Nuclear Verdicts Are Getting Worse

Nuclear Verdicts have returned to their pre-COVID-19 level after dipping during the pandemic, and the largest verdicts are growing in frequency, according to a recent study by the U.S. Chamber of Commerce’s Institute for Legal Reform (ILR). The ILR study, “Nuclear Verdicts: An Update on Trends, Causes, and Solutions,” analyzed Nuclear Verdicts over a 10-year period from 2013 to 2022, including the pandemic years when courthouses temporarily closed.

The study reveals that “while nuclear verdicts dropped significantly during the COVID-19 pandemic, they rebounded to near their prior levels by the third quarter of 2021. When excluding the pandemic years, the data shows an upward trend in the frequency of reported nuclear verdicts at all levels over the 10-year study period.”

According to the study, approximately half of nuclear verdicts over the 10-year period were between $10 million and $20 million, and over one-third were between $20 million and $50 million. The remaining 19% exceeded $50 million, “a group that included 115 ‘mega’ Nuclear Verdicts of $100 million or more.” ILR says the number of mega Nuclear Verdicts reached a new record in 2022, adding that preliminary data indicates that record will again be broken in 2023.

While the median nuclear verdict during the 10-year period was $21 million, it was higher in product liability and intentional tort cases. “The median nuclear verdict in product liability cases peaked at $36 million in 2022—a 50% rise over a decade,” notes the study, which adds that product liability, auto accident, and medical liability cases comprised two-thirds of reported Nuclear Verdicts.

State courts produced the vast majority of Nuclear Verdicts compared to federal courts, and four states in particular—Florida, California, New York, and Texas—were home to half of all Nuclear Verdicts in the U.S. The study points out that while these are large states, the number of Nuclear Verdicts was outsized even when accounting for their population. “States such as Georgia and Washington also host more than their expected share given their size,” according to the study.

While only about a quarter of Nuclear Verdicts included punitive damages, the study says that, when awarded, “they were often extraordinary sums.” The study adds that many Nuclear Verdicts do not include a complete breakdown of each component of damages, “but where that information was available, it showed that Nuclear Verdicts consist primarily of awards of noneconomic damages, such as pain and suffering.”

To that point, in a 2020 CLM magazine feature, “The Nuclear Age,” CLM member and Tyson & Mendes Managing Partner Bob Tyson stressed the need for the defense to argue noneconomic damages, pointing out that they typically do not do so. “This can be a sensitive subject for the defense to raise at trial, but counsel should not be afraid to broach the topic,” wrote Tyson. The ILR study’s data on impact of noneconomic damages on Nuclear Verdicts supports this approach.

Nuclear Verdict Drivers

The ILR study focuses on three separate areas that are driving Nuclear Verdicts: inside the courtroom, outside the courtroom, and in the legislative arena.

“In the courtroom, plaintiffs’ lawyers use tactics that manipulate juror behavior and arbitrarily inflate damages,” the study states. “They may, for example, resort to so-called ‘reptile theory’ tactics that aim to instill a sense of fear or danger in jurors’ minds, so they lash out at their perceived attackers. Plaintiffs’ lawyers may also suggest that jurors award a specific, exorbitant amount of damages or apply a method for calculating damages that will produce a Nuclear Verdict, knowing that jurors will often rely on such ‘anchors’ in assessing damages even though they are completely arbitrary.”

Outside the courtroom, the study states that plaintiffs’ attorneys and “lead generating” companies “may flood the airwaves with lawsuit advertising that touts extraordinary verdicts and shapes potential jurors’ views of appropriate compensation. Plaintiffs’ lawyers are also increasingly bringing litigation funded by third parties seeking a return on their investment, which not only enables such advertising and speculative claims but also contributes to nuclear verdicts by driving up award demands and widening the gap for parties to negotiate a reasonable settlement.”

Legislatively, the study points to plaintiffs’ bar efforts to get laws passed that lead to more Nuclear Verdicts. “These include, for example, expanding damages available in actions such as wrongful death lawsuits and eliminating or weakening existing safeguards on excessive awards, such as statutory limits on noneconomic damages.”

Turning the Tide

ILR examines potential solutions to the issue of Nuclear Verdicts, focusing mostly on legislative efforts. “Legislators can, for example, adopt reforms that do not permit lawyers to inappropriately file cases in areas known for nuclear verdicts, but rather where the plaintiff lives or the injury occurred,” notes the study. “They can prohibit manipulative trial lawyer tactics, such as arbitrary anchoring arguments or prejudicial practices, like multi-plaintiff trials, that fuel nuclear verdicts.

“Legislators and courts can also strengthen standards to screen unreliable scientific evidence used to generate some of these verdicts. And they can require transparency and prohibit conflicts of interest in third party litigation funding and stop misleading practices in lawsuit ads. Finally, legislators can reject proposals backed by the plaintiffs’ bar that would authorize more subjective forms of damages or weaken or repeal laws that have helped ensure that damages awarded provide reasonable compensation for a plaintiff’s injury.”