Author: Alliant

“Nuclear verdicts” are outcomes of civil litigation in excess of $10 million or settlements of civil liability claims that are disproportionate to the damages and much greater than anyone expected. Such outcomes have been of concern in matters involving private party defendants for some time. However, for several reasons, the factors driving these resolutions have also begun to seriously impact public entities.

According to a study published by the U.S. Chamber of Commerce Institute for Legal Reforms in September 2022, nuclear verdicts are increasing both in terms of frequency and amount. The median nuclear verdict increased by 27.5% in the 10-year study period, 2010-2019.ⁱ The study also revealed that venue has a significant impact on the rendering of such verdicts. For example, half a dozen statesⁱⁱ accounted for 63% of the nuclear verdicts in the 10-year period even though the states in question contained only 41% of the U.S. population in that decade.

Every day, public entities are exposed to liabilities that place them at unique risk. This is because the government carries out such a wide array of critical public facing functions from police and fire protection to road, bridge and other infrastructure construction and repair and education of children and sponsorship of children’s sports to community social care. The risks inherent in the delivery of all these services have been complicated by external factors such as climate change, civil unrest and social movements, the same factors driving nuclear outcomes in general and now impacting the growing liability exposure of public entities.

A leading theory about specifically what is giving rise to the increase in nuclear civil liability outcomes is called social inflation. Social inflation refers to a change in attitudes caused by several factors leading to pro-plaintiff jury verdicts and judicial decisions.ⁱⁱⁱ The suggestion is that the global pandemic, social justice movements, the sharp political divisions in the country and the new ways that information and news are shared have all led to a change in the way Americans in general, and jurors and the judiciary specifically, think.^iv They are angrier, trust establishment, authority and institutions less, are more susceptible to information sourced through social media and have a stronger sense of entitlement than previously. This means that when jurors encounter allegations against an institutional defendant like the government, they can be more inclined to “throw the book” at it and be more favorably inclined or susceptible to ever more inventive and manipulative arguments and tactics of plaintiff attorneys.  

In fact, one aspect of the social inflation idea is that plaintiffs’ attorneys have sharpened their storytelling skills to convince jurors to fear a defendant’s alleged wrongdoing as a menace to society and a threat to the wellbeing of jurors and their families. Commonly known as the “Reptile Theory,” it is an effective way to turn jurors against government defendants in today’s distrustful atmosphere and to cause fact finders to make decisions based less on reason and more on emotion.^v

In the atmosphere of social inflation, certain types of cases against public entities seem most susceptible to its effects and to result in nuclear verdicts or settlements. Among them are the following:

Sexual assault/molestation (SAM) cases are much more ubiquitous today than in the past since several states across the country, responding to societal factors bringing heightened attention to the subject, have amended their statutes of limitations laws applicable to these claims and lawsuits. The new laws allow for look-back periods of several more years after the expiration of the former statutory period if the claim arose when the alleged victim was a minor. Some of these new laws even remove statutes of limitations for these claims all together.^vi Because of this, these types of claims, always difficult to assess from a risk standpoint, are much more difficult to anticipate, plan for and defend, with incidents often dating back decades due to the increased time for filing. K-12 schools are highly susceptible to these types of claims as they employ hundreds of persons with access to children in various on- and off-campus activities from teaching to sports to counseling.

Civil rights claims against public entities and their employees can trigger several coverages—law enforcement liability, general liability, officers’ and directors’ liability, and employer practices liability. For example, Section 1983,^vii prohibiting the deprivation of civil rights under color of state law, is implicated when law enforcement is accused of making a wrongful arrest or when there is an alleged wrongful conviction. Title VII^viii prohibits employment discrimination in the workplace and encompasses sexual harassment or hostile workplace.  In the #MeToo and Black Lives Matter era in which we are operating, it is easy to see how social inflation is likely to impact claims against law enforcement and those involving workplace sexual discrimination/harassment and lead to nuclear verdicts or settlements.^ix