Erin Andrews’ Realistic Payday

Fox Sports’ Erin Andrews was awarded $55,000,000.00 by a Nashville Jury as damages in her Peephole Video lawsuit against a Hotel, its owner, and the individual who committed the crime. Here are the quick hits:

Plaintiff: Erin Andrews, celebrity Fox Sports’ Reporter previously employed by ESPN
Defendants: Michael David Barrett, stalker and videographer of the peephole video. Windsor Capitol and West End Hotel Partners, owner and operators of the Nashville, TN Marriott.
Venue: State Court (Civil) Trial by Jury in Nashville, TN before Circuit Court Judge Hamilton Gayden
Issue: Are Barrett and Hotel Group liable for Andrews’ economic and non-economic (pain & suffering, mental anguish) damages?
Verdict: Plaintiff’s Verdict in the amount of $55M.  51% liability assigned to Barrett. 49% to Hotel. Lion’s share of damages were non-economic in nature, meant to pay for Andrws’ pain and suffering and mental anguish resulting from the invasion of privacy.

Commentary: Barrett was found 51% liable for his role in the incident, which was filming and releasing the video. Barrett had previously been sentenced to 30 months in prison for interstate stalking. The Hotel Group was found 49% liable likely due to granting Barrett’s request for a room next to Andrews, and for not providing a secure enough environment where his actions could take place. It is very unlikely Andrews will see anywhere close to the $55M.

1. Excessive verdicts are often appealed, reduced.
2. Based on the above, settlements are often reached to avoid Appeal, which are both lengthy and costly.
3. Barrett is likely without many assets, after having served 30 months in prison, and as the adage goes, “you can not bleed a stone.” While Joint and Several liability would normally allow Andrews to look to the Hotel for the full $55M, Tennessee in 2001, significantly limited the doctrine of Joint & Several of Liability, and likely saves the Hotel in this instance, due to Barrett’s intentional and criminal actions.
4. The attorneys handing Ms. Andrews’ case were presumably not working on this case pro bono out of the goodness of their hearts; they want to get PAID. It is likely they were working on a contingency fee basis–that is they get a certain % of any settlement or verdict in Andrews’ favor, as opposed to hourly billing. Tennessee does not have a limit on the % a lawyer can charge as a contingent fee (only that it must be a reasonable fee), but it is likely in the range of 33% – 35% particularly based on Andrews’ level of sophistication as a client.
5. There is also the issue of the Tax Man. Generally, personal injury settlements and awards are non-taxable. However, the IRS might come knocking when there is no physical injuries or illnesses. Without seeing court transcripts or juror forms, it is unclear if Andrews’ mental anguish and emotional distress was tied to any physical ailments. If the anguish stands alone, Uncle Sam may get his cut, somewhere in the neighborhood of 33%.

So, quick math would dictate Andrews’ award against the Hotel is down to $27M, giving up what is owed by the deadbeat Barrett. A conservative settlement would be in the neighborhood of $12-$18M. A settlement of $15M, nets $5M for the trial attorneys in fees, and $10M left for Erin Andrews. The tax issue may or may not be in play, slashing Andrews’ take-home to $6-7M. Not a $55M payday, but certainly not chump change.