Doug Marcello, Chief Legal Officer with Bluewire, joins Dr. Bill Kanasky, Jr. to talk about the latest report from the American Tort Reform Foundation on Judicial Hellholes. Doug shares his analysis of the report including some of the common denominators: anchoring and changing jury demographics in some areas. Bill and Doug also discuss how much of a danger nuclear settlements are and how little attention they are getting, as well as the role and purpose of training manuals and policies and procedures, and suggestions on better ways to manage the topic of safety. Lastly, Doug shares what he is seeing being successful in current litigation such as being proactive, being prepared against Reptile, and provides updates on Bluewire.
Full Episode Transcript
[00:15] Bill Welcome to another edition of the Litigation Psychology Podcast, brought to you by Courtroom Sciences. I am Dr. Bill Kanasky, and with me, a very good friend and regular podcast participant, Mr. Doug Marcello. Doug, the reason we have you on today—well, we have a couple reasons—but I know that you’ve been doing some speaking on this new list of “Judicial Hellholes” that just came out. And now, this list has been around for quite a while, and I know that they update it fairly routinely. And I like to get your thoughts on that because I know I work in a lot of those areas. But when you—when it first came out, kind of what were your initial impressions of this list?
[01:05] Doug You know, having worked with this over the years—and again, this is done by the American Tort Reform Foundation, and each year I’ll interview Lauren Sheets-Jarrell, who’s the person who puts it out, does the work on it—we’ve seen a consistency in the states, but there’s some variations. And when I looked at it this year, Bill, it was kind of like, “Well, let’s step back from the geography and let’s look at kind of the why, the common denominators between some of these.”
The key thing—and one of the things I did in looking at the full report is to go back and kind of refresh myself in terms of: how do you get on the list? And the gist of it is, as you can appreciate, is that these are the jurisdictions… we look for a continuity of jurisprudence across the country. You know, you go to court, you should have at least a decent bandwidth in terms of what the options, what the potential are. These are the ones who are outside of the bandwidth.
And when we look at some of them, some of the states have similar features that put them on this list. For example—and this is right in your wheelhouse—the notion of anchoring. You know, New York and Georgia, in particular, made their way on the list, among other reasons, for the anchoring. And you know, I mean, I was looking forward to your thoughts in terms of what effect that has and how it does it, because we’re fortunate in Pennsylvania; the plaintiff attorney cannot put a number out in front of the jury. Okay? In fact, we can’t even plead a general damage number.
[02:34] Bill That’s huge. Yeah, absolutely, absolutely huge. And a huge advantage to the defense. But yeah, these… and I’m not sure if this is a ranked order list or just a list. I can’t really tell, but I’m looking at it.
[02:56] Doug They rank them, Bill, in terms of, you know, worst to first type of thing. And just like our beloved Phillies, Philadelphia and Pennsylvania came in second. But hey, we’re up there.
[03:08] Bill Very common, very common for those Pennsylvania teams. Number one being Georgia. I mean, now I can see why it’s on the list, because particularly the Atlanta metro area, it’s the birthplace of Reptile Theory. And we know what goes on there, and very tough juries down there. And there have been several nuclear verdicts down there recently. That’s no surprise. I guess I’m surprised that it’s number one, but you know, that’s definitely a place where things are red hot and continue to be red hot. And we see—I get a lot of phone calls from Atlanta. California definitely belongs on the list, you know, usually more Southern California.
Some crazy things happen. I don’t know if you’re aware, and it’s amazing how all these different venues, Doug, have different roles in the way they do things. You know, when you’re a state court in California, particularly like if you’re anywhere near LA, they assign you to like a court on Friday. It could be like one of eight or nine courts with different judges and completely different juries, which makes things very difficult to prepare for as opposed to kind of knowing where you’re going.
Number five, shockingly, which I thought would be number one, Cook County, Illinois. Now notice this is the only—and I want to make sure I look at my list—everything else is a state, okay? So Illinois, meaning Chicago, and then St. Louis are two cities on this list, right? Everything else…
[04:59] Doug Yeah, and Philadelphia Common Pleas. Give us some props here.
[05:03] Bill I’m sorry!
[05:05] Doug And that’s the same thing they do in Philadelphia is that they will say, “Look, you’re going to be—you can have a trial this month. We’ll give you theoretically 24 hours notice on that as to when, where, and how.” But yeah, you get some of these, and some of it’s based on reputation. And I’ve had discussions with both Philadelphia judges, clients, etc., that, you know, everybody says, “You know, we want to get to Philadelphia.” Philadelphia jury and verdicts are somewhat changing in that degree. And it’s a lot of fair amounts of demographics in Philadelphia where you have a reduction in union labor, you have an increase in gentrification.
