The Texas Supreme Court last month reversed a nearly $100 million judgment against Werner Enterprises, stemming from a 2014 crash where a pickup truck crossed a highway median and struck a Werner semi, leading to a fatality.
Lower courts had held Werner liable, arguing the company was negligent because its driver should not have been on the road. However, the state's Supreme Court reasoned that regardless of any potential negligence by Werner, the direct and unavoidable cause of the crash was the pickup truck losing control and crossing into the semi's lane. The court determined that simply being present on the road does not make a company legally responsible for an accident initiated entirely by another vehicle.
This landmark ruling could be a catalyst for tort reform and a change in how "jackpot justice" cases are litigated.
Speaker 1:
Did jackpot justice against trucking companies just have its watershed moment. Hey everybody, welcome back. I'm Jason Cannon and my co-host is Matt Cole. The short version of a long story is Werner was hammered with an eight figure judgment in a 2014 crash fatality case where a pickup truck left its lane, crossed a divided highway and struck a semi killing one person in the passenger vehicle and injuring three others. Werner was held liable basically because the court argued that the truck and its driver shouldn't have been on the road to begin with again. That's the short version.
Speaker 2:
The case made it to the Supreme Court of Texas this year where in June the judgment was reversed. But how do you overturn a nearly $100 million judgment when the facts of the case didn't change?
Speaker 3:
This is not atypical to be perfectly honest. So what we really were focusing on was a legal question, not necessarily a factual question. So to your point, the facts were pretty well established. We knew what the truck was, we knew where the pickup truck was, we knew the general speeds, and we knew what the conditions of the roadway were. What really changed was how the Supreme Court of Texas understood causation. So when you asked the question, why did this happen or, but for this, what would've been the result? And the court looked and said that there were things that made Werner do not great things like maybe we were driving too fast or maybe they were not training this guy in adverse weather conditions. But the reality was that crash doesn't happen unless that passenger vehicle loses control, crosses the median and incurs into the lane of Werner.
And so we really got a much narrower understanding from the Texas Supreme Court side of what is causation. So just because you're in a situation doesn't mean it's your fault. You're in that situation, and that's a legal question. It's a legal question of causation. So it's not rare for the courts to say, well, this fact is one way, and we look at it this different way when you're the Supreme Court looking at what the lower courts have done, you don't have to give them deference. You can look at it from your own perspective and say, yeah, there's no way that this truck should be at fault because they never left their lane. And even though the facts are sad, it doesn't mean that Werner has to be held responsible for this. But as a general rule, we don't look at Texas and go, that's a very defendant favorite location. It really isn't. But we have the Supreme Court, which is very conservative. I think that's the way to look at as they're more reasonable. It's not shocking that they reversed the lower courts, but it also isn't surprising that the lower courts came up with liability initially saying that it was Werner's fault. The majority of the fault belonged to Werner, when ultimately Supreme Court's like, no, that's not how we see this.
Speaker 1:
Now, does overturning one of the largest nuclear judgements in trucking history signal a changing of the tides in trucking litigation? Well, it's going to depend on how far a given motor carrier is willing to pursue it.
Speaker 3:
I think it's actually going to be something of a catalyst. So what we in the lawyers kind of world look at as this thing called tort reform, and that's kind of the idea of how do you make laws to regulate what happens with the plaintiffs and the big lawsuits that keep happening? Most companies could not litigate this case as extensively as Werner did. Werner brought it to the very last place they coached is the Texas Supreme Court, and they fortunately won. So if you're out there trying to tell the story of why tort reform is necessary, you look and say How many other companies would've gone bankrupt before they could get to the final place and be vindicated? How many companies have to go away because of what these plaintiffs and these jurors are doing to American businesses? I think the story is, it could be at least that if you don't do tort reform, this is what will happen.
