By LCA Senior Fellow Victor Vital and Chelby Sterling
A "nuclear verdict" refers to a jury award exceeding $10 million, often in personal injury or wrongful death lawsuits. These verdicts are most frequently found in product liability (23.3%), auto accident (23.2%), and medical liability (20.3%) cases.[1] They often come with a societal perception that they serve as retribution for alleged corporate malfeasance, rather than merely compensating the plaintiff for actual damages.[2] In addition to their size, nuclear verdicts can carry significant implications for businesses, both in terms of financial impact and risk management.[3] As the number of nuclear verdicts continues to grow, the ripple effects are felt across various industries, contributing to increased insurance premiums and, in some cases, threatening business viability.
The prevalence of nuclear verdicts has grown significantly over the past decade. Between 2013 and 2022, the median nuclear verdict saw a sharp rise, reaching $21 million, with some cases, particularly in product liability, seeing verdicts soar to even greater heights. In 2022, the median verdict in products liability cases alone peaked at an astounding $36 million—a 50% increase compared to 2013. [4] The situation worsened in 2023, with a staggering 89 nuclear verdicts awarded to plaintiffs, resulting in total damages of $14.5 billion.[5] The median verdict has again climbed by 7.3% since the previous year, settling at $44 million. [6] The mean nuclear verdict across all case types was much higher, at $88.9 million, driven by a group of awards in the hundreds of millions or even billions of dollars.[7] This upward trajectory shows no signs of slowing down, and it raises questions about the sustainability of these verdicts in the future. With each passing year, businesses—especially those in sectors like manufacturing, transportation, and healthcare—find themselves exposed to ever-greater financial risks.[8]
State courts are more likely to render nuclear verdicts compared to federal courts, with 9 out of 10 such verdicts occurring in state jurisdictions. The top states for nuclear verdicts are California, Florida, New York, Texas, Georgia, Illinois, Pennsylvania, Washington, Missouri, and Ohio. Despite representing only a third of the U.S. population, half of the nation's nuclear verdicts occurred in California, Florida, New York, and Texas. While punitive damages are common in large verdicts, 74% of the verdicts in the study were composed entirely of compensatory damages.[9]
Economic Impact on Businesses and Consumers
The rise of nuclear verdicts has created a ripple effect that extends beyond the courtroom and directly impacts businesses and consumers. As the frequency and size of these verdicts have grown, companies have faced sharp increases in their insurance premiums.[10] This is particularly troubling for smaller businesses that may struggle to afford such rising costs. Large verdicts often translate into higher premiums, and in many cases, companies may find it difficult to obtain necessary coverage at all, especially in industries considered high-risk. These rising expenses are often passed on to consumers, leading to higher prices for goods and services.[11]
Factors Perceived to Contribute to Nuclear Verdicts
There are several factors that commentators discuss as potentially contributing to the rapid escalation of nuclear verdicts, with some aspects rooted in both legal strategies and broader societal trends. Key factors include:
- Plaintiffs' Lawyer Tactics: Many believe that one of the primary drivers of large verdicts is the use of aggressive legal tactics, such as the "reptile theory." This strategy seeks to provoke an emotional response from jurors by framing the case in terms of public safety and danger. By shifting the focus away from the applicable legal standards and toward emotional appeals and “safety rules,” plaintiffs’ attorneys can sway jurors toward awarding larger sums. Strategies like the "reptile theory" aim to instill a sense of danger and fear in jurors, driving exorbitant verdicts through an over-emphasis on community protection and deterrence over the civil justice system’s compensatory focus.[12]
- Jury Anchoring: Another tactic that is perceived as a factor in the increase of nuclear verdicts is the frequent use of jury anchoring. In this approach, lawyers will suggest specific, often exorbitant, amounts for damages in the hopes of influencing jurors. By presenting an anchor figure, plaintiffs’ attorneys encourage jurors to award larger amounts, believing it is a justified response. This can lead to jury awards that far exceed what would have been considered reasonable based solely on the evidence presented in court. Lawyers suggest specific, often exorbitant amounts for damages, influencing jurors to award higher sums.[13]
- Third-Party Litigation Funding: In the discussion about the rise of nuclear verdicts, some commentators have noted the rise of third-party litigation funding, theorizing that such funding plays a role in extending legal battles and increasing the size of verdicts. External funding allows plaintiffs to pursue long, drawn-out lawsuits without the financial constraints that typically come with litigation. Some assert that, as these cases stretch on and the financial stakes rise, higher-than-expected jury awards occur consequently.[14]
- Public Sentiment: Increasingly, the public perception of large corporations as profit-driven entities with little regard for consumers or safety has fueled the desire for larger jury awards. Jurors, influenced by the broader societal mistrust of corporations, are often more inclined to impose significant financial penalties on defendants, particularly when the corporation is perceived as responsible for harm, even using “compensatory” awards as punishment of perceived corporate wrongdoing.[15]
Actions and Proposed Solutions to Stop Nuclear Verdicts
In response to the growing prevalence of nuclear verdicts, several solutions have been proposed at both the legislative and courtroom levels. While these proposals vary in approach, they share the goal of reining in excessive verdicts and protecting businesses from devastating financial exposure:
- Legislative Reforms: One of the most frequently discussed reforms is the implementation of caps on noneconomic and punitive damages. By placing limits on these types of awards, lawmakers can help ensure that juries are not swayed by emotions or arbitrary figures, resulting in more balanced and fair verdicts.