So you know, as one retired judge told me one time, Philadelphia juries are known for being more generous than others, but if you try to pull something on them, they’ll punish you. And if you catch the plaintiff in trying to be dishonest or make them take advantage of them, they’re going to react extremely negatively on the flip side of that one.
[06:09] Bill I totally agree. And living in Chicago for 15 years and consulting on hundreds of cases in that area, yeah, it’s dangerous. At the same time, none of my clients have been here for nuclear verdicts because I think that we did it the right way. I mean, when you get a case and you’re in one of these eight venues, I mean, you have to handle that file differently, right?
[06:38] Doug Well yeah, you know, I handle it pretty much the same way, Bill, but here’s the deal: we’re going to analyze it differently because we know the potential is there. There is a potential detonation there. So we’ve got to go through, work through it just like we would another, prepare in terms of the evidence. But at the same time, in terms of our analysis and perhaps for potential settlement and all, we’ll reevaluate it because of that.
You know, I interviewed Rebecca Brewster actually a couple years ago when their study first came out, and she said, “You know, one of the factors is like real estate: location, location, location.” And that’s what it is with these. This American Tort Reform Foundation study points to a September 2022 Chamber of Commerce study in which they did a review of nuclear verdicts. And they point out that while they do it on a state-by-state basis, they point you out and drill down within that the number and the high percentage of Pennsylvania that are in Philadelphia, Illinois that are in Cook County. And where you’re sitting right now, Bill, is the number one state from that study for nuclear verdicts is Florida.
[07:51] Bill Yeah, I mean, looking at the list. So the final ranking here: eight is St. Louis. St. Louis is a cesspool. That’s a very, very tough venue and I think getting worse. I think St. Louis may be working its way up that list. Number seven: Louisiana. Yeah, that whole state. I did several speeches there this year, and the defense attorneys were telling me there’s—I mean, between the judges and the jurors, I mean, everybody’s against them. That’s a very, very tough state to be in. Number six: South Carolina. It says specifically related to asbestos. I don’t do much work in South Carolina, so I’m not really sure about that.
But you know, take away this list, and something I said—I was doing a speech yesterday in Detroit, which I’m shocked is not on this list. But I was talking to some folks in Detroit and telling them, you know, nuclear verdicts statistically are very rare. Statistically, right? And the real financial problem is getting caught up in the “nuclear settlement,” where you’re having your clients having to write a very large check to avoid the courtroom or avoid one of these venues. And I don’t think that’s getting enough attention. What are your thoughts on that? Because it’s not as sexy as a nuclear verdict.
[09:18] Doug And Bill, you’ve been saying that for years, and I agree. When we did the interviews for the ATA presentation on that, that was one of the big points you raised, and something I’ve quoted you on going forward. It is on both ends of the spectrum. One of the things that’s overlooked—it doesn’t get the press because it doesn’t have that headline capacity—it’s the “death by a thousand cuts” by every company out there.
The insurance rates—and the actuary studies laid it out—the insurance rates are going up. In order to—you’re not going to reduce your premium—but in order to slow the increase, you increase your retention, your deductible. And those either questionable liabilities or “no injury” cases that the folks on the billboard still take, you know, they’ll leverage 25 to 50 thousand dollars for not being entitled to anything out of these companies. It’s the payment in order to avoid the cost of defense; it just perpetuates it. So at the lower end, there’s a continuing hemorrhage of these cases.
But yeah, at the upper end, a lot of it is just by avoidance. You know, “What can we do to buy out of this?” And I think it’s a factor of a skewed market. And one of the things that the Chamber of Commerce study points out is… between that and the actuary study, there’s an actuary study on insurance that said one of the biggest factors we have now is “social inflation.” You know, we see the ballplayers getting huge salaries, musicians getting huge salaries, we become just used to these numbers. Chamber of Commerce study then compounds that and goes, “Yeah, then we get these verdicts that most of them, or a lot of them, there’s never going to be a recovery on them. They’re never going to get paid.” But it is put out there as if that’s the market value of a verdict against a trucking company. And that’s where a lot of that comes in.
[11:18] Bill That’s a nice transition. Let’s transition to the transportation and trucking industry. You and I, extraordinarily active in that. What, as far as the industry goes, some updates? We’ve been very active with the Mongoose training. So some positive updates. What I see is many, and I mean many, trucking companies want to start to be proactive and they want to be ready for litigation. They want to tie up loose ends.
