Legal Decisions of Interest to Forensic Economists










Court Decisions of Special Interest to Forensic Economists

This is a list of legal decisions that are likely to be of special interest to forensic economists or attorneys who are knowledgeable about forensic economics. It has been compiled by a forensic economist and will not indicate the precedential value of the cases being cited. The list is a work-in-progress, with decisions currently reflecting the research interests of Thomas R. Ireland, who is the webmaster for this page. Other forensic economists have been invited to submit cases they have encountered as important in their practices, as well. Case descriptions should be checked for accuracy before being used. Although efforts will continue to rectify that fact, important cases may not be included in this list. Decisions are listed alphabetically for each jurisdiction rather than chronologically, which means that some decisions that are listed are of historical interest, but are no longer good law. These same descriptions decisions are posted at a website maintained at Denison University. That website has several alternative organizational frameworks, but is not divided into as many subsections as this website. To get to that website, click on Denison Forensics.

Decision are listed by venue, beginning with the United States Supreme Court, then the United States Tax Court, followed by decisions within each of the Federal Circuits, and then decisions within the 50 states and territories. Federal district court decisions are listed within the circuits in which those district courts reside. Thus, federal district court decisions interpreting federal law include district court decisions from Maine, Massachusetts, New Hampshire, Puerto Rico, and Rhode Island, and so forth for the other circuits.

While the general structure is to list decisions by jurisdiction, federal decisions that intepret a given state's law will be listed under the state whose law is being interpreted. In some instances, as in Smith v. Ingersoll-Rand, a decision is relevant to both federal and New Mexico law. That case is listed under Federal Courts of Appeal, with a note to see this decision listed under New Mexico. The number of subcategories is limited and may be expanded in the future. Cases are listed alphabetically within each subcategory. Currently, subcategories are:

                        Basis Income and Fringe Benefits for Projecting Earnings Loss
                        Life and Worklife Expectancies
                        Wage Growth Rates and Discount Rates
                        Standards for Recovery in Wrongful Death
                        Household Services
                        Life Care Plans 
                        Lost Chance of Recovery or Survival
                        Collateral Source
                        Treatment of Taxes
                        Annuities, Periodic Payments and Reversionary Trusts
                        Legal Procedure
                        FELA/Maritime
                        Hedonic Damages and Emotional Services
                        Wrongful Birth, Wrongful Pregnancy, Wrongful Life
                        Admission of Expert Testimony
                        Wrongful Termination
                        Miscellaneous 

United States Supreme Court

     Basis Income and Fringe Benefits for Projecting Earnings Loss

Flemming v. Nestor, 363 U.S. 603 (1960). Social Security benefits depend on the will of Congress and should not be included in projections of damages based on lost earnings.

Hisquierdo v. Hisquierdo, 439 U.S. 572; 99 S.Ct. 802; 59 L. Ed. 2d (1979). In a divorce action, Mrs. Hisquierdo sought an award for her spousal annuity under the Railroad Retirement Board Act. The California Supreme Court had ruled that she was entitled to such an award.  The U. S. Supreme Court reversed and ruled that a spousal annuity could not be anticipated under the Railroad Retirement Act of 1974 (45 USCS 231 et seq.) and that the federal constitution took precedence over the community property standards in California. This decision has been cited in FELA litigation as indicating that a claim for losses based on a spousal annuity, resulting from an injury, are precluded from consideration. 

Richardson v. Belcher, 404 U.S. 78 (1971). No right in Social Security benefits exist and projections of lost Social Security benefits should not be made in federal cases.

Weinberger v. Wiesenfeld, 420 U.S. 636 (1975). Social Security benefits are non contractual because "each worker's benefits are not dependent on the degree to which he was called upon to support the system by taxation.

            Disability

Toyota Motor Manufacturing v. Williams, 122 S.Ct. 681 (2002).  This ruling of the United States Supreme Court makes it clear that the Gamboa disability tables cannot be used in ADA cases because “It is insufficient for individuals attempting to prove disability statistics under this test to merely submit evidence of a medical diagnosis of impairment.” Disability must be analyzed in a “case by case manner” “in terms of their own experience,” in terms of “the effect of that impairment on the life of the individual” (quotes from the slip opinion).  Submitted by Gary Skoog.

            Life Care

Arkansas Dep’t of Heath & Human Servs. v. Ahlborn, 2006 U.S. LEXIS 3455 (U.S. 2006). This decision affirmed a decision of the 8th Circuit to the effect that the ADHS was only entitled to recover the portion of a judgment awarded to Heidi Ahlborn for medical services previously covered by Medicaid. The parties stipulated that Ahlborn’s entire claim was reasonably valued at $3,040,708.12 . She settled for one sixth of that amount. The parties stipulated that if Ahlborn’s construction of federal law was held to be correct, AHDS would only be entitled to one sixth of that amount, or $35,581.47. The District Court held that AHDS was entitled to the full amount of medical expenses covered by Medicaid, or $215,645.30. The 8th Circuit reversed and held that Ahlborn was correct.  “When a Medicaid recipient in Arkansas obtains a tort settlement following payment of medical costs on her behalf by Medicaid, Arkansas law automatically imposes a lien on the settlement in an amount equal to Medicaid's costs. When that amount exceeds the portion of the settlement that represents medical costs, satisfaction of the State's lien requires payment out of proceeds meant to compensate the recipient for damages distinct from medical costs--like pain and suffering, lost wages, and loss of future earnings. The Court of Appeals for the Eighth Circuit held that this statutory lien contravened federal law and was therefore unenforceable.” Other courts had held differently. In a unanimous vote, the U.S. Supreme Court upheld the decision of the 8th Circuit. Suggested by David Jones.

              Life and Worklife Expectancies

Vicksburg and Meridian Railroad Company v. Putnam, 118 U.S. 545; 7 S. Ct. 1 (1886). “In an action for a personal injury, the plaintiff is entitled to recover compensation, so far as it is susceptible of an estimate in money, for the loss and damage caused to him by the defendant’s negligence, including not only expenses incurred for medical attendance, and a reasonable sum for his pain and suffering, but also a fair recompense for the loss of what he would otherwise have earned in his trade or profession, and has been deprived of the capacity of earning, by the wrongful act of the defendant. . . In order to assist the jury in making such an estimate, standard life and annuity tables, showing at any age the probable duration of life, and the present value of a life annuity, are competent evidence.” 

              Treatment of Taxes

Commissioner of Internal Revenue v. Banks, 2005 U.S. LEXIS 1370; 73 U.S.L.W. 4117; 2005 WL 123825 (U.S. 2005). The United States Supreme Court held that prior to the American Jobs Creation Act of 2004, the portion of an award for lost earnings in a termination case must be treated as income for the purposes of taxation, thus reversing decisions of the 9th and 6th Circuits and supporting decisions of a number of other circuits. Under federal tax law before the American Jobs Creation Act of 2004, it was possible for applications of the Alternative Minimum Tax (AMT) to result in an award winner being worse off after an award than if a case had never been filed. After that Act, award winners can deduct attorneys fees before any application of taxes, including the AMT, occurs, eliminating the possibility of an award winner being made worse off after an award. However, the AJCA was not made retroactive and does not apply to previous awards.

Social Security Board v. Nierotko, 327 U.S. 358; 66 S. Ct. 637 (1946).  This decision held that a worker was entitled to include quarters for which pay was received in the form of back pay as quarters to be counted toward the 40 quarters needed for Social Security eligibility. This means that a forensic economic expert does not have to calculate the number of quarters as a possible source of loss to the plaintiff.  It also held that the IRS rule then in place that Social Security taxes should be based on earnings for years awarded back pay. This has since been changed to the year in which an award is received, as also upheld by the Supreme Court in United States v. English, 532 U.S. 200; 121 S. Ct 1433 (2001).       

United States v. Cleveland Indians Baseball Company, 532 U.S. 200; 121 S. Ct 1433 (2001). This decision held that for FICA (Social Security) and FUTA (Medicare) tax purposes, back wages should be attributed to the year in which they are actually paid, reversing a decision of the 6th Circuit on this issue.”  In other words, all back pay received in a current year is taxable under FICA and FUTA in the current year. This is parallel to how other income taxes are applied to back pay awards. The Court also said (quoting a brief from the “Company”): “Social security tax ‘contributions,’unlike private pension contributions, do not create a property right to benefits against the government, and wages rather than [tax] contributions are the statutory basis for calculating an individual’s benefits. Suggested by Jerry Martin.

          FELA/Maritime Cases

Chesapeake & Ohio R. Co. v. Kelly, 241 U.S. 485, 36 S.Ct. 630, 60 L.Ed. 1117 (1916). This decision establishes the principles that future damages should be reduced to present value, saying: “the putting out of money at interest is at this day so common a matter that ordinarily it cannot be excluded from consideration in determining the present equivalent of future payments, since a reasonable man, even from selfish motives, would probably gain some money by way of interest on the money recovered.” The decision gives as examples savings banks  for moderate sums at interest, possible sale of annuities, and, “for larger sums, state and municipal bonds and other securities of almost equal standing.” The court goes on to say that the kinds of investments used should not require unusual skill on the part of injured persons and that the rate of interest to be adopted should take into account “the best and safest investments, and those which require the least care (which) yield only a moderate return.” This is the source of the “best and safest” language in the Pfeifer decision, which quotes this decision. 

Eichel v. New York Central Railroad Co., 375 U.S. 253 (1963). Fact of disability payments cannot be introduced, even to demonstrate the extent and duration of the disability suffered by a plaintiff. Benefits received are not a function of payments by employer and thus cannot be considered in mitigation of lost earnings. "The Railroad Retirement Act is substantially a Social Security Act for employees of common carriers . . . The benefits received under such a system of social legislation are not directly attributable to the contributions of the employer, so they cannot be considered in mitigation of the damages caused by the employer." 

Jones & Laughlin Steel Corp. v. Pfeifer, 103 S. Ct 2541, or 462 U.S. 523 (1983). This is the single most important case in the field of forensic economics. Justice Steven delivered the opinion of the United States Supreme Court, which sets out a framework for how damages in a personal injury case should be presented by an economic expert.  The court is very careful not to specify a particular set of methods, as urged on it by various amici briefs that were filed, saying: “Because our review of the foregoing cases leads us to draw three conclusions. First, by its very nature the calculation of an award for lost earnings must be a rough approximation. Because a lost stream can never be predicted wtih complete confidence, any lump sum represents only a ‘rough and ready’ effort to put the plaintiff in the position he would have been in if not injured. Second, sustained price inflation can make the award substantially less precise. Inflation’s current magnitude and unpredictability create a substantial risk that the damages award will prove to have little relation to the lost wages it purports to replace. Third, the question of lost earnings can arise in many different contexts. In some sectors of the economy, it is far easier to assemble evidence of an individual’s most likely career path than others.”  Thus, instead of providing specific methods, the court provides a list of the issues that must be addressed in the report and the general framework for the methodologies that can be used to address those issues. The coverage in this case is quite detailed and multiple readings are recommended for forensic economists. 

Michigan Central Railroad Company v. Vreeland, 227 U.S. 59 (1913). This U.S. Supreme Court decision is a very early decision under the Federal Employers Liability Act (FELA), holding that a broad interpretation of household services is in order in FELA actions when calculating damages. The court indicates that: “It is not beyond the bounds of supposition that by the death of the intestate his widow may have been deprived of customary service from him [above and beyond support and maintenance], capable of being measured by some pecuniary standard, and that in some degree that service might include as elements ‘care and advice.’” The extended discussion of the meaning of the word “pecuniary” as “measurable by some standard” is thoughtful and extensive. 

Miles v. Apex Marine Corp., 498 U.S. 19 (1990). This decision provides a history evaluating differences between calculating damages between general maritime law and the Death on the High Seas Act (DOHSA) under both wrongful death and survival actions. It specifically precludes loss of society damages under DOHSA. 

Monessen Southwestern Railway Co. v. Morgan, 486 U.S. 330, 108 S.Ct. 1837 (1988). Reaffirms Pfeifer decision and implicitly rejects the Culver II decision of the Fifth Circuit Court of Appeals. The Court holds that Pennsylvania total offset standards cannot be imposed by judicial discretion. (Pfeifer had overturned the Pennsylvania Supreme Court in rejecting the use of Pennsylvania roles in a Jones Act case in 1982.) This decision holds that pre-judgment interest is not allowable in an FELA action. The modification of this description was suggested by Ronald Martinez.  

Norfolk & Western Railway Co. v. Liepelt, 444 U.S. 490; 100 S. Ct. 755; 62 L. Ed. 2d 689 (1990). In a 7 to 2 decision, the Supreme Court held that taxes should be subtracted from projections of lost earnings on a wrongful death action unless the amounts were de minimus and that trial court judges should permit a jury instruction that an award of damages is not taxable under federal income tax law. The court said: “The amount of money that a wage earner is able to contribute to the support of his family is unquestionably affected by the amount of the tax he must pay to the Federal Government. It is his after-tax income, rather than his gross income before taxes, that provides the only realistic measure of his ability to support his family. It follows inexorably that the wage earner’s income tax is a relevant factor in calculating the monetary loss suffered by his dependents when he dies. . . Admittedly there are many variables that may affect the amount of a wage earner’s future income-tax liability. The law may change, his family may increase or decrease in size, his spouse’s earnings may affect his tax bracket, and extra income and unforeseen deductions may become available. But future employment itself, future health, future personal expenditures, future interest rates, and future inflation are also matters of estimate and prediction. Any one of these issues might provide the basis for protracted expert testimony and debate. But the practical wisdom of the trial bar and the trial bench has developed effective methods of presenting the essential elements of an expert calculation in a form that is understandable by juries that are increasingly familiar with the complexities of modern life. We therefore reject the notion that the introduction of evidence describing a decedent’s estimated after-tax earnings is to speculative or too complex for a jury.”  

Sea-Land Services, Inc. v. Gaudet, 414 U.S. 573 (1974).  The U.S. Supreme Court “embraced a broad range of mutual benefits each family member receives from the others’ continued existence, including love, affection, care, attention, companionship, comfort and protection,” as recoverable under the Jones Act. There had been an earlier recovery by the injured seaman in a personal injury action. He had subsequently died and his widow brought a wrongful death action. The court held that lost financial support that would have come from lost wages that had already been awarded could not be claimed again in the wrongful death action, but that the widow’s loss of services and society with her husband could be recovered.  This decision explicitly affirmed that the right to recover lost earnings was based “on his prospective earnings for the balance of his life expectancy at the time of his injury undiminished by any shortening of that expectancy as a result of the injury (italics in original)” In evaluating damages for loss of society, the Court said, “insisting on mathematical precision would be illusory and the judge or juror must be allowed a fair latitude to make reasonable approximations guided by judgment and practical experience.” The court also indicated that recovery was permitted: “for the monetary value of services the decedent provided and would have provided but for his (the decedent’s) wrongful death. Such services include, for example, the nurture, training, education, and guidance that a child would have received had not the parent been wrongfully killed. Services the decedent performed at home or for his spouse are also compensable.”  This decision also contains a discussion of the meaning of “pecuniary damages,” but arrives at no definite interpretation of that term.
 
St. Louis Southwestern R. Co v. Dickerson
, 470 U.S. 409 (1985). Reaffirmed requirement in Chesapeake & Ohio R. Co. v. Kelley (1916) that damages must be awarded in terms of present value.

Tipton v. Socony Mobil Oil Co., Inc., 375 U.S. 34; 84 S. Ct. 1 (1963).  This U.S. Supreme Court decision is a companion decision to Eichel v. New York Central Railroad Co, 375 U.S. 253; 84 S.Ct. 316 (1963), which held that railroad retirement benefits were a collateral source that could not be introduce to show malingering on the part of a worker who had not found employment after his injury. In Tipton, the trial court had admitted evidence of the plaintiff’s benefits under the Longshoremen’s Compensation Act to indicate that the plaintiff thought his status was not as a seaman or member of a crew within the meaning of the Jones Act. The 5th Circuit had ruled that this was in error, but harmless error. The U.S. Supreme Court ruled that it reversible error to have mentioned the collateral source benefits and remanded the case to the district court. 

       Admissibility of Expert Testimony

Daubert v. Merrell Dow Pharmaceuticals Inc., 509 U.S. 579; 113 S.Ct. 2786; 125 L.Ed.469 (1993)(Daubert I). This decision states that the Frye Test from Fry v. United States, 293 F. 1013 (D.C. Cir. 1923) had been superceded by Rule 702 of the Federal Rules of Evidence (FRE) that were adopted by Congress in 1975. It directed that trial court judges should act as “gatekeepers” to insure that evidence presented in court was scientifically reliable, subject to four general tests: (1) Whether the theory or technique underlying the testimony can be or has been tested; (2) whether the theory or technique has been subject to peer review; (3) the known or potential rate of error should be determined, as should the existence and maintenance of standards controlling the technique’s operation; (4) whether the theory or technique has been generally accepted by the relevant scientific community. 

General Electric Co. v. Joiner, 522 U.S. 136; 118 S.Ct 512 (1997). Deals with admissibility of expert testimony.Deals with admissibility of expert  testimony. Joiner is the second in the triumvirate of decisions of the United States Supreme Court elaborating the meaning of the Daubert decision. The 11th Circuit had reversed the decision of a trial court judge not to allow testimony of a medical expert, suggesting that the standards for excluding testimony were more stringent than the tests for admitting testimony. The Supreme Court made it clear that trial court judges have considerable discretion and reversed the 11th Circuit decision. Justice Bryer’s concurring opinion strongly encourages trial court judges to make use of Federal Rule 106, which allows court appointed experts.

Kumho Tire Co., Ltd v. Carmichael, 509 U.S. 579; 119 S.Ct. 1167 (1999). This decision made it clear that while none of the original four Daubert tests may apply in a given instance, the general test of scientific reliability applies to all types of expert testimony. 

Weisgram v. Marley, 528 U.S. 440; 120 S.Ct. 1011; 145 L.Ed. 2d 958 (2000). Held that if expert testimony that was the basis for a claim was held inadmissible, the cause of action could be dismissed without a right of appeal. 

Winans v. The New York and Erie Railroad Company, 62 U.S. 88, 16 L. Ed. 68, 1858 U.S. LEXIS 626 (1858). “Experience has shown that opposite opinions of persons professing to be experts may be obtained to any amount; and it often occurs that not only many days, but even weeks, are consumed in cross-examinations, to test the skill or knowledge of such witnesses and the correctness of their opinions, wasting the time and wearying the patience of both court and jury, and perplexing, instead of elucidating, the questions involved in the issue.”

      Hedonic Damages and Emotional Services

Molzof v. United States, 502 U.S. 301; 112 S. Ct. 711 (1992). The United States Supreme Court held that the prohibition of “punitive damages”under the Federal Tort Claims Act (FTCA) did not have the meaning attached that term by the 7th Circuit Court of Appeals. The 7th Circuit had held that an award for lost enjoyment of life in a wrongful death action and for future medical expenses for medical services that were being provide free by a veteran’s hospital were punitive to the United States under the terms of the FTCA. The Supreme Court held that “punitive” should be understood in its ordinary meaning of “intending to punish.” Damages other than damages specified as "punitive" should not be interpreted as other than “compensatory” if such damages could be compensated under Wisconsin state law. The case was remanded to the trial court to determine whether such damages would be compensated under Wisconsin law.

       Legal Procedure

Bigelow v. RKO Radio Pictures, 327 U.S. 251, 265 (1946). The United States Supreme Court said: “Even where the defendant by his own wrong has prevented a more precise computation, the jury may not render a verdict based on speculation or guesswork. But the jury may make a just and reasonable estimate of the damage based on relevant data, and render its verdict accordingly. In such circumstances juries are allowed to act on probable and inferential as [upon] direct and positive proof. Any other rule would allow the wrongdoer to profit by his wrong doing at the expense of the victim. It would be an inducement to make wrong doing so effective and so complete in every case as to preclude any recovery, by rendering the measure of damages uncertain. Failure to apply it would mean that the more grievous the wrong done, the less likelihood there would be of recovery.”

Erie R. Co. v. Tompkins, 58 S.Ct. 817, or 304 U.S. 64 (1938). Held that except as otherwise specified, damages in federal courts would be awarded on the basis of state law in the state in which a trial was being held. 

Beech Aircraft Corp. v. Rainey, 488 U.S. 153; 109 S.Ct. 439 (1988). The dissent by Chief Justice Renquiest, joined by Justice O’Connor, discusses the “curative admissibility” doctrine as follows: “[O]ne doctrine which allows even a valid and timely objection to be defeated is variously known as ‘waiver,’ ‘estoppel,’ ‘opening the door,’ ‘fighting fire with fire,’ and ‘curative admissibility.’ The doctrine’s soundness depends on the specific situation in which it is used and calls for an exercise of judicial discretion.”

Hickman v. Taylor, 329 U.S. 495 (1947). This decision held that an attorney’s work product was protected. 

Winans v. The New York and Erie Railroad Company, 62 U.S. 88; 16 L.Ed. 68 (1858). This early U. S. Supreme Court decision defined the role of expert witnesses, saying: “Experts may be examined to explain terms of art, and the state of art, at any given time. They may explain to the court and jury the machines, models, or drawings, exhibited.  They may point out the difference or identity of the mechanical devices involved in their construction. The maxim of ‘cuique in sua arte credendum’ permits them to be examined to questions of art or science peculiar to their trade or profession; but professors or mechanics cannot be received to prove to the court or jury what is the proper or legal construction of any instrument of writing. A judge may obtain information from them, if he desire it, on matters which he does not clearly comprehend, but cannot be compelled to receive their opinions as matter of evidence. Experience has shown that opposite opinions of persons professing to be experts may be obtained to any amount; and it often occurs that not only many days, but even weeks, are consumed in cross-examinations, to test the skill or knowledge of such witnesses and the correctness of their opinions, wasting time and wearying the patience of both court and jury, and perplexing, instead of elucidating, the questions involved in the issue.”

