For the trucking industry, the past years have been described as nothing short of a “blood bath.” In August of 2019, what is believed to be the largest verdict ever against a trucking company was handed down by a jury in Columbus, Georgia. After just 45 minutes of deliberation, the jury awarded a verdict of $280 million against Schnitzer Southeast and Schnitzer Steel. The verdict was compromised of $150 million in wrongful death damages, $30 million in pain and suffering and $100 million in punitive damages.
While the facts of the Schnitzer incident were uniquely horrific, these so-called “nuclear verdicts” have not been so unique in the past several years. In fact, it is reported that there have been five times the number of $20 million-plus verdicts in the last five years compared to the five years before that. Thus, it isn’t surprising that rising insurance premiums and nuclear verdicts are commonly cited in bankruptcy proceedings as a primary reason for trucking companies shutting down.
The Anatomy of Nuclear Verdicts
Generally, a nuclear verdict is defined as a jury award in which the penalty exceeds $10 million. A more accurate definition is any award that is significantly disproportionate to what would be expected given the economic damages in the case.
The recent increase in nuclear verdicts is partially due to new and effective Plaintiffs strategies, questionable medical billing practices and the increased publicization of gruesome accidents. However, the increasing disproportionality between the total jury award and economic damages is best explained by the recent inflation of the verdict’s punitive damage component. Though surprising to some, there is no fixed standard for juries to determine the amount of punitive damages in California.[1] Further, unlike states like Nevada, California law provides no cap on the amount of punitive damages awarded. Thus, in cases where punitive damages are sought, the jury is to some extent untethered in their determination of punitive damages. In a time when society is increasingly being framed as the little guy versus the big company, juries are more inclined to award punitive damages that are disproportionate to the actual economic damages in the case.
Defense Strategy
As nuclear verdicts are becoming a harsh reality in the trucking industry, defense counsel must learn to employ effective strategies to combat the growing trend. The Reptile Theory—among Plaintiffs counsels’ favorite weapons—refers to intentionally appealing to the juror’s emotions rather than facts and reason. As a matter of practice, defense counsel should proactively combat this strategy by filing a motion in limine to exclude Reptilian evidence from the outset. Further, the more nuclear verdicts lead to bankrupt companies and lost jobs, defense counsel may soon see the opportunity to exploit the Reptile Theory’s double edge. With an excessive amount of trucking companies going under as a result of nuclear verdicts, the greedy corporate persona may slowly fade.
Conclusion
Whether it is fair or not, nuclear verdicts are an inevitable obstacle facing the trucking industry in today’s age. While competent defense counsel can help minimize the risk of enormous exposure at trial, in the face of unpredictable juries, trucking companies and carriers should thoughtfully consider the prospect of taking responsibility and settling before trial.