Did you think only the big trucking companies get sued? Do you think your insurance company will just take care of things if you get hit with a lawsuit? Do you think an LLC is a bulletproof shield that protects trucking company owners no matter what? If you answered yes to any of those questions - you’re wrong. Learn from the lawyers who defend trucking companies every day what it is like when small and mid size fleets get dragged into court and how to be prepared.
Highlights from the conversation:
Safe as Truck is a podcast powered by LogRock, a platform dedicated to handling all aspects of compliance for trucking companies. Learn more at www.logrock.com.
Derek Rogers 0:05
Welcome to Safe as Truck, the podcast focused 100% on breaking down the challenges of compliance and safety in the trucking industry. Safe as Truck is powered by LogRock, the only digital tool built exclusively to help America's trucking companies stay compliant and stand strong when the DOT or lawsuits come knocking at your door. Now, let's jump straight in with our host, Hunter Yaw.
Hunter Yaw 0:34
Alright, so this week we have with us Alex Baker and Matt Giardina from the law firm MG+M. MG+M have a whole bunch of experience representing trucking companies, whether it's through issues large or small, in court and out of court, and we're super excited to hear from them this week about the experiences that they have had in the trenches with trucking company owners dealing with all sorts of issues that they come through.
So guys, before we jump in, I just have one quick question that I need to clarify. I need you guys on the record as this is being recorded to confirm that you are not going to bill me by the hour for this conversation. Can you please confirm that for me?
Alexander J. Baker 1:11
I can confirm that for you.
Matthew Giardina 1:13
Just for you.
Alexander J. Baker 1:13
Yes, just for you. Yes, we'll enter it as non-billable time into our system.
Hunter Yaw 1:18
Excellent. So for everyone listening, if I get sent an invoice later, they promised that they weren't going to do that. I just want to make sure we get that super clear at the top.
So guys, let's jump in. So first of all, you want to tell us a little bit about the experience that you guys have representing trucking firms and the types of trucking firms that you've been involved with in the past, just to give folks a little bit of context?
Alexander J. Baker 1:36
Sure, I can start. I'm at our Chicago office here for MG+M. We do a wide variety of civil defense practice groups, including trucking and transportation. I've been with this firm and another firm (which have merged) for about 10 years now, so the trucking and transportation practice has been a part of that over the course of my career.
Hunter Yaw 1:56
Very cool. What about you, Matt?
Matthew Giardina 1:57
I handle the New England and East Coast, litigate. And for the trucking and transportation group, Alex is based in Chicago. But we do a lot of overlap. We have a number of clients that are either Chicago or maybe based in Boston, that convert the country every day. And one of our key roles is to help manage their litigation and compliance needs.
Hunter Yaw 2:21
One of the hottest topics in the industry and something I think everyone wants to (or at least needs to) learn more about are nuclear verdicts. Something that I found fascinating when I'm talking to, whether it's a trucking company owners or directors of safety. Every once in a while, if you mentioned nuclear Burdick, they respond about the same way as I do when my wife pulls me aside and says, Hey, we need to talk there's a fear that strikers are the heart and you know that nothing good is about to happen. But some folks hear the term nuclear vertical here, talk about it in the media wherever else. And they kind of shrug it off. And they feel like it's not going to happen to them, or it's not a risk for their trucking company. So you get this whole range of responses.
So a couple of things I wanted to ask. First, could you guys give us a little bit of context on what is a nuclear verdict? Because I think part of the issue may be whether everyone has the same understanding of what we're talking about when we say nuclear verdict. And then the second thing I want to dig into is why are there so many trucking company owners out there who think it's never gonna happen to them or think that they're immune to that risk.
Matthew Giardina 3:19
Defining a nuclear verdict is kind of an open question, like you said. I say a new verdict has anything over a million dollars, it's certainly anything a carriers insurance coverage. So you're you're definitely nuclear territory when the principles of the company itself are doling out money because their primary and excess coverage is exhausted. I think a number of people are becoming aware number of our clients are becoming aware of the issue. But there's also a hesitant to admit that nuclear verdict is not just the one-off in Florida or in Texas that you hear in the news, and a lot of our folks that we deal with have a sense that well, we already have insurance coverage. So we're going to be okay, what they believe that the facts of the new Gilbert case are such that those backs don't apply to them. They're doing everything right. They're compliant, and they're not going to be surprised down the road and they feel like they feel that they have a stern intallation when it comes to litigation.