Companies will get hit with liability when you look at the facts. They never should be responsible. A truck under the posted speed limit, never losing control, driving in its lane, someone else goes too fast, crosses smashes, and then a family is forever changed. That is not the story of how you say a trucking company should be at fault. So if the industry gravitates around this case and they should, because it was a very important case, it could be one of the ways we start challenging more states to enact tort reform, to make cases like this not get to that level. Because again, Werner spent millions of dollars, millions of dollars fighting this case and they could have lost, but they didn't. But even if they had lost, they probably would've survived. Most companies would not have survived that
Speaker 2:
For the rest of the industry. For trucking companies that aren't Warner, this case could set an important precedent that makes cases where the carrier is clearly not at fault, more difficult for plaintiffs, but that's only if the trucking companies that aren't Warner take note and apply the lessons learned from this case.
Speaker 3:
I think the way to look at it's twofold. One is if you are in Texas, this case is incredibly important because it will be binding on the lower courts. No doubt about that. If you're in a different state than Texas, it's not going to be binding. It'll be at best persuasive. So you might be able to cite it in the case and say, Hey, look at, this will happen here, but I don't think that that is going to be super effective. I think what will be effective is figuring out the strategy that Werner employed, the arguments that they made and employing those similar arguments. In other cases, because negligence cases, which is what this was, they're all done at the state level. There's not like a federal regulation on negligence. So they'll look at this and say, this is the roadmap that we use to be successful.
And I think that is where you're going to find the lasting impact of Werner saying, if you're willing to go to the mat and go to the floor with this, you might get a good outcome. It's also important to note who else played. In this case, the A TA filed an amicus brief. I believe the US Chamber of Commerce filed an amicus brief. Schneider Werner's biggest competitor filed an amicus brief. So we saw the industry kind of coming together, and that is something that I think gets replicated in more states as these things continue to develop. I do hope it changes how we talk about these big verdicts. I just was on a podcast I had with the Deputy General Counsel of the American Trucking Associations, and we were talking about broker liability. So the idea that a broker like a CH Robinson or an RXO could be held to the same liability as Werner if the motor carrier behaves poorly or makes an accident, and both the intermediaries and the trucking companies aren't fighting together on tort reform, they're fighting separately in their own little battles. And there's appeals now before the US Supreme Court that will speak directly to that issue of broker liability. And I think we can learn from the Werner case that collaborating with our competitors is not the end of the world if we're trying to influence policy. That is where I think their outcome ultimately rests
Speaker 1:
Absent of serious tort reform. Outcomes like this will continue to be rare, especially among carriers with limited financial resources.
Speaker 3:
Again, it's the small ones who can't survive these cases. Big boys are generally fine. They can last long enough to get to the final court, but the small guys, they don't have that opportunity or that luxury. The sad fact of this is your insurance company will likely tender the policy limit and wash their hands of it and say, the rest of it's up to you. They will defend you. They will pay to defend you in court for a period of time. But the reality is most companies that are hit with these verdicts, the pathway forward is to go bankrupt and try again. That's kind of the nature of what we've seen from a regulated industry in the eighties to a deregulated industry 45 years later. So it is not a great outcome, but that is probably the most reasonable path as we look at things right now.
Speaker 2:
We're not going to end this episode on a sour note like that because there are things you can do as a smaller carrier to put yourself in the best position possible,
Speaker 3:
Maintain your equipment, right, follow your preventative maintenance guidelines. If you invest in cameras, if you're not running dash cameras right now, you've made a terrible mistake. You need to invest in technology because that is how you will find some way to survive. Because if it's clear that you didn't cause the accident, that will help you survive these big cases. I saw a clip was on social media recently where a vehicle like a little minivan stopped in front of a truck and then backed up into the front of that truck, and it's just another way they can try to claim, oh, you hit me and all this damage without a camera, your word against theirs, and you'd probably lose. So there are things you can invest in, but ultimately, if you're in this catastrophic litigation and you are found liable, you may not be able to survive long enough to get to vindication.
Speaker 1:
That's it for this week's 10 44. You can read more on ccj digital.com. While you're there, sign up for our newsletter and stay up to date on the latest in trucking industry news and trends. If you have any questions or feedback, please let us know in the comments below. Don't forget to subscribe and hit the bell for notifications so you can catch us again next week.
