What's driving verdicts 'nuclear'?

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A. Vince Colella
Moss & Colella P.C.

 

News of an explosive verdict typically sends shock waves across the legal community. They are rare fish in a sea of settlements and defense verdicts. Recently, however, the size and frequency of verdicts has trended upward. “Nuclear” verdicts, as they are referred to among trial lawyers, are commonly defined as those marked by an award that exceeds $10 million dollars. When not measured by a specific dollar amount, they also refer to an exceptionally high jury award that surpasses what is considered reasonable. 

A recent study published in the U.S. Chamber of Commerce Institute for Legal Reform documents a rise in nuclear verdicts across the country. “Nuclear Verdicts: Trends, Causes and Solutions,” September 2022. The study analyzed 1,400 personal injury and wrongful death verdicts between 2010 and 2019. During that time period, the median nuclear verdict rose from $19 million dollars in 2010 to $25 million in 2019 (a 27.5% increase, far outpacing the inflation rate of 17.2 percent over the same period.) Pre-dominantly, one-half of the nuclear verdicts came from product liability (23.6%) and auto accident (22.8 %) cases. Perhaps surprisingly, state court juries produced a much greater number of nuclear verdicts than their federal counterpart. A state-by-state comparison revealed that six states comprised 63% of the nuclear verdicts. It is unclear whether the size of the state or allowance for punitive damages was of any significance. Michigan jury awards did not figure prominently in the study. 

In addition to the increase in “nuclear” verdicts, the overall value of verdicts exceeding $1 million dollars has grown dramatically. One study showed jury awards over $1 million dollars increased 1,000% from 2.3 million to 23.2 million from 2010 to 2018. (Moore, Keven: “A Disturbing Trend in Litigation – Rise in ‘Nuclear Verdicts, Awards Surpassing $10 million,” Northern Kentucky Tribunal. July 21, 2022.) In 2019, the study revealed a 300% increase in the number of verdicts over $20 million dollars. 

How does Michigan fare? According to Michigan Lawyers Weekly, in a typical year, there are between 10-15 personal injury verdicts over $1 million dollars. (In 2020 during the pandemic, when courts had shifted to remote access and jury trial had largely been suspended, there was only one such verdict reported.) In 2021, that number rose to seven. For 2022, (at the time of this publication), there have been 13 reported “million-dollar” verdicts rendered by Michigan state court juries for a whopping $48 million, bringing the average million-dollar verdict to nearly $4 million. 

While there are varying opinions about what is driving these staggering jury awards, there does seem to be a general consensus that a change in demographics has been a major factor. The age of jurors is trending younger, with more millennials serving. However, it’s not simply a matter of age; rather, a mindset or ideology that is driving substantial plaintiff verdicts. Millennials tend to value experiences rather than a dedication to work or careers and demand more “perks.” Anecdotally, they are believed to have a shorter attention span and pay less attention to complex defenses. Millennials have also grown up in an era of safety-protected environments, creating greater expectations for corporate accountability. They believe that corporations should take every precaution for safety, no matter how impractical or costly it may be to the company. 

The insurance industry has coined a phrase for the rise in jury verdicts beyond general economic inflation: “social inflation.” It reflects the notion that verdicts are not tracking at a normal pace of other more commonly accepted economic indicators. The industry has its own opinions on the causes of social inflation, including reckless government spending. Jurors are thought to becoming increasingly numb to high dollar figures as they are inundated with legislative fixes, i.e., the Covid Relief Act and Budget Reconciliation bills, which inject trillions of dollars into the economy with seemingly no economic recourse. Moreover, jurors are accustomed to hearing about athlete salaries, lottery payouts and corporate executive compensation packages that border on financial obscenity. Social inflation is seen as a primary driver of escalating costs in commercial liability – one that poses a serious challenge to the insurance industry. 

Another major force behind nuclear verdicts is the plaintiffs’ approach to trying cases. In 2009, David Ball and Don Keenan pioneered the “Reptile Theory.” While it has morphed into a variety of methods, including the Gerry Spence Trial College, lawyers have honed the indispensable skill of appealing to the unconscious mind of jurors. The reptilian approach seduces the part of the brain that controls the “fight or flight” response. Using fear and anger to solicit feelings of strong dislike for defendants has converted compensatory awards into punitive ones. Lawyers skilled in this style of presentation recognize the power of invoking emotional responses in place of rational, impartial evaluation of the evidence. It’s both troubling and fascinating. 

After more than a decade of increased jury awards, it is safe to say that ‘nuclear verdicts’ are not simply a trend, but a legal reality. 

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A. Vince Colella is a co-founder of personal injury and civil rights law firm Moss & Colella.



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