Massive jury award against FedEx unit could re-set standard for damages in truck accidents
Appeals court's decision to uphold $165 million award in fatal New Mexico accident could re-calibrate thinking on jury behavior.
The incident was horrific. The fault, in the eyes of the jury, was not in doubt. The monetary award was staggering. If upheld, the trucking industry could find itself confronting a new economic standard for juries meting out punishment in verdicts where a carrier is found at fault for a catastrophic accident.
On Feb. 6, a state appeals court in New Mexico upheld a January 2015 jury verdict that awarded $165 million to a New Mexico family, two of whom were killed in June 2011 when a tractor-trailer operated by FedEx Ground, the ground-delivery unit of Memphis-based FedEx Corp., slammed into a small pickup truck that was stopped or moving at a very slow speed along Interstate 10. The pickup's driver, Marialy Morga, died in the accident, as did her 4-year-old daughter Ylairam. Morga's 19-month-old son, Yahir, was seriously injured. The tractor-trailer driver, Elizabeth Quintana, also died. Quintana, who drove for the firm that FedEx contracted for delivery services, was driving at 65 mph when the vehicles collided, according to court documents.
Virtually all of the $165 million award, considered by several legal experts as an astounding figure in a case of this nature, compensates the Morgas for "non-economic" damages such as pain and suffering, physical impairment, and "loss of consortium." The latter is roughly defined in tort law as depriving the survivors the means of carrying on a future relationship.
Unlike "economic" damages, which cover such costs as medical claims and lost wages, and which can be calculated using established formulas, the amount of compensatory damages is, with a couple of exceptions, limited only by a jury's discretion. For example, the size of the award cannot, in legal parlance, "shock the conscience." Nor can a jury be influenced by passion, prejudice, the financial status of either party, or other elements that might conflict with a vetting of the evidence at hand. The jury did not award punitive damages in the case.
The appellate court ruling upholds a 2015 district court decision affirming the verdict and denying FedEx Ground's request either for a new trial or a reduction in the size of the award. The lower court rejected the company's argument that the amount was excessive and its size unsupported by the evidence, and that the jury was unjustly swayed by "improper factors" unrelated to the facts at hand.
The three-judge appellate panel ruled that the family's attorneys "presented sufficient evidence to support the jury's right to perform its unique function—award all compensatory damages, including any non-economic damages for pain and suffering and loss of life" incurred by the family.
In its appeal, the company was requesting that the appellate court "establish a threshold or an absolute financial limit on the value of life, despite the district court's and the jury's efforts to fulfill their assigned duty to quantify something that is legally unique, intangible and difficult to measure," the judges wrote. "We refuse to implement such a legal threshold or limit."
In a brief statement, FedEx Ground said that it is weighing its options, and that it disagreed with the appeals court ruling. Should the company pursue the case through the legal system, the next step would be an appeal before the New Mexico Supreme Court. The lead attorney for the plaintiffs, James Scherr, partner in the El Paso-based firm ScherrLegate, did not respond to an e-mail request for comment.
The award's amount stunned several legal observers. Robert Moseley, who oversees the transport practice at the law firm Smith Moore Leatherwood LLC, said he's unaware of any case of an appellate court upholding an award this vast. Moseley called the amount an "outlier" and the case a "poster child" for why states need to impose monetary caps on jury awards. Moseley said the amount clearly meets the "shock the conscience" criterion that courts warn jurors to be mindful of when they weigh the degree of monetary damages.
Brent W. Primus, a long-time transport attorney who runs his own practice, said in an e-mail that the award "does indeed raise the stakes for liability for accidents on the highway," and that it "underscores the need for shippers, brokers, and any other entity hiring motor carriers to use the utmost diligence in selecting, using, and monitoring the carriers they hire."
Primus added, however, that the panel may have believed the award was excessive, but that under the state's statutes was bound to uphold the verdict. The language used in the ruling leaves the "door wide open" for the state Supreme Court to reduce the award's amount, he wrote.
Perhaps in an effort to allay shipper and broker fears that the case could become a litmus test for other truck liability issues, Primus said the ruling did not herald any new or novel liability theories. It also does not involve "vicarious liability," where a party is held liable in the event of an accident even though it wasn't directly involved in the crash, he said.
Cases involving vicarious liability have been hot-button issues for shippers and freight brokers because they center on whether those parties should be held liable due to their alleged inability to vet the driver they chose.
Editor's note: The original story incorrectly referred to the venue as federal appeals court. DC Velocity regrets the error.
About the Author
Executive Editor - News
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
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