On many of these seminars that I do, I’m telling—like I did it yesterday—I’m like, “Everybody needs to go home today or go to your office. Two things that you’re going to look at: first, you’re going to go to your website and everything I taught you today, you need to evaluate your website. Number one. Number two, you’re going to get your internal documents, your policies, procedures, your training manuals, and really look at those.” Because the language in those two areas are used against you.
Doug, what is your thought? Because one of the questions that comes up constantly is—and I have thoughts, but I want to get the legal perspective from you—somebody in the audience will raise their hand, and typically it’s an owner or somebody important in a trucking company, and they’ll say, “Like, why do I have a policy and procedure or a training manual that’s 75 pages long? Like, do I really need all this stuff?” And my answer is no, but can you kind of handle that from the legal perspective of why not only is that not necessary, but you’re just providing ammunition to your adversary?
[13:01] Doug Yeah, absolutely. And I think too many times, Bill, people feel that there’s a need to create a document that is a speaking—or that they can wave and say, “This is who we are, this is what we believe in,” etc., rather than an effective document to promote safety within the company.
A couple of things: you know, there’s a company out there that I heard—I thought it was a great idea—they no longer have a manual; they have six principles. And that’s all you need. And it’s almost like if you take—folks in trucking are familiar with the Smith System—if you take those over to the safety side and say, “Look, you do these six things, boom, we’re home free.” It is easy. It’s understandable.
In today’s world, Bill, how many people sit down and read the manual? Nobody. Nobody does it. And you know, I can’t tell you how many times safety directors will go, “That’s in there? No, we don’t have that.” “Yeah, it’s in there.”
One of the things I spoke to the ATA about a couple years ago is maybe what we want to do is look at new ways of conveying this information. Short videos for today’s drivers, today’s generation. Hershey Medical School published almost like a graphic novel type of presentation for some of their humanities courses. There’s a lot of different ways to approach that. But yeah, I think what you have to look at is—and you and I have talked about this before—safety is ultimately aspirational. And the failure to hit that total compliance… we want to shoot for that, but we still got to do as the best we can on it. It’s really aspirational; it’s not doctrinal.
[14:45] Bill Yeah, and so I think that’s something I’ve seen: a big shift in everybody getting on board with that. What things are you seeing out there as we jump into 2023 and maybe some of the things and messages that you personally want to accomplish in the industry?
[15:04] Doug Big thing, and you hit it on the head: it’s got to be proactive. You know, it’s like we started out talking about football season. You can win those games in August. If you haven’t done the work in August, when it comes gametime, it doesn’t make any difference. And that’s what we’ve got to get out there and do.
Reptile Theory—you know, what you’re doing with the Mongoose Theory and getting out there in terms of how to deal with the situations they have and address those—is invaluable to the industry. What I think a lot of companies have to do is to look at, you know, okay, before the accident, what is it we need to do to get ourselves to eliminate the vulnerabilities? Because the Reptile Theory feeds on vulnerabilities. And when you go back to the book, you know, if it’s just an accident, if there’s no systemic failures, it’s not going to work. They tell you in the Reptile Theory book: plaintiff attorney, don’t try it, it’s not going to work then.
So that’s the thing to do is to look for that. There’s a lot of people we run into, Bill, that are afraid to look. You know, it’s like, “If we find it, it’s discoverable.” It’s there! Just because you don’t look for it doesn’t mean the plaintiff’s not going to find it. They’re giving courses on that. So you got to get out there and get ahead of the game. Be proactive is exactly like you said.
[16:18] Bill I think that’s the theme for 2023. Let’s wrap this up with Bluewire. What’s going on with Bluewire? I know you guys finished the year very strong. What’s on the horizon for Bluewire in 2023?
[16:34] Doug A couple things. Glad you asked, Bill. Number one, you know, it’s hard to imagine, but we’re not even a year out with the first product. The Motor Carrier product is nine months that we’ve had that to do an analysis, use AI, use intelligence and look for those vulnerabilities, identify them so you can cure them. The most recent thing—and again, it’s amazing to think this has only been in the market three months—is what we call the Gap Score. And we score with public data all 780,000 carriers. The use in the inquiry from that has come from freight brokers, insurance brokers, captives, groups who are looking at particularly… keep an eye in terms of: how are members doing? How are my insurers doing? Is there slippage there? So we can be proactive, get ahead of that. So in both fronts, Bluewire’s been really going and things have really taken traction on that.
