Updated: Nov 17, 2021
The data paints an ominous trend for so-called “nuclear verdicts” — the multi-million-dollar (often mega-multi-million-dollar) jury awards against motor carriers in crash lawsuits.
According to the American Transportation Research Institute’s 2020-published analysis of lawsuits resulting in nuclear verdicts, such judgments against motor carriers have risen dramatically over the past 15 years. In 2004, there were just four reported cases in which a verdict exceeded $1 million against a trucking company. In 2013, that number had jumped to more than 70.
Though the total number of multi-million-dollar verdicts has fallen slightly since then, the average dollar amount continues to skyrocket — surpassing $22.2 million in 2018, a ten-fold increase from the $2.3 million average in 2010.
This trend has caused insurance premiums costs to jump dramatically — by 35-40% on a year-over-year basis for the past five years for low- to average-risk carriers, says ATRI, which has forced many carriers out of business or to cut costs elsewhere simply to survive.
John Esparza, head of the Texas Trucking Association, sums up the trend this way: “Trouble rides a fast horse.”
Esparza was a featured guest last week, alongside Steve Bryan, co-founder of the upstart Bluewire and previous founder and CEO of motor carrier safety scoring firm Vigillo, in the inaugural episode of Trucksafe LIVE! — a new monthly show produced by Trucksafe Consulting and livestreamed on YouTube, LinkedIn, Facebook, and on TrucksafeLive.com.
Esparza and Bryan, alongside Trucksafe’s Brandon Wiseman and Jerad Childress, spoke about the current state of nuclear verdict awards, how the industry became so susceptible to these types of judgments, and, most importantly, how to find a way out.
Here are the top takeaways from that conversation, which you can watch in full in the video player above.
The crash itself doesn’t matter. Your company’s reputation does.
Plaintiffs’ attorneys have become masters at using the so-called “Reptile Theory” to win these major awards against trucking companies — that is, leveraging a company’s practices and reputation against it in jury trials, rather than concentrating on the circumstances surrounding the crash in question.
“These trial lawyers and their beloved Reptile Theory get to the emotion and the inflammation of anger in the jury to punish the motor carrier,” said Bryan. “It is rarely, if ever, about the specific incident of that crash. The crash is simply an opportunity for the plaintiffs and their private equity backers to open those doors and convince juries you have a terrible, bad, unethical corporate citizen here and the only way we’re going to get them on track is to punish them, punish them, punish them.”
When researching the true underlying roots of nuclear verdict cases as part of the founding Bluewire, that conclusion became clear, said Bryan.
In another article, Esparza was quoted as saying that once in a crash lawsuit deposition, a trucking company representative was questioned for eight hours — and not one question had anything to do with the circumstances of the crash itself. “[All of the questions] were about the company,” said Bryan.
Attorneys are exploiting “vectors of attack." Find yours and shore them up.
Like in the cybersecurity world, plaintiffs’ attorneys use multiple “vectors of attack,” said Bryan, to try to present motor carrier defendants as bad actors and, thus, worthy of severe punishment.
For example, if a company doesn’t pay close enough attention to hours of service violations, or if it’s not using in-cab camera systems, said Bryan, those areas can be exploited in trials. Even postings on job boards can be “self-inflicted wounds,” he said, as can be conversations between dispatchers and drivers. “Can you imagine a PowerPoint in front of a jury, in which a dispatcher is saying ‘I don’t care how many hours you have left — get the load delivered!’ Plaintiffs’ attorneys are very smart, and they’re very motivated. They’re looking for these types of things,” Bryan said.
Bluewire’s goal is to find carriers’ weak spots, those that can be exploited in crash litigation, so that carriers can shore them up — both to enhance fleet safety and to shield against nuclear verdicts.
‘Leveling the scales of justice’ — Texas’ push to mitigate mega verdicts.
The Texas legislature passed House Bill 19 into law this legislative session. Effectively, the new law separates trials against motor carriers into two components — one about liability and one about damages, which Esparza said simply codifies previously existing standard practices. The law will effectively close a major gap that plaintiffs’ attorneys were abusing, said Esparza.
For example, before a court can consider punitive damages against a trucking company in a crash lawsuit (such as those stemming from poor hours of service management or other negligence issues), it must first determine fault regarding the actual facts about the crash at the center of the lawsuit.
“They were using the process to bias juries against motor carriers, regardless of what events had occurred” surrounding the actual crash in question, he said. “This is about leveling the scales of justice.”
The new law is set to go into effect in September of this year.
Esparza said he’s spoken with colleagues at other state associations and held a panel to discuss HB 19’s success. “We stay in very tight communication [with other states]. Each state is different. Each board is different. Some states are seeing more abuse than others, and ours happen to be one of those states. We’re sharing what we’re doing here,” with other associations, he said.
Silos threaten action.
One chief area where plaintiffs’ attorneys excel against defendants is with sharing of information, said Bryan. “On the plaintiffs’ side, they share. They collaborate. They have books. They have conferences and seminars and symposiums and white papers. And they all gather and learn from each other how to attack the trucking industry,” Bryan said. “We on the defense side are 180-degrees. We’re in fact very secretive, and we actually work hard not to share our best practices openly. We’re afraid to. We have to overcome that.”
Heading off the next abuses.
While there’s still lots of work to do in shoring up the current abuses by plaintiffs’ attorneys, said Esparza, the industry also needs to keep an eye on potential looming strategies plaintiffs may employ in crash cases.
“We’re not going to count [H.B. 19] as a knockout,” said Esparza. “We all know the plaintiffs’ bar is very skilled, and it’s something we have to stay a step ahead of. What will they look to abuse next?”
Part of that, he said, is simply following the money. Other than the attorneys driving these cases, who else benefits financially? Esparza and Bryan both contend there are behind-the-scenes partnerships established meant to finance — and profit from — these verdicts. “Who stands to profit from a nuclear verdict?” said Esparza. “That’s something we want to look into.”
For example, Esparza said he’d like to see any lawsuit filed above the federal minimum of $750,000 immediately go to federal court, where they’re less tolerant of abusive practices that have been employed by plaintiffs’ attorneys at the state level.
“We have to stay ahead of it,” said Esparza, “and effectively find us a faster horse.”