Hunter Yaw 4:27
Are they immune? Are they completely prevented against this?
Matthew Giardina 4:30
No. There is no immunity. There's no vaccine for the nuclear verdict. The nuclear verdict arrives usually because something small, bastard, and plaintiff are able to latch on to a compelling story and the jury accepts that story.
Hunter Yaw 4:49
Help me understand, what do the mechanics of that look like? How does that actually shake out in court or in litigation? If there are some examples you can share.
Alexander J. Baker 4:56
I think it's important to distinguish between the type of damages that are being awarded. In verdicts, you have economic damages and non-economic damages. Economic damages are able to be calculated. So how much his medical expenses were, how much income he's lost, because your driver was injured or the person who was hit how, how long have they been out of work, where you're seeing the nuclear verdicts in noneconomic damages, which are kind of up to the jury to calculate their, it varies from jurisdiction. But these large verdicts, nuclear verdicts, you're seeing are coming on the noneconomic more punitive damages. So what plays out, I think what we're seeing is in these trucking companies, they need to hire somebody. So they are doing their compliance, and they aren't going through the steps that they need to in checking the background on a driver. So when a plaintiff's attorney finds in discovery that this person has been cited before for non-compliance or doesn't have their licenses up to date, that is played out by a plaintiff to the jurors to instill fear in the jurors that these drivers are out there. So they're not thinking rationally when they make these very large nuclear verdicts that we've been seeing.
Hunter Yaw 6:11
So I'm putting myself in the shoes of a trucking company owner who's about to enter this battle. What's the first thought that they have when they get hit with a lawsuit, in your experience?
Alexander J. Baker 6:21
I think a lot of times what happens is they put their insurance in place, they think the insurance carrier will completely take care of this, "I don't need to worry about anything. This is why I have the insurance," and they don't really understand that, yes, you need to have that insurance in place, but you also need to understand the compliance so that you can help your attorneys as much as possible in preparing your discovery responses and responding to discovery and preparing to take depositions (including their own). So I think "out of sight, out of mind" is kind of the first thought and then they quickly start to realize that they do need to be seriously involved in the litigation process.
Hunter Yaw 7:05
Interesting. So when does that reality hit? And what does that look like? At what point is it becoming clear that I can't just farm this out to my insurance company, my insurance company isn't just going to take care of this for me?
Alexander J. Baker 7:18
The first point when a client really starts to realize that maybe they aren't in the best position or that it starts setting in is when their attorney comes to them about responding to request to produce or answer discovery in terms of where the documents are kept, how they are kept. This is from your own attorney, so I think that kind of starts to settle in that they maybe are not as prepared as they thought they were.
Matthew Giardina 7:41
I think that's true. And I think we're really talking—maybe we need to be explicit about that—about the smaller companies. I mean, you have large, publicly traded companies that have had this down to its diet. Your large, 500+ truck carriers have their own compliance department have their own litigation department, it really the smaller company, the smaller mid-sized companies, they're not expecting litigation. When my clients say, "I can't believe I got sued," I usually tell them, "Look, in today's world, it's not IF you're going to be sued, but WHEN." Like Alex said, often they just want to push this away and get back to what they do back then. That's why the trucking company, and the attorney, I think we find that frustrating because we always think that we really have to pay attention, we have to be, we have to be proactive in responding to the events that are within the litigation itself. But we recognize these folks are running a business and that their number one priority. And it often is troubling when the client becomes really involved after, like Alex said, when working with a particular individual, whether it's a safety director or one of the principles and gathering, the company's history, all the doc all the crack documents of background check all of those original records, the drug testing, and the smaller companies, they find that challenging, and they will really find the next step to be almost overwhelming, and that's when they are deposed and the other side gets to ask them, quietly across the conference table, and we see that that is one of the more intense moments for these carriers because that doesn't end their business. They want to make sure that their cargo gets from point A to point B. And this is a foreign world for them which is, how can I do as much as we can to lighten that load? Every pun intended, but it will come down to the client itself.
Hunter Yaw 10:00
What impact does this have on your clients? This cannot be good for your health.
