Public Service Announcement: Lawsuits Are Not Worth The Amount Specified In The Ad Damnum Clause


Prayer for Relief

Recently, the Michigan Uber driver accused of murdering six people during a shooting rampage filed a lawsuit against Uber alleging that the transportation company is responsible for his incarceration. Was the headline “Accused Murderer Files Two-Page, Handwritten Lawsuit Alleging that Uber Ruined His Life”? For some media outlets, yes, for others, no. Various media outlets reported the story under headlines such as “Michigan driver charged with murder files $10 million lawsuit against Uber.” When Erin Andrews’ lawyers filed an amended complaint specifying that Andrews sought $75 million in damages, some media outlets reported the story under headlines such as “DWTS’ Erin Andrews files 75 Million Dollar Nashville lawsuit.” Hulk Hogan’s lawsuit against Gawker has been similarly reported as the “$100 million Hulk Hogan vs. Gawker lawsuit.” In our opinion, the goal is to suggest that these cases will ultimately be worth this much money in order to illicit eye rolls and comments regarding jackpot justice. The end result is that negative stereotypes regarding lawyers and the legal system are unfairly reinforced. We would ask our readers to ignore these misleading headlines and to see them for what they really are.

What is are these dollar figures based on? They are based upon the “ad damnum clause” in the Plaintiff’s complaint, which in some states, is used to specify an amount of money sought by the Plaintiff. In most states, this number is meaningless. In some states, Plaintiffs must specify that the amount is greater or less than $75,000.00, because if damages exceed $75,000.00, the amount in controversy requirement is met for federal court jurisdiction (if the parties on opposite sides of the lawsuit are completely diverse). In some states, Plaintiffs are not allowed to specify an amount of damages. In states in which a specific amount may be pleaded in the complaint, Plaintiffs occasionally include an exorbitant amount in order to generate publicity for the lawsuit. The bottom line, though, is that a lawsuit is worth what a jury awards (or the judge in the case of a bench trial), not a penny more, not a penny less, and further, the proportion of the jury’s (or judge’s) award that can actually be collected.

In the Erin Andrews case, the “$75 million lawsuit” tag turned out to be misleading. The Plaintiff’s attorney did not ask the jury for a specific amount of money in closing, and the jury ultimately awarded $55 million. Of the $55 million, the hotel owner defendant was required to pay $26 million when its share of the verdict was reduced proportionate to its percentage of fault. The $28 million portion of the verdict that the jury assigned to the individual defendant (who is currently serving time in prison) might as well be forgotten, as that will never be collected. With the uncertainty of what will happen on appeal, and potentially applicable insurance policy limits that are well below the amount awarded, the case will likely settle for significantly less than the jury awarded. As to the Uber driver, there is no cause of action for ruining someone’s life by not inviting them to company parties. That lawsuit will likely be dismissed almost immediately, despite the request for $10 million on the handwritten complaint.

The takeaway: We urge our readers to look past these misleading headlines, and we urge the media to be more accurate when reporting on civil lawsuits. The reality is that Plaintiffs can ask for whatever they want, and the Plaintiff’s desired outcome is certainly something to consider in civil lawsuits. However, Defendants have the ability to hire lawyers who are able to chip away at the Plaintiff’s case during discovery, and to present the facts favorable to the Defendant at trial. And good defense lawyers can significantly reduce the amount actually awarded or otherwise paid, occasionally to zero.

Let’s not describe lawsuits by their ad damnum clauses.

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