The incredible shrinking plaintiffs’ verdicts

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In November, a Camden County jury awarded $15 million to a retiree who was severely burned when his boat exploded on the Lake of the Ozarks. It was a singular victory for the plaintiffs’ attorneys, who persuaded the jurors in the outstate venue to hold the boat’s manufacturer liable for a faulty fuel system that caused a gas leak.

But in historical terms, the largest jury verdict in Missouri in 2014 was small potatoes. In the two prior years, it would have ranked no higher than fifth place. It is the smallest dollar amount to win the No. 1 verdict spot in at least the last decade.

Just a few years ago, Missouri Lawyers Weekly’s annual Verdicts & Settlements section was the province of massive cases, ranging from a $358.5 million jury verdict over a former lead smelter in 2011 to a $4.7 billion environmental settlement in St. Louis in 2012. But in 2014, those kinds of results all but disappeared.

The median value of plaintiffs’ wins of $1 million or more in 2014 was $2 million — the lowest figure in at least six years. Perhaps not coincidentally, there were just 72 reported results of $1 million or more last year, the fewest since 2009.

But on the other side of the bar, numbers are soaring. In 2014, there were an astonishing 29 defense wins valued at $1 million or more — an apparent all-time record.

The Verdicts & Settlements database, built on reports from attorneys and cases investigated by our staff, is not necessarily a complete record of Missouri litigation. As more litigation moves to outstate Missouri — and, importantly, out of the public eye altogether — some cases escape notice. Still, our 2014 results suggest that relatively modest results might be the new normal.

Verdicts and venues

Rob Sullivan of Sullivan Law in Kansas City, who led the trial team for this year’s winning verdict, blamed the shift on changes in the tort laws. After 2005 legislation dictated that personal injury suits must be filed in the venue where the accident took place, many cases that would have been tried in metropolitan areas moved to rural, more conservative areas of outstate Missouri.

Nearly 10 years after the change, cases filed under the new rules make multimillion dollar verdicts harder to come by, he said.

“I haven’t tried a case in a good venue in a while,” Sullivan said.

Which is not to undercut the achievement of winning a large verdict in an outstate county. Sullivan said his winning verdict, Black v. Brunswick Corp., was nearly seven times higher than the next highest verdict out of Camden County.

Stephen Moore of Galloway, Johnson, Tompkins, Burr & Smith was a defense lawyer in the case — though not the one on the losing end of the verdict. His client, the marina where the boat explosion occurred, was cleared by the jury, which put all the blame on the boat’s manufacturer. Prior to trial, plaintiffs had sought nearly $12 million from the marina, qualifying Leisure Hotels’ portion of the verdict as the fourth highest defense win of the year.

Moore said the size of the eventual verdict was surprising, particularly given the location of the case. Moore said that, in voir dire, the jurors made clear that they were hesitant to award large damages.

“One of them made a comment of something to the effect of, ‘If you are injured and you’re disabled, you just have to find another way to be happy in life,’” Moore said, noting that the woman who said it had an obvious back injury. Nonetheless, she voted to approve the hefty verdict. “What they say and what they do are two different things.”

Sullivan, however, can’t help but think that things might have gone differently in the days before the tort overhaul.

“If you saw our case in Jackson County,” he said, “it would have been a lot higher.”

Reluctant jurors

Jackson County has certainly been fruitful for lawyers. For the second year in a row, it was home to more million-dollar plaintiff wins (16 of them) than any other venue in the state. St. Louis County was in second place with nine $1 million or more verdicts or settlements; the city of St. Louis had eight, and Greene County had seven. Just 10 of the top 72 results came from rural venues.

On the other hand, Jackson County was also home to the most large-dollar defense verdicts last year, including the largest one of the year: a $30.5 million win for Missouri Gas Energy, which fended off liability for a repairman who was severely burned when an industrial gas furnace exploded.

Generally, Missouri Lawyers Weekly ranks defense wins by the amount of the plaintiff’s last pre-trial demand, which is essentially how much the defense saved by taking the case to trial and prevailing.

When information about pre-trial negotiations is unavailable or unreliable, we also look at the amount the jury was asked to award and the value placed on the case by expert witnesses. Such was the case in the winning defense case, Abbott v. Missouri Gas Energy; the parties did some negotiations, but they disagreed on the details, so we went with the amount of the damages the plaintiff claimed at trial.

Karrie Clinkinbeard of Armstrong Teasdale, an attorney for MGE, echoed Moore’s assessment of the Camden County jury pool: Many of the prospective jurors in Jackson County seemed averse to awarding multimillion verdicts. Of course, in her client’s case, that reticence carried over into the verdict.

“It’s a little unusual, especially in Jackson County, which is typically known to be a less conservative jurisdiction,” she said.

