In a report released on May 3, which examined "nuclear verdicts" nationwide, Marathon Strategies, a public relations firm, discovered that California experienced $912,019,135 in nuclear verdicts in 2023. Nuclear verdicts are defined as those exceeding $10 million.
The report also revealed that between 2009 and 2023, California had 117 nuclear verdicts amounting to $25.23 billion. This makes it the third highest state in terms of such verdicts. The prevalence of these nuclear verdicts in California is attributed to the state's "liability-friendly laws and courts." A notable example of a nuclear verdict in the state occurred in 2023 when Suzuki Motor was hit with a $161 million ruling following a vehicle accident lawsuit in Orange County.
According to an article from the Insurance Journal, one factor contributing to the surge in nuclear verdicts is an attorney tactic known as the "reptile strategy." This approach involves attorneys attempting to manipulate jury emotions by instilling fear and anger towards corporations. The rise in nuclear verdicts has had adverse effects on both the insurance industry and small- to medium-sized businesses that sometimes have to pay parts of large-scale verdicts out-of-pocket when the ruling surpasses their insurance policy limits.
DRI indicates that due to these nuclear verdicts, insurance providers are confronted with higher costs and loss ratios, compelling them to increase prices for all policyholders. Similarly, small businesses are forced to raise their prices to compensate for the increased risk cost resulting from outsized rulings, thus transferring litigation costs onto consumers.
CalMatters reports that Californians are struggling with high living costs driven by expensive car insurance. Some insurance providers have exited the state market leaving residents with limited options and higher costs. Lower-income families are particularly affected by these escalating prices.
Marathon Strategies is an independent research and communications firm, according to its website. Founded by Phil Singer in 2008, Marathon's team comprises data analysts, researchers, and attorneys. Singer established the firm after over two decades of experience in corporate and political communications.