Overloaded: The Massive Lawsuit Burden for America’s Truckers

The trucking industry is the backbone of the American economy, connecting manufacturers, farmers, suppliers, and retailers directly to consumers. Responsible for transporting over 70% of all domestic freight tonnage, this sector is vital to the nation's supply chain. However, trucking companies are increasingly burdened by a surge in litigation, which poses significant challenges to their operations and the broader economy.

Nuclear Verdicts…

A key factor driving this litigation crisis is the rise of nuclear verdicts-jury awards exceeding $10 million. ILR's 2024 research, Nuclear Verdicts: An Update on Trends, Causes, and Solutions, found a total verdict value of over $5.5 billion in trucking nuclear verdicts in the 2013-2022 period, before any appeals or reductions. Whether or not a trucking company is directly affected, verdicts at that scale filter into the cost of insurance, potentially making it inaccessible to smaller operators.

The risk of a nuclear verdict isn't easy to predict-except perhaps by geography. The likelihood of a nuclear verdict varies widely across states and jurisdictions. ILR's research showed that state courts are the source of approximately 90% of nuclear verdicts with California, Florida, Illinois, New York, and Pennsylvania having the highest number of nuclear verdicts per capita.

…and Everything Else

And the problem isn't just nuclear verdicts. ILR's 2023 study, Roadblock: The Trucking Litigation Problem and How to Fix It, analyzed 154 trucking litigation verdicts and settlements from June 2020 to April 2023, and found an average winning plaintiffs' award of over $27 million before repeals or reductions. Such inflated verdicts create significant financial strain on the industry, making it harder for companies to operate efficiently and affordably. The study also shows that the industry continues to struggle with public perception, despite a temporary improvement during the COVID-19 pandemic.

Data collected by the American Transportation Research Institute (ATRI) highlights the struggle trucking faces from the increasing volume of litigation filed against it. A 2020 ATRI report tracking verdicts and settlements in the trucking industry shows a significant rise in litigation, with the number of cases resulting in verdicts over $1 million increasing by 235% when comparing the 2005-2011 and 2012-2019 periods. Zooming in on 2010-2018, the average verdict over $1 million grew from $5 million in 2010 to $23.5 million by 2018. The huge and frequently disproportionate amounts in these cases can have devastating consequences for trucking companies, putting smaller operators out of business and increasing costs for consumers.

One of the most concerning trends highlighted in the study is the growing proportion of noneconomic damages-such as pain and suffering-in nuclear verdicts. The calculation of this hard-to-measure damages category can be highly subjective and difficult to predict, and it is increasingly relied upon by the plaintiffs' bar to generate massive returns. In fact, in six out of the 10 years in our research, noneconomic damages accounted for more than the combined total value of economic and punitive damages in nuclear verdicts for which a breakdown of damages was available.

What Can Be Done?

To combat these challenges, and to address the particular features of trucking litigation that tend to drive massive verdicts, our research recommends several solutions aimed at creating a fairer legal environment for the trucking industry. Key recommendations include:

1. Transparency in Medical Damages: Measures should ensure that damages claims reflect medical expenses actually paid, and shed light on the damages-inflating (and sometimes criminal) referral networks between lawyers, healthcare providers, and litigation funders.

1. Curb Inappropriate Jury Inflammation: Reforms like the McHaffie Rule can prevent plaintiffs' lawyers from pursuing extraneous claims in the case, which could inflame jurors against the defendant.

1. Prohibit "Anchoring": Preventing plaintiffs' lawyers from introducing damages figures and/or formulas unsupported by evidence during trial can reduce the risk that jurors will produce a disproportionate verdict based on "splitting the difference" between a defense verdict and the plaintiff's lawyer's excessively high number.

1. Limits on Noneconomic Damages: Commonsense limitations on noneconomic damages, such as pain and suffering, can help prevent unpredictable and disproportionate jury awards.

1. Remove Seatbelt "Gag" Laws: Many states still prohibit the introduction of evidence of seatbelt non-use at trial, even though seatbelt use is mandated in all but one state. Removing so-called "seatbelt gag" laws allows juries to consider highly relevant evidence that may sharply change the perception of the case facts.

These reforms, among many other reforms that ILR recommends, will contribute to reducing unnecessary litigation and curbing excessive verdicts against the trucking industry. By addressing these issues, decision-makers will help to foster a more balanced legal system that supports economic growth and ensures the sustainability of this critical sector.