Matthew Giardina 10:05
Yeah, it's not. We've seen people lose a lot of weight, people aren't eating, and that's at the deposition when it goes to trial, that physical impact becomes even more predominant. But also, in terms of business terms, we're taking somebody out of the business equation, meaning they're not doing their day job in order to work on this case with us. And that contributes to not eating, not sleeping because you're trying to catch up. So it is, it is something that we are always aware of what this pressure does to our folks.
Alexander J. Baker 10:45
It goes to what we were talking about earlier, in terms of the size of the companies too, because these larger corporations, it's it can be a drop in the bucket, but these mid-level smaller level pleats, where we kind of represent a nuclear verdict on one of these companies in one of these businesses, it's really harmful and could potentially put them out of business. So obviously, something that someone has worked so hard to build, being on the line is obviously going to have physical and mental effects on a person.
Hunter Yaw 11:16
So we're through the deposition and you said next we're going to trial. When we're in trial, when we're in court as the trucking company, is this a fair fight? Or is the deck stacked against us?
Matthew Giardina 11:25
Well, we're not quite into trial yet. Usually there is follow-up discovery in motion practice, but you're right. The next really large event is trial. And, yeah, I think that it's hard to say the stack, the deck is stacked against them. But it's close. It depends on a lot of issues: what's the insurance company's roll on it? Did mediation fail? We never like to take a case to trial that we know we're going to lose. So if we take a case to trial, we believe we have a compelling argument, but it is again, that's a very stressful situation for the client and even for the attorney.
Alexander J. Baker 12:08
As a defense attorney on the defense bar, I think one thing that the other side does really well is they coordinate much more than defense attorneys do. So they share their theories and their practices and their themes across the board. So you see much farther sweeping themes amongst the plaintiff bar against defendants. And I think that's also playing to these nuclear verdicts is that there's a formula for them to follow. And when we get involved in in the game, as defense attorneys, there's already been a significant amount of investigation done a good amount of legwork on the plaintiff side to bring this lawsuit. We're coming in Max, and it's already happened, a complaint has already been filed. So we're already behind the ball at a certain point when we entered the case, so it's not necessarily a completely fair fight on our end.
Hunter Yaw 13:04
Alex, to your point, they're sharing tactics, they're sharing strategies, they're sharing tricks of the trade from one case that was successful to another to try to build up that playbook. On the defense side, you're not just up against that playbook that they've developed and they've shared with each other and they've sharpened over different cases, but you're also at the structural disadvantage where they have spent years building this case, gathering information sometimes, as you said, up to three years (depending, I understand, on the state, and the circumstances), but man, up to three years. And then, did I get that right? You only have 20 days to prepare a defense to something that someone has been building up over three years?
Alexander J. Baker 13:44
Yeah, in certain jurisdictions I think 20-30 days is usually the range in terms of when you have to file responsive pleadings. Obviously, you can work with the other side in terms of that, but under the rules, that's kind of a standard. To also go to that point, we get to depose their client, the planet as well. But again, they have significantly more time to prepare that, that witness for the deposition, they are able to get to know that person on a deeper level, go through their family photos, and then you're really building the sympathy factor against these companies. And that's, that's the main, the main theory, the main approach that they have is sympathy, it's a jury. So that's where you get those large, vindictive, punitive verdicts against these companies.
Hunter Yaw 14:35
We're not necessarily talking about Warner or a Swift or a fleet with 1,000s of trucks. This could be a business that maybe it's 50-150 trucks. In a lot of cases, that's a business that's still being run by the person who built it from nothing, but you're saying they're gonna make you look like you're the big corporate bad guy.
Matthew Giardina 14:56
Absolutely.
Hunter Yaw 14:57
That's brutal. And I have to imagine that's a tough experience for the owner to be put in that position, to be painted in that light.
Matthew Giardina 15:04
Yeah, it is. The owner will turn to me and say, "I only take home $100,000 a year. My drivers are making more than I do and they're making me out to be like a Walmart or Target," or like you said, a Swift. The battle perception that the information that we always find repelled by that.
Alexander J. Baker 15:25
Yeah, and I think for guys like that or owners like that, even if they do go to trial and they end up winning the case and they have a defendable case and we end up winning, your insurance rates are still going to go up. So there are still repercussions for these small to mid-level fleets from these lawsuits.
