The Causes of Social Inflation and “Nuclear” Jury Verdicts


Last year, Johnson & Johnson was hit with an $8 billion verdict by a Philadelphia jury, an amount that exceeded the gross domestic product of more than sixty countries (included Monaco, Belize, and Greenland) in that same year, according to data from the International Monetary Fund. In fact, Johnson & Johnson has become the posterchild for what many in the legal industry refer to as “nuclear verdicts,” but J&J is not alone. Jury verdict awards in the hundreds of millions and billions are becoming more and more common in American trials. The impact of this upward trend in verdicts is often referred to as “social inflation” and has become a popular topic that has understandably caused panic within the insurance industry.

Social inflation and nuclear verdicts indisputably demonstrate that a standard economic analysis for assessing risk in litigation is no longer sufficient for accurately predicting potential risk. Under a standard economic analysis, the value of an injury such as quadriplegia for a plaintiff should be no different in 2019 than it was in 2007 for a similar plaintiff beyond the adjustment for standard inflation (and certainly no different from a similar injury in a similar 2019 case), but that is not what we are seeing with jury verdicts. Instead, they are wildly erratic and inconsistent. In short, the data on jury verdicts demonstrates irrationality at work. Fortunately, the study of jury economics (a subdivision of behavioral economics) helps explain this phenomenon, highlighting what renowned psychologist Dan Arriely calls the “predictably irrational” behavior of today’s juries.

There are widespread and differing beliefs about the cause of nuclear verdicts, but we can all agree that they are born out of irrational decision-making. Consequently, it is important to identify factors that are driving irrational decision-making in the deliberation room. In this article, we examine empirical data consistent with our observations in our own jury research with mock and actual jurors in an effort to isolate eight key factors that contribute to nuclear verdicts.

First and foremost, it is important to recognize that nuclear verdicts are born out of juror anger and frustration. While juror sympathy is important and influential, sympathy does not drive headline verdicts. Headline verdicts are referendums on the defendant and how it carries itself, born out of anger and frustration. These verdicts are always designed to “send a message,” even when punitive damages are not on the verdict form. In these instances, noneconomic damages become the punitive damages.

Here are eight key factors that drive nuclear verdicts.

The growing economic divide. One of the most prominent narratives in the American socio-political landscape is the growing economic divide between the haves and the have nots. According to Forbes, “in 2018, the richest 10% [in America] held 70% of total household wealth,” a significant jump from years past. In contrast, “the bottom 50% saw essentially zero net gains in wealth” over the last thirty years. Frustration with this gap has grown significantly in recent years, taking on new form with movements such as Occupy Wall Street and the emergence of popular “socialist” candidates in both local and national elections. Consequently, when a plaintiff is able to successfully sow the seeds of anger and frustration among jurors in a case against a wealthy individual or corporation, it also taps into frustration derived from this wealth gap, motivating jurors to “send a message” that is consistent with their (sometimes false) perceptions of the wealth of the individual or corporate defendant.

Growing distrust. Data published by the Pew Research Center in 2019 shows that trust in both institutions and individuals has significantly declined across the board. For example, Pew reports that trust in government is “near historic lows today.” In fact, elected officials and business leaders are viewed as the least trustworthy, followed by religious leaders, police officers, and members of the military. Trust in media is not far behind as 61% say “the news media intentionally ignores stories that are important to the public.” Finally, more than half of the population between 18 and 64 years of age believe that, “most people would try to take advantage of you if they got the chance.”

Nuclear verdicts often come in cases where plaintiffs are able to tap into this growing

distrust of American institutions. When successful, the case becomes an outlet for jurors’ pent-up frustration over that growing distrust.

The polarization of America. New research out of the National Bureau of Economic Research shows that political polarization has risen more quickly in the United States than any other country studied. In fact, it found that polarization is actually on the decline in recent decades in many other countries. This polarization has become so embedded in our culture that we now have siloed media where those of a particular political persuasion can find “news” that conforms to their political beliefs. The problem is that disagreement breeds enemies in today’s culture, often because that is the goal of political candidates who benefit most with this polarization motivating their base. As a result, civility is no longer a virtue, and we are left with heightened animosity toward those we disagree with.

Political polarization is fundamentally a war of values, or that is at least how it is packaged to the average American. The narrative from each side is that our core values are under attack and must be defended. You might wonder what this has to do with jury trials, but there are a variety of connections. For example, in a 2018 national survey conducted by Sound Jury Consulting, 31% of respondents said, if they knew or could figure out the political party of the attorney representing one of the sides in a lawsuit and that political party was different from their own, they would find that side’s case less credible.

A more important implication of this polarization relates to attorneys’ ability to tap into the values or arguments that define each side of the political spectrum. This is not as difficult as it may sound. After all, some of these values, such as personal responsibility, entitlement, and corporate accountability naturally permeate most cases. When a plaintiff attorney successfully grounds his or her case in values, themes, or language that drive our nation’s political polarization, they tap into pre-existing animosity that can motivate jurors to want to send a message with a large monetary award.

