Kentucky

Introduction

Kentucky once again finds itself on the Watch List after a one-year hiatus. Trial courts across the state award nuclear verdicts® and issue liability-expanding decisions. The excessive lawsuit abuse occurring in the state burdens Kentucky households by $2,608, on average.

Nuclear Verdicts® Becoming More Prevalent

In March 2024, a Grayson County jury awarded $22.6 million to a subcontractor’s wife and three construction workers in a negligence action arising out of an accident at a construction site. Following that verdict, a Greenup County jury awarded $22 million against a personal care home after a resident suffered a fatal brain bleed following a fall. The facility promptly notified the resident’s son — an attorney — who came in person to assess his father’s condition.

When symptoms worsened, staff immediately transported the resident to the emergency room. Nonetheless, the plaintiff’s estate pursued claims of negligence and inadequate care, resulting in the substantial award.

More recently, in March 2025, a Lyon County jury returned an $11.08 million verdict against a waste management company after debris allegedly fell from one of its trucks onto a highway. Although the driver testified that the load had been properly secured and the latch likely loosened during normal travel, several motorcyclists struck the debris and crashed, suing the company for negligence. Despite modest medical expenses — ranging from just $2,307 to $61,128 — each plaintiff received several million dollars in noneconomic damages.

Expansion of Vicarious Liability

The Jefferson County Circuit Court recently crafted a sweeping new vicarious liability standard for heavy motor trucks in Kentucky — while simultaneously handing down a staggering $164 million verdict.

The case arose from an accident in which a woman was rear-ended by a tow truck and sustained permanent injuries. The plaintiff sued both the driver and the towing company for negligence. However, what has drawn widespread concern is that the plaintiff was also permitted to sue GEICO — simply because the insurer had a contract with the towing company to provide roadside assistance to GEICO-insured drivers. This inclusion stretched far beyond the traditional independent contractor relationship that typically limits liability. Even more troubling, there was no confirmation that the tow truck was responding to a GEICO roadside assistance call at the time of the accident. A single, uncertain witness provided the only tenuous link between GEICO and the incident.

The court ruled that the nature of the relationship between GEICO and the towing company was a question for the jury, yet simultaneously paved the way for GEICO’s liability. Acknowledging that employers are generally not liable for the actions of independent contractors, the trial court invoked a narrow exception for “inherently dangerous” activities. In a significant departure from precedent, the court declared that operating heavy motor trucks qualifies as inherently dangerous — an interpretation traditionally reserved for activities involving explosives, fire, or other extreme risks. Relying on decades-old statutory language rather than modern case law, the court expanded this exception to include all heavy motor trucks, not just tow trucks, as posing inherent danger to the public.

The American Tort Reform Association (ATRA) filed an amicus curiae brief urging the appellate court to reject the trial court’s flawed reasoning. The brief emphasized that Kentucky precedent has consistently declined to classify even hazardous trucking activities — such as asphalt hauling — as inherently dangerous. The trial court’s overreach, ATRA argued, invites unwarranted liability and contradicts well-established doctrine.

If upheld, this decision could have sweeping consequences. Plaintiffs could begin targeting distant third-party insurers that had no direct involvement in an incident, leading to a surge in nuclear verdicts®. The resulting uncertainty and financial exposure could drive up insurance costs for trucking companies and motorists alike, with the heaviest burden falling on working-class Kentuckians who may be forced to scale back insurance coverage due to rising premiums.

Responding to Suspicious Claims

ATRF has kept a watchful eye on a case slowly making its way through the Kentucky court system that could impact the willingness of businesses and insurers to investigate and report potentially fraudulent claims.

In 2022, a Greenup County court punished a business for its conscientious investigation and reporting of a suspicious surge of disability claims asserted by its employees by stretching the torts of defamation and tortious interference.

A railroad company, CSX Transportation, Inc. (“CSXT”), had a policy of providing furloughed employees up to four months of benefits, but allowing employees who are out of work due to a medical condition at the time of the furlough to continue to receive benefits for two years. In 2017, a surge of employees attempted to exploit this policy following announcements of expected workforce reductions. CSXT became suspicious when it received an unprecedented number of soft-tissue injury claims filed on behalf of employees by two chiropractors who frequently treated CSXT railroad workers. Initiating an internal inves-tigation, CSXT and its medical director, Dr. Heligman, sent a letter to the Railroad Retirement Board, as well as private insurers and chiropractic boards, alerting them of the potential fraud involving the doctors and the employees. The investigation confirmed CSXT’s concerns, prompting the company to discontinue accepting injury claims submitted by these doctors.

The doctors sued CSXT and Dr. Heligman in 2018, alleging that their letter requesting that other entities investigate the suspicious claims was defamatory, and that they tortiously interfered with the doctors’ business relationships with the employees. A Greenup Circuit Court jury delivered a substantial judgment in favor of the plaintiffs, consisting of $21.4 million in punitive damages and $1.4 million in compensatory damages.

In May 2024, the Kentucky Court of Appeals overturned the verdict. The court held that the trial court erred by failing to instruct the jury that there is defense to liability for defamation (a qualified privilege) that allows people and organizations to communicate freely about matters in which they share a common interest. As Dr. Heligman had communicated his suspicions only to others that shared a common interest in uprooting fraud and regulating unethical activity. The plaintiffs have appealed to the Kentucky Supreme Court. ATRA filed an amicus brief in the case.

Failing to apply this privilege to employers with legitimate suspicions of fraudulent claims will deter businesses and insurers from sharing information, investigating lawsuit abuse, and reporting potential misconduct to those who can take action. Fraudulent claim schemes can arise in a wide range of contexts, from staged accidents to clinics that, working with attorneys, exaggerate injuries or inflate medical bills.

The ability to investigate fraud without a threat of liability for defamation is also particularly important in mass tort litigation, where illegitimate claims can easily get mixed in with viable ones. In fact, another case to watch is a RICO action pending before a federal court in Kentucky. That action, filed by 3M this summer, alleges that three attorneys conspired to file fraudulent lawsuits against the company claiming that its respirators (dust masks) failed to adequately protect workers from black lung disease.

According to the RICO action, the lawyers “solicited coal miners to join cookie-cutter complaints claiming that 3M was to blame for the black lung disease and other injuries allegedly sustained in coal mines and coached them to lie about those allegations.” The complaint alleges that the trio filed 850 of these claims over 18-months in Eastern Kentucky counties knowing some of their clients did not have the disease and others did not use 3M’s masks. The goal, as it often is in mass tort litigation, was to pressure the company to settle the cases en masse, according to the complaint. The lawyers recently filed motions to dismiss, arguing that 3M is simply unhappy about having to defend itself in Kentucky’s state courts and that they are immune from suit for their litigation activity.