Hunter Yaw 15:45
So even a win is still kind of a loss.
Alexander J. Baker 15:48
From a business perspective, definitely.
Hunter Yaw 15:50
These are businesses, so the business perspective is what matters, although the personal aspect, I understand as well. That's something that doesn't make the news, the experience of what it's like to be a trucking company owner having to go through all this.
Alexander J. Baker 16:03
Right, you definitely hear more about the nuclear verdicts than the defense verdicts for sure in the media.
Hunter Yaw 16:11
I really liked what you said, Matt, that there's no vaccine against nuclear verdicts, but I think there is prevention, right? There's the equivalent of diet and exercise right for trying to avoid this disease. So what is the equivalent of eating my spinach and going to the gym to be minimizing the risk, at least, of having to deal with something like this? And if I do have to deal with it as a trucking company owner, as a safety director, making sure that my team and I are in the best possible position?
Matthew Giardina 16:42
Yeah, I think 100 starts with, it starts with your clients from day one, right? What is your system to make sure that your weight is within acceptable Reg, what is your system to make sure that your drivers have the regular drive testing, that the background checks are complete, and you have that system, you stick with that system (unless it's not working), but and you can continue to check in with all those safeguards and you start building your good company story from, from the date you put out your ads, or I want to drive and you track everything that's really at the heart of compliance is what information do I have. Because if I can master this information, if I can be the master of my own information, then I can communicate effectively, what I did, and what I expected and what I knew in wet. So that will go so far in avoiding the situation where you'll be confronted because you have a weight violation, which is completely unrelated to the traffic accident that you may or may not have common.
Hunter Yaw 17:57
So I need a strong system in place to make sure that I am the master of my own data so that when they come at me I have every fact, every number, every data point in place and ready to go to deploy to be able to say, Listen, I took safety seriously, I took compliance seriously. When issues came up, this is how I resolved them. This is the date that I became aware of this, this is the date that I signed this driver training, this is the date that I made sure that we renewed, this is the date that I issued this drug test, this is the date that I got the result. It sounds like it's a data problem. Is that right?
Matthew Giardina 18:34
It is. More often than not, it is a data problem. One of the challenges that Alex and I always create is when there is a litigate, and when the litigation is filed, we go to the client say Okay, give me what, give me everything you have. And they have they said, Well, what does that mean? And we say we really want everything. After a while they give us a manila folder from one drawer, stack of paper for another from another. And out and I will be scratching our head. So this is gonna take a very long time to sort out. And you know, some of it may not actually involve this tractor or this trailer. And like you said, managing being the master of your own data. If you can package the thoughts in one click, then it's defense counsel, you are ahead of the game in lightyears ahead of the game.
Alexander J. Baker 19:35
I think the importance is not only collecting and keeping the data, it's also organizing it in a way that it's easily findable or searchable. Because you think our biggest issue in terms of litigation is when the companies start off rather small, they have 20 tractor-trailers, but then as they successfully grow their business over the years to 100-200 sites fleet, litigation becomes more serious and the people you had in place earlier, you want to be loyal to them, but they're in over their heads, and they've lost the ability to organize it properly. And I can't tell you how many times you've gone through what you thought is everything. And then they find a storage closet where there's a bunch of different boxes or something like that. And I think also, these businesses have been growing 34 years where everything was kept paper. Now, we're, we're seeing everything more digital. So you need to take that physical paper data and turn it into virtual data if you're able to.
Matthew Giardina 20:41
Yeah, just to go back to Alex's experience with these corporate rep depositions, there was nothing worse than the other side producing a document that you should have had that you should have seen, that really is horrible because think that document can be awful it can be, it can be so very bad. But if we know about that early on, there are things that we can do to help mitigate, minimize how bad that document is, if we're confronted with that document, or that sales receipt, or that bill of lading. At the deposition, that's when we can't prepare a defense for you can't analyze that appropriately. And that is the worst-case scenario.
Alexander J. Baker 21:30
And even when even in the scenario when the document isn't harmful or bad in itself, you've given plaintiff the bullet of arguing, what else are they hiding, they're hiding information from us. They didn't, they weren't straightforward. So even if it's a completely irrelevant document, you, you've now been able to paint that picture of you as an irresponsible company.
