A "nuclear" verdict against a trucking company is generally considered one over $10 million. And as the newest research focused on trucking shows, what is now an epidemic of such high-dollar verdicts and judgments against the industry shows no signs of slowing down, and the new study reveals the latest metastasizing methods that plaintiffs counsel are using to squeeze carriers at trial or even before that, in pre-trial settlements.
These latest eye-opening findings are found in a U.S. Chamber of Commerce Institute for Legal Reform study released last month, "Roadblock: The Trucking Litigation Problem and How to Fix It."
The new Chamber study, authored by Prasad Sharma of the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary, joins two other widely cited pieces, one out in June 2020 focusing on larger verdicts and another in November 2021 on smaller, more numerous rulings and settlements, by the American Transportation Research Institute (ATRI), and borrows heavily from and builds on those earlier ATRI efforts in cataloging the danger that large verdicts and proliferating small ones present to the trucking industry.
See also: 'Nuclear' verdicts roil and rile trucking
The Chamber of Commerce research also focuses on the post-pandemic period for the industry as the ATRI studies contain data mainly from the time before COVID changed the industry and reshaped the supply chain and the forces that come to bear on it.
A review of 154 litigation verdicts that involved trucking companies by the new study found:
- From June 2020 to April 2023, a mean plaintiffs' award combined with settlements of $27,507,334 and a median award of $759,875.
- For plaintiffs' verdicts, the mean award was $31,862,776, and the median was $314,217.
- For settlements, the mean award was $10,608,219, and the median award was $210,000.
- All are much bigger numbers than documented in the 2020 ATRI study, which focused on large verdicts and data from 2006 to 2020. It found, for example, mean and median awards of $3,162,571 and $1,750,000, respectively.
The new Chamber study also contrasted the elevating verdicts with a trucking safety record that it said is improving compared to the miles the industry travels, though National Highway Traffic Safety Administration data showed a 17% increase in fatalities in crashes involving large trucks in 2021 over 2020.
"A puzzling counterpoint to these rising verdict trends is a recent examination of trucking safety statistics, which showed that the trucking industry has made meaningful safety improvements from 2000 to 2020," the Chamber study notes. "Over that time, consumer demand for goods increased rapidly, resulting in a 47% uptick in large truck vehicle miles traveled (VMT). While the number of fatal crashes involving large trucks has remained steady, the fatal crashes per 100 million VMT decreased from 2.23 to 1.47 during those two decades—a drop of 34%."
Furthermore, the Chamber study notes other research by the University of Michigan's Transportation Research Institute "found that actions of drivers of passenger vehicles alone contribute to 70% of the fatal crashes with trucks."
Reptiles evolve: The changing tactics that target trucking
The new Chamber study on verdicts highlights tactics of the plaintiffs' bar against trucking companies, citing anecdotal examples of trying to gain favor from the jury box or leveraging the threat of large verdicts to yield, at times, larger settlements than what could be gotten at trial. One example: Using medical referral networks and inflated billing practices to pump up the dollar amounts of verdicts, highlighting what this study calls "financially interdependent relationships" between medical professionals and large law firms.
See also: Large fleets a big target for pricey litigation
The study also highlights "reptile" courtroom tactics by plaintiffs' lawyers. It notes: "The great majority of trucking companies take immense pride in their continuous efforts to operate safely. But to instill fear in the jurors, plaintiffs' attorneys will point to company acts or omissions—oftentimes instances where a policy was not followed—as violating the carrier's professed commitment to safety. It often does not matter whether those particular acts or violations had a direct connection to the accident or who caused the accident. The point is to instill fear that the trucking company is jeopardizing the safety of the jurors and their community."
The plaintiffs' bar also is widening its circle of defendants, such as freight brokers, to reach deeper pockets. "Because 92 percent of motor carriers have 10 or fewer trucks and are small businesses," it notes, "plaintiffs' attorneys are turning to other sources for recovery; namely freight brokers that act as intermediaries to arrange transportation by motor carriers for shipper clients."