       Punitive Damages

Philip Morris USA v. Williams, 2007 U.S. LEXIS 1332 (U.S. 2007). The U.S. Supreme Court held that a punitive damages award that is based in part on a jury’s desire to punish a defendant for harming nonparties amounts to a taking of property without due process. The Court emphasized that states my allow juries to award punitive damages to prevent a repetition of unlawful conduct, but held that states must set proper standards that prevent juries from depriving a defendant of “fair notice” of the penalties they may face. The Court also indicated that when awards are sufficiently large, one state may impose policy choices on neighboring states. This was a remand to the Supreme Court of Oregon in which the U.S. Supreme Court did not consider whether the size of the punitive damage award allowed by the Oregon Supreme Court was “grossly excessive.” 

State Farm v. Campbell, 2003 U.S. Lexis 2713 (2003). The U.S. Supreme Court held that punitive damages must bear some relationship to compensatory damages in a tort action. “Single-digit multipliers are more likely to comport with due process, while still achieving the State’s goals of deterrence and retribution, than awards with ratios in range of 500 to 1 . . . or in this case of 145 to 1.  The decision contains a good discussion of the differences between compensatory and punitive damages. 

       Workers Compensation

Metropolitan Stevedore Company v. Rambo, 521 U.S. 121; 117 S.Ct. 1953; 138 L. Ed. 327 (1997). In 1983 John Rambo had been awarded $80.16 per week for his permanent partial disability resulting from an injury in 1980 in an action under the Longshore and Harbor Workers’ Compensation Act (LHWCA). Subsequently, Rambo was trained as a heavy truck operator, with the result that his earnings increased to approximately three times as much as before his injury. His employer moved to modify the disability award. The administrative law judge (ALJ) terminated the disability award. The Benefits Review Board (BRB) upheld the termination. The 9th Circuit reversed the order, holding that an award could be modified only when there was a change in the claimant’s physical condition. The Supreme Court reversed the 9th Circuit decision, holding that a disability award could be modified where there was a change in the employee’s wage-earning capacity, even without a change in his physical condition, and remanded the 9th Circuit. The 9th Circuit again reversed the BRB and remanded for entry of a nominal award that reflected the worker’s disability. In this decision, the Supreme Court reversed the 9th Circuit decision for a second time, saying: “Disability is a measure of earning capacity lost as the result of a work-related injury. By distinguishing between the diminished capacity and the injury itself, and by defining capacity in relation both to the injured worker’s old job and to other employment, the statute makes it clear that disability is the product of injury and opportunities in the job market. Capacity, and thus disability, is not necessarily reflected in actual wages earned after an injury,. . . ., and when it is not, the fact-finder under the act must make a determination of disability that is ‘reasonable’ and ‘in the interest of justice,” and one that takes account of the disability’s future effects, § 8(h).” Justice Souter then provides extended comparison of the periodic payment method used in this case and the lump sum award method used in tort actions, pointing out that the need for finality is significantly reduced because awards made under “virtually all . . . workers’ compensation schemes” liberally permit modification, while tort awards require a single lump sum payment. Justice Souter wrote: “As the tripling of Rambo’s own earnings shows, a claimant’s future ability to earn wages will vary as greatly as opportunity varies, and any estimate of wage-earning potential turns in part on the probabilities over time that suitable jobs within certain ranges of pay will be open. In these calculations, there is room for error. . . That juries in tort cases must routinely engage in such difficult predictions (compounded further by discounting for present value) is the price paid by the common-law approach for the finality of a one-time lump-sum judgment.” Suggested by Kurt Krueger.

       Wrongful Termination

Pollard v. E. I. Du Pont De Nemours & Company, 532 U.S. 843; 121 S. Ct. 1946 (2001). This decision of the United States Supreme Court held that front pay is not a compensatory damage in a wrongful termination case, but an equitable remedy that serves in lieu of reinstatement in the job from which an individual was wrongfully terminated. This was relevant to the size of an plaintiff’s award in that compensatory damages were subject to a statutory cap on compensatory damages. The Court defined front pay as follows: “[F]ront pay is simply money awarded for lost compensation during the period between judgment and reinstatement or in lieu of reinstatement. For instance, when an appropriate position for the plaintiff is not immediately available without displacing an incumbent employee, courts have ordered reinstatement upon the opening of such a position and have ordered front pay until reinstatement occurs.”

United States Tax Court

Dunkin v. Comm’r, 2005 U.S. Tax Ct. LEXIS 10 (U.S. Tax Ct. 2005). In a divorce, Mrs. Dunkin was awarded $2072 per month as her share of his defined benefit pension as of August 19, 1997. This slightly less than half of John Dunkin’s defined benefit pension based on California’s community property law. John Dunkin did not retire on August 19, 1997 and the California courts ordered John Dunkin to begin making payments of $2072 per month to his wife in lieu of the benefits she would have received if he had retired. He deducted the costs of her pension from his income for purposes of income taxation. The IRS argued that he should pay income taxes on all of his income. The tax court ruled in John Dunkin’s favor that he could deduct amounts paid to his ex-wife from his income for purposes of taxation. This is a clearly reasoned decision that is worth reading.   

Vincent v. Commissioner of Internal Revenue, T.C. Memo 2005-95 (U.S. Tax Court 2005). This decision involved a case in which the parties to an employment discrimination law suit had settled. As a part of the settlement agreement, the settlement was described as for ulcers created by the employment dispute. The IRS had sent a tax deliquency notice and Vincent appealed. The court held that: “While the underlying litigation was adversarial, once Whittier agreed to a settlement amount and negotiated the inclusion of indemnification and release of liability clauses, the negotiation as to the characterization of the settlement proceeds ceased to be adversarial. Petitioner wanted a large portion of the recovery connected to a tortlike peronsl injury so that she could avoid taxes under section 104(a)(2).” Tax Court held that Vincent was liable for taxes on the entire amount of the settlement.   

United States Court of Claims

Bedell v. Secretary of the Department of Heath and Human Services, 1992 U.S. Ct. Cl. Ct. Lexis 458 (U.S. Court of Claims 1992). This is a Vaccine Act Case in which Judge George Hastings, Jr., provides his assessment of life care plans produced by the petitioner (the plaintiff in Vaccine Act Cases) by Drs. Robert Voogt and for the respondent (the defendant United States in Vaccine Act cases) by Jacqueline Peterson. Judge Hastings said of the petitioner’s experts: “I note that after listening to their testimony, I cannot conclude the Dr. Voogt and Dr. Walicke were particularly candid witnesses. To the contrary, while both are highly qualified in their professional fields, I conclude that they are also likely inclined to slant their testimony in a fashion designed to maximize the potential award to their clients.” Judge Hastings found the opinions of Ms. Peterson more “persuasive.”

Brown v. Secretary of the Department of Health and Human Services, 2005 U.S. Claims LEXIS 291.  This is a decision under the Vaccine Act. Both sides presented economic experts, Dr. Richard J. Lurito for the petitioner and Dr. Patrick F. Kennedy for Respondent. The decision reviews net discount rates that have been adopted by the Office of Special Masters in past cases and in the Pfeifer decision (1983).  Special Master Richard Abel preferred Dr. Kennedy’s net discount rate, saying: “In the end, Dr. Lurito’s reliance on present day interest rates of various instruments does not seem like a reasonable formula for making future projections. In fact, on several occasions, Dr. Lurito altered his calculations to account for fluctuations in his proposed portfolio. . .That is not to say that Dr. Lurito’s approach is entirely without merit. Were this case dealing with a shorter time period, Dr. Lurito’s methodology might be acceptable. As it stands, however, the Court is attempting to discern a net discount rate that will accommodate roughly the next 25 years. While Dr. Lurito’s calculations present one picture of what a safe return might look like today, they are too mercurial to be relied upon in making a future projection.”

Elk v. United States, 2009 U.S. Claims LEXIS 102 (U.S. Ct. Claims 2009). This decision involved the sexual assault of a member of the Sioux tribe on a reservation for damages under the “bad man” clause in Article I of the Fort Laramie Treaty of April 29, 1868. Judge Francis Allegra provided extensive discussion of how he reached his conclusions about the plaintiff’s damages.  Donald Frankenfeld was the economic expert for the plaintiff. Judge Allegra disagreed with Mr. Frankenfeld’s use of U.S. Treasury securities for his calculation of the earnings loss of the plaintiff, saying: “Mr. Frankenfeld did not adequately account for risk in selecting his discount factors. He set his discount rates extraordinarily low, using safe rates associated with Federal Treasury notes of varying securitites, rather than say, for example, the rates associated with a riskier form of corporate bond. Yet, in no way does the minimal risk associated with the payment of a Treasury bond reflect the risks that Ms. Elk would: (i) remain continuously employed for a period of thirty-three years from age 24.5 through 57.5, (ii) be employed in geographical areas of the country that track the national averages for salaries; and (iii) receive annual salary increases in lock-step with the average projected growth rate for salaries. Nor do the rates Mr. Frankenfeld selected account for the fact that the income being projected here is not for a person who already has a salary history in an established career, but rather for someone who, but for the assault, likely would have embarked on such a career. In the court’s view, to reflect these and other risks in the receipt of the income stream, the discount rate employed here must be substantially higher than that associated with the safest form of public investments, albeit with the admitted effect of diminishing the present value of the income that Ms. Elk is projected to lose as the result of the assault.  While defendant did not provide an alternative to the discount rate that Mr. Frankenfeld employed, the court is not bound to accept the rate offered by plaintiff, even if unchallenged. . . Finding the situation here is more comparable to that of a Baa corporate bond and further increasing the historic rates associated with such bonds to reflect Ms. Elk’s lack of a work history in the nursing field, the court finds that the discount rate here should be twelve percent.”   

Euken v. Secretary of Health and Human Services, 34 F.3d 1045 (Fed. Cir. 1994). This decision of the Federal Circuit Court of Appeals held that FICA taxes are “appropriate taxes” to deduct under the Vaccine Act. The petitioner claimed that since the vaccine injured child would never collect Social Security retirement benefits, FICA taxes should not be deducted from the child’s lost earnings. The Court said: “[T]he argument that Cory would not receive any Social Security benefits is simply not pertinent to the question of whether FICA taxes are appropriate taxes to deduct from the average gross weekly earnings of a private sector worker. . . Accordingly, we conclude that FICA tax, like federal and state income taxes, is an appropriate tax to deduct in determining a lost earnings award under the Vaccine Act. It should be noted that this decision applies only to Vaccine Act cases, but other federal courts in other types of cases have ruled in a similar fashion with respect to including FICA taxes as a type of income tax that needs to be deducted when deducting income taxes.

Paul v. Department of Health and Human Services, 2007 U.S. Claims LEXIS 408 (U.S. Ct. Claims 2007). This was a Vaccine Act decision in which payment of experts, annuity contracts and attorney contingency fees in Vaccine Act cases was discussed at length.

Watkins v. Secretary of Health and Human Services, 1999 U.S. Claims 62 (Ct. Claims 1999). The is a decision of Gary J.  Golkiewicz, Chief Special Master, in an Vaccine Act Case. This decision goes into considerable detail about how a child’s lifetime loss of earning capacity should be calculated if being compensated under the Vaccine Act. TheVaccine Act, 42 U.S.C. § 300aa-10 et seq. (Supp. V 1987). The Act states as a formula: “compensation after attaining the age of 18 for loss of   earnings determined on the basis of the average gross weekly earnings in the private, non-farm sector, less appropriate taxes and the average cost of a health insurance policy. . .” Both the plaintiff and the respondent had obtained economic experts, who were generally in agreement regarding average weekly earnings of $28,392 as of 1997 with subtraction of 11.40% for federal income taxes, 6.04% for Utah income taxes, 7.65% for FICA taxes and $248.93 per month for health insurance. The Special Master addressed the following measurement questions: “Should self-employed workers be considered in the base wages portion of the forumula? . .; Is “non-farm sector” equivalent to the government’s exclusion of ‘all workers in agricultural production (crops and livestock)? . . .; Should 15-17 year olds be excluded from the data since the Act awards lost earnings post-18 years of age? . . ; Should the tax offset include personal exemptions for dependents and thus reduce the applicable marginal rate? . . ; Should social security payments upon retirement be considered as part of compensation since FICA is being deducted?  After addressing those questions, the Special Master considered how the discount rate should be determined. The plaintiff expert, Dr. James Everson, argued for a net discount rate of 0.2% based on an historical comparison of figures from 1950-57. The defense expert, Dr. Patrick Kennedy, for a net discount rate of 2.0% based on an extended discussion of economic history that involved special weighting for “historic events.” The Special Master found Dr. Kennedy’s approach much more persuasive and pointed out a number of prior decisions using a 2.0% net discount rate. The Special Master also quoted “delusive exactness” language from the decision in Jones & Laughlin Steel Corp. v. Pfeifer, 103 S.Ct. 2541 (1983).

1st Circuit

    Court of Appeals

      Discount Rates

Conde v. Starlight I, Inc., 103 F.3d 210 (1st Cir. 1997). In this decision, the 1st Circuit concluded that the trial court had made an error and had not discounted a total lost future income stream of $254,176 to present value. The 1st Circuit calculated present values at discount rates of 1%, 2% and 3%, citing these values as rates coming from Jones & Laughlin Steel Corp. v. Pfeifer, 103  S.Ct 2541 (1983) as calling for less scrutiny. The Court used 1% as the rate most favorable to the plaintiff. 

      FELA/Maritime Cases

McGrath v. Consolidated Rail Corporation, 136 F.3d 838 (1st Cir. 1998). The First Circuit held that the trial court had made no reversible error in allowing admission of testimony about a worker’s occupational disability benefits for the purpose of showing that the worker had no financial incentive to resume working, but not as an offset to lost earnings. The First Circuit interpreted the U.S. Supreme Court decision in Eichel v. New York Cent. R.R. Co, 375 U.S. 253 (1963) as narrowly upholding the trial court’s discretionary ruling and not a bright line decision barring the admission of collateral source information that bears on the issue of malingering. The First Circuit held that there should be a balancing between the possibility of misuse by the jury of such information and the probative value of such information.

      Admissibility of Expert Testimony

Coastal Fuels of Puerto Rico, Inc. v. Caribbean Petroleum Corp., 175 F.3d 18 (1st Cir. 1999). Ruled specifically that Daubert and Kumho applied to economic analysis, stating: "the district court's gatekeeping function extendes to all expert evidence, including economic analysis, not merely to evidence involving scientific conclusions.

Cummings v. The Standard Register Company, 265 F. 3d 56 (1st Cir. 2001). This decision responds in part to an error in testimony initially made by economic expert Martin Duffy.  After being cross examined, Duffy realized that he had made an error in calculating front pay at $656,867. After correcting his figures, Duffy then testified to front pay losses of $494,712. His figures for back pay were deemed correct. Duffy’s report was not entered into evidence and the jury awarded $665,000  for front pay. The 1st Circuit determined that the jury had probably been confused by the initial error in Duffy’s calculation and offered Cummings the option of accepting $494,712 or a new trial. The court also determined under a Daubert standard that the district court had been correct in determining that Duffy’s testimony was admissible and that the district court did not abuse its discretion in refusing to strike the testimony of Duffy.

Quinones-Pancheo v. American Airlines, Inc., 979 F.2d (1st Cir. 1992)  Economic expert Mario Puchi based his projections on the assumption that the injured plaintiff had intended to reenlist in the military and remain there until eligible to retire on a military pension. The economic expert also assumed that the plaitiff had a total and permanent disability, which was not borne out by the facts of the case. The economic expert was not permitted to testify.

Stevens v. Bangor and Aroostook, R.R., 97 F.3d 594 (1st Cir. 1996). The plaintiff's vocational expert was permitted to testify. 

Torrez-Ocasio v. Texaco Puerto Rico, Inc., 2007 U.S. Dist. LEXIS 56102 (D. Puerto Rico, 2007). This is was a decision by Judge Juan M. Perez-Gimenez to grant a motion in limine to bar the testimony of plaintiff’s Life Care Planner, Gerri Pennachio, and economist Francisco E. Martinez based on the fact that the plaintiff had admitted that the testimony of plaintiff’s expert witness Dr. Jaime Zorba did not meet Daubert standards. Since the proposed testimony of the economist depended on the testimony of the Life Care Planner and the testimony of the Life Care Planner depended on the testimony of Dr. Zorba, the failure of his testimony to meet Daubert standard rendered the testimonies of Life Care Planner and economist inadmissible.

      Wrongful Termination

Lussier v. United States Postmaster General, 50 F.3d 1103 (1st Cir. 1995). The Court held that it is within the trial court’s discretion to tailor a front pay award to take account of collateral benefits in a discrimination case.

    District Courts in the 1st Circuit (MA, ME, NH, RI and Puerto Rico)

         Basis Income and Fringe Benefits for Projecting Earnings Loss

Bouchard v. United States, 2007 U.S. Dist. LEXIS 59265 (D. Me. 2007). Interpreting the decision of the Maine Supreme Court in Lovely v. Allstate Ins. Co., 658 A.2s 1091 (Me. 1995), the court applied “the single injury rule” to a personal injury to Bouchard, a plaintiff with significant pre-injury conditions. Under the “single injury rule” the burden is on the defendant to apportion damages between pre injury conditions and the injury itself. The court held that the United States had failed in its burden to do so. The decision provides extensive discussion of the opinions and calculations of Jack Bobb, vocational expert for the plaintiff, Eileen Kalikow, vocational expert for the defendant, and Dr. Alan McCausland, economist for the plaintiff. Among other details discussed, Dr. McCausland used a real discount rate of 2.25 percent and made no calculation of lost Social Security retirement benefits because he anticipated that Bouchard would receive Social Security disability payments. The court noted that Dr. McCausland’s calculation had melded lost past wages and future earning capacity even though “the law distinguishes between lost past wages and future earning capacity.”

Eaton v. Hancock County, 2010 U.S. Dist. LEXIS 28817 (D. Maine 2010). This is an order of John A. Woodcock, Jr., chief federal district judge of the District of Maine upholding a granted motion in limine of a U.S. magistrate judge. The magistrate judge had granted a motion in limine to bar testimony of vocational expert Peter Mazzaro and economist Dr. Robert Strong that was based on the assumption that the plaintiff Ronald Eaton would have become a licensed master plumber with corresponding earnings. At the time of his injury, Eaton was an unlicensed plumber’s helper with limited work history. The magistrate judge had allowed testimony based on the plaintiff’s actual work history, but barred testimony based on the plaintiff becoming a licensed plumber in the future. There was testimony that Eaton had completed a twelve-month trainee program as a plumber and was supposed to start as an apprentice. Judge Woodcock said: “Even conceding Mr. Eaton’s facts, to conclude that Mr. Eaton would have become a licensed plumber still requires speculation about his successful completion of a multi-step process, involving thousands of hours of fieldwork under ongoing supervision and a passing grade on a master plumber’s written examination. . . The brief answer to these objections is that even though Mr. Eaton had taken the very first step along this difficult course, had demonstrated an interest and aptitude in plumbing, and might at some point achieved his aspiration, to assume at trial that he would have done so would be to speculate. 

      Legal Procedure

Johnson v. Spencer Press of Maine, Inc., 2004 U.S. Dist. LEXIS 16560 (D.Me. 2004). This decision imposes sanctions on the defendant for actions forcing increases in the plaintiff’s trial expenses. One part of the sanctions involved payment of parts of the expert witness fees of Allan McCausland, the economic expert for the plaintiff. The reasoning of the judge in awarding reimbursement to the plaintiff for some of the economic expert’s bills, but not others is of interest. 

      Hedonic Damages and Emotional Services

Saia v. Sears Roebuck and Co., 47 F.Supp. 23 141 (D. Ma.1999). Hedonic damanges testimony by Stan V. Smith was not allowed.

       Treatment of Taxes

Pappas v. Watson Wyatt & Company, 2008 U.S. Dist. LEXIS 34 (D. Conn. 2008). This decision cited Sears v. Atchison, Topeka & Santa Fe Ry, 749 F.2d 1451, 1456 (10th Cir. 1984) and other cases allowing tax grossups in requesting a tax adjustment based on adverse tax consequences apparently arising from her attorney fees. The court held that the cited decisions did not apply because: “Unlike the plaintiffs in cases that she cites, nowhere does she express any concern that a lump sum damage award would place her in a higher tax bracket. Instead, the Plaintiff is effectively asking the Court to review the tax code and fashion a remedy where the provisions of the tax code fail ro allow her to deduct her damages from her gross income.”  

       Admission of Expert Testimony

Griffith v. Eastern Maine Medical Center, 2009 U.S. Dist. LEXIS 16236 (D. Me. 2009). The court granted a defense motion to exclude the economic testimony of Dr. Ray Neveu based on his failure to issue a complete report of his opinions by the scheduling deadline. Dr. Neveu’s report indicated that he would provide details of his opinions in a “timely fashion,” which the judge did not regard as meeting the requirements of the Court. The Court said: “This court has already specified what "a timely fashion" is in this case in its scheduling order. That is not a matter to be determined at the convenience of the expert witness, particularly when no reason is given why the expert cannot comply with the deadline set in the court's scheduling order. An expert's complete report is due at a specific time during the discovery period in order to allow opposing counsel to depose the expert, if desired, and to allow the opposing party's expert witness time to respond to the opinions expressed in the report, also within the discovery period, so that the plaintiff's counsel will also have an opportunity to explore those opinions before the end of discovery and the deadline for the filing of dispositive motions. See Thibeault v. Square D Co., 960 F.2d 239, 244 (1st Cir. 1992) (Rule 26 promotes fair play in discovery and at trial). Allowing an expert to express his opinions "before trial" at a time chosen by the expert would throw in disarray the orderly procedure that the civil rules are designed to promote. See Ortiz-Lopez v. Sociedad Espanola de Auxilio Mutuo y Beneficiencia de Puerto Rico, 248 F.3d 29, 35 (1st Cir. 2001). An expert can always supplement his or her opinions after submitting a report, should the need arise. What the expert cannot do is dictate the timing and progress of the case; that is a matter solely within the court's control.”