- Disclosure of Litigation Funding: Transparency in lawsuits involving third-party funding is another proposed solution. By requiring full disclosure of the external financing behind a case, it is believed that courts can ensure that these cases are not unnecessarily prolonged or inflated in value due to financial incentives.[16]
- Regulating Lawsuit Advertising: The influence of advertising on potential jurors is also a concern. Limiting or regulating misleading lawsuit advertisements could prevent public perceptions from being unduly shaped by exaggerated or sensational claims, potentially leading to more impartial jury decisions.[17]
- Promoting Sound Science in Courtrooms: Ensuring that expert testimony in court is based on sound, scientifically verified evidence is another key proposal. By maintaining high standards for expert witnesses, the legal system can avoid verdicts based on unreliable or skewed data. Ensuring that expert testimonies are based on reliable scientific evidence.[18]
- Counteracting Plaintiffs' Tactics: It is important to employ defense strategies to neutralize approaches like the reptile theory and jury anchoring.[19] While there are many potential strategies, just a few will be addressed here. One of those strategies includes the use of motions in limine to prevent the introduction of improper arguments and the use of counter-anchoring to challenge inflated damage requests.[20] Additionally, some have posited that the implementation of subsequent remedial measures and safety measures that are above the minimum duty tend to help counteract nuclear verdicts.[21] Comparative fault can also help mitigate nuclear verdicts by reducing the plaintiff's damages in proportion to their own responsibility for the injury. If the jury finds the plaintiff partially at fault, the award is reduced accordingly, which can lower excessive damages. Lastly, appellate review is critical in the defense of cases with nuclear verdict potential. An example of this is Nobles et al. v. City of Austin et al. In that case, following a jury verdict that awarded substantial damages to the plaintiffs, the defendants filed a motion seeking judgment as a matter of law, a new trial, or, alternatively, remittitur—a reduction of the damages awarded. Nobles v. Egal, No. A-19-CV-389-ML, 2022 WL 3971048, at *3 (W.D. Tex. Aug. 31, 2022), judgment entered, No. A-19-CV-389-ML, 2022 WL 6255520 (W.D. Tex. Sept. 14, 2022). The court reviewed the jury's awards and found certain amounts to be excessive. Consequently, the court granted remittitur, reducing the damages from the initial jury award of $67,107,500 to $8,000,000. at *17.
As nuclear verdicts continue to rise in frequency and size, it will be interesting to see how these actions and proposed solutions play out in courtrooms across the country. Businesses and corporate defense lawyers must stay vigilant and adapt to these developments to mitigate potential impacts.
[1] Institute for Legal Reform, Nuclear Verdicts: An Update on Trends, Causes, and Solutions, (May 30, 2024), https://instituteforlegalreform.com/research/nuclear-verdicts-an-update-on-trends-causes-and-solutions/.
[2] Institute for Legal Reform, What Are Nuclear Verdicts?, (June 26, 2024), https://instituteforlegalreform.com/blog/what-are-nuclear-verdicts/.
[3] Richard Vanderford, Nuclear Verdicts Driving Up Costs of Doing Business, Says Risk Management Society’s Head, Wall St. J. (May 9, 2024), https://www.wsj.com/articles/nuclear-verdicts-driving-up-costs-of-doing-business-says-risk-management-societys-head-b8a401bd.
[4] Institute for Legal Reform, Nuclear Verdicts: An Update on Trends, Causes, and Solutions, (May 30, 2024), https://instituteforlegalreform.com/research/nuclear-verdicts-an-update-on-trends-causes-and-solutions/.
[5] Institute for Legal Reform, Nuclear Verdicts: An Update on Trends, Causes, and Solutions, (May 30, 2024), https://instituteforlegalreform.com/research/nuclear-verdicts-an-update-on-trends-causes-and-solutions/.
[6] Ezra Amacher, Nuclear Verdicts Surge to $14.5 Billion in 2023 – Report, Insurance Journal (May 10, 2024), https://www.insurancejournal.com/news/national/2024/05/10/773721.htm.
[7] Institute for Legal Reform, Nuclear Verdicts: An Update on Trends, Causes, and Solutions, (May 30, 2024), https://instituteforlegalreform.com/research/nuclear-verdicts-an-update-on-trends-causes-and-solutions/.
