Corporate defendants across nearly 50 industries faced a staggering $14.5 billion in “nuclear verdicts,” verdicts surpassing $10 million, in 2023, according to an analysis by Marathon Strategies.
The median nuclear verdict rose to $44 million in 2023, a significant increase from $21 million in 2020, Marathon found. Last year also saw a 15-year high with 89 lawsuits resulting in verdicts over $10 million, while 27 were “thermonuclear,” or more than $100 million. This is the largest number of such cases Marathon has identified in a single year since 2009.
Missouri, Texas, Pennsylvania, and Washington were the states with the largest number of verdicts in 2023, while Florida, historically the No. 2 state for nuclear verdicts, dropped to No. 7 last year following tort reforms signed by Gov. Ron DeSantis in March 2023.
Several factors are contributing to the growth of nuclear verdicts. These include corporate mistrust, social pessimism, erosion of tort reform, and public desensitization to large numbers, according to the report. Additionally, shifts in jury pool demographics, particularly the influx of Millennial and Gen Z jurors who are more pro-plaintiff and less trusting of companies, have played a significant role, per the report.
Specific trial tactics may contribute to the size of verdicts emerging from juries, Marathon noted. These include:
- “Reptile theory,” in which plaintiff lawyers appeal to the emotional part of the brain of jury members.
- “Anchoring,” in which attorneys suggest an extraordinarily large award to a jury so that number becomes “anchored” in their minds.
- The “joinder” approach to claims, linking lawsuits or parties into one case to eschew venue requirements when shopping for a favorable litigation jurisdiction.
Beyond the financial costs, nuclear verdicts can have a catastrophic impact on a company’s reputation.
“A nuclear verdict can cost companies tens or hundreds of millions of dollars, but the reputational impact of headline-grabbing awards can be catastrophic,” the report stated, citing research that stock prices declined almost 22% in the years after the Great Recession for companies on the losing end of nuclear verdicts.
Plaintiff’s law firms are increasingly using the media and digital landscape to fuel corporate mistrust and negative headlines to shape perceptions of cases, Marathon stated, adding that attorney advertising now exceeds $1 billion each year.
The 2023 review revealed that product liability matters accounted for the majority of cases (37%), largely driven by lawsuits against Bayer AG over its Roundup herbicide alleged to cause cancer. Despite large sums against tech giants Google, Samsung, and Cloudera, intellectual property verdicts declined by 43% of all nuclear verdicts last year.
A landmark $1.8 billion antitrust verdict against the National Association of Realtors fueled a rise in real estate commission lawsuits, the report noted.
Legislative activity in several states aimed to limit the size and scope of verdicts through tort reform measures, including Florida, Iowa, Indiana, Texas, Utah and Wester Virginia.
To view the full report, visit the Marathon Strategies website. &
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