Lawsuit Abuse Resource Hub

Image
STOP Lawsuit Abuse

American Trucking Associations is committed to stopping lawsuit abuse against motor carriers. 

Overview    State of Play    Resources

Image
Jackpot Justice

Overview


We strongly believe that when a motor carrier acts wrongfully, and that wrongful conduct injures those with whom we share the road, the motor carrier should be held accountable and those injured should be fairly compensated. 

However, certain tactics, trends, and rules have transformed truck accident cases into a profit center for the plaintiffs' bar, rather than a fair system for determining fault and holding responsible parties accountable.

These perverse and destructive litigation practices have enabled the Jackpot Justice industry to engineer nuclear verdicts and settlements that are disproportionate to the alleged harm, or completely untethered from actual causation for the underlying accident that is the subject of a filed lawsuit.

 

 

Through targeted reforms, ATA is committed to restoring fairness and balance to the system to ensure justice drives accident litigation outcomes, not profits. Our reform efforts address issues including but not limited to the following issues: 

  • Stacked Environments: Trucking companies are finding it increasingly impossible to get a fair shake in many state courts when involved in accident litigation, as the plaintiffs' bar "forum shops" to find favorable judges that will steer the outcome in their desired direction.
     
  • Admissibility of Phantom Damages: Many states permit evidence of billed medical costs and do not permit evidence of what was actually paid for those medical costs after insurance, rate negotiations, and other adjustments. The difference between billed medical costs and paid medical costs is a phantom damage—essentially a fictitious number that generates a windfall profit for plaintiffs. Phantom damages create disproportionate economic damage recoveries in personal injury lawsuits, creating a higher baseline for non-economic damages.
     
  • Unfettered Noneconomic Damages: Noneconomic damages are subjective, non-monetary losses, such as pain and suffering. In many states, there are no limits on the noneconomic damages that can be awarded to a plaintiff.
     
  • Direct Negligence Claims: In many states, a trucking company can admit that it is responsible for its truck driver’s negligence but a plaintiff is still permitted to sue the trucking company for direct negligence allegations such as negligent hiring, negligent selection, negligent training, and negligent entrustment—even when those allegations did not cause the underlying accident. Such allegations are a red herring which distract and mislead a jury from the relevant considerations to determine who was at fault for a crash. 
     
  • Third-party Litigation Finance: Most people agree that civil litigation is not a stock market—but that is what it's becoming with the involvement of third-party litigation financing. Also known as "lawsuit lending," this occurs when a disinterested, third-party—often investment firms with billion-dollar portfolios—fronts the cost of litigation with an agreement that the plaintiff will repay the lender with interest on a verdict or settlement. This incentives plaintiffs to pursue outsized verdicts in order to repay their loan, making it harder to reach reasonable settlements. Many states do not restrict the ability for plaintiffs to enter into such funding arrangements, and judges, juries and defendants are left unaware of the arrangement.

These factors have contributed to a surge in nuclear and disproportionate verdicts that are causing industry-wide economic harm. For a motor carrier who receives a nuclear verdict, generally defined as an eight- or nine-figure verdict, it could mean bankruptcy. But it always means increased supply chain costs. 
 

Back to Top

State of Play


State by state, governors and state legislatures are waking up to the fact that the Jackpot Justice industry's abuses of civil litigation must be reigned in. These common-sense reforms targeting specific and perverse trial-bar tactics are leveling the playing field by putting justice over attorney profits.

 


The trucking industry is applauding the many wins since the campaign's inception:


Florida  

Governor DeSantis signed HB 837 into law on March 24, 2023. Among the many reforms, this comprehensive new law:

✅Shortens the statute of limitations from four years to two years;
✅Alters the comparative fault system moving Florida from a pure comparative negligence system to a modified comparative negligence system;
✅Standardizes the evidentiary threshold to prove medical expenses so that the jury will hear evidence of the amount paid and not the gross amount before write-offs;
✅Permits a jury to learn whether a plaintiff’s attorney made a specific medical provider referral to the client; and
✅Places limitations on the reimbursement rate for medical treatment performed under a Letter of Protection.

Iowa

Governor Reynolds signed SF 228 into law on May 12, 2023.

