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Date: May 15, 2024

Thermonuclear Verdicts on the Rise According to Recent Study

by Foley Mansfield
Date: May 15, 2024
by Foley Mansfield

Thermonuclear Verdicts on the Rise According to Recent Study

Marathon Strategies published a study regarding the rise in the number of “nuclear verdicts”—those with verdicts surpassing $10 million in damages—in the United States in 2023 and termed a new phrase– “thermonuclear verdicts.” The number of cases with nuclear verdicts has increased in 2023 by 27% from 2022, a 15-year high. The median nuclear verdict in 2023 rose to $44 million from a low of $21 million in 2020. These verdicts covered 47 unique industries, encompassing 89 lawsuits. These 89 cases are the most in any year since the Great Recession. Twenty-seven of these lawsuits went “thermonuclear”–verdicts over $100 million, with five cases over $500 million, and two over $1 billion.

The top verdicts against corporate defendants in 2023 included $1.8 billion against the National Association of Realtors, HomeServices of America, and Keller Williams Realty; $1.5 billion and $857 million verdicts against Bayer AG/Monsanto; and verdicts that exceed $500 million against Mitsubishi Motors, Union Pacific Railroad, and more.

The study notes that consistent with historical trends, in 2023 nuclear verdicts against companies were largest in product liability cases which accounted for 38% of these verdicts.

Marathon identified “corporate mistrust, social pessimism, erosion of tort reform, and public desensitization” as the primary driver behind this growth in nuclear verdicts from 2009 to 2022. Further adding to the crisis is a shift in jury pool demographics with younger generations being more pro-plaintiff and less trusting of American corporations. Additionally, tactics by plaintiffs’ firms contributing to the size of these verdicts include the “reptile theory”, as well as forum shopping. At the forefront of personal injury law firms’ tactics is their immense spending in advertising–eclipsing $1 billion each year.

While jurors may believe they are “fairly” compensating plaintiffs, they most likely do not appreciate how the public at large is also “paying” for these verdicts. Various studies have shown that in the first few years after the Great Recession, companies on the losing end of these verdicts have their stock prices decline an average of almost 22%. Furthermore, this does not account for an increase in insurance premiums, as well as the prices of goods and services provided to the public.

Seven states took measures to limit the size and scope of verdicts:

  • Florida: HB 834 included changes to the state’s comparative negligence system, adopted a federal standing of eliminating attorney’s fee multiplies, provided new standards to assist juries in calculating damages, and reduced the statute of limitations. Note, Florida was the number two state for nuclear verdicts from 2009 to 2022. In 2023, they came in at number seven.
  • Iowa: Senate File 228 capped liability damages against trucking companies to $5 million. HF 161 created a cap on noneconomic damages in medical malpractice cases.
  • Indiana: HB 1124 added a disclosure for third-party litigation funding to the state’s code.
  • Montana: New laws providing for greater transparency in litigation funding. SB 216 introduced comparative fault damages, limitations on defect claims, and statutory immunity for sellers complying with safety regulations.
  • Texas: HB 1745 limited vicarious liability claims against rideshare companies.
  • Utah: Law which seeks to deter over-naming in asbestos actions.
  • West Virginia: HB 3270 caps non-economic damages to injured workers in cases where the worker can prove deliberate intent by employers. The bill also sets a higher standard of proof required to bring a deliberate intent case when the underlying claim is for occupational pneumoconiosis.

At the other end of the spectrum, at least 11 states expanded liability in wrongful death cases. Five of the 11 states have enacted such expansion measures:

  • Maine: Raised the amount recoverable from $750,000 to $1 million and increased punitive damages maximum from $250,000 to $500,000.
  • Delaware: Added the threat of punitive damages to wrongful death claims.
  • Illinois: Added the threat of punitive damages to wrongful death claims.
  • Minnesota: Now permits recovery beyond economic losses by altering their wrongful death and survival statutes.
  • Rhode Island: Raised its minimum baseline amount of recovery in wrongful death actions from $250,000 to $350,000.

While New York does not have a damage cap (#10 state for nuclear verdicts since 2009), the governor vetoed the Grieving Families Act bill which would have greatly expanded liability under the states Wrongful Death Act.

The report believes this 15-year rise in nuclear verdicts since 2009 will continue to rise in 2024. Unless states place restrictions to limit nuclear verdicts, societal changes in how companies are viewed, in addition to the continued bombardment of attorney advertising, “social inflation” which will far outpace any economic inflation.

Marathon provides an interactive website to view their 2023 case data.

 

Contacts:

Michael Posavetz

 

Related Practice Areas:

Product Liability

Toxic Tort / Mass Tort

Talc Litigation

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