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Transportation Law Blog Legal updates, news, and commentary from the attorneys of Baker Sterchi Cowden & Rice LLC

In 2021, a Record Setting $1 Billion Dollar Verdict was Rendered Against a Trucking Company - Demonstrating that Nuclear Verdicts in Trucking Cases Continue to Rise

January 11, 2022 | James Jarrow and Joanna Orscheln

The trucking industry has experienced a continuous rise in “nuclear verdicts” since 2011. The American Transportation Research Institute (“ATRI”) defines a “nuclear verdict” as a verdict in excess of $10 million dollars.

In 2011, a $40 million dollar verdict was awarded to victims of a trucking accident in Georgia, where a semi-truck driver failed to stop, striking a passenger vehicle, killing two people and severely injuring a third. In 2012, a $281.6 million dollar verdict was initially handed down (reduced to $105.2 million), in a case where a drive shaft off a commercial truck went through the windshield of a passenger vehicle, killing the driver. The Court determined that the semi-truck driver was not negligent, but that the company was.

In 2014, a $90 million dollar verdict was awarded in Texas, where a semi-truck was driving under the speed limit in inclement weather conditions, and a passenger vehicle traveling in the opposite direction lost control and veered into the truck’s path. The trucking company denied all fault, arguing that the cause of the accident was the pickup truck that had lost control, nonetheless, the jury found the trucking company liable for the crash. The collision resulted in the death of a 7-year-old, and a paralyzed 12-year-old. In 2016, a semi-truck driver in Georgia fell asleep at the wheel, crossed over the centerline of a two-lane highway, causing a crash that killed five individuals including two young children, resulting in a $280 million verdict.

The 2021 Landmark $1 Billion Dollar Verdict

In 2021, a Florida jury awarded a landmark $1 billion dollar verdict in a wrongful death trucking case. The jury placed blame on two trucking companies, Kahkashan Transportation Inc. (“Kahkashan”) and AJD Business Services Inc. (“AJD”), for the death of the 18-year-old decedent, and awarded $100 million to the parents for the decedent’s pain and suffering, and $900 million in punitive damages for negligent hiring and retention of the AJD semi-truck driver.

The driver for AJD, was on his cell phone, driving over the legal limit of hours, and without a Commercial Driver’s License, when he caused an accident, flipping his semi-truck, and creating a massive back up on the interstate. An hour later a driver for Kahkashan was traveling the speed limit on cruise control, and collided into the line of stopped traffic killing the decedent. Further, his truck’s data recorder showed he did not attempt to break until one second before the impact.

The $100 million dollar verdict to the parents was split by the jury, 90% against Kahkashan and its driver, and 10% against AJD and its driver. The $900 million in punitive damages verdict was solely awarded against AJD. However, AJD is no longer in existence, and had not participated in the court proceedings for the previous 2 years. Additionally, AJD’s insurance was canceled in 2019.

Even if no money is collected from AJD, this case still has a great deal of impact on the trucking industry. It shows that juries believe these high awards are acceptable, and warranted in certain cases. Further, verdicts like this continue to tarnish the public image of trucking companies, and their safety procedures and policies. Nuclear verdicts like the ones mentioned above, have resulted in skyrocketing insurance premiums, which in some instances have put trucking companies out of business. Additionally, these nuclear verdicts motivate Plaintiff’s lawyers to take on trucking cases, and seek punitive damages against trucking companies.

What Factors Impact the Size of Jury Awarded Verdicts in Trucking Cases?

The ATRI analyzed data obtained from 600 cases to determine the variables that impacted verdicts in the trucking industry. See Dan Murray, “Understanding the Impact of Nuclear Verdicts on the Trucking Industry,” American Transportation Research Institute. Some of the variables include unfortunate outcomes that are outside of a trucking company’s control. For example, research showed that an increase in overall verdict amounts was witnessed in cases involving the death of a minor, spinal injuries, and roll-over accidents.

However, the research also shows that there are numerous factors which increase the value of verdicts that are within a trucking company’s control, either in the way company is run, or the manner in which the case is litigated.

Cases involving the following factors yielded verdicts in favor of the Plaintiff 100% of the time: a semi-truck driver being over hours of service or having logbook violations, lacking a clean driving history, driving under the influence of controlled substances, a semi-truck fleeing the scene of a crash, and/or an accident being caused by a driver’s health-related issues. In cases that involved cell phone use, only one case yielded a defense verdict, which was the result of Plaintiff being unable prove that the phone was actually in use at the time of the crash.

