Dive Brief:
- Wabash pledged last month to continue fighting a legal case that led to a $450 million verdict in punitive damages and $12 million in compensatory damages in September.
- The company has argued that the ratio between the two amounts, where the punitive amount is 37.5 times higher than the compensatory damages, is excessive and should be reduced by the court to a single digit level.
- “While we booked a non-cash charge during the quarter related to this verdict, we believe the damages are abnormally high and the verdict is not supported by the facts or the law,” CEO and President Brent Yeagy said on a Q3 earnings call Oct. 24.
Dive Insight:
The trucking industry has long fought so-called nuclear verdicts — in part by relying on legal caps in damages.
In January, Werner Enterprises reduced a $36 million verdict in punitive damages to under $336,000 for a discrimination case.
The case involving Wabash involved a passenger vehicle colliding with the back of a tractor-trailer in 2019, killing a driver and passenger in the vehicle, with lawyers arguing that the trailer’s rear-impact guard completely failed.
The OEM gave further perspective on how it expects to fare in its arguments, detailing how the jury was unable to hear “critical evidence in the case, including the driver’s blood alcohol level was over the legal limit at the time of the accident and neither the driver nor the passenger was wearing a seatbelt,” Yeagy said.
He added that the vehicle struck the back of a nearly stopped tractor-trailer.
“There will be post-judgment proceedings before the court enters a final judgment for the purpose of appeal but in the meantime, we are working closely with our external legal counsel, accounting and insurance firms, and we'll be evaluating all available legal options,” Yeagy said.
The company’s Q3 operating loss was $433 million, driven by the punitive damages portion of the verdict.The company posted an adjusted operating income of $17 million under non-generally accepted accounting principles.
