the living daylights out of anyone involved in business, from owners and investors down to middle managers and worker bees. Should you or your company be held liable if a negligent employee one day stole a company car and caused a fatal accident?
One day, jurors will ignore the dollar signs in the eyes of plaintiff's attorneys and realize that when they vote to enrich lawyers and their clients without good reason, they also cause irreparable damage to a community's long-term health. Insurance premiums rise, and companies have less capital to reinvest, expand or offer as compensation for employees. Employers also become more willing to investigate their workers' private lives, snooping for behavior they might judge risky.
If this judgment isn't reversed or lowered on appeal, it will serve as a prime example of the need for tort reform and caps on noneconomic damages.
The Delegado family was irreparably harmed. But they should blame Ellison, not Terrible Herbst.