The ATRI’s research showed that successful implementation of post-crash and pre-trial tasks such as case evaluation, mediation, and pre-trial preparation played a critical role in successful litigation results.

During the stages of an accident investigation, and case evaluation, it is critical that attorneys and insurance professionals work together to determine the verifiable facts, and assess the potential problems in the case. A thorough examination must be conducted as it relates to factors that may have contributed to the incident.

Next, assessing the reasonableness of an early settlement, based on the facts known at the time, generally helps promote a more reasonable settlement. Finally, pre-trial preparation is paramount. Having an attorney who is experienced, and familiar with the trucking industry will ensure that the necessary actions are being taken to combat arguments Plaintiff attorneys will raise, especially reptilian theory arguments, which lead to nuclear verdicts in trucking cases.

Despite Nuclear Verdicts Being on the Rise, Great Outcomes in Trucking Cases are Obtainable

In 2021 Baker Sterchi member, James R. Jarrow, secured a defense verdict in a week-long wrongful death trucking case that was tried in Missouri state court. Plaintiff alleged that the driver could have avoided the interstate accident, which resulted in the death of her husband. After significant pre-trial motion practice, and multiple experts testifying on both sides, the Plaintiff asked the jury for $3 million dollars in damages. But the jury agreed with the defense’s position, and rendered a verdict in favor of the trucking company.

Additionally, Baker Sterchi member, Joseph Swift also received a favorable outcome in 2021 in a challenging jury tried trucking case where liability was admitted, and the case was tried solely on the extent of damages. This case was initially filed in Cook County, Illinois state court, but was successfully removed to the federal District Court for the Southern District of Illinois. The truck’s dash camera (capturing both inward and outward views) showed 9 seconds of driver inattention, and a violent crash. Plaintiff sought to recover over $1.65 million in general and special damages. However, the jury awarded $145,000 in overall damages for cervical and lumbar surgeries, a very favorable verdict given the circumstances of the case.

Conclusion

Despite the upward trend of nuclear verdicts in the trucking industry, 2021 has proven that when cases are properly investigated, prepared, and tried, trucking companies can still obtain favorable jury verdicts.

Federal Aviation Administration Certifies UPS to Become First-ever Drone Airline.

November 7, 2019 | Elizabeth Miller

The Federal Aviation Administration (FAA) issued the first-of-its-kind Part 135 certification to UPS subsidiary, UPS Flight Forward, Inc. (UPS).

The Part 135 certificate declares two core matters: (1) UPS is exempt from certain federal rules and regulations governing flight operations, and (2) UPS is explicitly authorized to perform certain flight operations otherwise prohibited by the FAA.

Specifically, the Part 135 certificate issued to the UPS subsidiary waives the following federal regulations:

14 CFR § 107.31, Visual line of sight aircraft operation, is waived to allow operation of the small unmanned aircraft (sUA) beyond the direct visual line of sight of the remote pilot in command (PIC) and any visual observer (VO) who is participating in the operation.

14 CFR § 107.33(b) and (c)(2), Visual observer, is waived to the extent necessary to allow operation of the small unmanned aircraft (sUA) when any VO who is participating in the operation may not be able see the unmanned aircraft in the manner specified in §107.31.

14 CFR § 107.39, Operations over people, is waived to allow sUA operations over people who are not direct participants, necessary for the safe operation of the small unmanned aircraft.

The certificate provides as authorized operations:

Small unmanned aircraft system (sUAS) operations for the purpose of 135 certification, beyond the visual line of sight of the remote pilot in command (PIC) and Visual Observer (VO), in lieu of visual line of sight (VLOS) and sUAS operations over human beings.

Notably, Amazon Air and Uber Eats have yet to secure Part 135 certification status. Until now, one or all of the above UPS exemptions limited Part 135 operators, including Google’s Wing Aviation LLC, which received only a waiver for a single pilot. 

While Part 135 certifications were already used for drone deliveries, UPS is using its certificate to go one step further to build out the first drone airline thanks to the far-reaching parameters of the waiver. UPS’s Part 135 certificate removes limits on the size and scope of the company’s potential drone operations. The company is now also exempt from the FAA rule that mandates that drones fly within the sight of the drone operator. In other words, the certificate allows UPS to fly an unlimited number of drones with an unlimited number of remote operators. The certificate also lifts previous restrictions on drone flights, permitting a drone and its cargo to exceed 55 pounds and to fly at night. This allows the company to develop new technology to create and use different drones.