This reform prevents the assertion of direct negligence claims (e.g., negligent hiring, retention, training, supervision, entrustment) against the motor carrier when the motor carrier has admitted that the driver was acting in the course and scope of the driver’s employment and limits the total amount recoverable against the driver and the motor carrier for noneconomic damages to $5 million per plaintiff, unless an exception exists (e.g., the driver drove under the influence). 

Indiana

Governor Holcomb signed HB 1124 into law on April 20, 2023, which requires plaintiffs to provide notice of litigation funding agreements and makes the agreement itself discoverable in lawsuits.

Montana

Governor Gianforte signed SB 269 into law on May 2,2023, which requires the registration of litigation financiers and the disclosure of litigation financing agreements in any civil action.

Georgia

Governor Kemp signed HB 961 into law on May 15, 2022, which allows damages to be apportioned to all parties, including non-parties, regardless whether there are one or more defendants named in the lawsuit.

Louisiana

On June 14, 2021, Governor Edwards signed HB 15 into law, which establishes criminal penalties for staged motor vehicle collisions that cause death or serious personal injury. 

Texas  

On June 16, 2021, Governor Abbott signed HB 19 into law, which provides for significant procedural changes to trucking-related lawsuits.

Under HB 19, motor carriers can request a two-party trial (a bifurcated trial) under certain circumstances. In the first phase, a jury would determine the negligence of the driver, if any, and the amount of compensatory damages.  In the second phase, the jury would determine the amount of punitive damages, if any.  

HB 19 also limits the first phase admissibility of company-wide evidence that may be relevant to direct theories of negligence against the trucking company.

Montana

Governor Gianforte signed SB 251 into law on May 7, 2021. Among other things, SB 251:

✅Refined the definition of recoverable damages and the evidence admissible to establish the value of medical treatment;
✅Established that the reasonable value of past treatment cannot exceed the amounts actually paid to the medical provider; and
✅Established that the admissible evidence can only include the sums paid to satisfy the medical providers’ charges (amounts discounted and written off cannot be considered). 

West Virginia

West Virginia amended its seat belt gag law with the passage of HB 3029 in 2021. The fact that the plaintiff was not wearing a seat belt is now admissible to show exacerbation of or contribution to the plaintiff’s injuries. 

Missouri

On August 28, 2020, SB 591 was enacted, which ensures damages will only be awarded if the plaintiff “proves by clear and convincing evidence that the defendant intentionally harmed the plaintiff without just cause or acted with a deliberate and flagrant disregard for the safety of others.” Under the new law, there will be no punitive damage award where only nominal damages are awarded, raising the burden of proof. The law also raises the bar for proving punitive damages against an employer. It also imposes procedural hurdles that will limit the plaintiff’s ability to utilize a punitive damage claim for unwarranted discovery purposes.

Iowa

Gov. Reynolds signed SF 2338 into law on June 18, 2020, which prevents damages for past medical expenses from exceeding the amounts actually paid to or may be owed for treatment provided by the medical providers.

Louisiana

The Louisiana Civil Justice Reform Act of 2020 became effective on January 1, 2021. The Act, HB 57, was signed into law by Gov. Edwards on July 13, 2020.  

This comprehensive reform law:

✅Lowered the monetary threshold for jury trials,
✅Precludes the communication to juries the existence of insurance coverage,
✅Repealed the seat bag gage rule permitting evidence of plaintiff’s non-use to show comparative fault, and
✅Limits the plaintiff’s recoverable medical expenses where the amount paid by a collateral source, such as the plaintiff’s medical insurance, is less than the amount billed by the medical provider.

 

State legislatures have been active in 2023. Bills have been introduced in the following states to reform lawsuit abuses in these critical areas:

Seat Belt Admissibility Phantom Damages Litigation Financing
CT, NE, IN, GA, WI, PA AR, FL, IA, KY, MO, WV CA, CO, IN, LA, MO, MT, NJ, NV, LA

 

Back to Top

 

Resources


State Lawsuit Abuse Reform Toolkit

For ATA Members Only

This electronic notebook has been compiled as a guide for understanding the lawsuit abuse reform issue, its impact on the trucking industry, and potential steps to change laws in the states. ATA members can access the toolkit here.

Back to Top