And according to the Chamber of Commerce study, "some attorneys even go so far as to pay individuals to orchestrate the staging of accidents and then refer the fraudulent claimants to the attorney," citing a federal indictment that alleges perpetrators admitted to staging 150 different accidents.
In Michigan, a federal indictment alleged that personal injury attorneys were involved in a scheme where Detroit Police Department crash reports were unlawfully obtained to solicit crash victims and direct them to the attorneys.
The Chamber paper borrows heavily at one turn from ATRI research, which notes several states in the U.S. that are havens for aggressive litigation targeting business in general and trucking in particular. "It is not surprising that a litigation climate generally unfavorable for business will also be unfavorable for trucking," it remarks, noting that according to ATRI data, California topped the list of states for verdicts and settlements under $1 million while New York, Illinois, Texas, Florida, and Louisiana all made the top 10. In the Chamber paper's review of truck accident settlements and verdicts from June 2020 to April 2023, Florida led the way regarding the number of truck accident verdicts and settlements, followed by California, Pennsylvania, New Jersey, Texas, and Georgia.
Damage awards and the states where they thrive
The order changes when looking at damages awards, but the same states occupy the top spots, according to the Chamber of Commerce study. Texas led with a mean award of $114,617,913 (median award of $4,500,000), followed by Florida with a mean award of $96,572,173 (median award of $1,263,124), California with a mean award of $13,509,410 (median award of $7,938,343), New Jersey with a mean award of $11,348,897 (median award of $20,000), Georgia with a mean award of $2,700,942 (median award of $1,151,742), and rounded out by Pennsylvania with a mean award of $2,675,990 (median award of $910,000).
See also: How safety directors create litigation firewalls for fleets
"Because trucking is by far the most prevalent means by which communities throughout America get their goods, inflated and disproportionate verdicts against trucking companies affect everyone," says the chamber study, which goes beyond the ATRI work to propose solutions, including legislation, to stem to the surge of large verdicts and settlements against U.S. trucking:
- Require transparency in claiming medical damages. Legislation should limit medical damages to reasonable and customary amounts paid instead of inflated amounts billed. State legislatures or courts should ensure evidence of referral relationships indicating bias or conflict of interest is disclosed and available to juries.
- Prohibit the presentation of inflammatory arguments if a defendant trucking firm stipulates responsibility for a driver's negligence. To ensure awards are tied to reasonable compensation, policymakers and judges should ensure that evidence and arguments intended to inflate the verdicts are not presented to juries.
- Create reasonable caps on non-economic damages. Non-economic damages—or compensation for pain and suffering—are admittedly difficult to quantify but are an increasingly large portion of verdicts and settlements than more objective damages, like medical expenses for treatment.
- Prohibit the practice of "anchoring." Courts should ensure non-economic damages are supported by evidence and not arbitrarily chosen. Judges (and state legislatures if judges fail to) should prohibit unsubstantiated anchoring, where an award suggestion is argued without evidence simply to plant the number in jurors' minds.
"How much money is arbitrary, how much money is a valid dollar amount, and how much is just pulled out of the sky?" FTA President and CEO Alix Miller asked in an interview with FleetOwner, echoing the state-level exasperation.
"There are other consequences to nuclear verdicts and inflated settlements," she added. "They drive up insurance rates, divert money away from increasing companies' workforce, can delay purchasing new trucks and safety technologies. Ultimately, this affects everyone: the health of the economy, the supply chain, and cost to transport all of the goods we use."
"The current trajectory is unsustainable," the Chamber study concludes. "Many of the drivers of inflated verdicts are known. Likewise, a number of potential solutions have been identified. Policymakers, judges, law enforcement, and ethics bodies must now answer the call and restore reasonableness and fairness to the resolution of truck accident litigation claims."
