Nuclear verdicts are accurately named: they are those verdicts where, for whatever reason, the jury sees fit to punish a company with damages high enough to wipe it out, or at least severely handicap its operations. These are unfortunately becoming more common across the country in product liability actions, and per ALM’s Taylor Lyden “six states (California, Florida, New York, Texas, Pennsylvania, and Illinois) are responsible for 63% of nuclear verdicts, far greater than their share of the total US population.” Depending on the state’s rules on joint and several liability, even a defendant only marginally connected to the plaintiff’s injuries may face significant exposure. The purpose of this article is to highlight potential risk factors that may trigger such verdicts, which may help a wary litigator of which facts to fight and which cases to settle.
In our experience, nuclear verdicts can arise from two types of damages: the pain and suffering of the plaintiff, and punitive damages over the conduct of the defendant. The former, unlike special damages such as lost earnings and anticipated future medical care, are not typically constrained by the calculations of the parties’ experts. As to the latter, in many jurisdictions punitive damages are not available absent a specific factual showing of fraud or malice. Plaintiffs’ counsel often recognize the constraints of the latter category and can attempt to backdoor arguments that outsized damages are appropriate by pointing to the culpability, carelessness, or poor reputation of a defendant. While defense counsel can attempt to exclude such arguments and testimony, plaintiffs are more often than not successful in introducing the same as impeachment evidence. With all of the above in mind, a wily plaintiff’s counsel can attempt to paint a defendant as an uncaring corporation and in the next breath ask that the jury award millions in pain and suffering damages.
A defense counsel’s task in challenging these tactics is to mitigate and avoid the development of a factual record that can be used to plaintiff’s purposes. Common examples of such facts can include the following:
- Evidence that suggests that the defendant is controlled or directed by an outside entity, such as an unreachable shareholder or parent company that the jury cannot reach
- Evidence from salespersons and marketing publications where representations about the company or product were inaccurate, such as by stating that the product was tested by an outside expert when such testing was conducted on a prior model year (and where changes have since been made to the product)
- Evidence that the defendant was overly concerned about cashflow or profitability during the time period at issue
- Evidence that different departments within the company have different understandings of the company’s operations, which may imply a sloppiness in all of its operations
- Evidence that plays upon the unspoken prejudices of the jury, whether they be racism, sexism, classism, etc., which a jury member would likely not ever admit to
Plaintiff’s ability to develop such evidence can be the result of a failure to fully prepare a client’s Person Most Knowledgeable for his/her deposition, a failure to aggressively assert objections to the production of records which invade the client’s trade secrets, or a failure to exclude such evidence at Trial. For example, while a client’s corporate structure may be fair game in discovery, there may be grounds to object to identifying how strategic decisions are made if doing so could be used by the client’s competitors. Alternatively, if there are tensions within the company on the product at issue (such as what entity designed/manufactured/sold it), the narrative can be controlled by offering a single corporate designee to testify on behalf of the company and fighting efforts by plaintiffs’’ counsel to depose other employees.
Defense counsel must be vigilant against the risk of a nuclear verdict and the methods that plaintiffs’ counsel use to instigate such verdicts. These verdicts are often a matter of emotion, instinct, and prejudice, and a good litigator must be a good storyteller in developing a narrative that counteracts plaintiffs’ own stories.