       Wrongful Termination

Harding v. Ciambro Corporation, 2007 U.S. Dist. LEXIS 32849 (D.ME 2007). This is a legal memorandum in response to a motion for reconsideration in a wrongful termination case.  The judge had not ordered front pay because Harding was to be reinstated. However, Harding was not compensated between August 22, 2006 and February 20, 2007, when he was reinstated. Judge Woodcock awarded the additional front  pay in the amount of $56,843.67 for this period. Footnote 6 of this memorandum included the following language: “During the trial, Sheldon Wishnick, Mr. Harding’s economist, testified that his total economic loss from September 9, 2002 to August 1, 2006 was $563,897.00. Tr. at 336:1-22, 357:17-19. The jury’s back pay award of $563,000 is generally consistent with Mr. Wishnick’s testimony.” This decision provides significant detail about how back pay and front pay were handled between the parties, subject to the judge’s approval.

2nd Circuit

    Court of Appeals

Wage Growth Rates and Discount Rates

Ammar v. United States, 342 F.3d 133 (2nd Cir. 2003). The trial court judge had failed to discount an award for lost earnings, lost pension and life care costs. An appeal from the United States resulted in the trial court decision being remanded for reduction to present value at a 2 percent discount rate. The 2nd Circuit accepted the 2 percent rate proposed by the United States, saying: “Additional discounting may be needed to account for inflation where the award has been increased to anticipate an inflationary effect on, for example, higher wages, see, e.g., Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. at 538-39; but where there has been no such increase, there need be no deeper discounting, and the discount rate should reflect only the time value of money. . .” 

        Treatment of Taxes

Raymond v. United States, 355 F.3d 107 (2nd Cir. 2004). The court ruled that the entire amount of an award for lost earnings in a wrongful termination case must be declared as income for the purposes of income taxation. While a worker can treat an attorney's contingency fee as a deduction, this triggered the Alternative Minimum Tax in Raymond's case, increasing the amount of tax he owed on his award significantly. The district court had ruled that Raymond's income for taxation was the net value of the award after subtraction of the attorney fee. The 2nd Circuit overruled the District Court's decision. 

Tesser v. Board of Education, 2004 U.S. App. LEXIS 10450 (2nd Cir. 2004). This decision involved the issue of gross-ups to take account of tax consequences of a lump sum award for back pay in a wrongful discrimination case. The trial court judge ruled that tax returns of the Plaintiff could be admitted to impeach the testimony of a witness who “opens the door” to the subject. In this case, the argument that the award should be “grossed up” to account for higher taxes on a lump sum was treated by the trial court judge to opening the door to showing that the Plaintiff and her husband were already in the highest marginal tax bracket so that such consequences did not exist. The Plaintiff appealed on the basis that there was nothing in the tax returns that showed that she and her husband were in the highest tax bracket so that the tax returns were not “actually” inconsistent with the Plaintiff’s testimony. The 2nd Circuit did not resolve the differences between the parties, holding that the admission of tax returns was harmless error if it was error. There is substantial discussion in the decision about the definition of “harmless error.” 

United States v. Pearson, 2009 U.S. App. LEXIS 14555 (2nd Cir. 2009). This is a decision in the appeal of the restitution award in a child pornography case. Dr. Kenneth Reagles had projected life care costs of counseling for two female child victims of the child pornographer.  Reagles was described as: “the owner of K.W. Reagles & Associates, L.L.C., a company that provides ‘[f]orensic vocational, rehabilitation, and economic consulting services, as well as employee assistance, case management, and psychological counseling services.’ Gov’t App. at 65, 132. Reagles concluded that each victim ‘has a number of mental health issues that will require treatment and services, presently and into the future, some of the rest of her life’ as a result of her sexual assault by Pearson. He estimated the future cost to Pearson’s victims of obtaining medical care to be $2,002,732 and $921,976 for Jane Doe #1 and Jane Doe #2, respectively.” The District Court reduced those amounts to $667,577 and $307,325, respectively, arguing that although Reagles “who is a very good economist, [is] qualified to make diagnoses in the case of severe psychological impediments caused by the defendant,” the Court did not believe Reagles had the ability to determine the amount attributable to the girls’ pre-existing conditions. “The court concluded also that the victims’ future medical expenses should not be discounted to present value because restitution could not be paid presently.”  The 2nd Circuit also held that: “Where further losses are likely but the amount cannot be calculated with reasonable certainty at the time of the initial sentence, a victim may nevertheless be able to secure compensation for further losses pursuant to 18 U.S.C. § 3664(d)(5). The court remanded the decision to the District Court for further explanation of the amounts awarded by the District Court, vacating the amounts so that the District Court could change the amounts if it felt that such changes were warranted.

        Legal Procedure

Person v. Association of Bar, 554 F.2d 534 (2nd Cir. 1977). In a New York case, a judge had ruled that New York law precluding contingency fees for economic testimony was unconstitutional. The second circuit reversed the decision of the New York judge and held that the the New York prohibition against contingency fees for experts was constitutional. Submitted by Jerry Martin.

       FELA/Maritime Cases

Doca v. Marina Mercante Nicaraguense, S.A., 634 F.2d. 30 (2nd Cir. 1980). This pre-Pfeifer decision held that the real discount rate should not be less than 2 percent unless litigants offer evidence to the contrary.  The decision said: “A 2% discount rate appears to be the estimate of the true cost of money for use in a computation whose purpose is to determine the present value of lost future wages.” The Doca Court went on to say, however, that: “We emphasize that we are not requiring the use of an adjusted discount rate, nor specifying that when such a rate is used, it must be set at 2%. Litigants are free to account for inflation in other ways, or, if they use the adjusted discount rate approach, to offer evidence of rate more appropriate than 2%. But in the hope that disputes about the appropriate rate may be minimized, we simply suggest that the 2% rate as one that would be normally fair for the parties to agree upon, and we authorize district judges to use such a rate if the parties elect not to offer evidence on the subject of either inflation or present value discount. This decision rejected a 1% adjusted rate used by the district judge. 

McWeeney v. New York, N.H. & H.R.R. Co, 282 F.2d, 282 F.2d 34 (2nd Cir. 1960), cert. denied, 365 U.S. 870 (1960). This decision advanced a practice that is still maintained in Washington state law that taxes are not ordinarily subtracted from lost earnings, but an exception is made in cases of very high wage earners. The rationale for not subtracting taxes was: (1) taxes on interest on the fund would partially offset taxes on earnings; and (2) a significant portion of lost earnings of the plaintiff would be taken by the attorney's contingent fee. This decision was rendered moot in FELA cases by Norfolk & Western v. Liepelt, 444 U.S. 490 (1980) which mandated tax  reductions for all wage earners.

      Admissibility of Expert Testimony

Amorgianos v. National Railroad, 2002 U.S. App. Lexis, 17792 (2nd Cir. 2002). This decision affirms a trial court decision that had reversed a jury verdict in favor of a plaintiff, followed by a Daubert hearing to preclude testimony by two plaintiff experts and a summary judgement in favor of the defendants following the decision in the Daubert hearing. The decision of the trial court was 137 F.Supp.2d 147 (E.D.N.Y. 2001).  This is a short decision that discusses all four of the United States Supreme Court cases from Daubert to the present that involve admissibility of expert testimony. The discussion begins from Daubert v. Merrell Dow, 509 U.S. 579 (1993), proceeds through Gen. Elec. Co. V. Joiner, 522 U.S. 135 (1997), Kumho Tire Co. V. Carmichael, 526 U.S. 137 and Weisgram v. Marley Co, 528 U.S. 440 (2000), before upholding the decision of the trial court judge.  It also cites its own decision in McCullock v. H.B. Fuller Co, 61 F.3d 1038 (2nd Cir. 1995) to the effect that the abuse of discretion standards, which is the standard used to challenge a trial court judge on admissibility issues, is based on how the trial court went about determining reliability as much as it ultimate decision.  The 2nd Circuit cited In re Paoli R.R. Yard PCB Litig., 35 F. 3d 717 (3rd Cir. 1994) as saying: “[T]he reliability analysis applies to all aspects of an expert’s testimony: the methodology, the facts underlying the expert’s opinion, the link between the facts and the conclusion, et alia.” (Submitted by Jerry Martin.) 

Boucher v. U.S. Suzuki Motor Corp., 73 F3d 18 (2nd Cir. 1996). Dr. Kenneth Reagles, a vocational expert and not an economist, projected the lost future earnings of John Boucher. Mr. Boucher had a sporadic work history, having earned $10,393 in 1983, $5,800 in 1984, $4,600 in 1985 and $7,800 in 1985.  Dr. Reagles assumed that Mr. Boucher had an earning capacity as of 1988 of $12,480 per year plus 19 percent for fringe benefits, based on fringe benefits Mr. Boucher did not have at the time of his injury.  The court did not find this reasonable.

Shatkin v. McDonnell Douglas Corp., 727 F. 2d 202 (2nd Cir. 1984). The economist, Dr. Mantell for the plaintiff made calculations on behalf of a parent suing for damages in the death of a child. The court felt that there was no foundation for an assumption that the child would have supported the parent in the future and "noted a number of assumptions and assertions made by Dr. Mantell that were so unrealistic and contradictory as to suggest bad faith."

      Hedonic Damages and Emotional Services

In Re Korean Airlines Disaster of September 1, 1983, 807 F.Supp. 1073 (S.D.N.Y.1992). This decision interprets the relevance of the terms of the Warsaw Convention, ruling that hedonic damage claims do not survive in a death action. Lost earnings may not be recovered for a decedent but may be considered in determining lost financial support or loss of inheritance. 

Saffrani v. TheWerner Company, 1997 U.S. Dist. LEXIS 18589 (S.D.N.Y. 1997). In admitting expert testimony by a mechanical engineer, the decision cited United States v. Starzepyzel, 880 F.Supp. 1027 (1995), quoting that decision : "Yet, as distinguished from such discredited ventures as hedonic damage expertise, clinical ecology, trauma-cancer expertise or the Benedictin plaintiffs' statistical machinations, forensic document examination does involve true expertise, which may prove helpful to a fact finder."

United States v. Starzepyzel, 880 F.Supp. 1027 (S.D. N.Y.1995). Accepted testimony by document examiner.  Said: "Yet, as distinguished from such discredited ventures as hedonic damage expertise, clinical ecology, trauma-cancer expertise or the Benedictin plaintiffs' statistical machinations, forensic document examination does involve true expertise, which may prove helpful to a fact finder."

    District Courts in the 2nd Circuit (CT, NY, VT)

         Basis Income and Fringe Benefits for Projecting Earnings Loss

Dunn v. United States, 2007 U.S. Dist. LEXIS 26900 (S.D.N.Y. 2007). This decision provides a detailed consideration of the methods used by economists Dr. David Kennet for the plaintiff and Dr. Leonard Freifelder for the defendant by Judge Mark D. Fox.  Kennet’s present value of earnings loss was $474,760 while Freifelder’s was $320,668. Kennet had a work-life expectancy to age 62.9 (sic), while Freifelder was to age 60. Kennet projected wage growth at 3.8%, while Freifelder projected 3.0%. They used different tax rates from different tables. Freifelder added 9% for future benefits from plaintiff’s secondary occupation, while Kennet opined that this addition was speculative. Freifelder made reducation for 7.2% for work expenses, while Kennet did not. There were also differences in how social security benefits were calculated and the value of fringe benefits in post injury employment. The judge noted that neither economist had calculations consistent with an increase in earnings called for in the plaintiff’s pre-injury contract. 

Smith v. Boyer, 2006 U.S. Dist. LEXIS 48379 (N.D.N.Y. 2006).  This is a memorandum from Judge Peebles explaining his decision in a case that apparently did not involve a jury. The case was tried under Pennsylvania law. The judge was asked to exclude the testimony of Dr. David Eng, a neurosurgeon, whom the judge did not find very credible, under a Daubert standard. The judge declined to do so. The judge also indicated that he did not find the testimony of Dr. Kenneth Reagles persuasive that the plaintiff was unable to work at any job and found the plaintiff’s subjective complaints to be “exaggerated and not fully credible.” As such, the judge did not award future damages. The judge described the assumptions made by Dr. William Blanchfield, a forensic economist, leading to a projection of a diminution in earning capacity of $1.8 million. The judge awarded $69,109.32 for past lost wages.  The judge said in footnote 15: “Remarkably, Dr. Blanchfield did not calculate the present value of that lost income stream, even though it would extend for several years into the future.” It is possible, however, that Dr. Blanchfield was simply following the Pennsylvania rule that inflation is assumed to be equal to the discount rate.

Tivoli v. United States, 1997 U.S.Dist Lexis 23356 (S.D.N.Y. 1997). See under Household Services.

         Discount Rates

Ramirez v. New York City Off-Track Betting Corp., 112 F.3d 38 (2nd Cir.1997). The 2nd Circuit used a 2.0% net discount rate to determine damages, citing several of its own previous decisions and saying: “Where, as here, the parties have adduced no evidence relating to the discount rate, and have made no showing that the undiscounted lost wages figure has been adjusted upward to cover future inflation, we have suggested a discount rate of 2% per year.”  

         Life and Worklife Expectancies

In Re Joint Eastern and Southern District Asbestos Litigation. Rummo v. Celotex Corporation, 726 F.Supp. 426 (E.D.N.Y. 1989). This decision interprets New York law in a diversity action. It provides a thorough discussion of shortened life expectancies and the treatment of lost years in damages analysis across the United States as well as in New York. The decision also discusses the fact that in most states a personal injury action brought while an injured person is still alive precludes a wrongful death action when the injured worker eventually dies. It cites Iowa (Ehlinger v. State, 237 N.W.2d 784) as the one state that awards damages based on post injury worklife expectancy and points out that British law deals with shortened life expectancy by treating “abbreviation of life expectancy” as a separate element of damages. This decision held clearly that damages for lost earnings are to be based on pre injury life and worklife expectancy. Suggested by Gerald Martin.   

     Household Services

In the Matter of the Complaint of The Connecticut National Bank, 733 F.Supp. 14. (S.D.N.Y. 1990). This decision involves an award for damages to Louanna Duffy for the wrongful death of her husband James Duffy under the Death on the High Seas Act (DOHSA). Her economist was Dr. Richard Palfin. Judge Robert L. Carter indicates: “My problem with Dr. Palfin’s testimony is that he used abstract figures without reference to the actuality of the Duffy’s situation. He calculated the decedent’s household services based on information supplied by the United States Department of Agriculture for all males in a 1982 publication “Family Economics Review” (T.80), and without reference to information supplied on the subject supplied by the widow.” The judge then considered the decedent seaman’s time at home and time at sea to come up with his own value for lost household services. The decedent apparently had a work schedule of 56 days at sea and six days at home. 

Tivoli v. United States, 1997 U.S.Dist Lexis 23356 (S.D.N.Y. 1997). This case involves a judge talking about the reliability of testimony about lost earnings from Dr. Goldberg, a vocational expert for the defense and Dr. Les Seplaki, an economic expert for the plaintiff. Dr. Goldberg’s lost earnings projections were based on an assumption that the plaintiff could continue working and are dismissed out of hand by the judge. Dr. Seplaki’s calculations will need to be redone to include the impact of taxes. The defense had also retained Dr. Thomas Fitzgerald as an economic expert and deficiencies in his calculations are also discussed in the context of the life care plans. Both sides had life care planning experts and the judge comments on the credibility of both life care planning experts. Finally, he disallowed the plaintiff’s claim for the past value of homemaker services “since there is no proof that such services were actually utilized or that expense for such services was actually incurred.  Judge Fox did allow recovery for the future costs of such services as needed for her full life expectancy. 

     Life Care Plans

Tivoli v. United States, 1997 U.S.Dist Lexis 23356 (S.D.N.Y. 1997). See under Household Services.

       Legal Procedure

Barney v.  Consol. Edison Co., 2007 U.S. Dist. LEXIS 22494 (E.D.N.Y. 2007). An angry sounding federal judge precluded the report and testimony of the plaintiff’s economic expert, Dr. Frank Tinari because the plaintiff failed to comply with a court order to provide first names of Dr. Tinari’s previous clients and because plaintiff’s counsel had repeatedly failed to provide plaintiff’s tax returns to the defendant. “First, plaintiff was ordered to produce the first names of the clients for whom her expert, Dr. Tinari, had testified in previous litigations. . . If Dr. Tinari did not have the names, plaintiff was instructed to go to the court records in order to obtain them. . . Second, defendant was to send plaintiff blank authorization forms to acquire plaintiff’s tax returns from the IRS. . . Plaintiff was to sign these authorizations and send them back to defendant.” A year and a half later, the two sides were still arguing about these discovery issues and the judge was apparently quite angry at plaintiff counsel about the delay.   

Baum v. Village of Chittenango, 2003 U.S. Dist. LEXIS 18393 (N.D.N.Y. 2003). An attorney was compelled to disclose letters providing information about a case to the opposing party since the letters were relied upon by the expert in forming the expert’s opinions. The attorney had attempted to prevent disclosure on the grounds of attorney work product. This decision provides discussion of Hickman v. Taylor, 329 U.S. 495 (1947), which established the protection of attorney work product, and subsequent rule changes and conflicting decisions concerning the disclosure of attorney records that may be required. It determines that Rule 26(a)(2)(B) is paramount over attorney work product rules. (Submitted by Joseph Agrusa.) 

       FELA/Maritime

In the Matter of the Complaint of The Connecticut National Bank, 733 F.Supp. 14. (S.D.N.Y. 1990). See under Household Services. 

Rofail v. United States, 2009 U.S. Dist. LEXIS 51540 (E.D.N.Y. 2009). This is an unpublished decision of Judge Carol Bagley Amon in a Jones Act personal injury case. Plaintiff’s damages had been calculated by economic expert Michael Soudrey, who had found $153,378 in past earnings loss damages and $605,293 in future earnings loss damages for an age 65 retirement. (Soudrey has indicated that his tables provided year to year analysis.) Judge Bagley asserted the following differences with Soudry’s calculations: First, Soudry’s calculations were based on the plaintiff working a full six months of each year and reduced expected work days to 114 days. Second, Soudry had projected losses on the basis of the salary of oilman and junior engineer rather than an oilman alone. Judge Bagley held that the plaintiff had failed to meet his burden of showing that he would have been hired as an unlicensed junior engineer with another ship for three months of another year. Third, Soudry and projected losses to age 65 and the plaintiff had argued for age 67. Judge Bagley cited previous injuries in holding that Rofail would have worked to “his statistical retirement age of 60.7” and not to age 67.  Judge Bagley did not make the specific calculation of damages herself, but ordered that counsel for plaintiff should provide a proposed Judgment making calculations based on the changes indicated by Judge Bagley within 30 days of the order, saying: “Plaintiff shall accompany the proposed Judgment with an affidavit setting forth the calculations he used to arrive at the amount of damages. In setting forth the salary of an oiler, plaintiff is directed to cite the exhibits and testimony in the record that support his position.”

Wright v. United States, 2003 U.S. Dist. LEXIS 2598 (S.D.N.Y. 2003). This is a Judge McKenna’s memorandum that discusses the calculations of economists Patrick A. Gaughan for the defense and A. E. Rodriguez for the plaintiff. Gaughan had used a net discount rate of 3% based on the historic rate of return on long-term Treasuries, while Rodgriguez had arrived at 2% based on the three-month treasury bill yield. Citing the Pfeifer decision, Judge McKenna accepted the rate proposed by Rodriguez because it was allegedly based on “more conservative investments.” The case also involved the issue of how the award for pain and suffering should be reduced to present value. After reviewing legal decisions that might have given guidance, Judge McKenna decided to use the same 2% that he used with lost earnings. 

      Admissibility of Expert Testimony

Coleman v. Dydula, 190 F.R.D. 316 (W.D.N.Y. 1999). This decision is cited in some law books as interpreting the requirement for experts under FRCP 26(a)(2)(B) to list prior testimonies during the previous four years. The district court said: “Plaintiffs are precluded from introducing the testimony of their vocational expert, Herbert Weber, because they failed to comply with this court 's previous order of April 26, 1999. As to Dr. Reiber, plaintiffs shall provide defendants with a list of all cases in which Dr. Reiber has testified in the past four years in compliance with Rule 26. This list should include the name of the court, the names of the parties, the docket number (if available), and whether the testimony was given during a deposition or at a trial.” This decision was submitted by Jerry Martin. 

Coleman v. Dydula, 139 F.Supp.2d 388 (W.D.N.Y. 2001). The testimony of Dr.  Ronald Reiber was challenged under a Daubert motion and upheld. Dr. Reiber had projected lost future wages, future costs of health care coverage and worklife expectancy.  Dr. Reiber used growth rates of 3 percent and 7.3 pecent for both damages categories using a “sum of annuity” formula. Reiber cited the 1996 NAFE Survey as justifying “the theory that historical CPI data can be used to estimate future inflation” (Question 2 from that survey) .  Reiber was challenged because he did not say “how far back” he went in deriving his 3 percent growth rate, with defendant’s insisting that this was precisely the kind of thing that made Reiber’s testimony unreliable. He also justified his 7.3 percent growth rate based on Question 4 in the 1996 NAFE Survey.  Reiber’s worklife expectancy assumption was that the plaintiff would work to age 66, based on the fact that she did not have a pension in her current employment and had stated an intention to work to her 66th birthday. 

Hough-Scoma v. Wal-Mart Stores, Inc., WL 261857 W.D.N.Y.; 1999 U.S. Dist. LEXIS 7046. Testimony based on Gamboa tables was rejected because of lack of foundation.

