Nuclear verdicts in trucking cases rising at ‘exponential pace’

‘Nuclear Verdicts’ on the Rise Causing Insurance Rates to Skyrocket – Forcing Carrier to Shut Down

Nuclear verdicts in trucking cases rising at ‘exponential pace’

A study found that nuclear verdict cases are up 300%, causing insurance rates to skyrocket, forcing carriers to shut shut their doors.

According to the study by the American Transportation Research Institute (ATRI) Research Advisory Committee (RAC), nuclear verdicts against trucking companies are often over $10 million settlements. They typically stem from cases involving serious crashes that resulted in injury and/or death.

In 2019, the ARTI ranked the “Impact of Large Verdicts on the Trucking Industry” as one of its top research priorities, because at the time, several motor carriers had shut their doors, citing rising insurance premiums as a factor.

As more and more “nuclear verdicts” occur, the more the trucking industry will see insurance rates increase.

Nuclear verdicts first began in 1994 when a jury awarded a $2.7 million verdict in punitive charges for selling scalding coffee. While the amount was reduced after the appeal and then settled for an undisclosed amount, the large verdict captured America’s attention and became the standard.

Nuclear Verdicts

For trucking, that standard came in 2011, when a $40 million verdict was awarded to victims of a crash. In this case, a truck driver blew through a stop sign and struck a passenger vehicle, killing two passengers and severely injuring another.

One of the victims was a “prominent member of the business community, was calculated to have a future lost income of $15 million to $42 million for a business venture that had not begun.”

Once the case was over, the jury deliberated for five hours, and then awarded $40 million to the plaintiff.

Two years later, In 2012, a drive shaft broke off a truck and went through the windshield of a car. The driver of the car was killed.

“The court that heard this case found that while the driver was not negligent, the company, Heckmann Water Resources, was negligent. The court initially handed down a record verdict of $281.

6 million, which was reduced on repeated appeals, to $105.2 million, and eventually settled for an undisclosed amount,” ATRI states.

A 2014 crash near Odessa, Texas led to one of the largest settlements in the history of trucking.

A truck driver was driving under the posted speed limit in inclement weather when a car traveling in the opposite direction lost control, went through the media, and veered into the truck’s path.

As a result of the collision, a 7-year-oldwas killed, and three others were injured, one with traumatic brain injuries. The family sued the carrier and were awarded $90 million in 2018.

  (Read about the case here)

To date, the largest verdict for the trucking industry came from a truck-involved crash in Alabama in 2016. In that crash, the driver reportedly fell asleep and crossed the centerline and struck an SUV head on.

Judy Madere, 58 years old, Trudy Herbert, 58 years old, Carrie Jones, 23 years old, along with Jones’ two children, 7 year old Trinity and 4 year old Jackson, all died in the crash.

The driver and carrier were found liable and ordered to pay $280 million. (Read about the case here)

Since then, there have been multiple other nuclear verdicts, causing trucking companies to file bankruptcy or shut their doors.

One carrier, who faced such as verdict, said that they were forced to shut their doors because their insurance rates increased more than 100% in a year — from $340,000 to 700,000 for a single year. (Read more about that case here)

According to the ATRI study, “Cases with awards over $1 million have increased dramatically over the last 14 years. In 2006, only four cases with verdicts over $1 million were identified… At their peak in 2013, over 70 cases with verdicts over $1 million were awarded.”

Of the 451 cases ATRI analyzed, the average verdict was approximately $3.1 million. Over the last 6 years, the number of cases with verdicts over $1 million increased 335%. The number of verdicts greater than $1 million increased by 300%.

Rising Insurance Premiums

ATRI says that insurance costs are also on the rise. From 2017 to 2018, insurance increased 12%. Over the last five years, insurance has increased 18.3%.

Some new or small carriers are reporting a 35 to 40% annual increase!

According to the ATRI’s data, small carriers and owner operators are paying “pay out-of-pocket considerably more on a per-unit basis than larger fleets.”

“Not surprisingly, insurance rates have increased at similar rates as litigation awards. Over the last 2 to 5 years, commercial truck insurance premiums have increased annually between 35 percent and 40 percent for low- to average-risk carriers according to the expert surveys,” ATRI states.


Nuclear verdicts strangling trucking companies; not so, say lawsuit attorneys

Nuclear verdicts in trucking cases rising at ‘exponential pace’
Dave Wickenhauser on Wed, June 24, 2020

Last Updated: Tue, June 23, 2020

Cover of ATRI nuclear verdict report

“Nuclear” verdicts, monetary awards against trucking firms that are $1 million to $10 million or greater, have been making the news lately, and that's why the American Transportation Research Institute underwent an extensive study to quantify the number and size of awards, and to find out why the litigation landscape has changed so much to bring about these verdicts.

The study, released yesterday, titled “Understanding the Impact of Nuclear Verdicts on the Trucking Industry,” was named ATRI's highest research priority by the institute's Research Advisory Committee in 2019.

ATRI noted that large verdicts “typically stem from serious crashes involving injury and death. However, these large verdicts can exist on tenuous legal grounds and can have negative effects on multiple parties.”

One result of these large verdicts, according to the study, is that many trucking firms have closed their doors, often naming rising insurance premiums as the reason – premiums that have risen due to increased verdict awards.

