Texas Supreme Court Overturns Non-Economic Damages Award Not Grounded in Evidence

The Texas Supreme Court recently handed down an opinion that may help rein in the rash of “nuclear verdicts” juries have been awarding in the last few years. Until now, Texas juries have generally been allowed to pick any number when determining the damage amount. In Gregory v. Chohan, the Supreme Court of Texas addressed the evidence needed to support non-economic damage awards in wrongful death claims.

Gregory was a wrongful death lawsuit arising from a tragic multi-vehicle pileup. The jury delivered a verdict of $38.8 million, with one family receiving an award of just over $15 million in non-economic damages. The defendants appealed the lower court’s ruling on several grounds, including the size of the non-economic damages award. The court of appeals, sitting en banc, affirmed the lower court’s ruling on all grounds. The Supreme Court of Texas then overturned the verdict, in large part because of a lack of actual evidence supporting the amount of non-economic damages awarded.

As noted by the court, the jury’s duty is to find an amount that “would fairly and reasonably compensate for the loss.” Importantly, the court held that it is insufficient for plaintiffs to show the existence of mental anguish or other consortium-type loss: plaintiffs must also present evidence justifying the amount of non-economic damages sought. Put simply, the amount of damages must have a rational basis for the amount that is grounded in evidence.

In Gregory, the court also expressly rejected two common techniques plaintiffs utilize to support requests for large amounts of non-economic damages: unsubstantiated anchors and unexamined ratios.

Technique 1: Unsubstantiated Anchor

Unsubstantiated anchoring is a tactic whereby attorneys suggest damage amounts by referencing objects or values with no rational connection to the facts of the case. In Gregory, the plaintiff’s counsel drew analogies to a $71 million Boeing F-18 fighter jet and a $186 million painting by Mark Rothko. Attorneys across the country use anchors like these to place monetary values on injuries and force jurors to consider damage amounts similar to the numbers offered, despite the lack of a rational connection between reasonable compensation and the suggested anchor. According to the court, unsubstantiated anchors are not evidence of the plaintiff’s loss and do not assist jurors in finding reasonable damage amounts.

Technique 2: Unexamined Ratio

The court also rejected the use of unexamined ratios, where a numerical ratio—that is not related to any evidence in the case—is used to calculate damages.  In Gregory, the plaintiff’s counsel argued that the plaintiffs tried to give their “two cents worth” to the defendants throughout the course of the lawsuit. Then, counsel urged the jury to give their “two cents worth” for every one of the 650 million miles a defendant’s truck drove during the year of the accident. The court explained the plaintiff’s “two cent” argument lacked any rational basis to support the sought compensation. In fact, the Texas Rules of Civil Procedure address techniques like the ones used by the plaintiff and require counselors to confine their arguments “strictly to the evidence and to the arguments of opposing counsel.” Tex. R. Civ. P. 269(e). Furthermore, courts are obligated to prevent improper jury arguments and are not “required to wait for objections to be made when the rules as to arguments are violated.” Tex. R. Civ. P. 269(g).

In overturning the award in Gregory, the Texas Supreme Court is reinforcing the principle that all damages, even non-economic damages, must be rationally tied to the evidence in the case. Where there is no direct evidence illustrating a non-economic damage, such as emotional injury, plaintiffs must establish a rational basis for the damages awarded, such as potential financial consequences of severe emotional trauma. The nature, duration, and severity of the alleged mental anguish also remain relevant considerations when justifying the damage amount. It remains to be seen how effectively trial courts will implement this decision, but it may help limit or prevent irrational nuclear verdicts.

Texas Supreme Court Reaffirms Standard of Proof in Mesothelioma Cases: Bostic v. Georgia-Pacific

On July 11, 2014, the Texas Supreme Court released an opinion of major importance in Bostic v. Georgia-Pacific — an opinion Gordon & Rees partner William A. Ruskin recently commented on in a Law360 article.  The court’s decision reaffirmed the bedrock significance of the concept of dose in toxic tort litigation and rejected out of hand the argument that a less rigorous standard should be applied in a mesothelioma case than in an asbestosis case.  Bostic articulated that plaintiffs must prove substantial factor causation in all toxic tort litigation in general and in asbestos litigation in particular.