Israel v. Spring Industries, 2006 U.S. Dist. LEXIS 80863 (E.D.N.Y. 2006). Judge Robert M. Levy’s memorandum denied the admissibility of the testimony of Dr. Leonard Freifelder, Ph.D., president of Freifelder & Associates. Freifelder had projected an eleven year old child’s loss of future earnings and cost of future life care. Judge Levy noted that Dr. Freifelder had never studied labor economics or medical economics and had never held an academic teaching position in economics, and said: “An expert may incorporate assumptions into his or her opinion, but those assumptions must be ones that a reasonable juror could find correct based on admissible evidence. . . In other words, the expert’s underlying assumptions must be evaluated for accuracy. Dr. Freifelder’s underlying assumptions are problematic in a few respects. First, in determining Joseph’s pre-incident earning capacity, he assumes that, had Joseph not been exposed to polyester in the crip sheets, he would have had a normal work life expectancy, meaning that he would have been ‘able to work as a typical male[.]’ . . .His calculations do not take into account the possibility that some of Joseph’s medical conditions were pre-existing and would have affected Joseph’s work life regardless of his purported exposure to polyester. . . Dr. Freifelder testified that he knew that both of Joseph’s parents and one of Joseph’s siblings had received high school diplomas and not continued on to college, but he did not know whether any of Joseph’s other siblings had plans to attend college. . .Nor did he know what percentage of white males in the American population complete high school or attend college. . . Again, Dr. Freifelder does not claim to be a vocational or educational specialist; he has no expertise in evaluating personal skill sets or predicting a particular individual’s vocational or educational prospects. . . In making his calculations, he did not take into account Joseph’s individual characteristics or his family’s socioeconomic status . . . In short, his assumption that, had Joseph been healthy, he would have graduated from high school or completed some college is speculative.” 

Lava Trading, Inc., v. Hartford Fire Insurance, 2005 U.S. Dist LEXIS 4566 (S.D.N.Y., 2005). This decision contains extensive discussion of the expert report and methods used to develop that report by Dr. Eric Clemons, the plaintiff’s principle damages expert. Sanctions were awarded to the defendant based on way Dr. Clemons report was handled. The Court said about Dr. Clemons’ report: “It failed . . to identify either (1) the specific facts or factual assumptions on which Dr. Clemons relied to generate his opinions or (2) the methodology that he used (other than in the most general and unhelpful terms) or (3) his actual calculation of the losses or (4) the basis for the dramatic alteration of his loss numbers frm the first to the second report. In short, the report – in all of its manifestations and supplementations – did not disclose any of the essential details needed to understand and assess Dr. Clemon’s conclusions.” Dr. Clemens was precluded from testifying.

Liu v. Korean Airlines Co., Ltd., 1993 U.S. Dist. Lexis 16233 (S.D.N.Y. 1993).  This is a memorandum and order limiting and excluding part of the proposed testimony of the plaintiff economic expert, Dr. Thomas Kershner. Dr. Kershner was permitted to testify that he had studied the Taiwanese economy and found a history of a robust growing economy. He could explain the concept of household services, but could not give the figures contained in his report. He could testify about the decedent’s statistical worklife expectancy and his assumed spread of the growth of the decedent’s income from 1983 to the present (in 1993), but would be required to revise is figures to us $4,800 per month as the 1993 salary of a chief engineer.  He was not allowed to assume promotions contained in his report or 8% growth in future wages because that figure was not broken down into real and inflationary elements with specific justification for the real growth. Dr. Kershner was also not permitted to give testimony based on the assumption that fringe benefits were 19.5 percent of earnings because there was no support for that assumptin, nor was he permitted to testify about the deduction for personal consumption.

Manganiello v. Agostini, 2008 U.S. Dist. LEXIS 99181 (S.D.N.Y. 2008). Judge Harold Baer, Jr., described the lost earnings calculations of Dr. Frank Tinari on behalf of the plaintiff as “conservative” and indicated that the size of the award did not “shock the conscience, especially in light of the fact that defendants did not produce evidence to rebut Dr. Latif’s or Dr. Tinari’s testimony.” (Dr. Latif was another expert witness, but not an economist).  

Mastrantuono v. United States, 163 F. Supp. 2d 244 (S.D.N.Y. 2001). The court rejected the report of economist Andrew Weintraub, Ph.D., regarding Samantha Bellantoni’s claim for lost future wages, saying: “Weintraub was not given Bellantoni’s W-2 forms for the years 1998, 1999, and 2000, but instead had to estimate her annual earnings by averaging her 1995 to 1997 annual income (Tr. at 134-35.) Dr. Weintraub admitted that this rendered his report incomplete. (Id.) Additionally, Dr. Weintraub unaccountably assumed that Bellantoni’s future wages would grow at 4%, and used the same 4% rate in discounting the future wage loss to present value, as if the interest rate would ever be as low as the rate of inflation. Because we reject this report, we find that plaintiff has failed to prove her future loss of wages by a preponderance of the evidence.” 

Pouliot v. Paul Arpin Van Lines, Inc., 2006 U.S. Dist. LEXIS 32564 (D.CT, 2006). This decision involved Dr. Tony Gamboa for the Plaintiff and Dr. Allan McCausland for the defendant. It appears that Dr. Gamboa used a total offset method, which the defense challenged as not reducing damages to present value. The judge held that Connecticut law “requires that the parties by allowed to present evidence on the proper method of calculating damages, and that the jury be permitted to choose whether or not to credit any evidence presented. He also wrote that “[a]lthough Arpin argues that Dr. McCausland’s testimony as to the appropriate discount rate was more correct than that of Dr. Gamboa, the jury may well have credited Dr. Gamboa’s testimony above Dr. McCausland. The court does not find it necessary to disturb this credibility assessment.”

Queen v. International Paper Company, 2006 U.S. Dist. LEXIS 26725 (N.D.N.Y. 2006). This is Memorandum-Decision and Order by U.S. Magistrate Judge David Homer, holding that an expert witness report by Dr. James Lambrinos would not be precluded in the ground that Dr. Lambrinos initial report was not signed and failed to include Lambrinos’ compensation or llist of cases in which Lambrinos had testified as an expert. These materials were served to the defendant six weeks after the close of discovery. The court held that the substance of the disclosures was made prior to the discovery deadline and therefore that the error had been harmless.

Shatkin v. McDonnell Douglas, 565 F.Supp.93 (S.D.N.Y. 1983). This is one of two decisions excoriating the testimony of Dr. Edmund Mantell in related litigation from two different federal judges.  The other is Shu-Tao Lin v. McDonnell Douglas, 574 F.Supp. 1407 (S.D.N.Y. 1983). Dr. Mantell used the same methods used in that case, as described in that listing. Judge Pollack said: “This court finds that Dr. Mantell’s assumptions and techniques of calculation involve gross error at almost every step. The testimony is not competent, has no evidentiary value and no reasonable juror would be justified in relon on or according any weight to it whatsoever. To permit the jury to hear it would amount to irretrievable prejudicial projections of an unfounded character and hopelessly prejudice the fairness of the trial.”

Shu-Tao Lin v. McDonnell Douglas, 574 F.Supp. 1407 (S.D.N.Y. 1983). This is one of two decisions excoriating the testimony of Dr. Edmund Mantell in related litigation from two different federal judges. The other is Shatkin v. McDonnell Douglas, 565 F.Supp.93 (S.D.N.Y. 1983). Dr. Mantell used total offset, 25 percent increases in income for the first four years after the wrongful death, $125,000 as an extrapolation from actual earnings in the five months prior to the death, compared with annual earnings in the previous year of $56,000, a 13 percent tax rate. However, the award was increased by 50 percent for the interest income to Mrs. Lin resulting from the damage award.  Judge Sweet quoted Judge Pollak from the Shatkin decision as saying: “This court finds that Dr. Mantell’s assumptions and techniques of calculation involve gross error at almost every step. The testimony is not competent, has no evidentiary value and no reasonable juror would be justified in relon on or according any weight to it whatsoever. To permit the jury to hear it would amount to irretrievable prejudicial projections of an unfounded character and hopelessly prejudice the fairness of the trial.” The discussion of the inadmissibility of this testimony because of internal contradictions under Rule 703 is very interesting.

Supply & Building Co. v. Estee Lauder International, 2001 U.S.Dist. Lexis 20737 (S.D.N.Y. 2001). This is an order admitting the testimony of the defense economic expert Theodore Martens and denying the testimony of the plaintiff’s expert Robert Sherwin. Both were CPA’s and this was a business damages case. The order places heavy reliance on the Daubert and Kumho decisions. 

United States v. Starzecpyzel, 880 F. Supp. 1027 (S.D.N.Y. 1995). Judge Lawrence M. McKenna allowed the testimony of Forensic Document Examiner (FDE) Mary Wenderoth Kelly in a criminal action. At 1029, Judge McKenna said: “Yet, as distinguished from such discredited ventures as hedonic damages expertise, clinical ecology, trauma-cancer expertise or the Benedictin plaintiffs’ statistical machinations, forensic document examination does involve true expertise, which may prove helpful to a fact finder.

           Legal Procedure

The Cadle Co. v. Ogalin, 2007 U.S. Dist. LEXIS 47977 (D. Conn. 2007).  The jury in this case had found that transfers from Frank Ogalin to his wife Christina constituted fraudulent transfers under bankruptcy law instead of legitimate payments for services rendered. The Court said: “The evidence for evaluating Christina Ogalin’s annual salary payments was the testimony of economist Arthur Kenison and plaintiff’s Exhibit 104, a statistical table of national salary averages based on worker’s age and education level[.] . . While Kenison did not purport to have specific knowledge of the particular tasks that . . . Christina Ogalin performed, he explained to the jury that the figures represented salary averages, which were subject to adjustment for exceptionally skilled employees or employees who performed beyond the scope of their expected duties.” The court upheld the jury verdict that payments to Christina Ogalin represented fraudulent transfers.

           Wrongful Termination

McGrory v. City of New York, 2004 U.S. Dist. LEXIS 20425 (S.D.N.Y. 2004). This is decision in an employment discrimination action. Economic damages were established through the testimony of the City’s former chief actuary, Jonathan Schwartz based on an assumption that the plaintiff would never work again. The jury awarded front pay damages for six years, but did not subtract for Social Security disability payments that both sides agreed should have been subtracted. The judge offered a remittitur, reducing back and front pay damages and the amount awarded for emotional distress. The decision provides detailed discussion of the modifications in the remittitur.

Pappas v. Watson Wyatt & Company, 2007 U.S. Dist. LEXIS 86077 (D .Conn. 2007).  A Title VII victim of unlawful retaliation was allowed to claim as damages taxes and penalties she had paid on amounts withdrawn from her retirement account to pay for expenses after being fired. However, the Court did  not allow a claim losses of interest and capital appreciation that would have occurred on the amount that was withdrawn. This portion of the award was in addition to back pay, which the parties had stipulated were $51,000 plus COBRA contributions in the amount of $6,063.36. The Court described damages in a Title VII case as “tort-like” and considered the issue of “proximate cause” in reaching its decision. The Court held that the defendant could reasonably have foreseen the consequence that the plaintiff would need to withdraw money from her retirement account, but could not reasonably have foreseen that increases in the stock market during the period from her firing and recovery would have been as fortuitous as they were.

Thomas v. iStar Financial, Inc, 2007 U.S. Dist. LEXIS 67856 (S.D.N.Y. 2007). This legal memorandum provides a detailed consideration of how the judge arrived at a remittatur for front pay damages and punitive damages awarded by the jury in a racial discrimination case. Two factors stand out: First, the plaintiff had misrepresented his educational credentials to his employer. This was not discovered until after the case was in litigation, but affected how the judge thought about mitigation of damages. Second, the plaintiff had purchased a home that would have required a three hour commute to work, which the judge thought would not have indicated a long period of front pay with the plaintiff’s existing employer. There is discussion of the opinions of economic experts on both sides of this case.

          Miscellaneous

Colaio v. Feinberg, 2003 U.S. Dist. LEXIS 7626 (S.D.N.Y. 2003). This decision held in summary judgment that the rules developed by Kenneth Feinberg for the Victims’ Compensation Fund for providing compensation to victims are consistent with the intent of the legislation. The decision includes extensive discussion of the history of the legislation and the rules used to determine damages. 

3rd  Circuit

    Court of Appeals

        Annuities, Periodic Payments and Reversionary Trusts

Godwin v. Schramm, 731 F.2d 153 (3rd Cir. 1984). Deals with how attorney fees were determined in a case involving a reversionary trust.  This was an FTCA action that also involved the United States as a defendant. 

       Legal Procedure

Bucks County v. Commonwealth of Pennsylvania, 2004 U.S. App. LEXIS 17231 (3rd Cir. 2004). “We hold that under the particular circumstances of this case, where a trained service provider was not available and the parent stepped in to learn and perform the duties of a trained service provider, reimbursing the parent for her time spent in providing therapy is ‘appropriate’ relief. A child was eligible for state provided therapy, but no qualified therapist was available. The mother of the child took training to be able to provide the necessary therapy. The third circuit held in a precedential decision that she should be compensated at $22 per hour even though she had no out of pocket expenses. Suggested by David Jones.

      Treatment of Taxes

Eshelman v. Agere Systems, Inc., 2009 U.S. App. LEXIS 1947 (3rd Cir. 2009). The 3rd Circuit held that it was not an abuse of the trial court’s discretion to have provided an additional monetary award to offset the negative tax consequences of the plaintiff’s back pay award. The Court said: “A chief remedial purpose of employment discrimination statutes such as the ADA is ‘to make persons whole for injuries suffered on account of unlawful employment discrimination. . .  Congress armed the courts with broad equitable powers to effectuate this ‘make whole’ remedy. . . District courts are granted wide discretion to ‘locate a just result’ regarding the perameters of the relief granted in the circumstances in each case.” The Court added: “[E]mployees may be subject to higher taxes if they receive a lump sum back pay award in a given year, meaning the employee would have a greater tax burden than if he or she were to have received the same pay in the normal course. This is the origin of Enshelman’s argument that she should receive an additional sum of money to compensate her added tax burden.” The decision further explained that Enshelman had: “submitted an affidavit from an economic expert who calculated the amount of tax-effect damages based on the back pay award, the applicable tax rates, and Enshelman’s tax returns for the appropriate years. . . Having reviewed the record, we hold that the District Court did not abuse its discretion in awarding Enshelman $6,893 as compensation for the negative tax   consequences of receiving her lump sum back pay award.” 

Gelof v. Papineau, 829 F.2d 452 (3rd Cir. 1987). This decision reaffirmed that unemployment compensation cannot be used to offset an award for back pay, even if the unemployment compensation came from the state of Delaware that was the defendant employer in this case. The decision also dealt with the tax consequences of the lump sum award for back pay in a wrongful discrimination case. The Court pointed out that both parties had agreed that adjustment for tax consequences was relevant so that the legitimacy of such an adjustment was not a question before the court. The plaintiff economic expert had projected the amount to be added to the award for tax consequences was $85,031. However the amount was calculated on the basis of a back pay award $23,331 higher than actually awarded and was based on 1986 tax rates instead of 1987 tax rates when the award was made. There was also an issue about whether the part of the award for prejudgment interest should have been included in the tax adjustment calculation. The Court pointed out that it was unable to determine from the District Court’s finding the precise basis for the plaintiff’s economic experts tax consequence calculation or $85,031. The Court therefore vacated the $85,031 and remanded for further findings of the district court on that issue. 

      Hedonic Damages and Emotional Services

Broome v. Antler's Hunting Club, 595 F.2d 921 (3rd. Cir. 1979). Held that loss of enjoyment of life damages are not available in a wrongful death because "only a living person whose faculties have been impaired through injury may recover damages for life's amenities." 

Williams v. Dowling, 318 F.2d 642 (3rd Cir. 1963). The 3rd Circuit reversed the decision of a Virgin Islands trial court to award $5,000 to the plaintiff mother of a decedent minor child for losses arising from the death of her minor son. The reasoning of the 3rd Circuit is based on the fact that the Virgin Islands Wrongful Death Act was modeled after the California Wrongful Death Act, so that California rules and decisions were applicable to the case at hand. The 3rd Circuit said, “a careful reading of the record in this case fails to disclose any evidence whatever bearing upon the pecuniary damage which the plaintiff claims to have sustained or might be expected to sustain as a result of her son’s death, or which would furnish support for a finding of such damages.”

      Admissibility of Expert Testimony

Benjamin v. Peter’s Farm Condominium Owners Association, 820 F.2d 640 (3rd Cir. 1987).  The lost earnings projection of Leonard Chasen, a certified public accountant, had been admitted by the trial court judge. It was rejected by the Third Circuit Court of Appeals on the grounds that the only foundation for an assumption that the plaintiff’s post injury earning capacity was $10,000 per year was “Benjamin’s personal belief as to how much money he could earn together with his personal records reflecting money recived and disbursed during the three month period after the injury.  Likewise the only foundation for pre injury earnings was business earnings of $24,500, based on Benjamin’s 1984 tax return.  The court said, “We agree with PFCA’s position that, on this record, Chasen’s calculation is a “castle made of sand.” 

Donlin v. Philips Lighting North America Corp., 2009 U.S. App. Lexis 8408; 106 Fair Empl. Prac. Cas. (BNA) 1 (3rd Cir. 2009). This decision affirmed the district court as to liability, but remanded for a new trial on damages. Several issues were involved with why the damage portion of the district court decision was remanded. One of those issues was that the district court permitted the plaintiff to testify at length about back pay and front pay. The 3rd Circuit said: “[W]e find that the District Court should have barred portions of Donlin's testimony requiring technical or specialized knowledge. Donlin admitted that she was "not a professional," nor a finance major or forensic economist. . . . Donlin's testimony regarding facts within her personal knowledge (such as her current and past earnings) was appropriate. But, much of Donlin's testimony went beyond those easily verifiable facts within her personal knowledge and instead required forward-looking speculation for which she lacked the necessary training. For instance, in calculating her front pay, Donlin speculated that Philips would provide a 3% annual pay raise; in fact, the company did not provide an increase of more than 1.3 % in the years immediately prior to the trial. Additionally, having no experience with retirement benefits, Donlin misinterpreted Philips's definition of "pensionable earnings" and erroneously assumed a flat 5% per year on pension earnings based only on an example in the Philips pension manual. After admitting that she had never performed a present-value discounting calculation prior to the day before trial, Donlin testified that she received instructions from her lawyer the night before regarding the proper discount rate. Finally, Donlin misapplied the life expectancy charts and therefore did not properly account for the probability of her death. In sum, Donlin's testimony crossed  the line into subject areas that demand expert testimony.” Suggested by Marc Weinstein.

Elcock v. KMART Corporation, 233 F.3d 734; 2000 U.S. App. LEXIS 34822 (3rd Cir. 2000). This decision provides extensive discussion reasons why the 3rd Circuit reversed the trial court decision to admit the vocational testimony of Dr. Chester Copemann and the economic testimony of Dr. Bernard Pettingill. It cites eight Daubert factors from In Re: Paoli Railroad Yard PCB Litigation (Paoli II), 35 F.3d 717, 742 (3rd Cir. 1994) and finds numerous faults with the testimony of Dr. Copemann. It also discussed at length the degree to which the fact that Dr. Copemann had pled guilty to embezzlement could be introduced to impeach the crediblity of his testimony. The discussion of reasons for not admitting the economic damages testimony of Dr. Pettingill was not as extensive, saying: “In sum, we believe that Pettingill’s economic damages model relied on several empirical assumptions that were not supported by the record. Although Pettingill suggested to the jury that it might discount the 100 percent disability figure he plugged into his economic model, this suggestion is not sufficient to change the result. In the absence of clearer instructions or emphasis by the witness or the court, a jury is likely to adopt the gross figure advanced by a witness who has been presented as an expert. Accordingly, the District Court abused its discretion in admitting Pettingill’s model as evidence.”

Gumbs v. International Harvester, Inc., 718 F.2d 88 (3rd Cir. 1983).  S. Jones-Hendrikson, the economist for the plaintiff, had projected lost earnings based on the life expectancy of the plaintiff without consideration of worklife factors and had used a base income figure more than double the plaintiff's average income in the four years prior to the accident. 

Oddi v. Ford Motor Company, 234 F.3d 136 (3rd Cir. 2000). This case does not directly evaluate economic damages, but cites Elcock v. K-Mart and provides Elcock's set of eight Daubert tests for admission of testimony.

Williams v. Rene, 72 F.3d 1096 (3rd Cir. 1995). The decision of the trial court was reversed by the 3rd Circuit for several reasons. Among those reasons, the plaintiff had presented an unnamed actuarial expert to project lost earnings.  The 6th Circuit found “two serious deficiencies” that undermined the testimony of the actuarial expert. First, “there was no evidence on which the expert could properly base an opinion that plaintiff’s gross earnings would triple in the remaining seventeen years of his service before retirement. Second, the loss was not reduced to present value, “an obligation that plaintiff must shoulder.” 

      Wrongful Termination or Employment Discrimination

Collins v. Prudential Investment and Retirement Services, 119 Fed Appx. 371 (3rd Cir. 2005). This was an employment discrimination case based on the plaintiff having been diagnosed with Attentin Deficit Hyperactivity Disorder (ADHD) two months after being terminated. The trial court ruled for the defense and the third circuit upheld that decision under the framework of Toyota Motor Manufacturing, Inc. v. Williams, 534 U.S. 184; 122 S.Ct. 681 (2002). The second to last paragraph of the decision may be of interest to forensic economists: “Collins did not claim that she was substantially limited in the major life activity of working during the trial. However, she now suggests as much in her appeal. She now claims that Calvin Anderson testified as her expert that she could not do corporate taxes on a full-time, long-term basis and that corporate taxes are associated with a broad range of jobs associated with her associate degree in accounting. She fails to mention that Anderson was her economic expert, not a vocational expert or medical expert. Accordingly, even if we were to entertain this argument for the first time on appeal, we would find it has no merit.