Matthew Giardina 21:53
So Hunter, I think we can provide you with a tale of two cases. I had a case, we had very similar facts, but they turned out very differently based on the information that the clients had and mantained. In my case, it was we are fairly confident that it was a staged accident. And as the litigation proceeded, actually, immediately, we understood that there were problems because not all of the registration paperwork, the maintenance paperwork was readily available, we identified that right off the bat. And then during the litigation that was highlighted, and at the deposition of not only the driver, but also the company, there was a lot of discussion, a lot of questioning about the maintenance record and how the maintenance records of the trailer, we're not even talking about the power unit, but the trailer was maintained. And the long and the short of it is we had a seven-month gap where we could not account for any records of the trailer and the plaintiff's counsel, use that as a bat to lodge in our corporate representative into Togetic, that our company didn't take safety seriously, to suggest that we didn't maintain our records appropriately. And our position was that it was irrelevant. You know, this was the maintenance history of the trailer, it did not add any real-world impact on the causation of the accident. But it took a toll on our client because it became a sideshow issue that was real. And at the end of the day, the insurance carrier, the client agreed that it would be better to settle the case at a premium, rather than have this issue with the lack of knowledge, lack of information, and really the seven-month gap become, you know, public knowledge or for that information to be exposed and go outside of the litigation. So we ended up settling. Under normal circumstances, we would have fought the case to a conclusion because we didn't cause this accident. As I said, we were fairly often that they were staged. In this particular case, not having the ability to locate and maintain proper record keeping really caused them to settle a case and pay money. You should not have. And then Alex, I think you had basically the opposite situation.
Alexander J. Baker 24:38
Yeah, I had a similar situation where the driver involved for the company that we were representing was involved in an accident which was involved minimal impact, a rear-ending of a passenger vehicle, low speed, and minimal impact. But the plaintiff claim damages from back and neck pain that he experienced and experienced from this accident. We received relatively high demand from the plaintiff's counsel based on our company's policy limits. However, luckily for us, this company just had impeccable records of the accident to the driver's credit, he immediately messaged the dispatcher describing the accident that he was cut off, the dispatcher saved those messages within the company's procedure, the driver took photos of the accident to illustrate the impact of the via to the vehicle. And you could see the plaintiff walking around the car, clearly not in any serious pain. And then the risk management person at this company requested that the video and it was all saved and provided to us. We were able to take all of this information that we received from the risk management department of this company and provided it to playing plaintiff's counsel and it was a complete game-changer, they completely changed their story from where they were initially at what their high-end demand, and saw that saw this for what it was and ended up we ended up getting a voluntary dismissal in the case. So it's just an illustration to go to show how important keeping this information and having the processes in place to save all this information to provide to your attorneys because it does make our job so much easier when we have all that information.
Hunter Yaw 26:24
That's amazing. So in one case, all that was missing was seven months of records, maintenance records around a trailer, which has no ban on anyone in the industry, no bearing on the accident, no, like there's no, completely irrelevant. And that results in a much, much bigger award or settlement. And then in the other case, you've got everything in place, and the case gets dismissed. So I mean, it's not just it's the difference between not just a settlement, but a much bigger settlement in the hope of keeping it out of court because God knows what would have happened there, versus getting the whole thing dismissed. I mean, that's night and day.
Matthew Giardina 27:01
And it goes to show you that if you can demonstrate that you have your act together and that you prepared, that is what changes the case that those are the cases that are not only defensible, but they're highly defensible because there is no gap. When we faced the situation that I had, you're faced with the fact that we could not explain why our records were missing and that the plaintiff was making the suggestion that we bought if our records related to a trailer were missing, what was missing with respect to the driver, what was missing with respect to the power unit. And it was effective, the plaintiff was effective, he knew he didn't have a good case. But he found something that was a wound for us. And he exploited that.
Alexander J. Baker 27:52
I think what it also illustrates is that in my scenario where the end result was positive is that it's not just important for the top higher-ups or the risk management department to have an understanding of what's needed to defend these cases, it needs to be a top to bottom approach. In my scenario, the driver acted appropriately, the dispatcher acted appropriately. And that helped the Risk Manager perform his job at this company and then, in the end, really save the company a lot of money.
