What Are Nuclear Verdicts & Settlements?
Nuclear verdicts refer to exceptionally high jury awards—generally, those exceeding $10 million. Such verdicts have become increasingly common in the past decade. In fact, a recent report from public relations firm Marathon Strategies confirmed that nuclear verdicts reached a 15-year high in 2023, with the number of such verdicts rising by 27% in the past 12 months alone. Additionally, the report found that 27 of these verdicts were “thermonuclear,” indicating jury awards above $100 million.
A variety of factors have contributed to this trend, including rising litigation funding, eroding tort reform and, above all, deteriorating public sentiment toward businesses. Amid growing corporate distrust, businesses are not only expected to meet higher standards in their operations but also held more accountable for their wrongdoings. Upon being sued and taken to court, businesses have frequently encountered juries that are sympathetic to plaintiffs. Compounding this issue, there’s a rising perception that businesses (especially large ones) can always afford the cost of damages. This means juries are likely to have fewer reservations when awarding substantial damages to plaintiffs, resulting in nuclear verdicts.
Nuclear verdicts can carry significant consequences for businesses of all sizes and sectors, causing lasting reputational harm, posing underinsurance concerns and wreaking largescale financial havoc. That’s why it’s vital for businesses to better understand these verdicts and how to prevent them. This case study summarizes a recent nuclear verdict that resulted from a product liability incident, outlines factors that led to the verdict, highlights associated compliance considerations and provides related risk mitigation measures.
$287 Million Product Liability Loss
Case Details:
In February 2019, a 75-year-old man was operating his Harley-Davidson Tri Glide Ultra trike motorcycle with his 63-year-old partner riding as a passenger on an upstate New York roadway when the vehicle’s brake system suddenly malfunctioned, causing it to swerve and topple down an embankment. The couple was fortunate to walk away from the accident with minor injuries and had the motorcycle fixed at a local Harley-Davidson repair shop. Despite these repairs, the vehicle’s brakes failed once again while the couple was using it in the same area in June 2020, resulting in a far more serious accident. The crash left the man with severe injuries and proved fatal for his partner.
Following the second accident, the man and his deceased partner’s family filed a lawsuit against Harley-Davidson, alleging that the motorcycle manufacturer was liable for the vehicle’s defective brake system and, in turn, contributed to the crash. Specifically, the lawsuit claimed that Harley-Davidson failed to promptly identify and warn consumers about the vehicle model’s faulty brakes. Although the motorcycle manufacturer issued a recall on the Tri Glide Ultra due to a malfunctioning traction control system—which can cause unintended activation of one rear brake—in the months leading up to the second accident, Harley-Davidson refused to accept fault for the man’s particular brake failures; it claimed the crash must have stemmed from user error, ultimately taking no responsibility. The company also said that it wasn’t liable for any vehicle-related issues that may have been introduced by the repair shop after the first accident.
In August 2024, a Livingston County jury determined that the motorcycle’s brake system was defective, holding Harley-Davidson responsible for the crash. As a result, the jury awarded $120 million each in punitive damages to both the man and his deceased partner’s family and additional compensation for each party’s ongoing pain and suffering, loss of life enjoyment and medical expenses, generating a total verdict of over $287 million. While Harley-Davidson said it plans to appeal the verdict, the man’s attorney asserted that justice had been served.
“This is small-town justice in a big-time way,” the attorney said. “The message this jury sent was super, super powerful. Companies putting out unsafe and dangerous products must and will be held accountable.”
Factors That Led to the Verdict – $287 Million Product Liability Loss
A product defect refers to any component of a product that negatively impacts its ability to be used or operated as intended by the original designer or manufacturer. Such defects often pose hazards or other safety concerns for consumers, therefore increasing the risk of related injuries and, in most cases, leaving designers or manufacturers liable for any harm consumers may experience upon using defective products. As it pertains to this case, the motorcycle’s malfunctioning brake system constitutes a product defect.
