Huge Jury Awards Seldom Live Up to Their Billing

The Karen Silkwood saga that inspired an Oscar-winning movie starring Meryl Streep didn’t end with a $10.5-million jury award against Kerr-McGee Corp., which owned the Oklahoma nuclear plant where Silkwood was exposed to plutonium.

But Silkwood’s children never collected the millions that a jury felt was owed them in 1979, after the 28-year-old laboratory analyst died in a one-car accident on her way to meet a reporter and a union official.

After years of appeals and delay, the family and Kerr-McGee settled for $1.38 million. The three children, all teenagers by then, shared $500,000. The rest went to legal and estate fees.

It was an ending familiar to many plaintiffs who receive large jury awards. Mammoth awards that make headlines and spur calls for tort reform frequently are considerably reduced before they reach plaintiffs.

“There is a public perception that getting the verdict is getting the money,” said Pennsylvania lawyer Joseph P. Lenahan. “But getting a verdict is nothing more than getting a door open to get a chance to get the money.”

On the other side of the door are appeals that can overturn or slice big awards, defendants who don’t have the money or insurance coverage to pay or who have sheltered their assets, and lawyers’ fees. In many cases, the plaintiffs negotiate a lower settlement, hoping to enhance their chance of collecting some money.

In a review of 25 of the nation’s largest personal injury awards in 1993--the year examined to allow for subsequent appeals--The Times found that plaintiffs in 18 cases received an average of less than 20% of what the jury ordered. In most cases, even that share was reduced by another third to half by legal and court costs.

One of the 25 cases is still on appeal, and the rest were settled for undisclosed amounts.

Awards ranged from $15 million to $163 million, handed down by juries as restitution for a multitude of horrors, from a needless amputation to a fatal plane crash to negligent transmission of AIDS. Injured litigants or their families collected as much as 60% of their original award--or as little as nothing.

Despite the discrepancy between awards and payment, huge jury awards, while rare, are often cited as justification for reining in the tort system, the legal arena that allows recovery for injuries. These highly publicized awards also may give plaintiffs unreasonable expectations about hitting the jackpot.

In fact, the larger the jury award, the smaller the percentage that will be collected. “The verdict is just the beginning of the story,” said Suffolk University law school professor Michael Rustad, who has studied the difference between awards and payments.

The difference was staggering for Donald VanDyk, 38, of Jacksonville, Fla. He had been shot in the head in an unprovoked attack in a Florida bar in 1988; he filed a lawsuit against the gunman and the bar that served him.

The jury awarded VanDyk $25 million, potentially making him a wealthy man. The award was among the top 25 for 1993 personal injury cases reported by Pennsylvania-based Jury Verdict Research, which collects verdict information from reporters, lawyers and published sources.

But VanDyk’s victory was short-lived. All he could collect was about $100,000, the amount of insurance held by the tavern owner. He pocketed $50,000 after paying court costs and legal and medical bills.

Brain damaged and partially paralyzed from the shooting, VanDyk now makes his living photocopying documents at his lawyer’s Jacksonville office. “No justice, man,” he said. “No justice.”

To understand how big awards are dismantled requires familiarity with how they are built. Laying the groundwork for a huge verdict often becomes a grisly matter of pricing limbs, paraplegia and death. Some lawyers can cite the biggest award for the amputation of an arm, for example.

“The lawyers who represent the defendant start to lose control of the case, and you can feel the jurors become enraged,” said Lenahan, who has represented both plaintiffs and defendants in cases that generated huge awards. “It is a process that is frightening.”

The death of a child in an accident may be “worth” less than the death of a high-earning executive with a family: Juries are given evidence about life expectancy and award economic damages for lost earnings, giving the edge to the family of the biggest moneymakers.

A death caused by a hospital’s malpractice in California probably would generate less in damages than a disabling injury in the same hospital, said Beverly Hills malpractice lawyer Dr. Bruce Fagel, because a disabled plaintiff can ask for millions for future medical care.

“The reality is that if you are going to be negligent in a hospital setting, it is far cheaper to kill someone than to just injure them,” said Fagel, who practiced emergency medicine before becoming a lawyer.

The share of an award that gets collected tends to depend in part on the kind of damages that juries gave. Compensatory damages include money for lost earnings, medical bills and pain and suffering. Punitive damages are intended to punish and deter bad behavior--but are the least likely to survive appeals intact.

“A large punitive damage award is a red flag that the verdict is going to be reduced,” Lenahan said. “It’s like one of those deductions that the IRS always questions.”

In The Times’ survey, the cases that were settled for more than half of the original award involved only compensatory damages or victims who had high earning power before their accidents.

Other studies have found that the larger the award and the greater the punitive damages, the more vulnerable it is to reduction. A 1987 Rand Corp. study found 93% of jury awards of less than $100,000 were paid, but payment averaged only 57% for 10 cases with verdicts more than $10 million. When courts made the reduction, they cut by more than half, the study found, a larger reduction than when the two sides reached a settlement.

The Times, examining the largest jury awards reported by Jury Verdict Research, obtained settlement amounts or estimates from lawyers or sources familiar with the case. Although the sample was not nationally representative, Duke University law professor Neil Vidmar, citing his and others’ research, said he believes that the relatively small average collected is probably typical for such large awards.

Courts chopped many of the big 1993 awards, sometimes with little explanation. A New York appeals court in September cut a $22-million award to $3 million for a New York man left a paraplegic from a negligent police shooting.

The man had been pursued by nonuniform police officers who had been tipped off that he had a gun. In fact, he had only a pellet gun. During the pursuit, one of the officers shot him.

