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.