The study encompassed examining 600 lawsuits between 2006 and 2019. The researchers found that there were only 26 cases in the first five years of $1 million or greater. But in the last five years of the study, ending in 2019, that number had grown exponentially to nearly 300 cases.

Not only the number of large verdicts against carriers has grown, but the size of verdict awards grew dramatically during the study period. In the first eight years of the study, monetary awards grew by almost 52 percent every year.

And from 2010 to 2018 the average size of a jury verdict against carriers increased from $2.3 million to $22.3 million, an increase of almost 1000 percent.

Some who argue against the growing severity of these awards say they merely reflect real-world cost increases. However, during this same time standard inflation grew by only 1.7 percent, and health care costs grew by only 2.9 percent.

Factors leading to higher jury verdicts against carriers

ATRI's research lead them to believe that there are two key factors associated with higher jury awards after an accident – crash factors and litigation factors.

Crash factors would include aspects of the crash the type and severity of injuries, the number of cars involved in the crash and, of course, the number of deaths involved.

The main litigation factor leading to a high-dollar verdict appears to be when an expert witness is called into the trial. And this “benefit” works both ways – in favor of the plaintiff, as well as of the defendant.

Not surprisingly, if children are involved in the crash and it becomes an aspect of the litigation, the jury awards increase dramatically, as is illustrated in ATRI's Figure 8, showing a 1,687 percent increase in awards.

Even the type of injury from a crash can influence juries to award higher verdicts against carriers. For example, spinal injuries will tend to increase a jury verdict by almost 20 percent more over a similar crash without a spinal injury.

Traumatic brain injuries, as well as the time elapsed between the crash and when the final verdict is decided also are factors increasing the size of a verdict. “Understand the value of these cases and settle them early, not three years later. Settle them within three months,” a defense attorney stated in the ATRI report.

Driver behavior affecting jury verdicts

According to the ATRI study, there were five truck-driver related factors that resulted in judgments against the carriers 100 percent of the time:

  • Hours of service or logbook violations
  • Lack of clean driving history
  • Driving under the influence of controlled substances
  • Fleeting the scene of the crash
  • Health-related issues

Phone use by the drivers resulted in verdicts going to the plaintiffs in every single case but one. That one case was only because the plaintiff accused the driver of being distracted by phone use but couldn't prove it.

“The defense intends to focus on the 30 seconds before the crash. And when I handle a case, I look long before that. I look at how he was hired, how he was trained, and how he was supervised…,” an attorney for a plaintiff, stated in the ATRI report.

Location, location, location

Of interest is that location appears to play a part in whether the verdict will go in favor of the defendants – the accident victims – or toward the plaintiffs – the commercial carrier.

For example, according to the study, in Alabama some 92 percent of the time juries declined to award money for the plaintiff. That compares to California where 97 percent of the time the plaintiffs won their lawsuits against carriers.

With the largest number of cases, 86, Texas juries gave awards to the plaintiffs in nearly 56 percent of the cases.

“This issue has had a stifling impact on motor carriers and industry stakeholders – well beyond those involved in a truck crash,” Rob Moseley, Founding Partner with Mosely Marcinak Law Group, stated in the ATRI press release.

“ATRI's research on litigation provides important guidance on leveling the playing field between truckers and trial lawyers, both in and outside of the court room.”

Clay Porter, who is a partner at Porter Rennie Woodard and Kendall, agrees. “Runaway verdicts are increasing in both size and numbers. This study documents a frequency in excessive awards that, while not surprising, tells us that the trial system has gotten completely off track. Foundational changes are needed in the way we determine non-economic and punitive damages.”

Truck accident attorneys group rebuts ATRI's findings

Posted at Trucking News Now immediately after release of the ATRI's “nuclear” verdict findings is a rebuttal by the Academy of Truck Accident Attorneys to the ATRI study, and to American Trucking Associations' President Chris Spear's statement that, “nuclear verdicts are strangling the trucking industry.”

The ATAA points out that there is a disparity between the types of carriers as to their size, their safety records and the amount of insurance that each carries, but that the ATRI study “lumps together all motor carriers.”

For example, ATAA quotes figures from the Federal Motor Carrier Safety Administration that 50,000 motor carriers representing only 10 percent of carriers were responsible for 45 percent of recorded crashes.

The ATAA rebuttal article also stated that:

  • There are only three or four verdicts each year of more than $10 million, but the ATRI report “spends the bulk of the report describing $1 million+ verdicts.”
  • The nuclear verdicts almost always involved extreme misconduct by the carrier and driver.
  • Nuclear verdicts almost always involved “horrifyingly catastrophic injuries or deaths.”

The ATAA says that large verdicts act to encourage carriers to put policies in effect to operate more safely in order to prevent crashes that could lead to these large verdicts.

They state, furthermore, that rather than being “strangled” by these verdicts, “Not one motor carrier has declared bankruptcy after a nuclear verdict,” ATAA co-founder Michael Leizerman stated in the article. “The real problem is that insurance minimum limits haven’t been updated in over 40 years.”

In the article, ATAA co-founder Joe Fried concluded that these large verdicts can draw the public's attention to bad carriers.

“Nuclear verdicts are a result of the way truck crash cases are defended. The public is tired of baseless denials of obviously dangerous conduct and bad truck companies. The way the public responds is with these large verdicts. It is rare to see a nuclear verdict when bad conduct is admitted.”

Sources: ATRI Press Release, ATRI Study (registration required), Trucking News Now


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