{"id":10462,"date":"2022-11-03T01:07:00","date_gmt":"2022-11-03T06:07:00","guid":{"rendered":"https:\/\/solerastaging.wpengine.com\/?post_type=industry-insights&p=10462"},"modified":"2024-04-04T13:16:07","modified_gmt":"2024-04-04T18:16:07","slug":"don-osterberg-fleet-nuclear-verdict-protection","status":"publish","type":"industry-insights","link":"https:\/\/www.solera.com\/industry-insights\/don-osterberg-fleet-nuclear-verdict-protection\/","title":{"rendered":"Protection from nuclear verdicts: Why compliance isn\u2019t enough"},"content":{"rendered":"\n

By Don Osterberg, Safety Advisor<\/em><\/strong><\/p>\n\n\n\n

The term \u201cnuclear verdict\u201d is generally defined as a damage award exceeding $10 million. It\u2019s also been defined less precisely as \u201ca high damage award that exceeds rational parameters \u2026 inflated, outlandish or even destructive.\u201d1<\/sup> Any litigator or defendant who\u2019s been on the losing side of a nuclear verdict would likely go with the second description.<\/p>\n\n\n\n

Nuclear verdict is a more recent term for a phenomenon going back to at least the 1980s, with the 1984 $180-million Agent Orange settlement against the chemical\u2019s manufacturer. One year later, a $10.5 billion settlement in favor of one oil company against another in a business dispute became the largest-ever monetary award up to that point. Over time, a certain irrationality set in. In 2011, a jury awarded $150 billion2<\/sup> in damages to the family of a burn victim, larger than the $145 billion settlement in the Florida tobacco case.<\/p>\n\n\n\n

The trucking industry has not been immune to this trend. In fact, it exemplifies the destructive effect that nuclear verdicts can have on an industry essential to the national economy and basic, everyday life. The fact is, we are living in the Nuclear Verdict Age and it impacts all of us.<\/p>\n\n\n\n

The Billion-Dollar Trucking Verdict<\/h2>\n\n\n\n

In 2021, a jury in Florida helped set a trucking industry record: a $1-billion3<\/sup> verdict against a Canadian trucking company, Kahkashan Carriers, and a Staten Island, NY, company, AJD Business Services. The victim was a Florida college student. AJD was hit with 90% of the verdict in a quirk but was no longer in business. Kahkashan and its driver were responsible for the rest, $900 million and $100 million respectively.<\/p>\n\n\n\n

The quirk is meaningless. And no one is dismissing the loss of life that occurred or the need for justice and fair compensation for those who have suffered injury or loss. Fair compensation is an essential part of the system; enriching personal injury attorneys beyond all reason is not. Yet this verdict was 10 times larger than a $90-million4<\/sup><\/sub> decision against a trucking company in Texas just three years earlier. The biggest problem with verdicts like these is that they pave the way for even larger, more incomprehensible verdicts.<\/p>\n\n\n\n

Reptile Theory: Godzilla Goes to Court<\/h2>\n\n\n\n

If you Google the phrase \u201cReptile Legal Theory,\u201d you\u2019ll get a lot of scholarly articles with stock images of actual reptiles. LexisNexis features a confident-looking Godzilla<\/a>5<\/sup>. The images are apt.<\/p>\n\n\n\n

Reptile Theory was first thrust upon the legal world in the book Reptile: The 2009 Manual of the Plaintiff’s Revolution by plaintiff attorney Don Keenan and theatrical director-turned-jury consultant David Ball. In a May 2022 article, the National Law Review6<\/sup> described reptile legal theory this way: \u201c\u2026authors Don C. Keenan and David Ball advocate persuading jurors by appealing to their \u201creptile brains\u201d\u2014the \u201coldest\u201d part of the brain and the part responsible for primitive survival instincts.\u201d<\/p>\n\n\n\n

Primitive survival instincts are hardly a prelude to rationality and reason. They\u2019re a response to the fear and panic we feel when threatened. In reptile legal theory, the goal is to make the jury members themselves feel as though their very lives were threatened by the actions of the defendant and respond with a verdict to match their emotion. It\u2019s not surprising that a study by the American Transportation Research Institute found that \u201cwhen children are involved in a crash, either being injured or killed, the size of the verdict increases 1,687 percent, from $2.3 million to $42.3 million.\u201d7<\/sup><\/p>\n\n\n\n

Keenan and Ball claim their reptile approach is responsible for $7.7 billion5 in verdicts and settlements. It\u2019s certainly spawned an industry of legal strategizing to defang it, but in the meantime, verdicts based on emotion instead of reason keep rising.<\/p>\n\n\n\n

Another driver of nuclear verdicts may be \u201clitigation funding.\u201d8<\/sup> Basically, ultra-large verdicts are now seen as an investment opportunity by firms who are willing to fund expensive litigation for a share of the settlement. Frankly, even if a purely financial incentive for outrageous settlements that let wealthy third parties turn the death of a stranger into a payday is legal and profitable, it\u2019s also part of the problem.<\/p>\n\n\n\n

The Impact of Nuclear Verdicts<\/h2>\n\n\n\n

The costs of nuclear verdicts against trucking companies can ricochet through the economy. The trucking companies, their customers, their customers\u2019 customers, and the insurance companies all pick up some of the cost. That adds cost pressures to insurance rates, shipping rates, and eventually, the prices of products down the line.<\/p>\n\n\n\n

They also destabilize the industry. Larger trucking companies may be able to handle a verdict that exceeds their coverage, but not easily. For smaller companies, if the cost of responding to litigation didn\u2019t do them in, a settlement may. If they have to be absorbed by a larger carrier, industry consolidation tightens.<\/p>\n\n\n\n

To Protect Against Nuclear Verdicts, Move Past the Myths<\/h2>\n\n\n\n

Here\u2019s a popular misconception among carriers: Operating an FMCSA-compliant fleet will protect you from punitive damages and nuclear verdicts in post-crash litigation. It won\u2019t.
Plaintiff\u2019s attorneys have identified two paths to punitive damages they\u2019ll pursue simultaneously:<\/p>\n\n\n\n