After a months-long legal battle, Wabash National successfully lowered a $450 million verdict in punitive damages to $108 million, according to a March 20 securities filing.
A Circuit Court in St. Louis, Missouri, determined that the initial award went against the company’s constitutional rights. The revised ruling comes as business groups decry the increasing prevalence of “nuclear verdicts” related to truck accidents.
However, Wabash is not satisfied with the reduction and believes that the damages “remain abnormally high and the verdict is not supported by the facts or the law,” per a March 24 press release. Wabash said it will continue to evaluate all available legal options.
The case pertains to a 2019 accident in which a passenger vehicle collided with the rear of a Wabash trailer, killing the driver and passenger. While the plaintiff argues that the trailer’s rear guard failed, Wabash contests that the accident occurred long after the trailer was manufactured in compliance with regulations in 2004.
The OEM further claims the jury was unable to hear “critical evidence in the case,” such as the driver’s alleged illegal blood alcohol level or that neither the driver or the passenger were wearing their seatbelts.
“Wabash stands firmly behind the quality and safety of all its products, and this ruling will not prevent the company from continuing to provide its customers with products that contribute to safer roads,” the company said in the March 24 release.
The court’s ruling will change Wabash’s 2024 earnings, as its reported operating loss for the year was previously $356 million. However, that figure included a line item for the original $450 million verdict in punitive damages.
The company also incurred $1 million more in legal expenses than anticipated in Q4, CFO Patrick Keslin said during the company’s Q4 earnings call in January. “Legal expenses related to the verdict will also be a headwind for us in 2025 as it relates to margins,” he said.
Similarly, the company warned in its securities filing that the ultimate outcome of the case “cannot be predicted with any certainty.”