Outrage culture and declining tolerance. In a 2017 piece in the Huffington Post, the author declared, “Productive discourse is dying, trampled over by closed minds who value comfortable opinion-holding over uncomfortable soul-searching. As dialogue lies flailing and gasping, outrage culture’s pulse is stronger than ever. We see the degraded consequence everywhere.”

Our national media is only perpetuating this problem since outrage provides guaranteed clickbait. The result is headlines designed to inflame. In fact, this clickbait strategy has proven so fruitful that we have scores of journalists who spend their days scouring old social media posts of anyone who has done anything notable, looking for a comment they can spin as outrageous and newsworthy.

In our outrage culture, it has become sport to go after others and take them down. Jury duty offers one of the most unique opportunities to accomplish this. Nuclear verdicts give jurors the opportunity to send a loud and clear message that may even allow jurors to step into the media spotlight through news coverage of the verdict.

The normalization of nuclear verdicts. Since we are discussing the role of the media, it is also important to highlight the normalization of nuclear verdicts. In short, we are seeing them more and more in our headlines, which without a doubt, has an anchoring effect on angry and frustrated jurors. A verdict in the hundreds of millions (and even billions) no longer seems out of the question with jurors who routinely see news reports of similar verdicts in other trials. Johnson & Johnson alone seems to have a monthly (even weekly at times) headline about being hit with such verdicts. This makes these verdicts seem normal and reasonable when jurors believe the circumstances call for the need to send a strong message.

The importance of beliefs over facts. A national survey conducted by Sound Jury Consulting in 2019 found that 75% of jury-eligible respondents said they would decide a case based on their own personal beliefs of right or wrong if those beliefs conflicted with the law as instructed by the judge. If we take that data and narrow it just to millennials, the percentage increases to 82%. However, the problem is not uniquely tied to millennials alone. The fact is that we are evolving into a “me first” culture defined by an extraordinary tendency towards motivated reasoning, where our beliefs drive what we are willing to accept as “facts” and “law.”

The natural result of this trend is that jurors are becoming more unbound from the restraints of the law as imposed by judges in the form of jury instructions, allowing for nuclear verdicts to flourish. This can be observed on many levels with jurors. Here are just a few examples from a 2019 national survey conducted by Sound Jury Consulting:

  • 57% of respondents said they would ignore a judge’s instructions to avoid internet research on the case if they felt that they could learn something important from that research.
  • 52% said they would not take the time to look at the jury instructions during deliberations if they felt like they understood the basic issues in the case.
  • 75% would disregard the instruction from a judge to ignore inadmissible testimony if they felt the testimony was important.

In short, this “me first” culture leaves us with the Me Principle of jury decision-making: verdicts are more about the jurors than they are about the case and the law.

A new generation of jurors. Blame it on too many participation trophies or blame it on helicopter parents who insisted their child was particularly special and unique. There are endless theories about why millennials are so different from other generations and equally expansive research on the specific differences. Perhaps the most important difference of all is learning style. Some researchers suggest the broad array of generational differences we see in millennials ultimately derives from fundamental differences in learning style. We know that millennials consume and act on information in different ways.

Christy Price, a professor of psychology at Dalton State College, has devoted considerable time and research to the subject of millennial learning styles. Her research has identified five key differences in the learning styles of millennials. Here is how she explains each of these differences:

  • Millennials do not typically value information for information’s sake. One of the greatest challenges of the professoriate will be to connect course content to the current culture, and make learning outcomes and activities relevant to Millennial learners and their future.
  • Unlike Boomers who were raised in a more authoritarian manner in which they more readily accept the chain of command, Millennials were raised in a non-authoritarian manner and are more likely to conform, comply, and adhere to course policies when they are provided with a rationale.
  • Millennials thrive in a less formal, more comfortable learning environment in which they can informally interact with the professor and one another.
  • Millennials are extremely relational. They are more central to their parents’ lives than previous generations and are used to having the adults in their lives show great interest in them. They appreciate it when professors show that same interest, and they seem to be more willing to pursue learning outcomes when we connect with them on a personal level.
  • Research-based methods. Millennials have grown up in an era in which they were constantly engaged. When they are not interested, their attention quickly shifts elsewhere. This research suggests Millennials prefer a variety of active learning methods, as opposed to a more traditional lecture-only format.

Each of these key differences in learning styles has important implications for how attorneys present the case and witnesses in the courtroom. The failure to recognize and adapt to these differences allows plaintiffs, who often have the simpler and more compelling story, to control jurors’ views of the case.

Lawyers’ failure to adapt to emerging learning styles. The worst characteristic of many litigators is how set in their ways they are and how unwilling they often are to adapt to the styles of others. This is certainly not true of all, but it is true of many. Many attorneys will tell you that they are open to new perspectives and express genuine interest in them but return to their old ways when it comes to actual execution. The problem is that we have a rapidly changing jury pool. We have had profound cultural change over the last two decades and we have a new generation of millennials taking over in the jury box. Technology, the internet, and social media have overwhelmingly influenced how we consume information and make decisions. Fundamentally, the learning style of the average juror has changed while the presentation style of many attorneys has largely remained the same. When attorneys fail to connect with and effectively communicate to jurors, they cede control to all of the corrosive influences that drive nuclear verdicts.

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