    District Courts in the 3rd Circuit (NJ, PA and Virgin Islands)

   
Basis Income and  Fringe Benefits for Projecting Earnings Loss

Conn v. United States, 2009 U.S. Dist. LEXIS 34474 (W.D. Pa. 2009). This judicial memorandum described the thinking of Judge Cercone in arriving at damages in this suit against the United State. Dr. Mathew Marlin was the economic expert for the plaintiff and Mr. Jay Jarrell was the vocational expert and economist for the defendant. Dr. Marlin was described as vice president of AAEFE and member of NAFE and there is mention of his role with the Journal of Legal Economics. Mr. Jarrell was mentioned as a member of NAFE. Dr. Marlin’s specific calculated values are mentioned for both past and future. Dollar Value of a Day is referenced as the source for Dr. Marlin’s projection of household services. His use of 24.9 years of work-life expectancy from a “Journal of Economics” source is mentioned. Mr. Jarrell’s disagreements with Dr. Marlin are listed in less detail, but primarily consisted of offset earnings at the minimum wage rate that Judge Cercone apparently used in arriving at damages. Judge Cercone said of Dr. Marlin: “Dr. Marlin calculated the amount of lost earnings through the date of his report at $139,000. The record clearly supported each assumption underlying this calculation and we find the amount to represent adequately and fairly the loss in this category. . . We credit Dr. Marlin’s calculation reflecting the total amount she would have earned during her work-life expectancy if the injury had not occurred. We take into account the residual effects from the accident and Donna’s functional capacity as set forth above.” On that basis, Judge Cercone reduced Dr. Marlin’s projection of future damages from $624,000 to $525,000. Judge Cercone’s basis for determining other elements of damages is also indicated.

Henry v. Hess Oil Virgin Islands Corporation
, 163 F.R.D. 237; 1995 U.S. Dist. LEXIS 12668 (D. Virgin Islands 1995).  Plaintiff’s vocational expert was Dr. Chester Copemann, who testified that plaintiff could only work at minimum wage. Plaintiff’s economist, Dr. Lawrence Roberts, provided damages estimates for minimum wage employment and total disability. Dr. Michael Shahansarian, vocational expert for the defense, “offered uncontradicted testimony that he contacted IMC, plaintiff’s employer at the time of the accident, and was told plaintiff showed no interest in resuming his prior job or any other alternative job they offered.” The jury awarded $1.1 million in damages, which court agreed was excessive and ordered a new trial on damages only.

     Tax Treatment

Argue v. David Davis Enterprises, 2009 U.S. Dist. LEXIS 32585 (E.D.Pa. 2009). This opinion of Judge Gene E. K. Pratter denied a defense motion for a gross-up of the award to account for the negative tax consequences of a lump sum verdict in an age discrimination case. In this case, the gross-up was primarily based on differences between tax rates applicable in 2003 versus 2007 and not primarily upon differences cause by movement from a lower tax bracket to a higher tax bracket based on the size of the lump sum. The plaintiff had submitted calculations of economic expert Andrew Verzilli to make its claim for a gross-up of the award. Judge Pratter described Mr. Verzilli’s method as follows: “Mr. Verzilli took the entire jury award, including back pay and lost benefits, added it to Mr. Argue’s present yearly income, and calculated Mr. Argue’s 2007 tax rate to arrive at a tax rate of 16.62%. He then determined what Mr. Argue’s 2007 tax rate would have been if he had remained at Davis Acura at a salary comparable to his salary for the years he was employed there. To arrive at his estimated tax impact, he subtracted the 2003 tax rate from the 2007 tax rate and multiplied the lump sum award by the difference in tax rates.”  Judge Pratter concluded: “This is not a case in which the equities demand additional compensation for any negative tax consequences; nor is Mr. Verzilli”s affidavit or calculation unhampered by speculation. For instance, Mr. Verzilli uses 2007 as a tax year in which Mr. Argue would receive his award and suffer tax impact, despite the fact that the trial took place in 2008, making 2008 the earliest possible year that Mr. Argue would receive the judgment. Of course, it is now 2009 and, to say the least, the question of federal income tax rates is in its own state of flux and speculation. Moreover, given that Mr. Argue’s tax returns are available for each year between his termination and trial (and were in fact introduced as exhibits at trial), estimating the tax impact by using one year as a comparison ignores the fact that information about more than one year is readily available. See Loesch v. City of Philadelphia, Civil Action No. 05-cv-0578, 2008 U.S. Dist. LEXIS 487757, 2008 WL 2557429 at *(E.D. Pa. June 19, 2008)(awarding compensation for negative tax consequences, but rejecting Mr. Verzilli’s calculations, in which he used a methodology similar to the one used in this case, as not properly grounded in the facts of the case). Such “moving targets” are hardly a proper basis for a damage award.”

Loesch v. City of Philadelphia,
2008 U.S. Dist. LEXIS 487757, 2008 WL 2557429 (E.D. Pa. 2008). Plaintiff’s introduced a report from Andrew Verzilli providing a calculation of $87,330 in negative tax consequences. The decision described Mr. Verzilli’s method in detail. The defendant submitted a corrected calculation of the tax consequences making clear errors in Mr. Verzilli’s calculations and leading to a tax consequence of $46,746, which Judge J. Curtis Joiner accepted in lieu of Mr. Verzilli’s calculation. The decision is interesting because of the detailed discussion of methods used by Mr. Verzilli and errors noted by the defendant regarding those methods. 

O’Neill v. Sears, Roebuck and Company,
108 F. Supp. 443 (E.D. Pa. 2000). This decision held that negative tax consequences of a lump sum payment of back and front pay should be taken into account (by a gross-up) in a wrongful termination case. However, the Court held that negative tax consequences were limited to the part of the award for back and front pay, not “the compensatory and liquidated damages, which the Court held “are only a product of this lawsuit.” Economist Andrew Verzilli provided calculations of the necessary amount to offset tax consequences of a large lump sum payment for all damages, so that the Court had to divide Verzilli’s calculated tax consequence into a portion relevant to back and front pay and a portion relevant to compensatory and liquidated damages. The Court said: “According to Mr. Verzilli (and the defendant presented no evidence contrary to Mr. Verzilli’s calculations), the O’Neills’ gross earnings this year would have been approximately $55,843, had Mr. O’Neill continued working at Sears. . . Using the O’Neills’ deductions of approximately $12,000 yields a tax rate of 11.96%.  At that tax rate, Mr. O’Neill would owe $28,384.91 in taxes on the $237,332 he has received in front and backpay. However, because he is receiving this money all at once, together with his present salary of $24,960 and Mrs. O’Neill’s salary of $11,428, his gross income this year, exclusive of compensatory and liquidated damages, will be $273,730. Using the same deductions, the tax rate jumps to 28.3%. Applying this rate to plaintiff’s front and backpay recovery of $237,332 shows a tax bite of $67,164.96. This amount is $38,780.05 more in taxes than plaintiff would owe on this money had he received it over time as annual wages. The court will, therefore, mold the verdict to include an award of $38,780.05 for these negative tax consequences.”

Shovlin v. Timemed Labeling Sys., Inc
., 1997 U.S. Dist. LEXIS 2350; 1997 WL 10253 (E.D. Pa. 1997). This judicial order denies plaintiff’s motion to have negative tax consequences of a lump sum award based on age discrimination taken into account. The plaintiff had cited the case of Gelof v. Papineau, 829 F.2d 452 (3rd Cir. 1987) as authority, but the Court rejected that argument based on a footnote indicating that this had not been an issue in Gelof because the defense in that case had conceded that the award should take negative tax consequences into account and the Gelof Court had therefore not addressed the question of whether this should have been done or not, a point made clear in a footnote to that decision. The reason for the denial to take negative tax consequences in Shovlin was that: “[A]t the trial in this case there was no testimony by a tax expert calculating the ‘negative tax consequences’ to the Plaintiff in the future in connection with an award of back pay and front pay and this court is not inclined to engage in the speculative task of determining the Plaintiff’s future tax liability.”

Tomaso v. The Boeing Company, 2007 U.S. Dist LEXIS 70001 (E.D. Pa 2007). The district court in this case denied plaintiff’s request for compensation for the negative tax consequences of the jury’s award, saying: “Plaintiff provided the court with an affidavit from his expert, Mr. Verzilli, which estimates that plaintiff will incur a negative tax consequence of $42,893. . . However, the court does not find compelling the argument that plaintiff must be awarded damages for the increased tax burden in order to be made whole. Absent express direction from the Third Circuit that damages should be awarded to compensate a plaintiff for the negative tax consequences from an ADEA back pay award, this court is not inclined to offer such relief.” Such express direction from the Third Circuit was presumably provided later in Eshelman v. Agere Systems, Inc., 554 F. 3d 426 (3rd Cir. 2009).

     Legal Procedure

Aetna, Inc., v. Express Scripts, Inc. 2009 U.S. Dist. LEXIS 84975 (E.D. Pa. 2009).  This order denies a motion in limine (under Daubert criteria) to exclude the testimony of economic expert, Robert J. DeLuca, in a contract violation commercial litigation. This decision contains a valuable discussion of “reliability” and “disclosure” in the opinions offered by economic experts in commercial cases. Specifically the defendant did not disclose its method for rounding up prices of products, but then attacked the expert in deposition for his failure to round up prices using the defense’s undisclosed procedure. The plaintiff expert produced an errata sheet with calculations corrected for the now disclosed rounding procedure. The defendant then moved to bar the errata as a new report filed after the disclosure deadline. Similarly, the defendant did not disclose prices and costs for certain product lines and DeLuca had to “fill-in” missing data using projections. The defendant attacked the expert for lack of reliability in using projected rather than actual data. The decision held that the defendant created the need for the errata sheet and data projections and could not use the defense’s failure to disclose this information as the basis for disqualifying the plaintiff’s expert. (Some language used in this description was provided by John O. Ward.)

     FELA/Maritime Cases

Berryman v. Consolidated Rail Corporation, 1995 U.S. Dist. LEXIS 12768 (E.D.Pa.1995). This is the third of three decisions reached by judges for the U.S. District Court for the Eastern District of Pennsylvania within one month, all of which had relied on Maylie v. National Railroad Passenger Corporation, 791 F.Supp. 477 (1992).  The other two decisions were Sparklin v. Consolidated Rail Corporation, 1999 U.S. Dist LEXIS 10857, and Troy v. National Railroad Passenger Corporation, 1995 U.S. Dist. LEXIS 10596. In each of these decisions, including Maylie, the plaintiff had not claimed any lost retirement benefits. Correspondingly, the court held that Railroad Retirement Board taxes paid to fund those retirement benefits could not be subtracted from lost earnings.   

Maylie v. National Railroad Passenger Corporation, 791 F.Supp. 477 (E.D.Pa. 1992). The judge ruled in this case that "Because defendant did not consent to the inclusion of the value of the [Railroad Retirement] pension, it was not error to refuse to reduce plaintiff's lost wages by the amounts he would have had to pay in railroad retirement taxes."

     Admissibility of Expert Testimony

Booth v. Black & Decker, 2001 U.S. Dist. Lexis 4495 (E.D.Pa. 2001).  This decision did not involve economic testimony, but cited the eight Daubert factors used in Elcock v. K-Mart. The decision excluded the testimony of Richard B. Thomas about toaster defects, saying: "there was no evidence that the method he applied was subject to peer review, had a known or potential rate of error, could be measured by existing standards, or was generally accepted. Futhermore, there was no establishiment of the relationship beteen the technique and the methods. Though Thomas may be qualified to testify on these matters, he did not take sufficient care in supporting the credibility or reliability of the methodology he applied . . ."

Bowman v. International Petroleum Corporation, 1995 U.S. Dist. LEXIS 10873 (E.D.PA 1995). The defendant appealed based in part on the trial court having permitted the testimony of economic expert David Bunin, which was based on a flawed methodology. The Court emphasized the fact that the defense had time to retain its own economic expert, but had not done so in rejecting this part of the appeal.

Gutierrez v.  Johnson & Johnson, 2006 U.S. Dist. LEXIS 80834 (D.N.J. 2006).  This memorandum by Judge William M. Walls rejects motions in limine under a Daubert standard to strike the reports of economists Dr. Janice Madden on behalf of the plaintiff and Dr. David Wise on behalf of the defendant in an employment discrimination at the stage of class certification. Dr. Madden has her Ph.D. from Duke University and is a professor at the University of Pennsylvania. Dr. Wise is an economist at Harvard University. Regarding Dr. Madden’s report, Judge Walls said: “The Court is unpersuaded that Dr. Madden’s choice of variables renders her analysis so fatally flawed that it should be stricken as a matter of law. Generally, decisions regarding what control variables to include in an expert report go to weight, not admissibility. . . Since the expert accounted for experience and seniority within the company and tracked the employees over time, the data was not so incomplete to be rendered irrelevant and any inadequacies in the methodology could be addressed in cross examination.” Regarding Dr. Wise’s report, Judge Walls said: “Plaintiffs raise some serious limitations to Dr. Wise’s approach. However, this Court is mindful that under Daubert, a court is directed to focus on principles and methodolgy, not on the conclusions they generate. Daubert, 509 U.S. at 595. Plaintiffs do not dispute the validity of the statistical tests Dr. Wise performed, nor could they. As Nobel Laureate Dr. Daniel McFadden stated in his declaration, the Chow test, fixed affects models, f-tests, and t-tests are all standard, peer reviewed tests with acknowledged reliability. . .Rather, Plaintiffs challenge Dr. Wise’s interpretation of the results as they relate to the legal concept of commonality. However, disagreements about the conclusions to be drawn from a particular test affect the weight of a report, not its admissibility. . . Plaintiffs’ concerns about the significance or lack of significance of the Wise Report can be adequately addressed through cross-examination.”

JMJ Enterprises, Inc. v. Via Veneto Italian Ice, Inc, 1998 U.S. Dist. LEXIS 5098 (E.D.Pa. 1998). Leon A. LaRosa, Jr., who had a Bachelor’s Degree in Business Administration and a Master’s in Taxation, had his testimony ruled inadmissible because: (1) He did very little to verify his sales projection; (2) Did not attempt to verify information in the tax return; (3) Did not consider the owner’s experience with respect to the company’s potential success; (4) Did not conduct industry research; and (5) Found sales would rise dramatically but expenses would not increase.  There is a good discussion in this decision of Daubert standards and how they should apply in a business valuation context.  (Submitted by Holly Sharp.) 

Montgomery v. Mitsubishi Motors Corp., 2006 U.S. Dist LEXIS 24433 (E.D. PA 2006).  In this judicial memorandum, Judge Pratter denied Mitsubishi’s move to preclude the testimony of Dr. Anthony Gamboa. Judge Pratter denied the motion without prejudice, meaning that the issue can be raised again later. At least one error in Mitsubishi’s brief was a claim that Dr. Gamboa had assumed that Montgomery would work to age 89 based on the LPE-type calculation Dr. Gamboa had made. 

McNamara v. Kmart Corporation, 2010 U.S. Dist. LEXIS 865 (D. Virg. Isl.). This opinion upheld a trial court decision not to admit the testimony of economic expert Robert Johnson and to severely limit the testimony of vocational rehabilitation expert Susan McKenzie. The Court rejected the testimony of physiatrist Dr. Gary Jett, upon whose testimony much of the testimony of McKenzie and all of the testimony of Johnson rested. The Court said: Johnson’s conclusions were premised on his understanding of McNamara’s future medical and non-medical expenses provided to him by McKenzie. Because future medical needs and costs were beyond McKenzie’s expertise and her calculation of medical expenses were derived from Dr. Jett’s unreliable chart, the basis for Johnson’s opinions were faulty. There was simply nothing for him to reduce to present value. His testimony would have been a mere reiteration of Dr. Jett’s suspect numbers.” The Court’s description of Dr. Jett’s methods and opinions was very negative.
 
Polymer Dynamics, Inc., v. Bayer Corporation, 2005 U.S. LEXIS 7945 (E.D.Pa. 2005). Defendant Bayer filed motions in limine under a Daubert standard to exclude the testimony of various plaintiff experts, including Dr. A. Lawrence Kolbe. The court found that Dr. Kolbe was qualified to offer the jury an opinion on damages, that his methodology was reliable and that Dr. Kolbe’s testimony fit the facts of the case.

Schieber v. City of Philadelphia, 2000 U.S. Dist. Lexis 17952 (E.D. Pa. 2000). LPE methods used by Gary French were discussed in detail. French was permitted to present estimates based on most probable earnings scenario for Shannon Schieber as a teacher, but not for a less probable private sector career. Tried under federal standards. 

      Punitive Damges

Voilas v. General Motors Corp., 73 F. Supp. 2d 452 (D.N.J. 1999). In addition to other aspects of his proposed testimony, Dr. Frank Tinari had been proffered to present three alternative approaches for the jury to consider in awarding punitive damages (463).  Judge Wolfson found Dr. Tinari to have had “a distinguished professional career in the field of economics.” She upheld his ability to testify about general characteristics of the General Motors Corporation and about personal injury damages of the variety usually addressed by forensic economists. She did not, however, allow his testimony about punitive damages, saying (at 464): “[T]he court finds there are no credentials that could qualify an individual as a punitive damages expert, primarily because the area of assessing punitive damages, implicative of various societal policies and lacking any basis in economics, rests strictly within the province of the jury and, thus, does not necessitate the aid of expert testimony. . . Indeed, courts have characterized the jury’s assessment of punitive damages as “an almost unconstrained judgment or policy choice about the severity of the penalty to be imposed, given the jury’s underlying factual determinations about the defendant’s conduct.” In this respect, Judge Wolfson compared testifying about punitive damages as having parallels with testifying about hedonic damages. 

      Wrongful Termination

Alphonso v. Pitney Bowes, Inc, 2004 U.S. Dist. LEXIS 13704 (D.N.J. 2004). The defendant was awarded sanctions based, in part, on maintenance of a wage loss claim even though a terminated worker was unquestionably earning more after his termination. Andrew Verzilli was brought in as an economic expert at the last minute by the plaintiff. Jerome Staller was hired by the defense to state that there was no earnings loss.

4th Circuit

    Court of Appeals

        Basis Income and Fringe Benefits for Projecting Earnings Loss

Simo v. Mitsubishi, 2007 U.S. App. LEXIS 19421 (4th Cir. 2007). Simo was an 18 year old passenger in a 2000 Mitsubishi P45 Montero Sport that rolled over, causing severe injuries to Simo and ending his potential career as a soccer player. The district court awarded $6,050,000 in damages to Simo. One of the appeals made by Mitsubishi was that verdict was excessive and that the district court erred in admitting the expert testimony of Patrick McCabe, a sports agent, and the testimony of economist Ken McCoin based on McCabe’s testimony. The 4th Circuit conducted a Daubert-Kumho review and held that the district court was within its discretion in admitting testimony from McCabe and McCoin. The ruling that McCabe’s testimony was admissible also rested on South Carolina law. The 4th Circuit said: “While neither McCabe nor anyone else could predict with certainty what the future would have held for Simo, South Carolina damages law did not require such certainty. See South Carolina Fin. Corp. of Anderson v. W. Side Fin. Co., 236 S. C. 109, 113 S.E.2d 329, 336 (S.C. 1960 ) (‘The law does not require absolute certainty of data upon which lost profits are to be estimated, but all that is required is such reasonable certainty that damages may not be based wholly upon speculation and conjecture, and it is sufficient if there is a certain standard or fixed method by which profits sought to be recovered may be estimated and determined with a fair degree of accuracy.’ (internal quotation marks omitted). McCabe explained that his projections encompassed ‘a range of averages,’ rather than a precise prediction of Simo’s future. J.A. 2025. And, it is noteworthy that even Mitsubishi’s expert testified that he was sufficiently informed to offer a ‘probable career path’ for Simo. Id. At 1092; cf. Correa v. Cruisers, 298 F.3d 13, 26 (1st Cir. 2002) (‘Acceptance of the methodology by the other party’s expert may give additional credence to the reliability of proffered testimony.’) 

                Treatment of Taxes

Flannery v. United States, 718 F.2d 108 (4th Cir. 1983). This decision included several important holdings about the application of the Federal Tort Claims Act (FTCA). First, it held that taxes must be subtracted from lost earnings regardless of state law concerning subtraction of taxes. Second, it held that the discount rate used to reduce future values to present values must be a tax adjusted rate. Third, it held that lost enjoyment of life damages were not allowed in an FTCA action as punitive to the United States (this holding was later overturned in Molzof v. United States, 502 U.S. 301; 112 S. Ct. 711, 1992). Fourth, it held that the medical costs in a life care plan for a comatose person must be subtracted from lost earnings.

                  Admissibility of Expert Testimony

Balance v. Wal-Mart Stores, Inc., 1999 U.S. App. LEXIS 7663 (4th Cir. 1999). This decision involved a slip-and-fall case in Wilson, North Carolina. At issue on appeal was whether the medical testimony of Dr. David Tomaszek and the corresponding life plan testimony of Anthony Sciara, Ph.D. should have been admitted. A Daubert hearing had been conducted by the District Court judge and the 4th Circuit Court of Appeals upheld the District Court judge. 

Berlyn Inc. v. Gazette Newspapers, Inc., 2003 U.S.App. LEXIS 16814 (4th Cir. 2003). From footnote 3: “Appellants also seek to rely on the the testimony of their proposed exert witness, Mr. James Shaffer. The district court correctly ruled, however, that Shaffer is unqualified to offer expert testimony as an economist on the establishment of relevant product or geographic markets. While Shaffer has an MBA and significant executive experience in the newspaper industry, he subscribes to no economics journals, has not published any economics-related articles. He is also unfamiliar with basic terminology and concepts used by economists who work on antitrust cases. Furthermore, Shaffer admitted that he had never conducted a relevant market analysis, and that any reading he had done on the subject came from materials provided to him by Appellant’s attorneys.” 

    District Courts in the 4th Circuit (DE, MD, NC, SC, VA, WV)

         Basis Income and Fringe Benefits for Projecting Earnings Loss

Roark v. United States, 2006 U.S. Dist. LEXIS 74784 (W.D.VA 2006). This is a legal memorandum describing Judge Jones thought processes in evaluating reports of economic and rehabilitation experts for the plaintiff and defendant. The economic experts were Norman Fayne Edwards for the plaintiff and Dr. Richard Edelman for the government. Dr. Edwards projected past lost wages at $66,529, while Dr. Edelman projected past lost earnings at $87,057, which included lost medical benefits. In addition, Dr. Edelman had projected slightly greater wage growth based on the rate for skilled blue-collar workers, while Dr. Edwards had used a general national average. (It is not made clear in this memorandum why the economist with the higher figures was the economist for the defendant.)

