Jury awards exceeding $10 million, often called “nuclear verdicts,” are becoming increasingly common and carry significant implications for businesses across industries. In a recent Litigation Commentary article, Haynes Boone Partner Victor Vital and Associate Chelby Sterling examine the causes behind this trend and explore potential legal strategies to mitigate its impact.
Read an excerpt below:
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. 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. In addition to their size, nuclear verdicts can carry significant implications for businesses, both in terms of financial impact and risk management. 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. The situation worsened in 2023, with a staggering 89 nuclear verdicts awarded to plaintiffs, resulting in total damages of $14.5 billion. The median verdict has again climbed by 7.3% since the previous year, settling at $44 million. 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. 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.
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.