In recent press statements, UPS CEO David Abney stated UPS worked closely with the Department of Transportation and the FAA to achieve this goal. Mr. Abney stated the certification will be used to accomplish multiple unmanned aircraft deliveries to multiple locations. UPS’s first focus will be a strategic healthcare initiative to expand its drone delivery service to further support hospital campuses throughout the United States. Abney stated the company has contemplated numerous campus-like settings for drone delivery and he believes the drone expansion will serve 20 or more locations during the rollout phase of the newly authorized drone deliveries. When regulations are complete, Abney expects expansion to residential delivery. 

In anticipation of Part 135 approval, but before receipt of the certificate, UPS began to develop a ground-based fleet of drones that help detect and avoid technology. UPS has also already begun to organize and develop technologies to create a consolidated control center that will allow the company to dispatch and operate drones from one consolidated area, thereby minimizing costs associated with infrastructure. 

The immediate concern of economists is that of American jobs while yet another industry inches closer towards automated functionality. The certificate and control center allow the company to facilitate its drone program with a fraction of the number of drone operators otherwise required by the FAA, and to avoid a need for jobs that would support additional drone operation locations. Economists speculate that as drone deliveries increase, reliance on UPS truck deliveries will decrease thereby eliminating at least some of the need for UPS drivers. 

As with all developments in this ever-evolving field, only time will tell what and how the legal and regulatory environment mesh with the actual uses that UPS finds for its drones.

It's not a bird or a plane... So what do we do with it? Concerns and regulations increase as drone usage skyrockets.

December 20, 2017

Reports of incidents involving unmanned aircraft systems (UASs), or drones, are on the rise. In October, for example, a drone crashed into a small passenger airplane as it was approaching the runway at the Jean Lesage International Airport in Quebec City, Canada.  Although the airplane was landed safely and there were no reported injuries, the post-collision aircraft inspection revealed damage to one of the plane’s wings.  This is the first time a drone has collided with a commercial aircraft in Canada, though pilot sightings of UASs has increased dramatically, at home and abroad, in the recent years.

Drone popularity has risen steeply as commercial users, not only individuals, are finding new and creative ways to incorporate drone usage into their business models.  Drones are now used to provide video footage for major news stories.  They hover over football players during NFL games.  They’re used to film promotional videos for luxury resorts and hotels.  They may, someday, be used to ensure same-day delivery of online orders. 

The Federal Aviation Administration (FAA), through authority conferred by 49 U.S.C. § 106, implemented regulations known as Part 107 to apply specifically to small unmanned aircraft systems used for purposes other than solely hobby or recreational.  These regulations, effective in 2016, provide relevant definitions (small UASs are those weighing less than 55 lbs) and guidelines for operation of UASs.  For example, 14 C.F.R. Part 107 requires registration of UASs with the FAA and calls for voluntary reporting of accidents or damage caused by a drone.  Similarly, Part 107 requires commercial “flyers” to obtain FAA certificates and prohibits drone usage in certain airspace (e.g., around airports) without the permission of Air Traffic Controllers.

This month, President Trump signed the 2018 National Defense Authorization Act into law, which extends certain requirements to those using model UASs.  Although previously exempted from the registration requirement of Part 107, drone hobbyists (those that purchase and use drones for personal, non-commercial use) will be required to provide their name and contact information to the FAA, as well as pay a small fee, to be legally compliant when operating their drones.

While drones offer many benefits across multiple industries, there are still numerous issues to be addressed.  There are safety considerations (as evidenced by the airfield collision in Canada), legal considerations (e.g., inability to identify owners of drones involved in accidents or collisions), as well as privacy considerations (e.g., drones used for unknown surveillance of an individual), to name a few.  Additionally, the nature and scope of insurance related to drones remains in its early phase.

As drone usage continues to increase, it’s only a matter of time before the common law will develop to address some of these lingering concerns.  Insurance coverage, terms and conditions also will impact the nature and extent of protection for those using drones.

The ultimate impact drones will have on our national airspace, and those involved in its regulation, is unknown.  We’ll keep our eyes to the sky and provide relevant updates when they become available.

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Baker Sterchi's Transportation Law Blog explores significant issues and developments of interest to various participants in the aerospace, railroad, and trucking communities. Topics range from proposed regulatory changes to key court decisions.  Learn more about our aerospace, railroad and trucking practices.

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