Todd v. Schneider
, 2003 U.S. Dist. LEXIS 25192; 2004 AMC 409 (D.S.C. 2003). Joseph and Phyllis Todd were injured in a boating accident. Dr. Perry B. Woodside, III, testified on behalf of the Todd’s, projecting loss of household services both Mr. and Mrs. Todd and loss of earnings for Mr. Todd, who was 60 years old at the time of his injury. Earnings loss was projected to ages 67 and 70. Woodside also projected economic loss based on increased costs of health insurance because of the injury. The court rejected as too speculative testimony about the costs of clearing and subdividing 53.5 acres of land owned by the Todd’s before the injury, indicating that “no evidence was offered that Mr. Todd has ever cleared and developed a similarly sized tract of land or even that he possessed the equipment necessary to carry out an operation of this size.”

     
   Legal Procedure

Abramson v. Laneko Engineering Company, 2005 U.S. Dist. LEXIS 10064 (S.D.W.Va., 2005).  From footnote 1: “The Hill firm retained Dr. Michael Brookshire as a forensic economist. Dr. Brookshire charged $1,950 for his report. After submitting his report and being paid for his services to that point, he chose to terminate his involvement in the case. He explained that he was uncomfortable with accepting the case because the decedent, like Dr. Brookshire, was employed as a professor at Marshall University and that he had raised this concern with Mr. Hill, who reassured him that it would not be a problem. Later, when Mr. Hill was no longer counsel, Dr. Brookshire decided to end his relationship to the case out of concern about his connection to the decedent. The plaintiff then had to retain and pay for a new economic expert. The risk that Dr. Brookshire would be unable or unwilling to complete his service to the case should be borne by Mr. Hill, not the plaintiff. Therefore, his bill should not be reimbursed.

         Hedonic Damages and Emotional Services

Livingston v. United States, 817 F.Supp. 601 (E.D.N.C. 1993). Rejected hedonic damage testimony by Gary Albrecht.

Sterner v. Wesley College, Inc., 747 F.Supp. 263 (D.De.1990). Rejected hedonic damage testimony by Stan V. Smith.

     Admissibility of Expert Testimony

Berlyn Inc., et al. v. The Gazette Newspaper, Inc., 214 F.Supp. 2d 530 (D. Maryland). The district court excluded the antitrust economics testimony of James B. Shaffer, but allowed Shaffer to testify about lost profits on the basis of his experience in the newspaper industry. Shaffer’s proposed opinion about market power was rejected because: “Shaffer is not qualified to offer this opinion. Shaffer’s background is completely devoid of specific education, training, or experience in economics or antitrust analysis. His education is in engineering and business administration. He has never performed a relevant market analysis for antitrust purposes, and at the time he was retained as an expert n this case, he was entirely unaware of how an economist would perform such a study. Clearly, Shaffer cannot qualify under the general requirements of Rule 702, which requires ‘knowledge, experience, training or education.”

McMillan v. Weeks Marine, Inc., 2007 U.S. Dist. LEXIS 20833 (D.DE 2007). A new trial on damages was granted because Royal A. Bunin had been admitted to testify about the plaintiff’s lost earnings, but went beyond the scope of his expertise in his testimony. “During trial, Mr. Bunin, an actuarial economist expert witness, was permitted to testify, over Defendant’s objection, about the employment frequencies, hours worked, and employment experiences of workers in the dredging industry. He testified that ‘while earlier on in a person’s career there may be fluctuation as they’re known in the industry picking up work, but once they’re known in the industry, they get picked up and their work seems to be more solid year round. (D.I. 95 at 11). He also testified that this opinion derived from other reports he had prepared for other workers in the dredging industry who were members of the Union of Operating Engineers Local 25. Id. After reviewing Mr. Bunin’s expert reports, the Court finds that these opinions were not disclosed as required, nor did Mr. Bunin provide any bases to support them. Moreover, the Court concludes that Mr. Bunin’s testimony on Plaintiff’s future prospects for employment in the dredging industry reflects vocational experience outside the scope of his expert report, discipline and prior experience as an actuarial-economist.”

TFWS, Inc. V. Schaefer, 183 F. Supp. 789 (Dist. of Maryland 2002). Drs. Frank Chaloupka and David Levy for the defendant and Thomas Overstreet for the plaintiff were all found qualified to offer expert opinions in an antitrust matter, with the court emphasizing the Kumho decision in its ruling. The court went on to say that it found the testimony of Drs. Chaloupka and Levy more persuasive than that of Dr. Overstreet.

5th Circuit

    Court of Appeals

        Basis Income and Fringe Benefits for Projecting Earnings Loss

Knight v. Texaco, Inc., 786 F.2d 1296 (5th Cir. 1986). The decision examines the calculations of Dr. George Rice in holding that the trial court was not in error in its final opinion of damages in a Jones Act case. Rice used a base earnings rate of $13.06 per hour, projected 1.5 percent productivity increases and used a below market discount rate pursuant to Culver II of 3.0 percent to project lost earnings. Most of the decision involves assessing the reasonableness and foundation for Dr. Rice’s projections. Suggested by Gerald D. Martin.

Smith v. Harrah’s New Orleans Management, 2007 U.S. App. LEXIS 893 (5th Cir. 2007). This is an unpublished opinion. Kenneth Boudreaux was the economic expert for the defendant, but there was no economic expert for the plaintiff. Boudreaux’s calculations are described in the decision and were accepted by the Court. The Court said: “Awards for lost earnings ‘are inherently speculative and intrinsically insusceptible of being calculated with mathematical certainty.’ Melancon v. Lafayette Ins. Co., 926 So. 2d 693, 708 (La. Ct. App. 2006) (internal quotation omitted). Accordingly, such damages need only be shown with ‘such proof as reasonably establishes the plaintiff’s claim.’ Id.; see also Gunn v. Robertson, 801 So. 2d 555, 565 (La. Ct. App. 2001) (‘Future loss of earnings, which [is] inherently speculative, must be proven with a reasonable degree of certainty, and purely conjectural or uncertain future loss of earnings will not be allowed.’) This decision also discusses awards for “loss of life enjoyment” in Louisiana at some length, indicating that “loss of enjoyment of life” awards are normally smaller than “pain and suffering” awards. The decision distinguishes between “special damages” and “general damages” under Louisiana law. “Loss of earnings is a “special damage” because it can be calculated with relative certainty, while “loss of enjoyment of life is a “general damage.” Because general damages are “not susceptible to monetary quantification,. . . the jury necessarily has broad leaway.” (Citation omitted).

        Wrongful Death

Benavides v. United States, 497 F.3d 526 (5th Cir. 2007). The 5th Circuit held “that 26 U.S.C. § 104( c) does not exclude punitive damages from the gross income of the survivors of a deceased worker when the wrongful death laws of the state in question do not limit recovery to punitive damages, even if, as here, some other law of the state, such as its Workers’ Compensation Act, might restrict wrongful death recovery to punitive damages” in affirming the decision of the district court. (This language is directed at the fact that Alabama only allows punitive damages in wrongful death cases.) 

        Life and Worklife Expectancies

Crador v. Louisiana Department of Highways, 625 F.2d 1227 (5th Cir. 1980). “The evidence suggests that Ccrador was 48 years old and had a work life expectancy of 14 years and a life expectancy of 22 years at the time of the accident.” Suggested by Gerald D. Martin.

Osburn v. Anchor Laboratories, 825 F.2d 908 (5th Cir. 1987). This was a diversity action tried under Texas law. Osburn contracted leukemia, which he claimed was the consequence of a drug manufactured by the defendants. The defendants claimed that his earnings losses should be based on his life expectancy of from 2 to 5 years.  The 5th Circuit held that the plaintiff was entitled to recover for his lost earnings “on the basis of his work life expectancy at the time of his injury, ‘undiminished by any shortening of that expectancy as a result of the injury.” Suggested by Gerald D. Martin.

        Household Services

Hernandez v. M/V Rajaan, 841 F.2d 582 (5th Cir. 1988).  This decision provides an interesting discussion of whether in injured Mexican worker who was illegally in the United States could recover for lost earnings in the United States. The corrections made by the 5th Circuit Court of Appeals to damages of the trial court judge on lost earnings based on the worker’s earnings record is also interesting. The decision ruled clearly that social security taxes are taxes that must be subtracted in the meaning in federal maritime cases. Of greatest interest, however, was the rejection of household service losses and the consideration of double counting between damages awarded for loss of household services and the provision therefore in a life care plan. The court said: “It is indisputable that Hernandez, a paraplegic, has lost his ability to perform household services in the future. However, the trial court is not at liberty to grant damages for lost household services in the absence of any evidence that Hernandez performed household services in the past. . . In addition, because Hernandez received an award for attendant care, the additional recovery for lost household services would constitute double recovery.”  Submitted by Stephen Horner. 

          Life Care Plans and Reasonable Value of Medical Expense

Lebron v United States, 279 F.3d 321 (5th Cir. 2002). The trial court decision was remanded on the basis of possible duplication between life care award for rehabilitative items to alleviate suffering or mental anguish in a life care plan and a separate award for "pain and suffering, bodily injury, mental capacity, and loss of the capacity for the enjoyment of life." Sosa v. Lago Izabal, 735 F.2d 1028 (5th Cir. 1984) as authority. The court said: “As in Sosa, we cannot determine from the trial court’s opinion whether part of the medical expense award may duplicate part of the award for intangible harms. For instance, the former award included equestrian and aquatic therapy, which the court described in terms suggesting that it was at least in part compensating for emotional harms caused by the defendant’s negligence. We therefore remand for a determination of which items were compensable medical expenses and which duplicated intangible awards.” 

Miller v. Wladyslaw Estate, 2008 U.S. App. LEXIS 22283 (5th Cir 2008). This decision held that a hospital is not required by law to seek payment from Medicaid simply because an uninsured patient later becomes eligible for Medicaid.  The hospital was seeking payment from an award won in a tort action. The 5th Circuit affirmed the trial court decision that the hospital had the right to do so. At issue is the fact that Medicaid and other insurance sources routinely have agreements such amounts paid are much smaller than amounts billed. The court held that since the hospital had accepted no money from Medicaid, it had the right to seek full payment from the patient who had won an award that included medical expenses. The court indicated Medicaid has specific provisions to prevent a medical care provider from trying to recover more than was initially paid by Medicaid, but did not preclude a hospital seeking payment from trying to collect directly from a patient. The decision provided definitions for two billing practices that are specifically not allowed under 42 U.S.C. § 1396a(a)(25)(C), “balance billing” and “substitute billing.” “Balance billing occurs when a provider accepts payment from Medicaid and then seeks to recover from the patient the balance between that payment and its customary fee.” “Substitute billing occurs when a provider accepts payment from Medicaid and then tries to return the payment in order to recover its entire customary fee from the patient.” The court pointed out that neither of these practices could occur without the medical care provider having tried to first bill Medicaid. Suggested by David Jones.

       Treatment of Taxes

Blue v. The Western Railway of Alabama, 469 F.2d 487 (5th Cir. 1972). This decision provides extensive discussion of methods for calculating tax liabilities just prior to Norfolk & Western Railway Company v. Liepeldt, 100 S.Ct. 755 (1974). The 5th Circuit held that it was reversible error that the plaintiff had not been permitted to give evidence based on gross earnings and remanded for a new trial. In Liepeldt, the U.S. Supreme Court held that taxes must be subtracted, rendering the decision in Blue moot. Suggested by Jerry Martin. 

Hernandez v. M/V Rajaan, 841 F.2d 582 (5th Cir. 1988). See under Household Services.

Johnston v. Harris County Flood Control District, 869 F.2d 1565 (5th Circuit 1989). This decision involved a plaintiff who won an jury award under Title VII of the Civil Rights Act and 42 U.S.C.S. Section § 1983 for wrongful termination. The decision includes extensive discussion that would assist a forensic economist in understanding the nature of awards in wrongful termination cases. The 5th Circuit held that the decision about whether or not to treat Social Security disability benefits as a deductible offset from an award for back pay was within the discretion of the trial court judge. It held that the plaintiff by ceasing to search for new employment had failed in his duty to mitigate damages, requiring offset for that purpose. It also discussed the difference between back pay and past earnings loss that is “personal-injury-like” in character in that the former are subject to federal income taxes and the latter are not. This suggests that front and back pay can be coupled into the same decision with past and future earnings loss and that tax treatment of front and back pay is subject to tax while past and future earnings loss are not.  The court also held that a plaintiff is liable for the Social Security taxes that would have accrued in the  year the wages were due.  This latter holding was subsequently overruled by United States v. Cleveland Indians Baseball Company, 532 U.S. 200; 121 S. Ct 1433 (2001). Based on that decision Social Security taxes are currently based on the year in which back pay is received. Suggested by Jerry Martin. 

Madore v. Ingram Tank Ships, 732 F.2d 475 (5th Cir. 1982). Social security taxes were properly deducted from earnings in projecting lost future earnings.

Smith v. United States, 2004 U.S. Dist LEXIS 23903 (5th Cir. 2004). The estate of Louis R. Smith brought suit claiming that it was owed a refund of federal estate taxes based on the fact that retirement accounts held by the decedent were overvalued because the valuation of those accounts did not take into account the future income tax liability of beneficiaries deriving from those accounts. The trial court granted summary judgement on the grounds that beneficiaries were not entitled to such a tax reduction. The 5th Circuit upheld the trial court.  

      Legal Procedure

Gonzales v. Chrysler Co., 2002 U.S. App. LEXIS 17163 (5th Cir. 2002). Gonzalez attempted to bring an action for the death of his three year old son in an accident in Mexico. He had purchased his automobile in Mexico, allegedly after seeing advertisements in Texas on a trip to Houston. Gonzalez argued that the remedy for tort harms in Mexico was inadequate even though the automobile had been purchased in Mexico and the accident had taken place in Mexico. The district court ruled that the action could not be brought in Texas and should be brought in Mexico and the 5th Circuit affirmed. 

        FELA/Maritime

Culver v. Slater Boat Company, 688 F.2d 280 (5th Cir. 1982) (Culver I). Culver I overruled the prohibitions in Johnson v. Penrod Drilling Co, 510 F.2d. 234 (5th Cir. 1975) which had prohibited taking inflation into account. The 5th Circuit said: “The goal is not, it must be made clear at the outset, to protect the lump-sum award from the effect of inflation. Rather, before determining how much now needs to be paid, the goal is to assure the plaintiff of the equivalent of his future wages, including those likely to be given/received in the form of cost of living increases in response to inflation.” Culver I provides an extensive review of cases before 1982 in other circuits that considered how to deal with inflation or discount rates.  The details in this decision make it very worthwhile for a forensic economist to read, even the 5th Circuit changed its own procedures in Culver II

Culver v. Slater Boat Company, 722 F.2d 114 , (5th Cir. 1983) (Culver II). Culver I had been decided shortly before the United States Supreme Court had reached its decision in Jones & Laughlin Steel Co. v. Pfeifer, 103 S.Ct. 254 (1983). This rendered portions of the Culver I decision invalid and the 5th Circuit reached a new decision in light of the parts of Culver I that were invalid.  In making those changes, the Culver II court specifically mandated economic damages calculated in the 5th Circuit must follow the “below market” discount rate method, with rates falling between 1 and 3 percent, that was one of three methods allowed in the Pfeifer decision. Current jury instructions for the 5th Circuit indicate that the requirements of Culver II have been overridden by the United States Supreme Court decision in Monessen Southwest Railway Co. v. Morgan, 486 U.S. 86 (1988). However, Culver II is still cited and generally followed in the 5th Circuit and to a lesser extent in the 11th Circuit which split from the 5th Circuit after he Culver decisions had been reached.

Hernandez v. M/V Rajaan, 841 F.2d 582 (5th Cir. 1988). See under Household Services.

Johnson v. Penrod Drilling Co., 510 F.2d 234 (5th Cir. 1975). This decision is five years before Liepelt seven years before Pfeifer and was rendered moot by those decisions. However, it provides useful historical insight into federal rules regarding lost earnings prior to 1980. From the Federal Reporter headnotes: "Such contingencies, variables and predictions as the impact of income taxes, taxe effect of contingent attorney's fees and taxability of interest earnings were to be withheld from jury's consideration in determining award of damages for future lost earnings.  Award for damages was to be based on predicted gross earnings lost . . . In determining award of damages for future lost earnings, triers of fact should not be instructed with respect to future inflationary or deflationary trends, and should not be advised to consider such alternative descriptions of inflationary or deflationary trends as purchasing power of the dollar or the consumer price index." This case also provides a useful review of differenced between the federal circuits that existed in 1975 and good descriptions for earlier federal decisions relating to inflation and taxes.

Law v. Sea Drilling Corporation, 510 F.2d 242 (5th Cir. 1975). Ruled that the personal expenses of a decedent husband were  within 10 to 15 percent range. 

Madore v. Ingram Tank Ships, 732 F.2d 475 (5th Cir. 1982). Social security taxes were properly deducted from earnings in projecting lost future earnings.

McDonald v. Federal Barge Lines, 496 F.2d 1376 (5th Cir. 1974). This decision cited Sea-Land Services, Inc. v. Gaudet, 414 U.S. 573 (1974), as embracing the right to recover for “a broad range of mutual benefits each family member receives from the others’ continued existence, including love, affection, care, attention, companionship, comfort and protection.” The defendant had claimed that no evidence had been provided for the value of the loss of society. The Court found that while the evidence was “not overwhelming, it likewise not insignificant and is certainly sufficient to support a damage award.”

Pickle v. International Oilfield Drivers, Inc., 791 F.2d 1237 (5th Cir. 1986). Social Security/Medicare payroll taxes should be subtracted from projections of lost earnings.

Sosa v. M/V Lago Izabal, 736 F.2d 1028 (5th Cir.1984). This decision involved a Mexican national who was a seaman. “Lost earnings and future lost earning capacity” were based on Mexican pay rates, but the awards for past and future medical expenses were based on American standards based on the district court’s determination that Sosa would not receive adequate medical care in Mexico. The district court had awarded $10,000,000 for “pain and suffering, bodily injury, mental anguish and the loss of capacity for the enjoyment of life.” The district court also awarded Sosa $5,995.03 per year for rehabilitation services, which consisted of 39 items “such as a speaker telephone service, an electric toothbrush, and a beverage holder” that would increase Sosa’s personal comfort. The defendant argued that this award duplicated the portion of the award that related to pain and suffering. The 5th Circuit agreed and said: “To the extent that these rehabilitative items are not medical expenses but merely serve to alleviate physical suffering or mental anguish, they duplicate the $10,000,000 pain and suffering award. Some items, such as the therapy weights, certainly seem to be medical expenses; others, such as the electric toothbrush, more likely serve only to alleviate suffering. Thus, we remand for the district court to determine which items are compensable medical expenses and which duplicate the award for pain and suffering. The decision also discusses how to account for taxation of a future earnings award. The 5th Circuit would have allowed either an addition to the lump sum award to take into account taxes on the interest on a fund as suggested in DeLucca v. United States or Hollinger v. United States or by using lower tax exempt instruments as considered in Flannery v.United States. The decision was determined under Culver I, not Culver II.

Tallentire v. Offshort Logistics, Inc., 754 F.2d 1274 (5th Cir. 1985). “In computing future earnings, the defendant’s economist deducted social security taxes for the decedent’s life span. Taylor in essense argues that social security payments are similar to payments to a pension plan, and that in any case social security deductions are matched by the employer’s contribution, so there is no loss of income. Although this argument has a certain amount of superficial appeal, our cases establish that social security taxes should be deducted in computing future earnings. See Culver v. Slater Boat Co., 688 F.2d 280, 302 (5th Cir. 1982), modified in other respects Culver v. Slater Boat Co., 722 F.2d 114 (5th. Cir. 1983); Madore v. Ingram Tank Ships, Inc., 732 F.2d 475 (5th Cir. 1984).

Welch v. Leavey, 397 F.2d 189 (5th Cir. 1968). Welch was injured on November 24, 1961 and was determined by the Commissioner under the Longshoreman Act to have suffered a permanent partial-disability to his back. Welch had subsequently been promoted and had an increase in salary from $10,790 in 1959 to $14,927 in 1964. The Longshoreman Act 33 U.S.C. § 908(c)(21) required compensation equal to 66 2/3 percentum of the difference between his average weekly wages and his wage-earning capacity thereafter in the same employment or otherwise. Because the Deputy Commissioner had determined that Welch’s wage-earning capacity had increased rather than fallen, no permanent award was made. Welch appealed. In denying Welch’s appeal, the 5th Circuit cited section 908 (h) of the Longshoreman Act as follows: “The wage-earning capacity of an injured employee * * * shall be determined by his actual earnings if such actual earnings fairly and reasonably represent his wage-earning capacity; provided, however, that if the employee has no actual earnings or his actual earnings do not fairly and reasonably represent his wage-earning capacity, the deputy commissioner may, in the interest of justice, fix such wage earning capacity as shall be reasonable, having due regard to the nature of the injury, the degree of physical impairment, his usual employment, and other factors or circumstances in the case which may affect his capacity to earn wages in his disabled condition including the effect of disability as it may naturally extend into the future.” 

                Hedonic Damages and Emotional Services

Smith v. Harrah’s New Orleans Management, 2007 U.S. App. LEXIS 893 (5th Cir. 2007). This is an unpublished opinion. Kenneth Boudreaux was the economic expert for the defendant, but there was no economic expert for the plaintiff. Boudreaux’s calculations are described in the decision and were accepted by the Court. The Court said: “Awards for lost earnings ‘are inherently speculative and intrinsically insusceptible of being calculated with mathematical certainty.’ Melancon v. Lafayette Ins. Co., 926 So. 2d 693, 708 (La. Ct. App. 2006) (internal quotation omitted). Accordingly, such damages need only be shown with ‘such proof as reasonably establishes the plaintiff’s claim.’ Id.; see also Gunn v. Robertson, 801 So. 2d 555, 565 (La. Ct. App. 2001) (‘Future loss of earnings, which [is] inherently speculative, must be proven with a reasonable degree of certainty, and purely conjectural or uncertain future loss of earnings will not be allowed.’) This decision also discusses awards for “loss of life enjoyment” in Louisiana at some length, indicating that “loss of enjoyment of life” awards are normally smaller than “pain and suffering” awards. The decision distinguishes between “special damages” and “general damages” under Louisiana law. “Loss of earnings is a “special damage” because it can be calculated with relative certainty, while “loss of enjoyment of life is a “general damage.” Because general damages are “not susceptible to monetary quantification,. . . the jury necessarily has broad leaway.” (Citation omitted).