It’s too early to tell if last year’s 29 reported high-dollar defense wins reflect a long-term trend. Still, defense lawyers say they’re seeing an increased interest among their clients in taking cases to trial.

“For the past couple of years we’ve taken more cases to trial than I can remember since I’ve been here,” Clinkinbeard said of her firm, where she’s worked 15 years.

That increased willingness on the part of defendants to risk a trial, as well as the venues in which such trials occur, may be reducing verdict sizes across the board, despite the occasional large win on the right facts. In 2014, just 17 of the 72 top cases were the result of a jury trial. In 2013, that proportion was 28 jury verdicts out of 74 top cases.

“My feeling overall is that juries are less willing to hand out money than they used to be,” Moore said.

More than just cash

While verdicts get a lot of headlines, most cases end in settlements, which are very often the highest valued cases. That was certainly the case with the top plaintiffs’ win of 2014, Pipkens v. Missouri Title Loans Inc., worth a whopping $263 million.

The settlement, however, illustrates a common feature of settlements these days: They’re not just for cash. Often, they include less tangible valuables.

The winning case, for instance, was achieved mostly through debt forgiveness. The plaintiffs alleged Missouri Title Loans had failed to disclose high interest rates on short-term loans. After years of litigation, the final agreement called for a $575,000 cash payment and the forgiveness of much of the class members’ debt to Missouri Title. The company wrote off $262,769,788.64 in debt, according to a transcript of the final hearing in St. Louis Circuit Court in May.

“My feeling overall is that juries are less willing to hand out money than they used to be.” –Stephen Moore of Galloway, Johnson, Tompkins, Burr & Smith

Erich Vieth of Campbell Law, one of the attorneys for the class, said he couldn’t elaborate on the terms of the Missouri Title settlement. But speaking in general, he said such settlement terms are not uncommon.

“There are many cases we’ve considered bringing or have brought where the primary value to the class members is something other than a traditional cash payment,” he said. “And yet ultimately those approaches can be very valuable for class members.”

He noted that, whether the defendant is cutting a check or giving up future earnings, such settlements have a real monetary value.

“That’s still money. It’s just not money you have in your pocket yet,” he said.

Another of the year’s top settlements also featured quasi-monetary value. HCW Development and the City of Branson v. Chicago Title Insurance Co., a complex dispute over a multimillion-dollar retail and entertainment development along Lake Taneycomo in southern Missouri, involved a $1.5 million payment of attorneys’ fees. But the real value of the deal, which took five months to write, was in a $90 million lease-hold insurance policy covering the developer and the city. The defendant insurance companies agreed to honor the contract despite the ongoing litigation — akin to negotiating a fire insurance contract on a building that is already burning.

A note about the one of the largest settlements in Missouri last year: US ex rel. Health Dimensions Rehabilitation Inc. v. RehabCare Group Inc. et al.  The $30 million settlement was handled in federal court in St. Louis, but the primary attorneys on the case were with the U.S. Attorney’s Office in Minneapolis. Because our annual rankings honor Missouri attorneys, the settlement was excluded from our award rankings.

Keep it quiet

The litigation against Missouri Title, which took some seven years, was hardly a secret: The case went to the Missouri Supreme Court twice on the issue of whether arbitration clauses the debtors had signed could be enforced.

Yet Vieth was not able to speak freely about the case, apparently due to a provision of the agreement. Confidentiality clauses in settlements are nothing new, but they appear to be increasingly specific, allowing the parties to discuss ever narrower portions of the litigation.

“A lot of defendants don’t want anything said about the case,” said Vieth, again speaking generally. “They simply want it to disappear.”

Missouri Lawyers Weekly will agree to withhold details from settlement reports in certain cases, but only if the attorney is providing a settlement amount that would otherwise be confidential. The results of trials and on-the-record settlements are not subject to redaction. In all events, we require attorneys to confirm the submitted details, preferably by providing a copy of the settlement and giving us a chance to speak to the other side.

Many cases submitted in the last year omitted not only both of the parties’ names but also such bread-and-butter details as the venue, the names of defense counsel and all but the barest facts. All such submissions are considered on a case-by-case basis to see if they are appropriate for publication.

One such bare bones report was the fifth ranked settlement in 2014: a $10.8 million settlement in an asbestos case. According to the attorney, Louis C. Accurso, the settlement in October was for a 45-year-old man who died after allegedly suffering asbestos exposure as a young adult. Other than that, there was almost nothing else Accurso was able to disclose.

Although there’s no way to tell for sure, such draconian gag orders on plaintiffs’ attorneys also probably account for the general decline in reported V&S values. Many notable settlements simply aren’t seeing the light of day.