[17:25] Bill Excellent. Final question, because I do talk about the insurance industry a lot during my speeches and during this podcast, and I try to keep it factual, right? And some people get mad at me. I have insurance people call me and they go, “You’ve nailed it. You’re 100% correct, just no one wants to talk about it.” But what I will say is I have noticed a shift in the insurance industry. They’ve kind of woken up a little bit with this proactive, you know, more type of model, which kind of goes against the traditional model, which is more of a cost-savings, “wait it out” model. But yeah, again, the reptile folks and the rest of the plaintiff’s bar totally taken advantage of that system. I know that through Bluewire and your practice, you’re very involved and talkative with the insurance industry. Again, as we approach the new year, what’s the temperature you’re getting from the insurance folks?
[18:23] Doug It’s coming, Bill. And I think they’re realizing on both ends of the spectrum. Number one: the nuclear verdicts. One of the things that I propound—and you know, it just seems to be so strange—but insurance companies coming around: if we have an argument on liability and we’ve suffered damages and there’s a possibility they’re going to drag us into one of those hellholes, sue them first. Lock jurisdiction in where the accident happened—more conservative jurisdiction.
The flip side of it is also those death by a thousand cuts. Let’s get aggressive right after the accident happens. Don’t just get the letter, a rep, put it in your file, or let them ring the bell with medical damages. Let’s push for a pre-suit IME. You know, there’s no loss there. Either they’re going to let us do an IME or they’re going to deny it, and we put them in a position they’ve got to explain: what was the problem? You wouldn’t let us examine your person if they’re really hurt? Push for early medical bills, early surveillance. Get out there early. Because as Randy Gillyard down in Louisiana referred to it, that “dark period” where we’re sitting there while they’re just building up the bills that are going to be the basis for them to make a claim on the damages. We got to get after them. More insurance companies are realizing getting proactive on that.
[19:39] Bill Good. And anytime I say it’s the last question, it’s never the last question.
[19:42] Dougl I know you don’t, I appreciate it.
[19:46] Bill But this is my last question. Dr. Steve Wood, oftentimes my co-host on this podcast… we’re going to do a podcast on this topic, and we’re also going to author a paper that will be published in Law360. By the way, big announcement: Law360 has… we now have an agreement to write for them monthly. So Dr. Wood and I will be writing monthly for them in a column on litigation psychology. So we’re thrilled.
One of our first articles is going to be the concept of confirmation bias. Now everybody talks about confirmation bias with jurors, right? Here’s the thing—and I published an article in 2014 on this—at the end of it, I tagged on two paragraphs to pretty much say, “By the way, confirmation bias is a human thing, not a juror thing.” And it happens with attorneys and it happens with claims people, right? And you see the plaintiff attorney convinced they have a winner when they haven’t really—they don’t have the evidence, the mock jury evidence—but they stick with them and then they lose, right?
But at the same time, you have both defense counsel but also what I see is claims people at insurance companies that refuse even after a mock trial or after a focus group where we’re like, “Hey listen, you’re going to get freaking hammered here.” They refuse to because they’re emotionally invested. Tell me about your experience with that and how you communicate—not just you looking in the mirror and being radically honest with yourself on the case, but then secondly, communicating with your client to make sure they are looking at this thing accurately and not emotionally.
[21:33] Doug Difficult from both ends of the spectrum. The ones who are just convinced, “We don’t care, we’re going to win this thing.” My job is—I got the greatest job in the world. I go to the table and I’m at the table playing with other people’s money. I got the house money here. But at the end of the day, my responsibility is to say, “Look, this is where you’re at. This is where I think it’s going to come in.” And I understand your position, I’m glad to try the case—that’s what I’m here for and that’s what I enjoy doing—but just to know, to go through this…
So I’m responsible to make sure that they know that either they’re underevaluating the case—there are factors there. “Yeah, you’re right, the facts are on our side, but there’s emotion here. You know, somebody was killed and we’re going to have the whole family come in here.” The flip side is, “Hey look, I understand that we’re in a certain jurisdiction or I understand we’re here, but here are the facts. We got a good case. So maybe there’s potential there, but I think we can hold it down and we got a shot. We got a puncher’s shot on this thing.”
So it goes with both ends. My responsibility is to make sure that I convey it. They might not listen, they might not hear, but again, you say looking in the mirror—I look in the mirror, I got to make sure that I do that.
[22:52] Bill And I do think the value of the mock jury research…
[22:54] Doug Oh, absolutely.
[22:56] Bill It’s a good kind of third party. “Hey, you know, let’s take our emotion out. Let’s see what people in this venue are telling us.”
[23:02] Doug And even beyond that, Bill, my last answer to your last question is to learn from that mock jury research and say, “Hey look, we can change it to get to where you think or what we need to do on it.” And that’s invaluable.
[23:21] Bill Great to have you as always. Thank you to our audience. Thank you very much for participating in this episode of the Litigation Psychology Podcast, brought to you by Courtroom Sciences.
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