Total State Verdicts: $2,004,085,567
Total Federal Verdicts: $1,902,657,757
Top Sub-Industries: Broadcasting, Pharmaceuticals, Real Estate, Water Utilities, Health Care Equipment
Alignment of State/Federal Verdicts Skewed By $956 Million Southern District of New York Verdict
42% of State Verdicts Were In Workplace/Premises Liability Matters: New York’s “Scaffold Law” Imposes Absolute Liability On Employers for Workplace-Related Injuries At Height
46.5% of State Verdicts Were In Product Liability Matters, Including Asbestos Cases, For Which New York Is a Preferred Jurisdiction
Trial Lawyers Use “Anchoring” Tactic to Introduce Extraordinarily Large Awards in Jurors’ Minds
Legal Services Ads in New York Increased 66% From 2016 to 2020
Litigation Finance-Favorable Jurisdiction
Marathon’s analysis found that New York was another state like Virginia, where nuclear verdict trends in state and federal courts appeared similar. However, New York’s federal total was largely driven by just two extraordinary verdicts in the US District Court for the Southern District of New York: $956 million in the fraud matter Liberty Media Corp. v. Vivendi Universal in 2012 and $253 million in the employment case Velez v. Novartis Corp. in 2010.
Marathon’s analysis found that 42% of corporate nuclear verdicts in New York state courts were ordered in worker/workplace negligence, premises liability, or construction matters. These comprised eleven verdicts totaling $836.7 million from juries across four Supreme Courts in New York City: New York, Kings, Bronx, and Queens counties.
New York’s Large Verdicts Driven By Multiple Factors
Corporate nuclear verdicts in New York, by and large, have been driven by a variety of state-level, plaintiff-friendly environmental factors, precedents, and local laws. Plaintiffs’ attorneys in the state also employ several tactics used by those in California, including “anchoring,” which is further detailed in the following section.
Perhaps chief among these local factors is New York’s unique Labor Law 240, or “scaffolding law,” which imposes absolute liability on employers for workplace-related injuries that occur at height, even if the injured party is at fault.
Initially enacted in the 19th century to protect workers who built New York City’s skyline, the scaffolding law has garnered controversy for contributing to high liability insurance rates, project delays, and expensive lawsuits. The law has put trial lawyer lobbyists at odds with the construction industry, the latter of which has argued that the lawsuit lending industry touts the scaffold law as a “safety law” amid increasing construction injuries. According to the Nelson A. Rockefeller Institute of Government, the scaffold law led to a fivefold increase in workplace injury cases from 1990 to 2012.
Unlike some other states, New York does not set a cap on awards for pain and suffering. N.Y.C.P.L.R. 5501(c) states that the appellate division should determine “that an award is excessive or inadequate if it deviates materially from what would be reasonable compensation.” In New York, courts look to prior awards for comparable injuries sustained on appeal for guidance. Prior to the recent surge in nuclear verdicts, only two New York appellate cases surpassed $10 million in noneconomic damages, and so that number had become established as the state’s de-facto limit.
Product Liability Verdicts – Asbestos Litigation
According to Marathon’s analysis, 46.5% of corporate nuclear verdicts in New York state courts were ordered in product liability matters. These comprised thirteen jury verdicts totaling $925.3 million, with most issued in New York County Supreme Court.
New York City has long been a preferred jurisdiction for asbestos litigation, ranking second for mesothelioma case filings in 2020. This is due in part to high rates of exposure in the city. Several of the largest of the product liability verdicts identified by Marathon were asbestos matters, including a $190 million award to plaintiffs in five cases consolidated for trial in Assenzio v. AO Smith Water Products Co. (2013). Other top asbestos cases included a $75 million verdict in Robaey v. Air & Liquid Systems Corp. (2017); a $60 million verdict in Macaluso v. AO Smith Corp. (2018); and a $19.5 million verdict in Konstantin v. 630 Third Avenue Associates.
This area of litigation is also ripe for lawsuit abuse. According to a June 2021 New York Civil Justice Institute report, many plaintiff firms adopt a “sue first, discover later” approach, indiscriminately and wrongfully naming asbestos defendants that lack a connection to the plaintiffs suing them. The NYCJI’s review of the New York City Asbestos Litigation (NYCAL) docket found that the average case from 2015-2020 named 30 to 40 defendants, with some cases naming upwards of 90, and a high dismissal rate. The study recommends that New York adopt laws similar to those in other states that require asbestos plaintiffs to include sworn information with their lawsuits proving there is a basis for including all defendants.