[8] Richard Vanderford, Nuclear Verdicts Driving Up Costs of Doing Business, Says Risk Management Society’s Head, Wall St. J. (May 9, 2024), https://www.wsj.com/articles/nuclear-verdicts-driving-up-costs-of-doing-business-says-risk-management-societys-head-b8a401bd.
[9] Institute for Legal Reform, Nuclear Verdicts: An Update on Trends, Causes, and Solutions, (May 30, 2024), https://instituteforlegalreform.com/research/nuclear-verdicts-an-update-on-trends-causes-and-solutions/.
[10] Richard Vanderford, Nuclear Verdicts Driving Up Costs of Doing Business, Says Risk Management Society’s Head, Wall St. J. (May 9, 2024), https://www.wsj.com/articles/nuclear-verdicts-driving-up-costs-of-doing-business-says-risk-management-societys-head-b8a401bd.
[11] Richard Vanderford, 'Nuclear' Jury Verdicts Rise Alongside American Anger, Wall St. J. (July 8, 2024), https://www.wsj.com/articles/nuclear-jury-verdicts-rise-alongside-american-anger-f63b94b3.
[12] Institute for Legal Reform, What Are Nuclear Verdicts?, (June 26, 2024), https://instituteforlegalreform.com/blog/what-are-nuclear-verdicts/.
[13] Institute for Legal Reform, What Are Nuclear Verdicts?, (June 26, 2024), https://instituteforlegalreform.com/blog/what-are-nuclear-verdicts/.
[14] Institute for Legal Reform, New U.S. Chamber Research Shows “Nuclear” Verdicts Continue to Increase in Size and Frequency, (June 4, 2024), https://instituteforlegalreform.com/press-release/new-us-chamber-research-shows-nuclear-verdicts-continue-to-increase-in-size-and-frequency/.
[15] Richard Vanderford, 'Nuclear' Jury Verdicts Rise Alongside American Anger, Wall St. J. (July 8, 2024), https://www.wsj.com/articles/nuclear-jury-verdicts-rise-alongside-american-anger-f63b94b3.
[16] https://instituteforlegalreform.com/press-release/new-us-chamber-research-shows-nuclear-verdicts-continue-to-increase-in-size-and-frequency/.
[17] Institute for Legal Reform, New U.S. Chamber Research Shows “Nuclear” Verdicts Continue to Increase in Size and Frequency, (June 4, 2024), https://instituteforlegalreform.com/press-release/new-us-chamber-research-shows-nuclear-verdicts-continue-to-increase-in-size-and-frequency/.
[18] Institute for Legal Reform, New U.S. Chamber Research Shows “Nuclear” Verdicts Continue to Increase in Size and Frequency, (June 4, 2024), https://instituteforlegalreform.com/press-release/new-us-chamber-research-shows-nuclear-verdicts-continue-to-increase-in-size-and-frequency/.
[19] Institute for Legal Reform, What Are Nuclear Verdicts?, (June 26, 2024), https://instituteforlegalreform.com/blog/what-are-nuclear-verdicts/.
[20] MAPCO, Inc. v. Jenkins, 476 S.W.2d 55, 62 (Tex. App.—Amarillo 1971, writ ref’d n.r.e.) (Improper to suggest to the jury “that appellant was a big corporation motivated by profit to appellees’ detriment, and that the next condemnation might happen to the members of the jury if appellees were not well paid.”); Ramirez v. Welch, No. 05-16-00681-CV, 2018 WL 3725254, at *16 (Tex. App.—Dallas Aug. 6, 2018, no pet.) (holding that defense counsel’s mention of reptile tactics was not an incurable jury argument).
[21] Krista Torralva, Lawyers Discuss Perceived Surge of So-Called 'Nuclear Verdicts', TEX. LAWBOOK (May 9, 2024), https://texaslawbook.net/lawyers-discuss-perceived-surge-of-so-called-nuclear-verdicts/.
LCA Senior Fellow Victor Vital is the Global Chair of Haynes Boone's Trials Practice Group. Victor tries cases to judges and juries where the outcomes can profoundly impact his clients' businesses or lives, bringing passionate advocacy to those matters. Because of his broad trial experience, clients and lawyers turn to Victorregardless of the subject matter when they need a trial lawyer for their important cases. Victor is ranked in Band 1 by Chambers USA, Chambers and Partners, for Litigation: Trial Lawyers, 2024. Chambers reports, “Victor Vital … is a strong performer in a range of commercial disputes and also has considerable experience handling high-stakes personal injury litigation. He is recognized for his trial abilities.” (2024) Clients report to Chambers that Victor “is a team player so it is easy to work with him. He is unflappable and a good trial lawyer with a positive attitude,” and that he is “very versatile and can handle a lot of types of cases.” Victor’s trials and verdicts have been nationally recognized. For instance, he secured a jury verdict in a business dispute that was listed in the National Law Journal Top 100 list. Another one of his jury verdicts was listed in the Courtroom View Network’s list of Top 10 Most Impressive Defense Verdicts of 2022.