ETT BLOG_texasTimothy Bostic’s relatives sued Georgia-Pacific and 39 other asbestos-related product manufacturers claiming that Bostic’s fatal mesothelioma was caused by exposure to their products.  At trial in 2006, the jury allocated 25 percent of the causation to Knox Glass Co., the decedent’s former employer, and 75 percent to Georgia-Pacific. An amended judgment awarded plaintiffs over $11 million in compensatory and punitive damages. The Court of Appeals reversed the trial court’s decision holding that the plaintiffs failed to prove that the exposure to Georgia-Pacific’s asbestos was a substantial factor in bringing about Bostic’s death.
In affirming the Court of Appeals, the Texas Supreme Court held that the substantial factor causation standard applies to all asbestos cases involving multiple sources of exposure. To meet this standard, proof of “some exposure” or “any exposure” did not suffice to establish causation.  Instead, there must be defendant-specific evidence relating to the approximate dose to which the plaintiff was exposed, along with evidence that the dose was a substantial factor in causing the asbestos-related disease.

Bostic elaborates upon the Texas Supreme Court’s prior decision in Borg-Warner Corp. v. Flores, an asbestosis case. Flores addressed the issue of why the plaintiff’s causation evidence was legally insufficient in the absence of evidence of how much asbestos the plaintiff might have inhaled. Flores explained that proof of frequency, regularity, and proximity to a toxic substance alone is not sufficient to support causation, because it does not demonstrate that the defendant-specific dose was a substantial factor in causing the disease. Bostic expressly rejected the plaintiffs’ attempted distinction between a mesothelioma case and an asbestosis case. Rather, the court held the “framework for reviewing the legal sufficiency of causation evidence lends itself to both types of cases.”

Fundamentally, a plaintiff must show that the defendant supplied the product that caused the injury. Hence, the court viewed plaintiff’s “any exposure” theory as “illogical,” in part because it does not take into account a background dose of exposure.  In asbestos-related cancer cases, plaintiffs are not required to show that specific fibers from a defendant’s products were the ones that actually caused the asbestos-related cancer. Instead, it must be shown that exposure to a defendant’s product was a substantial factor in contributing to the total dose of asbestos the plaintiff inhaled, and therefore to the risk of developing asbestos-related disease.

The Supreme Court disagreed with the lower court, however, stating that the plaintiffs do not have to meet the heightened standard of “but-for” causation. Although the court recognized that “producing cause” or “but-for” is the level of causation applicable to most products liability cases, it was unwilling to apply that standard in a case with 40 defendants.

Acknowledging that causation is difficult to prove in multidefendant cases, the court referenced its prior holding in Merrell Dow Pharmaceuticals, Inc. v. Havner, 953 S.W.2d 706 (Tex. 1997), which offers an alternative method for establishing causation in the absence of direct proof. Havner recognized the possibility of using epidemiological studies to prove a population exposed to a toxin faces the increased risk of injury as compared to an unexposed or general population. Under Havner, the epidemiological evidence must show that the plaintiff’s exposure to the defendant’s product more than doubled the plaintiff’s risk of contracting the disease.

In essence, the Texas Supreme Court found the causation evidence in Bostic to be legally insufficient to uphold the trial verdict. The plaintiffs did not establish any approximation of dose resulting from Bostic’s exposure to Georgia-Pacific’s products. Bostic rejected the plaintiffs’ “any exposure” standard and instead reaffirmed adherence to substantial factor causation.

Alexana Gaspari is a law clerk in Gordon & Rees’s New York office.

Image courtesy of Flickr by Ray Bodden