In slashing the award, the appellate court described the damages as “excessive” and deviating “materially from what would be reasonable compensation.” The plaintiff is still weighing whether to accept $3 million or go to trial again.

The scrutiny from appellate courts is often mild compared to the disdain that huge awards generate among the public. The $2.9 million awarded to an elderly woman who received severe burns after spilling McDonald’s coffee in her lap became fodder for tort reformers and talk show hosts. Unbeknown to most, the award was reduced by a court and settled for less than $640,000.

After winning a $15-million malpractice award in 1993 for a lower leg amputation, Lenahan said, several acquaintances reproached him, grumbling, “ ‘There is no way a leg is worth $15 million.’

“So I would ask them, ‘How much would you want to have your leg amputated?’ ”

Donald Hagler, 64, says reductions by courts dilute the messages that the jury wanted to send. A laconic man of simple tastes, Hagler had never been to court when he filed a libel suit against Proctor & Gamble Manufacturing Co. He worked for the company for 41 years at a Dallas plant.

The plant was shutting down when the company fired Hagler for theft, accusing him of stealing a $35 telephone as he left the plant one night. Notices of his termination for theft were posted on company bulletin boards.

“I spent 41 years building a reputation for honesty and integrity, and they tore it down with one lie,” he said.

Witnesses at the 1993 trial testified that the phone had indeed belonged to Hagler, as he had claimed, and the jury decided that the company knew its charge was false even though the company insisted that it had acted appropriately. Jurors awarded Hagler $15.6 million, most of it in punitive damages.

But an appellate court, ruling that the evidence failed to prove the legal standard of actual malice by the company, ordered a retrial. In the end, Hagler received less than $1.55 million, according to a source familiar with the case, a settlement that was not substantially more than he would have taken home had he been allowed to retire. He said he wishes that the company had been more severely punished.

“Fifteen million dollars wouldn’t have made a lot of difference in my life,” said Hagler, who spends much of his time fishing, “but I was after justice.”

Yet even reduced awards bring change. McDonald’s, which had received many complaints about coffee temperature, finally lowered it after the award to the woman who had been painfully burned.

In medical malpractice cases, the awards and even sometimes the mere filing of the suits lead to personnel and policy changes. “Monetary costs change behavior,” Fagel said. “Whittled down to anything over a million dollars is still a significant amount.”

Minnesota resident Jennifer Mikkleson wanted vindication more than money when she filed suit against an uncle who had molested her for more than nine years when she was a child. Too many years had passed to prosecute him criminally, but a jury that heard her story in 1993 ordered him to pay her $30.45 million, all but $450,000 in punitive damages.

A judge set aside the punitive damage portion, and in a second trial, a jury awarded only $500,000 in punitive damages. Whether she will ever collect the full $950,000 is doubtful.

“This guy is not a multimillionaire,” said James C. Wicka, her lawyer. “We are just garnishing away.”

Still, Mikkleson is glad she went to court. “She knows this is about sending a message,” Wicka said.

In a growing number of cases, the relevance of the jury verdict is undermined even before it is delivered. Lawyers hedge their bets and reduce their risks by making a so-called “high-low” agreement: The defense agrees to pay a minimum amount and the plaintiff promises to accept a maximum, regardless of what the jury does. If the jury returns an award between that spread, that is what the plaintiff gets.

“It’s kind of like insurance on a 21 hand at the blackjack table,” said Rita Burks, administrator for the Houston plaintiffs firm of Friedman & Gold.

Her firm made one of these agreements during a 1992 Houston trial over a fatal swimming pool accident. Because of a faulty pool gate at an apartment complex, a girl drowned and her sister was left in a permanent vegetative state. A TV film crew had happened by the accident and broadcast the wrenching scene from the pool as the girls were dragged out, footage subsequently shown to a jury.

But the family’s case was complicated by the girls’ mother, a topless dancer who was in her boyfriend’s bedroom when the children left his apartment. Would the jury blame her instead of the apartment owner?

While the jury deliberated, the opposing lawyers decided that the defendant would have to pay a minimum of $4 million and a maximum of $17 million, a “high-low” agreement.

“If the jury didn’t buy our story at all,” Burks said, “at least we could get our client $4 million.”

The jury awarded $84 million, and the brain-damaged child and her mother received the pre-negotiated $17 million, the amount of insurance carried by the apartment owner.

Such pacts have raised ethical concerns. Critics say they mislead the jury and compromise the integrity of the judicial system by presenting the court with a false question. Defenders contend that they reduce litigation by preventing appeals while still using a jury as a guide.

Even without such agreements or court reductions, awards are vulnerable to the vagaries of collection. In the October Yale Law Journal, Cornell University law professor Lynn M. LoPucki predicted the “death of liability” as companies learn to protect assets from judgments.

Although lawyers generally investigate the amount of insurance a defendant may have before filing a lawsuit, fights over liability often move into appeals courts, consuming years and raising legal costs. Sometimes insurance companies go bankrupt.

A Texas family learned the difficulty of collection after losing a 4-year-old daughter to malpractice. She had been given a sedative overdose during a routine examination for a urinary tract infection.

The jury that heard her story awarded her family $34.6 million from a clinic where the overdose was given. But the clinic’s owner had insulated his corporation from liability, and an appellate court ruled that he could not be held personally liable.

“He made sure that the corporation had no assets in it, and the corporation had no insurance which would cover it for acts of professional negligence,” said Les Weisbrod, the family’s attorney.

Not a cent of the judgment was collected.