On the other hand, failure to warn consists of a product designer, manufacturer or retailer neglecting to properly educate consumers on the possible risks associated with using a product, particularly when these parties knew or should have known that such risks existed. Failure to warn may involve designers, manufacturers or retailers providing insufficient product warnings (e.g., giving limited details about various product hazards) or not providing these warnings whatsoever. Regardless, failure to warn typically results in consumers operating a product differently than they would have if they knew about the product’s potential risks, thus elevating the likelihood of consumers using the product without taking proper precautions and even hurting themselves in the process. In this case, Harley-Davidson’s neglect to inform consumers about the risk of injury or death due to defective brakes when operating the Tri Glide Ultra trike motorcycle—even after issuing a recall on the vehicle model—constitutes a failure to warn.
Compliance Considerations
This case poses compliance considerations related to product liability. Such liability refers to the legal responsibility of product designers, manufacturers and retailers to compensate consumers who experience bodily injuries, property damage or other losses as a result of purchased goods. In other words, any party with the potential to profit from the sale of a product is responsible for taking reasonable steps to ensure nobody is harmed by using or operating their product as intended.
While there are no federal product liability laws in place, most states—including New York, where this particular case took place—possess such legislation. Product liability claims may fall into one of the following categories:
- Defects—These claims can result from designers and manufacturers neglecting to address or simply ignoring defects in their products, which go on to injure or otherwise harm consumers. They may also stem from designers and manufacturers failing to equip products with essential safety features or provide ample warning labels and instructions. Defects often arise in the absence of proper product testing and quality control measures.
- Post-sale duties—Such claims can result from designers, manufacturers and retailers failing to uphold their duty to warn consumers if they discover product hazards after they have been sold, regardless of whether these hazards existed before the sale. A post-sale warning is generally required if a designer, manufacturer or retailer knows or reasonably should know that a product poses a risk to others, the consumers who require notification can be easily identified and are likely unaware of the product’s risk, the warning can be effectively communicated and acted upon, and the product’s risk is significant enough to justify the effort and investment required to issue the warning. New York law operates under the principle of strict liability, which means that consumers don’t necessarily need to prove that designers, manufacturers or retailers were negligent or intended to injure people when making or selling their products; instead, it needs to be established that these parties’ products were defective, that such defects made the products “unreasonably dangerous,” and that the defects caused consumer injuries or fatalities. Strict liability is generally proven by conducting the consumer expectation test (CET). Under the CET, products are deemed defective if they fail to perform as safely as average consumers would expect them to.New York law also imposes a statute of limitations on product liability allegations, requiring consumers to file these claims within a set amount of time in order for them to be valid. The statute of limitations begins as soon as an impacted consumer determines or should reasonably deduce that a product defect caused them harm. This is often at the same time that the product-related injury or other damage took place, but may occur at a later date if the loss is discovered afterward. From there, the consumer has three years to take legal action against the product designer, manufacturer or retailer.
Risk Mitigation Measures
- Minimize product liability exposures. Businesses should prioritize investing in high-quality product manufacturing processes and equipment. In some cases, businesses may want to transfer a portion of their product liability risks to other parties through supplier contracts (e.g., hold harmless agreements). It’s also best for them to conduct regular inspections and tests to ensure their products function correctly and are safe for consumers, making adjustments as needed. When creating product warning labels and instructions, businesses should consider leveraging consumer focus groups to confirm that their wording is clear, accurate and easy to follow. Even after their products have been sold, businesses should take consumer feedback seriously and investigate any reports of product defects. In the event of post-sale concerns, businesses should have product recall plans in place that outline key steps to limit related losses (e.g., removing remaining products from stores and notifying impacted consumers). Lastly, all processes and risk management measures associated with products’ lifecycles—including design layouts, quality control assessments, production and sale logs, and liability claim records—should be properly documented.
- Ensure compliance. Workplace policies should be regularly assessed to maintain compliance with product liability laws and safety standards, as well as any other applicable federal, state and local regulations. Businesses can work with legal counsel for additional compliance assistance.
- Secure proper coverage. In this increasingly litigious environment, businesses need to have a robust insurance portfolio. It’s best to consult insurance professionals to discuss specific coverage needs.
If you have questions, reach out to one of our insurance advisors to discuss specific coverage needs, so you can avoid a nuclear verdict or product liability loss.