New Legislation Could Be A Game Changer For The Trucking Industry

Source: Gallagher Sharp LLP 

In what many hope will be a new trend around the country, Iowa’s state legislature recently proposed three significant bills that would curb the unfortunate trend of “nuclear” verdicts that have been plaguing many industries and sectors – none more so than the trucking industry.

Iowa’s state Senate recently proposed a bill that would cap noneconomic damages awards at $1,000,000 for personal injury and death claims specifically against “commercial motor vehicle owner and operators,” while Iowa’s state House of Representatives separately proposed a bill that would cap noneconomic damages awards at $750,000 for any civil action involving personal injury or death “regardless of the number of plaintiffs, derivative claims, theories of liability, or defendants in the civil action.”

Notably, Iowa’s proposed laws provide no exceptions to the noneconomic damages caps, which is noteworthy as many states with laws capping noneconomic damages typically include exceptions. For instance, Ohio’s noneconomic damages caps do not apply if a plaintiff suffers from a “permanent and substantial physical deformity,” “loss of use of a limb,” “loss of a bodily organ system,” “a permanent physical functional injury that permanently prevents the injured party from being able to independently care for himself or herself and perform life-sustaining activities,” or the claim involves a wrongful death. These exceptions, like those around the country, leave the trucking industry and their insurers susceptible to “nuclear” verdicts, whereas Iowa’s proposed bills—which are supported by Iowa Governor Kim Reynolds and the Iowa Motor Truck Association—effectively thwart the possibility of a runaway verdict (unless punitive damages are alleged and justified).

Iowa’s Senate has also proposed a bill that would render all litigation funding contracts void and unenforceable. As the trucking industry is acutely aware, litigation funding has resulted in plaintiffs’ attorneys and their clients to more aggressively prosecuting their claims since they are funded by outside sources and treated as an investment—instead of what they should be—a means for their clients to receive a fair and equitable verdict or settlement.  Critics of third-party litigation funding have long recognized that treating claims like investments leads to litigation abuses and slows the settlement of valid claims.

It is clear Iowa’s legislature has recognized the abuses trucking companies and their insurers have been long facing and are taking the lead in stopping the unfortunate tide of inequitable, “nuclear” verdicts. While the above bills have not yet been signed into law, we hope this will indeed occur and that more states around the country will follow in Iowa’s footsteps.

As always, we will continue tracking Iowa’s bills, and hopefully others proposed around the country, and provide additional information as it is disseminated.