As we first reported here, legislators in Wisconsin introduced a bill (AB 647/SB 613) that would cap the recovery of noneconomic damages from trucking companies and commercial drivers. Authored by Sen. Cory Tomczyk (R-Mosinee) and Reps. John Spiros (R-Marshfield) and Rick Gundrum (R-Slinger), the aim of the bill is to protect employers from unreasonable “nuclear verdicts” and stabilize insurance costs for the trucking industry.

SB 613 cleared both houses of the Wisconsin Legislature on February 20. First, the Senate voted 21-11 to pass the bill, with one Republican joining all Democrats present in opposing the bill. The Assembly concurred in the bill by voice vote later that day.

The bill is now ready to be presented to Gov. Tony Evers (D) for his review. Once the bill is formally presented to the governor, he will have six days, excluding Sunday, to sign or veto the bill before it becomes law automatically.

Despite broad support for the legislation among Wisconsin’s business community, at the behest of the plaintiff’s bar, we anticipate Gov. Evers is likely to veto this reform.

The legislation sets a per-victim limit (not a per-accident or per-incident limit) of $1 million in noneconomic damages that can be recovered from a commercial motor vehicle carrier for injury, death, or other loss caused by an employee of the carrier while acting within the scope of employment.

In tort law, “noneconomic damages” include intangible costs such as pain and suffering, mental anguish, or loss of consortium. By contrast, “economic damages” include quantifiable costs such as medical bills, property damage, or lost wages and earning capacity. “Punitive damages” can also be awarded to punish egregiously harmful conduct, such as intentionally causing harm or disregarding the safety of other drivers by operating while impaired.

The function of a limit on noneconomic damages is not to deprive plaintiffs of a fair judgement or settlement, but rather to protect employers from unreasonable nuclear verdicts and stabilize insurance costs for vital industries like medicine and logistics. These costs are inevitably passed on to consumers in the form of higher prices.

Capping damages is not unusual. For example, Wisconsin already caps noneconomic damages in medical malpractice cases to help keep medical malpractice insurance affordable. The limit on noneconomic damages in medical malpractice cases is $750,000.

Under this bill, economic damages would remain uncapped. In Wisconsin, punitive damages are subject to general limits, except that they are not limited when a defendant in a motor vehicle accident was under the influence of an intoxicant that rendered the defendant incapable of safe operation of the vehicle.

Trucking is the backbone of our state and national economy: nearly three-quarters of all goods shipped in the United States are moved by truck, and over 90 percent of trucking companies are small businesses with ten or fewer trucks. In Wisconsin, 72 percent of all goods are moved by truck, including 95 percent of all manufactured tonnage. There are 57,680 trucking companies registered in Wisconsin; most are locally owned and served by a wide range of supporting business totaling 183,780 jobs (1 in 16 jobs in the state).

Over time, trucking has become progressively safer, yet trucking-related litigation costs and verdicts have risen rapidly, out of sync with the facts on the ground. This raises costs for anyone who buys or sells a product shipped by truck. Between 1975 and 2021, the large truck fatal crash rate in America dropped 65.7 percent, while research shows that 70 percent of fatal crashes involving a truck were the fault of passenger vehicle drivers.

A study of civil verdicts over $1 million, conducted by the American Transportation Research Institute, found a 967 percent increase in the average size of verdicts in the trucking industry between 2010 and 2018. This increase is not due to overall inflation or healthcare cost inflation, which increased at much lower rates of 16 percent and 26 percent, respectively.

AB 647/SB 613 will protect motor carriers and consumers from unreasonable noneconomic damage awards and attendant cost increases, while maintaining the ability of plaintiffs to obtain fair judgements and settlements to compensate them for losses sustained in trucking-related accidents.

A memo issued by the bill’s authors notes that “a nuclear verdict is generally an exceptionally high jury award that surpasses what should be a reasonable or rational amount. While trucking companies work diligently to operate safely on our roads, aggressive litigation and inflated settlements risk driving up insurance rates, redirect resources away from improving a business’ workforce, and can prolong the purchase of new equipment. The rise in nuclear lawsuits ultimately exacerbates current supply chain issues, which leads to a weakened economy. … We believe this legislation strikes an ideal balance between those who file lawsuits and the trucking industry.”

Last year, Iowa became the first state in the country to limit noneconomic damages against trucking companies and commercial drivers. Senate File 228 was signed into law on May 12 by Iowa Gov. Kim Reynolds (R). The law sets a $5 million limit on the noneconomic damages that can be recovered in court by a victim of an accident involving a trucking company. Economic damages remain uncapped in Iowa, as they would in Wisconsin under the above proposal.