May 23, 2023

Texas appeals court upholds $100M judgment against Werner


(Editor’s note: a comment from a Werner executive has been added from the original publication).

Truckload carrier Werner Enterprises has lost a key round in the appeal of a jury decision that saddled it with a now more than $100 million judgment as a result of a 2014 accident that resulted in the death of a child and serious injuries to family members.

Werner plans to appeal.  In a prepared statement, executive vice president and chief legal officer Nathan Meisgeier said: “Werner is disappointed with the court of appeals’ decision, and we plan to seek relief with the Texas Supreme Court.”

In a split en banc decision by Texas’ 14th Court of Appeals issued last week, the judges backed the decision handed down in Harris County in mid-May 2018. That judgment was then valued at $92 million but has since grown because of interest accrued.

The appeal went straight to an en banc hearing at the 14th Court of Appeals after a controversial move in 2021 to skip over the usual three-judge appeals panel. 

Werner already has taken financial hits from the verdict, according to its annual 10-K report filed with the Securities and Exchange Commission earlier this year. But its filing makes clear it is not on the hook for the full amount of the judgment if it makes it through any further appeals.

Werner said in the 10-K that its “maximum liability” for the accident is $10 million, plus interest prejudgment and post-judgement. It also said in the filing that it already has recorded liabilities of $34.1 million and $28.8 million as of the close of 2022 and 2021, respectively. Werner in the filing also said it had recorded a $79.2 million receivable from the insurance company and an offsetting liability in the same amount. 

On the day of the wreck, just after Christmas 2014, Interstate 20 near Odessa, Texas, was hit by freezing rain and black ice. A car driven by Trey Salinas, transporting a woman named Jennifer Blake and her three children, crossed the median strip and hit a truck head-on driven by Werner driver Shiraz Ali, who is a defendant in the case along with Werner (NASDAQ: WERN). 

One of Blake’s children was killed, another was left a quadriplegic and a third child had significant but non-life-threatening injuries. Blake had physical injuries and mild brain injuries. 

Although the lower court found most of the liability fell on Werner and Ali, there was blame assessed against Salinas.

The Court of Appeals decision to uphold the lower court decision was not unanimously agreed to by the full en banc panel of nine judges. There were dissents on some of the findings, even by judges who agreed with other parts of the decision to uphold the lower court decision.

What Werner was fighting on appeal was a series of “relevant facts” that included several points damaging to the truckload carrier at the lower court level. Among those: There was black ice on the highway (described as a “skating rink”); Ali did not reduce his speed by an adequate amount to compensate for the weather; he was not allowed to operate a CB radio, which might have warned him from other drivers on the road about how treacherous the conditions were; highway officers on the road saw Ali’s vehicle traveling at an unsafe speed given the conditions, estimated at 43 mph (and possibly as high as 50 mph) even as a local tow truck driver had slowed to 15 mph; and that the injuries from striking the car driven by Salinas would have been less calamitous if the Werner truck was operating at a slower speed.

The lower court jury, in allocating blame on the questions of who caused the injuries, put 70% of it on Werner, 14% on Ali directly and 16% on Salinas. 

Werner’s arguments on its liability came down to Texas law and how it holds an employer liable for actions taken by its employees. That question was the basis for one of the dissents, submitted by Judge Randy Wilson. 

But the full court was unsparing in agreeing that Werner was negligent in putting Ali on the road — he had been out of driver school for not even seven days — and how it managed him once he got there. 

“The risk was astonishingly high that a newly trained 18-wheeler driver who was not trained to drive in winter weather would cause serious death or injury if confronted with a traffic scenario requiring quick reactions while traveling at approximately 50 miles per hour on a Texas highway with black ice, freezing rain and freezing temperatures during a National Weather Service storm warning,” the judges wrote, noting that Ali had the “second-lowest possible” evaluation score and was driving a “high-pressure (just in time) delivery.”

The end result, the judges wrote, is that “Werner should have reasonably anticipated that it created unreasonable dangers for other travelers who were traveling in treacherous weather conditions.”

Werner should have understood the “foreseeability” of its actions, the judges said. “We do not believe it is too much to ask of Werner to require its drivers from driving unreasonably fast.” 

In what it called a “balancing analysis,” the court laid out various tests. It said the possibility of risk, likelihood of injury and foreseeability were all very high, given such facts as the weather, the high speed of the Werner truck and the driver’s lack of experience.

Offsetting those three things — partially — are the legal tests of “magnitude of burden,” the “social utility of the actor’s conduct” and the “consequence of placing the burden on the defendant,” all of them raised by Werner as defenses. 

Balancing those factors, the judges said, “impose[s] a duty on trucking companies to (1) refrain from preventing their drivers from accessing information about foreseeably dangerous weather conditions while they are driving through those conditions and (2) refrain from assigning inexperienced or low-scoring drivers to high pressure deliveries, such as just in time runs.”

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