Trial Tactics – Anchoring
According to the US Chamber of Commerce, nuclear verdicts in New York are less likely to include punitive damages than in other states. Rather, personal injury lawyers urge juries to return supersized non-economic damage awards through a tactic known as “anchoring.” This occurs during summation, when lawyers suggest an extraordinarily large award to the jury and that number becomes “anchored” in a juror’s mind. According to the New York Law Journal, New York has experienced a trend of upwardly spiraling verdicts for pain and suffering “directly precipitated” by abuses of anchoring. Marathon’s analysis also found instances of anchoring in top California nuclear verdicts.
Anchoring occurred during one of the most prominent New York cases identified by Marathon, Perez v. Live Nation (2019), filed in New York County Supreme Court. In that case, plaintiffs’ lawyers asked a jury to award $85 million in noneconomic damages against defendant Live Nation Worldwide Inc. The jury returned with a $85.75 million pain and suffering award on top of $13.5 million for medical care and lost wages. The trial court lowered the noneconomic damages to $40.6 million – still high above what New York courts have permitted – and the appellate court lowered it to $20 million. According to Bloomberg, the $20 million pain and suffering award was still a record for New York state.
A September 2022 review by the US Chamber of Commerce found anchoring in 34 nuclear pain and suffering verdicts in New York in which plaintiffs’ lawyers asked juries to return amounts between $20 million and $140 million. In several of those cases, juries returned the exact amount requested or “compromised” with a nevertheless extraordinarily high verdict that “was clearly influenced” by the amount the lawyer requested. While these awards are often reduced on appeal – such as in Perez v. Live Nation – New York’s appellate division has frequently declined to consider whether plaintiffs’ lawyers may ask for damages at levels state courts have never sustained as “reasonable compensation” in comparable cases, per the Chamber. Now that several recent verdicts have breached the de facto $10 million limit on noneconomic damages, nuclear verdicts and settlements are even more likely in the state.
Effective Trial Attacks
Further, a three-part research study published in the New York Law Journal in July 2020 identified a suite of so-called “how-dare-they-defend” trial attacks that purportedly explain the rise of nuclear verdicts in New York courts over the past two decades. These attacks, according to the study, feed off the innate sympathy any injured person deserves, while stripping defendants of rights to defend themselves in a civil trial over just compensation. Attorneys in New York courts attempt to appeal to emotional outrage, employing language like “big corporations” and “hired guns” when speaking to juries. The most frequent lines of attack, per the study, include:
“Send a message” attacks, based on punishing the defendant financially and creating a “climate of hostility” and appealing to the jury’s passion and sympathy, as opposed to ascertaining a just compensatory pain and suffering award;
“Hired gun” comments where, in so many words, a defense expert or examining physician is vilified to a jury on the basis that they are not treating doctors and/or that their opinions are “bought,” an especially cynical attack in an era where injured plaintiffs are routinely referred by their counsel to troupes of litigation-based physicians who audaciously then declare themselves to be treating physicians;
The “big corporation” attack, which can be subtle or overt, but which, either way, substitutes for a direct reference to the defendant’s wealth or insurance;
“Vouching,” where an attorney acts as an unsworn witness, whether to the character of their own client or the supposed bad conduct of their adversary;
The “golden rule,” otherwise known as attempting to inflame and prejudice the jury by asking them to put themselves in the injured plaintiff’s shoes;
The simple “how dare they,” whether by denigrating defense counsel’s and the defendant’s motivations and similar personal attacks, or by expressions of personal indignation or outrage or disgust at the defendant’s audacity for exercising its right to defend itself;
The “dream team” attack, whereby the very excellence of defense counsel’s performance and of defense experts’ reputation and testimony is styled as a de facto admission of wrongdoing;
The “unit of time” calculation of damages, encouraging an excessive verdict by proposing a significant figure and then asking the jury to multiply it over a number of years; and of course
“Improper anchoring,” the tactic of asking for an absurdly large number so that the jury will award a “compromise” figure that is still well above the bounds set by CPLR 5501(c).”
Legal Services Advertising
According to the ATR Foundation and Kantar, between 2016 and 2020, spending on local advertisements for legal services and/or soliciting legal claims in New York increased by 16.46% while the quantity of ads increased by 65.98%.
Litigation Finance-Favorable Jurisdiction
New York has been identified as among the top four most attractive states for investing in litigation by the American Transportation Research Institute.
State courts have specifically held that litigation finance agreements are enforceable, while a consent decree between the New York Attorney General and the American Litigation Funding Association ALFA permits litigation finance agreements that include certain minimum disclosures and provide for a five-day “cooling-off” period after execution that would permit consumers to rescind the agreement.
There is a very low risk that a litigation financing transaction would be invalidated in New York as long as it conforms to those guidelines, as well as a very low risk that such an agreement would be subject to the state’s usury law, according to the ATRI.
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Corporate Verdicts Go Thermonuclear
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