$10.15 Million Verdict Against Freightliner Over Fuel Tank Fire That Killed Two

On November 21, 1974, Billy and Dee Maxey were traveling outside Comanche, Texas, when their tractor-trailer rig tilted onto its right side rounding a curve and slid to a stop. The cab's right aluminum fuel tank, mounted outside the frame rail, sheared loose on impact. It ruptured, spilled its load, and caught fire. Both Billy and Dee Maxey died in the resulting fire. Their children survived, orphaned.

The truck was a 1963 Freightliner. Its fuel system consisted of two lightweight aluminum tanks, each holding roughly 80 gallons, fastened to the exterior of the frame rails and linked by an equalizer line at their bases. Because the equalizer ran between the tanks at low level, a rupture to one tank could drain fuel from both. Windle Turley, representing the Maxey family, argued that this configuration placed the tanks directly in the impact zone of a foreseeable rollover and that Freightliner had never conducted crash testing on this design, despite published safety literature dating to the 1940s identifying such placements as hazardous.

At trial in the Northern District of Texas, the jury found that Freightliner had shown gross indifference to the safety of truck occupants. It returned a verdict of $150,000 in actual damages and $10,000,000 in punitive damages. The trial court, however, entered a judgment notwithstanding the verdict and set aside the punitive award, concluding the evidence was insufficient to support the gross-indifference finding.

Turley appealed. A divided Fifth Circuit panel affirmed the trial court in 1980 (623 F.2d 395), agreeing that the punitive award should be set aside. Turley pressed on to a rehearing before the full court, and in 1982 the Fifth Circuit, sitting en banc, vacated the panel opinion (665 F.2d 1367). The en banc court held that evidence of Freightliner's failure to crash-test its own product over more than two decades, despite known hazards, could support a jury finding of conscious indifference, and it reinstated the plaintiffs' right to punitive damages. At the same time, the court found the $10 million figure excessive and remanded for reconsideration of the amount.

On remand the district court accepted punitive liability but conditioned it on a remittitur, and in the final 1984 appeal (727 F.2d 350) the Fifth Circuit reversed the judgment notwithstanding the verdict outright while affirming a reduced punitive award of $450,000, roughly three times the actual damages. The $150,000 actual damages award to the Maxey children stood throughout. The litigation established important Fifth Circuit precedent under Texas law holding that a manufacturer's decades-long failure to crash-test a known dangerous fuel-tank configuration could constitute the kind of conscious indifference that subjects a defendant to punitive exposure.