Transco Leasing Corporation v. United States, 896 F.2d 1435 (5th Cir. 1990). This decision holds that an FTCA action being tried under Louisiana law was not bound to follow the 5th Circuit rule requiring use of a “below market” discount rate as set forth in Culver v. Slater Boat Co., 722 F.2d 114 (5th Cir. 1983). There is extended analysis of why Louisiana law rather than Texas law should apply in this matter. The decision also provides an extended comment about valuing the loss of love, affection and guidance. The 5th Circuit said: “‘The loss of a loved one is not measurable in money. Human life is, indeed priceless. Yet the very purpose of the lawsuit for wrongful death is to fix damages in money for what cannot be measured in money’s worth.’ Caldarera v. Eastern Airlines, Inc., 705 F.2d 778 (5th Cir. 1983). When we discuss the loss of love in terms of money, we feel more than a little ghoulish in engaging in such surreal exercises. This fiction of reducing love to a monetary figure is a difficult and distasteful task for a court.”

      Admissibility of Expert Testimony

In re Air Crash Disaster at New Orleans, Louisiana on July 9, 1982, 795 F.2d 1230 (5th Cir. 1986). The Fifth Circuit Court of Appeals reversed the trial court decision in a wrongful death matter because: “We are persuaded that the evidence in support of the claimed loss of inheritance was too speculative and that the remaining awards of the jury were so excessive as to require a new trial.”  The unnamed economist had projected that the decedent’s salary would grow at an annual real rate of 8 percent and would have paid only 5 percent of his income in income taxes. The court pointed out that this was extremely unrealistic and also noted evidence in the case that suggested “increasingly significant sums had been spent in previous years in gambling junkets to Las Vegas.” On the inheritance issue, the 5th Circuit said: “In sum, we find the assumptions of plaintiff’s economist so abusive of the known facts, and so removed from any area of demonstrated expertise, as to provide no reasonable basis for calculating how much of Ted Eymard’s income would have found its way into assets or savings to be inherited by his children.”

Marcel v. Placid Oil Company, 11 F.3d 563 (5th Cir. 1994). The district court had precluded the testimony of economic expert Dr. Kenneth Boudreaux based on the worklife expectancies of oil field workers that had been prepared by Richard Camus & Associates. Plaintiffs criticized the Camus study as outdated, statistically suspect, and untrustworthy. The 5th Circuit said: “In presenting the testimony of Dr. Boudreaux, Placid did not tender any evidence comparing the worklife in the oilfield with the national average or with the worklife in any other occupation. Without some indication of how oilfield worklife differs from that of other occupations, however, there are several bases upon which the district court could have excluded the evidence, for example, a finding that the probative value of the Camus study did not outweigh the prejudice of its admission or that it was not sufficiently reliable in the present context. Upon the record before us, we cannot hold that it was an abuse of discretion to exclude the tendered evidence.” In a footnote, the 5th Circuit noted that “Plaintiffs contend that Placid failed to preserve this issue for appeal because it did not proffer either the Camus study or the testimony of Dr. Boudreaux.” 

Randolph v. Laeisz, 896 F.2d 965 (5th Cir. 1990). A trial court decision was reversed in part on the basis of the unreasonable calculations of an unnamed economist.  Randolph had worked as a clerk/checker for two unions that had merged in 1983, after which there was a loss of hours worked by Randolph. This loss of hours had been ignored by plaintiff’s economist. The court also noted that: “[T]he record does not support the validity of the economist’s actual mechanical calculations. His testimony on direct and cross examination was confusing at best and nothing else in the record clarifies how the economist reached his end result figures.” 

    District Courts in the 5th Circuit (LA, MS, TX)

   
   Basis Income and  Fringe Benefits for Projecting Earnings Loss

Bell v. Montgomery Ward, 792 F.Supp. 500 (W.D.La. 1992). This decision discusses the opinions of Dr. Melvin Harju as the economic expert for the plaintiff and Dan Cliffe for the defense. Ultimately, the judge ruled that the plaintiff had not shown that the defense was responsible for the injury to the plaintiff, but the case provides a useful discussion of the judge’s assessment of some of the expert testimony that was presented. The judge did not comment on the quality of the testimony of the two economic experts, but there was a wide difference between the two, based on different assumptions about future earning capacity.
 
Commings v. Mike Hooks, Inc., 2008 U.S. Dist. LEXIS 64887 (E.D.La 2008). This opinion provides a detailed consideration of the lost earnings projections under the Jones Act that were prepared by Drs. Randolph Rice for the plaintiff and Kenneth Boudreaux for the defendant. The Court provides clear description for why greater weight was given to Dr. Boudreaux’s calculations.

Harris v. Tim Jordan’s Truck Parts, Inc., 2006 U.S. Dist. LEXIS 87906 (W.D.LA 2006). The court excluded the testimony of vocational expert Mr. Glen Hebert and economist Dr. Douglas Womack on the basis of reports based on earnings of wages of other workers and confusion of lost earnings with losses of corporations owned by the plaintiff. Defendants argued that plaintiffs had confused lost wages with lost earning capacity and the judge agreed. The court said: “The best evidence of the wages and type of employment enjoyed by Mr. Harris before the accident cannot come from wages to be paid to another. We cannot say, with any confidence, that the wages (approximately $600 -$700 per week as described in the contested reports) bear any likeness to those paid to Mr. Harris before the accident. We are curious as to why plaintiffs avidly seek the introduction of such attenuated evidence instead of simply introducing the plaintiff’s own pay stubs or income tax records. If this anomaly is the result of plaintiff’s attempt to enjoy benefits of the corporate form without its consequences, we cannot aid that achievement. . . . We can envision no evidence that would convert corporate claims into individual claims.”

Harrison v. Diamond Offshore Drilling, Inc., 2008 U.S. Dist. LEXIS 17120 (E.D. La. 2008). This memorandum evaluated the economic reports of Shael Wolfson for the plaintiff and Dr. Randolph Rice for the defendant. The judge credited Rice’s calculation of base income and assumption of residual earning capacity to be more accurate, but found Wolfson’s work-life expectancy as being more accurate.  Rice’s pre-injury earnings estimate was higher than Wolfson’s, but the larger pre-injury earnings estimate was more than offset Rice’s assumption of larger post-injury earning capacity.

Hopper v. M/V UBC Singapore, 2010 U.S. Dist. LEXIS 70716 (S.D. Tex. 2010). This memorandum granted defense motions to exclude the testimony of three plaintiff experts, including Dr. Kenneth McCoin, an economist. The Court said: “In the Fifth Circuit, lost future wages in maritime cases are calculated using a four-step process: (1) estimate the expected remaining work-life of the plaintiff; (2) calculate the lost income stream; (3) compute the total amount of damages; and (4) discount that total amount to its present value. Culver v. Slater Boat Co., 722 F.2d 114, 117 (5th Cir. 1983)(en banc). . . ‘Calculation of the lost income stream begins with the gross earnings of the injured party at the time of the injury.’ From the gross earnings combined with other income incidental to the injured party’s work, ‘the fact finder should subtract amounts the wage earner would be required to pay, such as income tax and work expenses.’. . Where the injury results in the wage earner’s death, ‘the maximum loss of benefits to the survivors cannot be determined without also subtracting the living expenses that the worker would have incurred had he continued to live and work. . . The record establishes that McCoin, while acknowledging the Culver procedure, failed to comply with it in any meaningful way. McCoin began his analysis with $93,000.00 as Hopper’s gross earnings at the time of his death in April 2009. His only source for this figure was the representation of Plaintiff’s counsel. . . McCoin had the relevant payroll information, including 1099 forms, pay stubs and unfiled tax returns, but he elected not to consider this information. Had he reviewed the actual payroll records, he could have determined that Hopper’s annualized gross revenue for 2009 was $69,000. Alternatively, he could have determined that Hopper’s historical annual gross revenue was $73,067. Instead, McCoin chose to accept the figure provided by Plaintiff’s counsel. This is clearly not ‘the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.’ McCoin failed to deduct all the taxes that Hopper would be required to pay. Although McCoin issued a timely revision to his report, deducting $299,039.00 in Social Security taxes he initially failed to deduct, the original failure to deduct all applicable taxes reflects the lack of ‘intellectual rigor’ in McCoin’s analysis in this case. . . In calculating the living expenses that Hopper would have incurred had he continued to live and work, also referred to as the personal consumption deduction, McCoin relied on a Department of Labor report entitled, ‘Consumer Expenditures for 2007.” There is no evidence that this report is routinely used or generally accepted by economic experts for calculating a personal consumption deduction. Indeed, the report is a survey of household expenses for a year, not an analysis of the amount any individual would be expected to consume over an extended period of years.’” 


Kirksey v. P&O Ports Texas, 2007 U.S. Dist. LEXIS 37154 (S.D. Tex. 2007). This decision involved economists Drs. Kenneth McCoin for the plaintiff and Dr. James Yaeger for the defendant. McCoin’s lost earnings report was accepted in lieu of testimony, but Yaeger apparently testified largely in support of McCoin’s calculations. This memorandum decision also discussed the judge’s reasoning with respect to loss of enjoyment of life, pain and suffering and mental anguish and about life care costs before reduction to present value.

Norris v. Bertucci Contracting Corp., 2006 U.S. Dist. LEXIS 53567 (E.D. La. 2006). This is a federal judge’s memorandum in response to a request for a new trial or remittatur from the verdict of the jury. The judge granted a large remittatur, noting that the Court had listened carefully to “the testimony of the plaintiff as well as all of the other witnesses, including the physicians and economists.” With respect to past loss of wages and fringe benefits, the judge wrote: “This award is reduced to $57,019.00 as it was the amount provided by plaintiff’s expert witness using assumptions most favorable to plaintiff – i.e. based on his work history of one month rather than three years.” With respect to future loss of wages and fringe benefits, the judge wrote: “The Court reduces the loss of earnings to $425,801. This award is indeed generous as it is again based on work history of one month rather than a thee year work history; indeed, in the event that a three year history was used, plaintiff would experience no future loss of wages and fringe benefits.” It appears in context that this is the amount projected by the plaintiff’s economic expert, but which was largely ignored by the jury. The jury had awarded $60,000 for past loss of wages and benefits and $1,600,000 for future loss of wages and benefits.

          Wage Growth Rates and Discount Rates

Hogans v. United States, 2005 U.S. Dist. LEXIS 32359 (W.D.Tex. 2005). This case involved Dr. Don Huddle as an economic expert for the plaintiff and Dr. Stan Smith as an economic expert for the defendant. The Court held that Dr. Huddle’s method: “followed the ‘below market’ rate method required by the Fifth Circuit as stated in Culver v. Slater Boat Co., 722 F.2d 114 (5th Cir. 1983). His discount rates of 1.2 percent for future medical cost and 1.0% for future lost earnings fall squarely within the example of proper below-market discount rates set forth in Culver.” The Court said of Dr. Smith: “The methodology employed by defendant’s economic expert, Dr. Smith, violates Culver because Dr. Smith relied primarily on a market methodology specifically disapproved by the Fifth Circuit Court of Appeal’s below market requirements. Dr. Smith’s high discount rate of 7.42% fails the Culver test because Dr. Smith’s methodology employs a 2/3 (65%) reliance on the stock market’s average over the highest performing period in the market’s history, and Culver maintains a below  method that distinguishes a seriously injured plaintiff’s need to sustain his or her future economic needs after suffering a serious injury from speculating investors willing and able to accept some risk for a potentially higher return on their investments.”

          Treatment of Taxes

Tallentire v. Offshort Logistics, Inc., 754 F.2d 1274 (5th Cir. 1985). “In computing future earnings, the defendant’s economist deducted social security taxes for the decedent’s life span. Taylor in essense argues that social security payments are similar to payments to a pension plan, and that in any case social security deductions are matched by the employer’s contribution, so there is no loss of income. Although this argument has a certain amount of superficial appeal, our cases establish that social security taxes should be deducted in computing future earnings. See Culver v. Slater Boat Co., 688 F.2d 280, 302 (5th Cir. 1982), modified in other respects Culver v. Slater Boat Co., 722 F.2d 114 (5th. Cir. 1983); Madore v. Ingram Tank Ships, Inc., 732 F.2d 475 (5th Cir. 1984).

          Life Care Costs and Reasnable Value of Medical Expenses

Richardson v. United States, 2007 U.S. Dist. LEXIS 71159 (W.D. La. 2007). This opinion by Judge Dee D. Drell provides a determination of damages in a automobile accident cause by a federal employee in an FTCA action. The decision discusses earnings loss calculations that were prepared by Dr. G. Randolph Rice in the amounts of $46,594 in lost past wages and $18,520 in lost future wages “based on evidence that Mr. Richardson could return to his pre-accident rate of pay after an 18-month period of retraining.” The Plaintiff claimed future medical expenses for surgeries that treating indicated would not be useful because of the Plaintiff’s “obesity, diabetes and hypertension.” The Court said: “The court finds that it is more probable than not that the future surgical procedures will not occur. Thus, Mr. Richardson has failed to satisfy the burden of  proof under Louisiana law for these expenses. Thus, we will award no damages for future medical expenses relating to the surgeries.” 

Taylor v. Progressive Security Ins. Co., 09-701 (La.App. 3 Cir. 04/07/10); 2101 La. App. LEXIS 506 (La. App. 2010). The Court said: “The evidence in the record demonstrates that Ms. Taylor has incurred almost $ 65,000.00 in medical expenses in a four-year period, without yet having an expensive neck surgery recommended by her physician. Ms. Taylor's future expenses (including a possibility of two costly surgeries and a multitude of additional treatments) were established with some degree of certainty. Thus, the jury did not err in awarding Ms. Taylor $180,000.00 for future medical expenses, and we will not disturb that award (italics added for emphasis).”

           Treatment of Taxes

Bell v. New Hampshire Insurance Company, 2008 U.S.  Dist. Lexis 43322 (E.D.La. 2008). The plaintiff had not been previously filing income tax returns, but presented as evidence of amounts deposited in his checking account prior to the accident, as well as a signed letter from his employer estimating his income per week to be $720. The plaintiff had presented an economic expert.  The Court said: “A plaintiff need not produce an economist to testify as to the probability or improbability that Plaintiff would have earned similar amounts during the remainder of his work life . . . Louisiana law does not indicate that in order to prove the income asserted by Plaintiff, Plaintiff must present tax returns as proof of income . . . While tax returns serve as the best single source of evidence on the subject of future earnings and earning capacity, Plaintiff’s uncorroborated testimony is sufficient to prove a loss of past wages as long as such proof reasonably establishes the claim . . . While Defendant correctly points out that 26 U.S.C. 1402(b) requires a self employed person to file a federal income tax return if his annual income exceeds $400, Plaintiff is not presently on trial for a violation of this federal law. . . Sans income tax returns, the trier-of-fact must determine if the amount claimed by Plaintiff proves reasonable in light of the evidence proffered and testimony presented at trial.” The decision also discusses how Louisiana law deals with the intersection of workers’ compensation liability and uninsured motorist coverage.  

           Legal Procedure

B. J. Tidwell Industries, Inc. v. Diversified Home Products, Inc., 2007 U.S. Dist. LEXIS 78227 (W.D. Texas 2007).  This is a memorandum denying motions in limine to exclude the testimony of Dr. Gregory Faulk, a finance professor at Belmont University, for the defendant and Gerald Hill, a CPA, for the plaintiff. Dr. Faulk was retained first and Mr. Hill was retained later to comment on Dr. Faulk’s report. The Court held that Dr. Faulk was not required to verify the accounting information provided to him by the defendant.   

In Re: Vioxx Products Liability Litigation, 2007 U.S. Dist. LEXIS 40612 (E.D. La. 2007).  The plaintiff was granted a new trial on the ground that a defense witness, Dr. Barry Rayburn, had testified that he was a board certified cardiologist when, in fact, he was not a board certified cardiologist.

Melendez v. BP Oil Company, USA, 2005 U.S. Dist. LEXIS 30878 (S.D. Texas 2005). This decision allowed the defendant to transfer venue from the federal Southern District of Texas to the federal Southern District of California. Plaintiff had argued against the transfer on the ground that plaintiff’s economist and treating physicians reside in in the Southern District of Texas and that plaintiff could not compel them to attend trial in California. Judge Kent rejected plaintiff’s argument and transfered the case to the Southern District of California. 

Wise v. Kan. City Life Ins. Co., 2006 U.S. Dist. LEXIS 36875 (N.D. Miss. 2006). “Plaintiffs carry the burden of proving their damages with reasonable certainty, and expert economist testimony is often preferred in cases involving the present value of future damages. As the Plaintiffs properly note, however, "the right to recover is not precluded by uncertainty regarding the exact amount of damages." The court finds that the evidence presented at trial by the Plaintiffs regarding their actual damages, while not presented through expert economist testimony, was sufficient to demonstrate to the jury a "benefit of the bargain" damage calculation, and allowed the jury to reasonably ascertain the actual damages suffered by the Plaintiffs. As the jury was instructed by the court prior to entering deliberations, the benefit of the bargain rule provides that each Plaintiff is entitled to receive the value that he would have received if the insurance premium paid, and benefit received, for his policy was as represented by the Defendant's agent, Nowlin. The Plaintiffs presented evidence at trial concerning each Plaintiff's individual situation and how each failed to receive the value that was promised by Nowlin. The court finds that this damages formula was sufficient to permit the jury to accurately calculate each Plaintiff's actual damages, even though the testimony was not presented by an expert economist.”

Thomas v. S.H.R.M. Catering Servs., 2007 U.S. Dist. LEXIS 14059 (S.D.TX 2007). This was a decision transferring venue to the Eastern District of Louisiana, New Orleans Division. The decision was opposed by the plaintiff largely on the grounds that the plaintiff’s economist lived in Houston even though most of the witness doctors lived in New Orleans. The change of venue was granted. 

          Hedonic Damages and Emotional Services

Am. River Transp. Co. v. US Maritime Servs (In re Am. River Trans. Co), 2007 U.S. App. LEXIS 14464 (5th Cir. 2007).  The 5th Circuit held that parents of a 24 year old man wrongfully killed while working as a longshoreman in territorial waters could not recover under maritime law for loss of society with their decedent son. This decision provides a review of the evolution of maritime law on the question of loss of society between adult children and parents and points out a conflict between other federal circuits and the 9th Circuit on this question.

Augustin v. Hyatt Regency of New Orleans, 1992 U.S.Dist. Lexis 1061 (E.D.La. 1992). Melville Wolfson was not permitted to present hedonic damage testimony based on an interpretation of Louisiana law. 

Badeaux v. Rowan Companies, 1991 U.S.Dist. Lexis 13532 (E.D.La. 1991). Held that: "Damages for loss of the enjoyment of life or 'hedonic' damages are not recognized as a separate element of recovery in the Fifth Circuit. They are not a factor to be separately measured as an independent ground of damges," but must be included as part of pain and suffering. Testimony of Melville Wolfson was not permitted.

Craft v. Matlack, Inc., 1992 U.S.Dist. Lexis 7978 (E.D.La. 1992). Rejected hedonic damage testimony by Melville Wolfson based on 5th Circuit rules.

Davis v. Rocor International, 226 F.Supp.2d 839 (S.D.Miss. 2002). A Daubert standard was applied to the proffered expert testimony of Dr. Stan Smith in several areas. The hedonic damages testimony of Stan Smith was rejected on the grounds of not assisting the trier of fact to understand or determine an issue in this case. The loss of society testimony of Stan Smith was rejected on the basis of lack of evidence showing loss of society based on percentages in this personal injury action and on the basis that Smith, as an economist, has not been shown to be qualified as an expert with respect to relationship values. The loss of household services testimony of Stan Smith, projected on the basis of 40 percent, was rejected because there was no showing that Smith, as an economist, is independently qualified to make that determination and that Plaintiffs had not shown that Smith’s opinion would assist the trier of fact in understanding the evidence presented at trial. 

Faciane v. Rhodes, 1997 U.S.Dist. Lexis 17361 (E.D.La. 1997). Melville Wolfson was not permitted to testify about hedonic damages. 

Trabucco v. Hilton Hotels Corporation, 1994 WL 419846 (E.D.LA). Granted motion in limine to preclude hedonic damage testimony by Melville Z. Wolfson.

      Admissibility of Expert Testimony

Albert v. Jordan, 2007 U.S. Dist. LEXIS 85368 (W.D. La 2007). Judge James T. Trimble, Jr., granted a defense motion in limine to exclude testimony of vocational expert Glen Hebert, MRC and R. Douglas Womack, Ph.D. that was based on occupations and earnings that Hebert claimed represented the earning capacity of plaintiffs Paul Reed and Keith Dorn. Judge Trimble held that amounts being projected were far in excess of the earning capacity demonstrated by the two plaintiffs in their earnings record and said that “Plaintiffs have presented no evidence is to either plaintiff’s aptitude or earnings history that would indicate support for the opinions proffered by Mr. Hebert. He also held that the Court “will allow these experts to testify as to Mr.Reed and Mr. Dorn’s loss of earning capacity based on a wage scale proven by their work history.”

