Nuclear Verdicts and Tort Reform Efforts
Nuclear verdicts continue to be on the rise across the county, with damaging consequences for businesses, consumers, and the value of the legal system. The U.S. Chamber of Commerce Institute for Legal Reform examined 1,376 nuclear verdicts (jury verdicts worth $10 million or more) in state and federal courts from 2010–2019. The report showed that these verdicts grew significantly in frequency and size in the 2010–2019 study period, with the median verdict rising from $19.3 million in 2010 to $24.6 million in 2019. That’s a 27.5% increase, exceeding inflation of 17.2% over the same period.
Increases in the frequency and number of nuclear verdicts does more than create challenges in the civil litigation landscape. Nuclear verdicts tend to threaten the viability of any business, and with it the jobs of its employees and others in a community whose livelihoods are connected to the business. Rising lawsuit costs can also inhibit job growth and new investments for businesses or industries, needlessly exhaust judicial resources, and erode basic confidence in the rule of law, all of which can have far-reaching adverse impacts.
About one in four auto accident trials that resulted in a verdict of $10 million or more involved a trucking company.[1]
Attempts to curb the rising costs to the trucking industry because of increasing jury verdicts around the country.
Florida adopts favorable summary judgement standard.
Florida has been a hotspot over the last decade for nuclear verdicts. Nearly two-thirds of Florida’s nuclear verdicts in personal injury and wrongful death cases were reached in product liability (38.5%) and auto accident litigation (24.4%). This is far higher than the proportion of nuclear verdicts coming from product liability cases nationally (23.6%) and slightly higher than auto accident cases (22.8%) overall. In the most recent three years of data, the share of reported nuclear verdicts resulting from auto accident lawsuits in Florida climbed to 32%.
In an effort to control the growing pain associated with trying cases in Florida, on December 31, 2020, the Florida Supreme Court rendered an opinion in In Re: Amendments to Florida Rule of Civil Procedure 1.1510, No. SC20-1490, aligning Florida’s rules of civil procedure with the supermajority of U.S. states and formally adopting the federal standard for summary judgment motions. The decision came on the heels of another case, Wilsonart, LLC, et al. v. Lopez, No. SC19-1336 (Fla. Dec. 31, 2020), in which the Florida Supreme Court reviewed a trial court’s decision to weigh compelling video evidence against a conflicting eyewitness statement and grant summary judgment in the defendant’s favor.
In making this comprehensive reform, the Florida Supreme Court showed its direction in attempting to improve the fairness and efficiency of Florida’s civil justice system. This will also assist in relieving parties from the expense and burden of meritless litigation and save juries for cases where there are real factual disputes that need resolution. As appellate courts review more cases applying the new summary judgment standard, the case law will continue to expand and provide additional guidance for practitioners.
Montana law places limitations on lawsuit damages.
In Montana, Governor Greg Gianforte signed Senate Bill 251 which revised civil liability laws related to damages in lawsuits. Specifically, the legislation deals with inflated medical bill amounts and of victims in truck accidents. The new law requires that plaintiffs injured in accidents be compensated only for actual costs. The bill seeks to limit the phantom damages stemming from artificially inflated damages. These phantom damages occur any time lawsuit recoveries are calculated using the dollar amount a patient was billed for a medical service instead of the amount the patient, their insurer, Medicare, Medicaid, or workers’ compensation actually paid for treatment.
Louisiana House
Louisiana ranked seventh among the states for the number of nuclear verdicts in auto accident cases over the ten-year study period according to the U.S. Chamber of Commerce Institute for Legal Reform. Recently, legislature in Louisiana passed the Omnibus Tort reform bill, which will allow trucking attorneys to introduce evidence of accident victims not wearing seat belts and included a provision that would limit certain medical bills from jury awards know as phantom damages. The bill also contained a provision that would cut down on a practice allowing attorneys to judge shop.
The Louisiana Legislature also passed a bill that makes staging an accident with a car or truck a criminal office. This includes causing or knowing that a motor vehicle collision was intentionally caused for the purpose of obtaining anything of value.
Texas Senate Transportation Committee takes action on curbing lawsuit abuse.
In Texas, nuclear verdicts largely stem from auto accident claims, which make up 32.6% of verdicts over $10 million over the ten-year period compared to 22.8% nationwide. Texas is particularly known for nuclear verdicts against the trucking industry.[2]
To curb the trend of nuclear verdicts in Texas, after several monthslong lobbying in the state house, the Texas Trucking Association and several lawsuit reform groups marshalled House Bill 19 through the house and senate. This bill seeks to level the future of litigation playing field for truckers. It includes a provision that will allow properly authenticated photographs or videos of a vehicle or object involved in a collision to be admitted into evidence. It additionally bifurcates trials so that one trial is for evidence as to liability and the second trial would allow allegations of unsafe motor carrier safety practices to be introduced.
[1] Other studies and media reports also confirm this trend. See Understanding the Impact of Nuclear Verdicts on the Trucking Industry, American Transportation Research Inst. (June 2020); see also Contessa Brewer & Katie Young, Rise in ‘Nuclear Verdicts’ in Lawsuits Threatens Trucking Industry, CNBC, Mar. 24, 2021; Y. Peter Kang, Plaintiffs Bar is Steering Truck Crash Cases to Mega Verdicts, Law360, Aug. 6, 2019.
[2] Keep Texas Trucking Coalition, Lawsuit Abuse and Its Impact on the Transportation Industry, 2021.
Written by associate Pavel Glazunov.