Dive Brief:
- Wabash agreed to settle a legal case involving a fatal crash with a $30 million payout after initially facing $450 million in punitive damages and $12 million in compensatory damages, according to a securities filing last week.
- A Missouri Circuit Court previously reduced the September 2024 punitive damages to $108 million in March after the OEM sought to appeal the case and get a new trial.
- “The Company, after taking into account the insurance coverage, will recognize a $81.2 million reduction to the charge taken in the third quarter of 2024,” the securities filing said.
Dive Insight:
Nuclear verdicts and awards not only create direct eight-figure costs to companies, but they also have knock-on effects in the industry, such as inflated insurance premiums for carriers.
Legislators have considered reform in the area, with some states like Florida and Iowa making adjustments that are more compatible with the industry, executives and stakeholders have noted. Trucking groups have said law firms are aggressively taking on plaintiffs' cases to sue businesses.
For Wabash, insurance will cover costs beyond the $30 million payout, but the exact amount wasn’t specified by the securities filing.
The case involved a 2019 fatal crash in which a passenger vehicle collided with a nearly stopped tractor-trailer, the company previously said. Lawyers for the plaintiffs argued a rear-impact guard on the Wabash trailer completely failed.
Wabash said the passenger car driver’s blood alcohol was over the legal limit, and neither the driver nor passenger was wearing a seat belt, but legal teams debated over what was admissible, and those details were kept from the jury.
The securities filing said the settlement does not constitute any liability or wrongdoing, and plaintiffs and beneficiaries agreed in the settlement to drop further legal challenges.