Hunter Yaw 28:24
We've seen this with our clients and folks we work with on a day-to-day basis. Even if they've completely digitized even if there's nothing left on paper. And that's fairly unusual. But let's say it's the best-case scenario, we still regularly come across a situation where and I'm curious, if you guys have the same thing, the data is still stored all over the place. Some of it is in the cloud, some of it is stored on someone's desktop, some of it is stored on someone's laptop, some of it is on a USB drive somewhere and getting all that together, there's usually someone in the company who knows where it all lives. But if that person has left the business or if that person is on available or can't remember, even a fully digitized setup can still be really tricky if those files are living all over the place and spread across desktops and laptops and storage files and USB drives. Is that something you guys have come across as well?
Alexander J. Baker 29:15
Yeah, 100%. Definitely, especially in the trucking industry. You're sometimes dealing with an office attached to a garage, right. So it's kind of like, you're not thinking of litigation, you're thinking I need to get trucks out on the road. So you're just throwing boxes of documents, wherever they may be, until it gets to a certain point. There's only so much digging a person can do. And so I've definitely run across that numerous times throughout my career.
Matthew Giardina 29:43
The other thing that's not unique, but certainly typical in the trucking industry is the wage valid dynamics where the company should have a copy of the driver's food receipt when he's on the long haul on the long haul journey. What we see often is we know something is missing, but we can't find that. That receipt may tell us what his break was. We know that thing and it becomes a scavenger hunt to find that because that could be a critical piece of information for the defense. And that's sometimes it's more frustrating to both counsel and client is, then that not knowing it existed at all, is okay, we know there should be a document, where is it and strategy to systems to put in place so that you take a photo of that receipt uploaded, and in cataloged appropriately, is invaluable to the defense counsel?
Hunter Yaw 30:51
Well, that makes sense because we were talking before about how you guys are up against the clock, and I understand that it's 20 to 30 days to get that initial response, but still, you're at a time disadvantage. And so I'm assuming anything you can do to be able to move faster. The fewer hours you guys are working will hopefully mean a more reasonable bill for the client because you guys don't want to be spending your time digging through stacks of paper either, right? But it's also, I would imagine, helps you save that time, which is such a valuable resource in the defense.
Matthew Giardina 31:20
Yeah, it's not just our time, it's also the client's time. Every company that we work with does something a little bit differently so identifying the person who knows where that document is. Is it on the desktop? Is it in the hardcopy file? Is it in the repair shop rather than the front office? We may need one or two pieces of paper and it takes two weeks to get that, and in the meantime, we're worried about it, but so is the owner.
Alexander J. Baker 31:55
I don't think a lot of business owners in the trucking industry when they start out are really thinking about their compliance or their legal representation. But their two must-haves, if you want a successful business, if you're able to provide us that documentation quickly, for us to review it separately and not have to hound you for records. That's invaluable to your business. Not only are you helping us on the defense side to defend your company. But you're also able to get back to the things that actually making revenue for your company by not having to deal with Matt Nye.
Matthew Giardina 32:21
And it may also help you avoid dealing with Alex and a budget. That pains me to say it because if the company if the safety director or one of the owners, they get an alert that alright, driver, driver, John Jones did act or more poorly didn't do anything, they're able to deal with that right away. All right, if the background check is missing, or if there was, for example, if the driver has a moving violation, the company has to take immediate steps regarding notice and comply and in complying with federal motor carrier safety regulations in that the delay and information getting to them only exposes them to greater risk, because they're not able to immediately take steps to comply with their obligations under the regulation.
Hunter Yaw 33:25
Can't you can't fix a problem you don't know about.
Matthew Giardina 33:27
Exactly.
Hunter Yaw 33:29
All right, Alex and Matt, this has been absolutely fascinating. We see these articles that highlight the size of the award—this state, this company, this number of millions of dollars—but the nitty-gritty, the nuts and bolts of what it's like and the ways that you can prepare yourself and minimize that risk in advance I think are things that the trucking community deserves to have a better understanding of, better information about. We really appreciate you guys taking the time to help us understand that and share the experience of defending trucking companies. So again, we had today with us, Alex and Matt from MG+M, the law firm who are active in defending trucking companies, have years of experience doing it. We really appreciate you guys joining us. Thank you very much.
Alexander J. Baker 34:09
Thanks for having us.
Matthew Giardina 34:09
Thank you, Hunter.