NEWS & REPORTS

What it takes to advocate for legal abuse reform

May 15, 2024 | Articles

Pamella De Leon

The surge of nuclear verdicts – post-crash jury awards exceeding over $10 million – against trucking companies have sent shockwaves through the industry.

Despite a decrease in fatal crashes, verdicts are increasing, according to a 2023 study by the U.S. Chamber of Commerce Institute for Legal Reform. Looking at 154 trucking litigation verdicts and settlements from June 2020 to April 2023, the statistical mean plaintiffs’ award was $27.5 million and a statistical mean award of $759,875 for settlements.

Addressing lawsuit abuse is a “top tier issue” for the American Trucking Association, said David Bauer, vice president of state and tax policy. This involves ATA and its Federation partners at the state level pressing for reforms at the state level.

Besides trying to rein in huge lawsuits and nuclear verdicts, Bauer noted that the goal of tort reform is to restore balance and fairness to the judicial process for the trucking industry, pointing out how the judicial environment has become “unbelievably skewed” against the industry.

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Insurance costs are also a major concern, with Bauer noting an increasing propensity of insurance carriers to completely leave states due to liability concerns is alarming.

“Our efforts are really this industry standing up and saying, ‘enough is enough’ to the plaintiffs’ bar, which has perverted justice and turned civil litigation into a profit center to line their pockets,” said Bauer. “The costs are borne by everyone, not just trucking companies, but consumers in the form of higher insurance rates and higher prices for everyday goods.”

The nitty gritty

As the surge in nuclear jury verdicts intensifies, various states have successfully pushed through reforms.

During this 2024 state legislative session, in Indiana, the “seatbelt gag rule,” which prevented jurors presiding over an auto accident lawsuit from knowing whether the injured party was wearing one and thereby led to unfair jury verdicts, was ended.

Persistence was an important factor, along with requiring “constant, unrelenting information sharing with legislative leaders,” and emphasizing how businesses and individuals were being impacted, said Indiana Motor Truck Association President Gary Langston.

“It took three legislative sessions to get the seat belt admissibility language passed,” he said. The first two attempts, though not successful, established a stronger base to start the next effort for the third session. Langston said they were also able to develop a coalition of stakeholders who were impacted by lawsuit abuse.

“Each attempt gave us additional opportunities to better inform the legislators about how their constituents are consumers being impacted by exorbitant lawsuit amounts being imposed on the transportation industry,” said Langston.

Last year, Iowa passed legislation to put a $5 million cap on noneconomic damages.

Having a member in every legislative district was the most powerful grassroots tool, said Iowa Motor Truck Association President and CEO Brenda Neville. She also credited the association’s volunteer leaders and members in educating lawmakers in their three years effort.

She commended their legislative leaders for their support who were “consistent” and “unwavering.” She added, “The trial bar is a very formidable opponent and many state legislatures are filled with trial lawyer legislators from both sides of the aisle, which make these lawsuit abuse initiatives very difficult and challenging. So, you really do need to have the right political landscape.”

Florida enacted last March a landmark legislation to protect consumers and businesses from trial lawyer tactics. Some of the reforms include increasing transparency in civil proceedings by reducing the ability of plaintiffs’ attorneys to introduce fictitious and inflated medical bills at trial.

“Phantom damages are but one of the tactics used by the plaintiffs’ bar to create a pervasive climate of lawsuit abuse that has sent insurance rates soaring to unsustainable levels,” Bauer said.

The tort reforms in Florida were almost 20 years in the making, said Alix Miller, president and CEO of Florida Trucking Association. Miller credited strong leadership and support at the legislative and executive level, preparedness and communication with the business level community, and long-term education.

“Before the pandemic, the supply chain crisis and even hurricanes in Florida, the public didn’t really understand the essential nature of the trucking industry,” said Miller. The association took the opportunity to launch a strategic communication plan so Floridians (elected officials and general public) would understand the crucial role of the trucking industry, and how, when it financially suffers, consumers suffer as well.

“If trucking companies are being targeted by billboard attorneys, via nuclear verdicts and the perpetual cycle of settlement mills in Florida,” Miller said, “that cost – or even worse, supply chain delays for the more important of commodities – trickles down to everyone in the state.”

To be successful, Miller said, they had to find a way to change the paradigm on how tort reform has pitted trial lawyers against insurance companies.

“This would not be a fight pitting wealthy trial lawyers, insurance companies with household names, and billion-dollar corporations,” she said. “It needed to be a fight about people, families and small business. The fight needed to defend the backbone of the American economy, not manage a food fight among the Goliaths of wealth and power.”

Miller said that the FTA engaged with not just the trucking industry, but also small business owners to hear the impact and rising cost of lawsuit abuse. “It was our members who testified in front of legislators and legislative committees to share their stories. And in the end, it was our members who joined the Governor to sign the most comprehensive tort reform package in the country into law,” she said.

Other states such as West Virginia, Georgia, Montana, Texas, and Louisiana have also enacted tort reform to mitigate the escalation of litigation costs.

Moving the needle

There’s still a lot of work to do. Wisconsin Gov. Tony Evers earlier this month vetoed a bill to put a $1 million cap on awards for noneconomic damages from commercial motor vehicle settlements.

As a bill aimed to protect small businesses, since most members are small carriers and family businesses, Neal Kedzie, president at Wisconsin Motor Carriers Association, expressed his disappointment, adding he plans to reconvene with coalition business partners over the next few months to strategize.

Kedzie said a formidable obstacle to overcome are the Wisconsin trial attorneys heavily advertising against the trucking industry and promoting lawsuits against carriers on media outlets.

“Though I’m disappointed that we didn’t have our tort reform passed, I’m encouraged that we had it pass both houses of the state legislature and make its way to the governor’s desk on our first attempt,” said Kedzie. “I believe that in time, we will be successful.”

As other states push for reform measures, Langston said it’s important to get legislators other than just those who serve on the judiciary committees involved in understanding the reptile theory tactics that trial lawyers use to divert a jury’s attention from the facts of the trial.

“The story to focus on is the impact of lawsuit abuse to the small business,” said Miller. “98% of trucking companies operate with 20 trucks or less. One fender bender can put an entire company out of business. Spend the time to humanize the industry.”

Bauer said ATA will work with any stakeholder that wants to enact reform. “In any effort to take unfair advantages from plaintiff’s attorneys, you are going to get their best efforts to distort our arguments and keep their gravy train going,” he said.

Bauer pointed out that even rational arguments can get twisted to misleading messaging. For example, in over half the states, it is still not permissible to introduce evidence that a plaintiff was not wearing their seatbelt at the time of an accident.

“These are falsifications we are fighting against as we continue our lawsuit abuse campaign,” he said. “We are not close to completion, in fact, we’re just getting started.”

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