Arreola v. Epic Divers, Inc, 2006 U.S. Dist. LEXIS 88275 (E.D.LA 2006). The Plaintiff challenged the admissibility of testimony by the defense economist, Kenneth Boudreaux, that Plaintiff’s work-life expectancy as a commercial diver was five years baed on a July 1993 case study compiled by Louisiana State University’s Department of Quantitative Business Analysis for the benefit of the Association of Diving Contractors, Inc. Boudreaux’s report noted that “if Plaintiff’s alleged impairment precludes him only from diving for a living, as opposed to undertaking a non-diving occupation, then any future wage loss calculation should be based on Plaintiff’s remaining expected worklife as a diver. . .  The Plaintiff argued that the LSU study did not meet the requirements of Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993), because no other court has ever ruled on its admissibility, and because it has never been published or subject to peer review. Plaintiff also argues that the time frame reflected in the report (1975-1992), which was supposedly one of very unfavorable economic conditions for buyers, does not correlate with today’s conditions.” The Court went on to discuss the nature of the LSU study in some detail and said: “[G]iven Boudreaux’s impressive credentials, if the jury learns about the LSU study from his lips then it will surely give more credence to the report than what it could ever garner on its own. It would simply be unfair to allow the Defendants to use the study to put the burden on Plaintiff to convince the jury that unlike other divers in past years he would not have voluntarily dropped out of diving. Again, unlike other divers who might voluntarily choose to end their careers, the Plaintiff’s career had ended not by choice but by necessity given his injury. He is entitled to a presumption that he would have spent his entire career as a diver.”  Boudreaux was not allowed to testify regarding any type of reduced worklife expectancy for divers “because that is not his area of expertise” and any testimony about the LSU study was specifically excluded because the judge did not consider it reliable.

Berk-Cohen Associates, L.L.C. vs. Orkin Exterminating Co., 2004 U.S. Dist LEXIS 3789 (E.D.La 2004). The District Court denied a Daubert motion in limine to bar the testimony of “Mr. Boudreaux” (possibly Kenneth Boudreaux) who calculated the present value of a projected stream of lost profits, based on challenging the assumption that the contract would have remained in force for the 30 years projected by Boudreaux. The court said that the challenge went to the credibility of Mr. Boudreaux’s testimony, not its admissibility.

Bomarito v. Penrod Drilling Corp., 929 F.2d 186 (5th Cir. 1991). The trial judge had summarily excluded the testimony of defense economic expert Dr. Wood (first name not provided) because that expert had relied upon the Camus report, which is a study of the worklife expectancy of offshore oil workers performed by Richard Camus. The 5th Circuit strongly criticized the defense for failing to comply with F.R.Evid. 103(a)(2) by proffering a copy of the Camus report, indicating that the 5th Circuit therefore had no basis to determine whether the trial court’s exclusion of testimony based on the Camus report was “manifestly erroneous.” The decision, however, implies criticism of the trial court judge for not providing more of his reasoning. Suggested by David Jones.

Butler v. MBNA Technology, Inc., 2003 U.S. Dist LEXIS (N.D.Tex. 2003).  A motion to exclude the expert opinion of Dr. James T. McClave, an economist for the plaintiff, was granted in part and denied in part. “Dr. McClave’s opinion is traceable to a specific, identifiable source,” which satisfied the court that “expert opinion must be founded on facts and data that are capable of independent verification.”  However, Dr. McClave’s comparison of plaintiff’s annual salary increases with those of job candidates who hold degrees in computer science was rejected as unreliable. The plaintiff had a job grade of Senior Software Engineer, based on a bachelor’s degree in Management Information Systems, which the court did not consider as equivalent to degrees in computer science.” 

Catania v. Anco Installations, 2009 U.S. Dist. LEXIS 107337 (M.D. La. 2009). This order denied a motion to exclude the expert opinion of Shael Wolfson. Wolfson had based his calculations of the lost financial support of Barbara Catania for Michael Cantania in a wrongful death action under Louisiana law on her income, but not the family income of the Catanias. Wolfson’s calculations were based the Ruble Nelson Patton Tables, which are based on family income. The Court said: “Wolfson used a factor of 30% based on a chart of such factors published by Ruble, Patton & Nelson in the Journal of Forensic Economics, which takes into account both family size and family income (“Ruble Method”). Wolfson then multiplied that factor by $36,587, Decedent’s income in 2004, to reach a personal maintenance of $10,976, resulting in a loss of support of $25,611.  Pharmacia argues that the Ruble Method actually calls for a personal maintenance factor of 15.6% of total gross family income. Multiplying Pharmacia’s factor by the $124,219 earned by Decedent’s family in 2004 equals a personal maintenance of $19,378 and a loss of support of $17,209, roughly $8,000 less than computed by Wolfson. . . Pharmacia argues that [Wolfson] violates Rule 26 of the Federal Rules of Civil Procedure. . . Contrary to Phamacia’s assertions, Wolfson has complied with the rule. Not only did he provide a complete statement of opinions that he plans to express and the reasons for giving them, but he also cited the Ruble Method as the date that he has considered in forming his opinions. Even though his ultimate method did not strictly follow the Ruble Method, he clearly considered that method. Therefore, the Court finds that Plaintiffs have complied with Rule 26.”

Garcia v. Columbia Medical Center of Sherman, 996 F.Supp. 617 (E.D.Tex. 1998).  The plaintiff had retained Daniel J. Slottje as its economic expert. The defense had retained Ygnacio D.Garza as its economic expert.  Defense moved to bar the testimony of Slottje.  The court said: “[T]he methods and principles used by Slottje in reaching his opinions certainly have a sound basis in the field of economics. . . The question of whether Slottje’s opinions are accurate in light of his use of United States figures for worklife expectancy is a question that goes to the weight, not the admissibility, of this evidence. In fact, Columbia’s own expert . . . used the same methodology as Slottje in reaching his opinions regarding Garcia’s past and future earnings. . . he too substituted data for worklife expectancy in the United States for the unavailable Mexican data.” 

In Re: Vioxx Products Liability Litigation, 2007 U.S. Dist. LEXIS 40612 (E.D. La. 2007).  The plaintiff was granted a new trial on the ground that a defense witness, Dr. Barry Rayburn, had testified that he was a board certified cardiologist when, in fact, he was not a board certified cardiologist.  

Jack v. Schlumberger Technology Corp., 2008 U.S. Dist. LEXIS 13530 (W.D.La. 2008) This is a one page memorandum responding to plaintiff’s motion for a Daubert hearing to determine whether Dr. Kenneth Boudreaux could testify based on the Camus study. The judge denied the motion as not needed because he was ruling that Boudreaux’s testimony was excluded to the extent that it relied upon the Camus study, for which Dr. Boudreaux’s testimony had been excluded fourteen years earlier in Marcel v. Placid Oil, 11 F.3d 563 (5th Cir. 1994). The Camus study allegedly measured worklives over oilfield workers. The defendant did not oppose this ruling.  

Miller v. Burlington Northern, 2001 U.S.Dist. Lexis 16650 (N.D.Tex 2001). This is a short, very well written memorandum Robert K Roach, U.S. Magistrate Judge, admitting the economic damages testimony of Jeffrey Opp, the economic expert for the plaintiff under the Daubert standard. Judge Roach said: “The knowledge and skills used by Opp in assembling and compiling the data, performing mathematical calculations, selecting the formulae (functions) to be applied to the data, charting the results, and then summarizing the end figures in mathematics do not require special college courses or post-graduate education. The methodology is not a proper subject for peer review. The bachelor’s degree in economics which Opp holds reflects the degree of mastery of basic mathematical, statistical and language skills necessary to perform the compilations, calculations and formulae selections used by Opp in his analysis and making his report. Brain surgery, it ain’t. . . . Mathematics is not junk science. Defendant’s Daubert motion is overruled. Opp can testify.” 

Owens v. Excel Management Services, Inc., 2003 U.S. Dist LEXIS 20296 (N.D.Texas 2003).  The testimony regarding back pay and front pay damages of economist J. Herbert Burkman, Ph.D., was permitted after a Daubert hearing. Dr. Burkman’s testimony was challenged on the grounds of his assumption that she would maintain her earnings if she had transitioned with fellow employees to a new department and because he had projected her earnings to age 70.  The court said regarding his age 70 projection: “Nor does Dr. Burkman’s decision to project plaintiff’s future lost wages to age 70 dictate that his testimony be stricken. Dr. Burkman based his estimate of front pay damages on plaintiff’s stated desire to work until age 70, if possible. . . . Although worklife expectancy tables estimate that a 54-year old college educated woman will likely retire in her mid-sixties, nothing in Daubert or its progeny requires an expert’s testimony to be circumscribed by statistical averages when evidence in a particular case supports a different conclusion. A jury can easily recalculate earnings if it finds that retirement at an earlier age is warranted.” 

Ostrowiecki v. Agressor Fleet, Ltd., 2008 U.S. Dist. LEXIS 59586. This is a memorandum denying a plaintiff motion in limine to preclude the defense testimony of economist Dr. Kenneth Boudreaux and a defense motion in limine to preclude the plaintiff testimony of economic expert Holly Sharp. Daubert standards were used. Judge Lance M. Africk rejected each defense and plaintiff argument by saying that vigorous cross examination was the correct method to deal with the issues being raised, not the barring of expert testimony. Sharp had projected several damages not projected by Boudreaux, one of which was loss of accumulations to an estate. Boudreaux argued that any such calculation was inherently too speculative for him to project. Sharp had provided a projection. One other key difference between the experts was that Sharp had projected a loss from the sale of the decedent’s business after the decedent’s death, while Boudreaux had not done so.

Scardina v. Maersk Line, LTD., 2002 U.S. Dist. LEXIS 13468 (E.D.LA. 2002). This legal memorandum responds to motions to limit the testimony of Dr. G. Randolph Rice, an economist, and to strike the report and testimony of Dr. Fereydoun Aghazadeh, an Industrial Engineer/Ergonomist. Both motions were granted. The Court said of Dr. Rice: “Dr. Rice, plaintiff’s expert economist, is expected to testify as to plaintiff’s economic damages, that is lost past and future income. In a report dated December 12, 2001, Dr. Rice set forth various projections using an annual wage base of approximately $30,000.00. Plaintiff’s average annual earnings in the three to five years preceding the accident were approximately $26,000. His annual earnings for the five years from 1994 through 1999 varied from a low of $15,895 to a high of $39,536.06 in 1996. On April 29, 2002, Dr. Rice produced a second report at the request of plaintiff’s counsel. This report based plaintiff’s ‘impairment of earning capacity’ on projected annual incomes of $38,481.00 and $76,962.00, which of course produced much higher economic damages. . . It is the provenance of the Court to assure that an expert’s testimony is not based on evidence that is speculative and conjectural, but is sufficiently tied to the facts of the case so that it will actually assist the trier of fact in resolving a factual dispute or to understand the evidence. Daubert, 113 S.Ct at 2795. The court concludes that Dr. Rice’s testimony as to his supplemental opinion based on projected annual incomes of $38,000 and nearly $77,000 is not sufficiently tied to the facts or supported by the evidence available to the Court at this time, and is therefore excluded, subject to the Court’s reconsideration of the issue should evidence be introduced at trial provide sufficient factual basis for such testimony.”

Stewart v. Rowan Companies, Inc., 2002 U.S. Dist. LEXIS 4135 (E.D.LA 2002). This is a memorandum allowing Shael Wolfson was permitted to testify about economic damages. The defendant had challenged the admissibility of Wolfson’s testimony on the basis that only a Ph.D. in economics is qualified to offer an opinion of plaintiff’s economic damages. The court said: “Wolfson possesses a masters of science degree in economics from Florida State University, and is currently pursuing a doctorate in economics at Louisiana State University. In addition, he has published journal articles on the topic of calculating economic damages. He has been qualified in state court cases. . .The absence of a doctorate does not compel the conclusion that he is not qualified to testify as an expert economist. . . . Indeed, defendant gives no reason why a person with a master’s degree in economics is not sufficiently schooled in economics to estimate economic losses. The Court finds Wolfson sufficiently qualified to render an opinion on plaintiff’s economic losses.” 

Taylor v. Air Logistics, Inc., 1988 U.S. Dist. Lexis 7409 (E.D. LA 1988). This memorandum and order discusses the litigative history of a decision that was originally reached on April 21, 1983 and therefore fell under Culver I and not Culver II.  The decision went through appeals to the 5th Circuit Court of Appeals and came back again with instructions that the trial court set damages for lost household services.  The plaintiff’s economist was a “Dr. Goodman,” while the economist for the defense was Kenneth Boudreaux.  It is indicated that damages were based on a wage growth rate of 5.3 percent and the discount rate was 10.25 percent, as used by both economists, who nevertheless came up with slightly different present values for lost earnings based on differences in the way taxes were calculated. Dr. Goodman came up with $294,747.02 and Dr. Boudreaux came up with $294,002.00. With respect to household services, Dr. Goodman found $34,075.48 and Dr. Boudreau found $25,002.00 The judge accepted Dr. Goodman’s figure in determining final damages. There was also a long discussion of the amount to award for pre judgement interest. 

Utsey v. Olshan Foundation Repair Company, 2007 U.S. Dist. LEXIS 85918. (E.D. La 2007). This memorandum by Judge Helen G. Berrigan denied a motion to exclude the testimony of economic expert Dr. Randolph Rice. This is a Daubert-Kumho review. Defendants had charged that Louisiana law required the testimony of a vocational expert as a foundation for an expert opinion of earnings loss by an economist.  Judge Berrigan wrote: “Although defendants’ argument may be correct regarding the amount of money the plaintiffs could recover in state court, the defendants have not provided any federal authority to support their argument to exclude Rice’s expert report under the federal rules of evidence . . . Therefore, the defendant’s concern about the factual basis of Rice’s report is best resolved by vigorous cross examination and the presentation of contrary evidence.” 

Vienne v. American Honda Motor Company, Inc., 2001 U.S. Dist. LEXIS 606 (E.D.La. 2001). 
The District Court held that Barney Hedgewood, a vocational rehabilitation expert, had sufficient training and experience to be allowed to testify about his life care plan for the plaintiff after a consideration of Daubert standards.

Vogler v. Blackmore, 2003 U.S. App. LEXIS 24020 (5th Cir. 2003). This decision affirms a trial court decision to admit the testimony of “grief expert” in “thanatology,”Dr. Phyllis Silverman, who had a bachelor’s degree in psychology and sociology, a master’s degree in social work, and a Ph.D. in public health. The court added the following: “Further, even if we were to find that the district court abused its discretion in admitting Dr. Silverman’s testimony, the admission of that testimony was harmless. The facts of this case are tragic: a mother and child are dead, leaving a grieving father to care for his wife’s children from a prior marriage while attempting to care for himself. Evidence presented by the collective Plaintiffs at trial included pictures of a happy family and the mangled, flattened remains of Mrs. Vogler’s car. It is highly unlikely that Dr. Silverman’s testimony aided the jury’s resolution of this case or in its awards to Mr. Vogler.”  There is also discussion of a 50 percent multiplier between a jury’s award of economic damages and the allowable size of an award for future mental anguish and future loss of companionship. The 5th Circuit seemed to be saying that the multiple was between economic damages that the jury could have awarded and the allowable size of the award for future mental anguish and loss of companionship. The economic expert had testified to future earnings loss between $455,000 and $700,000, with an addition of $200,000 for the value of household services. Thus, the 5th Circuit said that $900,000 could have been awarded. Submitted by Jerry Martin.

Walker v. Yellow Freight Systems, Inc., 1999 U.S.Dist. LEXIS 15012 and 1999 U.S.Dist LEXIS 16128 (E.D.La 1999). In the first order (9/23/99) defendant’s motion to prohibit testimony by economic expert Robert Johnson was denied in a Daubert hearing. Kenneth Boudreaux was the economic expert for the defense. Of major focus was Johnson’s assumption that the decedent had contributed 35 hours per week of household services based on the Peskin study, which projected 15.1 hours per week. It appears that Johnson had used the value per hour from the Peskin study. The court said: “Because the Peskin study itself is reliable, the Court assumes that any figures it provides are reliable. In his affidavit, Dr. Boudreaux is admittedly unfamiliar with the Peskin study and the Court does not give weight to his objections. The Court also discussed other questionable assumptions in Johnson’s report, but said that went to the weight of the evidence. The second order (10/19/99), interpreting Louisiana law, held that “loss of earning capacity may be factored into a loss of support calculation, since earning capacity is relevant to ‘the possibility of a decrease or increase in earnings.’ 

        FELA/Maritime

Broussard v. Stolt Offshore, Inc., 2007 U.S. Dist. LEXIS 1687 (E.D. LA 2007). This memorandum from Judge Mary Ann Vial Lemmon provides a concise statement of damages to a seaman under the Jones Act: “A seaman claiming to have suffered persona injury may be entitled to recover past and future economic losses. Culver v. Slater Boat Co., 772 F2d 114, 122 (5th Cir. 1983). The purpose of such an award is to ‘provide the victim with a sum of money that will, in fact, replace the money he would have earned.’ Id. at 120. Past economic losses are generally measured by the actual wage loss incurred by the plaintiff to the date of trial, and may include fringe benefits if proved. Williams v. Reading & Bates Drilling Co., 750 F.2d 487 (5th Cir. 1985). Future economic losses include earning capacity and fringe benefits. When determining future economic losses, the court must consider whether plaintiff will be totally or partially disabled so that his future earnings will not be diminished. . . . Variables to consider in determining future economic losses include work life expectancy, the plaintiff’s past wages, overtime, and vacation pay. . . The award should be discounted to account for the fact that the plaintiff will receive a payment in a lump sum, rather than over a period of years in the future.” The plaintiff’s economic expert was Dr. Bernard Pettingill. The defendant’s economic expert was Dr. Kenneth Boudreaux. Having determined that the plaintiff was totally disabled, Judge Lemmon relied upon the lowest estimates of Dr. Pettingill because Dr. Boudreaux had provided no calculations that were based on the plaintiff being totally disabled

6th Circuit

    Court of Appeals

        Basis Income and Fringe Benefits for Projecting Earnings Loss

Reed v. PST Vans, Inc., 1998 U.S. LEXIS 17928 (6th Cir. 1998). Michael Brookshire was the economic expert for the plaintiff and “had valued the decedent’s life at $1,161,339, controlled for inflation, discounted to present value, and taking into account other variables such as unemployment, life expectancy, and early retirement. . . In reaching his total pecuniary value calculation, Dr. Brookshire opined that the decedent’s lost earning capacity was $788,741 and that this amount should be reduced by $75,796 for personal maintenance costs, to the amount of $712,945. He also opined that the decedent’s military pension had a value of $31,868 ($21,000 per year), and that the replacement cost of household services that the decedent performed for his spouse was $116,526.” The jury awarded $300,000 and the plaintiff appealed.  The 6th Circuit said: “Under Tennessee law, the assessment of damages in a wrongful death suit ‘is not governed by fixed rules of mathematical precision, but the matter is left to the sound discretion of the jury.’  [Giving citations.] Defendants presented evidence that tended to discredit Dr. Brookshire’s calculations, in particular those relating to deductions for personal maintenance as defined by Tennessee law. For example, it is reasonable to think that if at the time of his death the decedent had accumulated $34,000 of credit card debt, his habits and expenditures exceeded the $8,000 per year deducted by Dr. Brookshire. Similarly, it is reasonable not to include the $116,526 that Dr. Brookshire added for the replacement cost of household services provided by the decedent when Mrs. Reed never testified to the actual extent of the decedent’s services. Likewise, the jury could reasonably find that because of his particular employer, the decedent had a chance of unemployment greater than the national average figure used by Dr. Brookshire.” The 6th Circuit upheld the trial court decision. 

            Life and Worklife Expectancies

Rogers v. Norfolk Southern Railway Company, 2005 U.S. App. LEXIS 4337 (6th Cir. 2005). The 6th Circuit said: “At trial, Rogers offered the expert testimony of an economist, Dr. Francis Rushing, who presented an analysis of the salary and benefits Rodgers would have received over the expected course of his work life had he not injured his knee. The jury apparently relied heavily on Dr. Rushing’s testimony, since its award for future lost earning capacity was identical to the estimate given by Dr. Rushing, a figure based on Rogers’s pre-injury work life expectancy of 28 years. Dr.Rushing’s estimate did not account for any future income Rogers might earn to offset his financial loss, even though Dr. Rushing testified that Rogers still possessed 10.7 years of work life expectancy despite his knee injury. In light of this testimony, Rogers’s attorney conceded during closing argument that the jury should reduce Rogers’s work life expectancy by 10.7 years and award Rogers only 61 percent of $1,159,808, the estimated amount of future earning capacity given by Dr. Rushing. Although the jury apparently ignored counsel’s request and awarded the full amount to Rogers, the award is not necessarily unsupported by the evidence or the result of a mistake. Rogers testified that as a result of his injury, he has been unable to secure employment and has been rejected by over 70 different employers, including Norfolk.”

             Treatment of Taxes

Estate of Clarks v. United States, 202 F.3d 854 (6th Cir. 2000). In this decision, the 6th Circuit interpreted Michigan law on attorneys’ fees as creating a lien on interest from an award for a personal injury, such that the recipient bore no tax liability for interest paid to the attorney as attorneys’ fees.  Clarks had died after winning the award, but before it was paid. There was no issue about taxation of the $5,600,000 award itself because it was for a personal injury and not taxable. However, the $5,707,837.55 of interest on the award in the interim was taxable and the issue related to the tax owed on the portion of that interest that was paid to attorneys. The 6th Circuit determined that the IRS should refund taxes paid by Clarks’ estate  to the estate. The decision also discusses differences between the circuits on this matter. 

        Legal Procedure

Doren v. Battle Creek Health System, 187 F.3d 595 (6th Cir. 1999). This is a decision under the Americans with Disabilities Act. The plaintiff alleged she was disabled because of a series of medical conditions. The court’s ruling was that she was not disabled under the meaning of the ADA.  The decision discusses an affidavit issued by Dr. Robert Ancell stating that the plaintiff “was not able to perform the duties (of a nurse) on the adult floor.” The court pointed out that Dr. Ancell’s affidavit did not offer “specific facts showing that there is a genuine issue for trail.”  Suggested by Penelope Caragonne. 

Equal Opportunity Employment Commission v. Watkins Motor Lines, Inc., 2006 U.S. App. LEXIS 23177 (2006). The 6th Circuit ruled that morbid obesity which is not related to any physiological cause is not an "impairment" under the Americans with Disabilities Act. 

L & W Supply Corporation v. Acuity, 2007 U.S. App.  LEXIS 1393 (6th Cir. 2007).  This decision reversed a lower court decision awarding all of an expert witness’ fees to the plaintiff. It covers Supreme Court decisions holding that expert witness fees can only be recovered by an opposing party on the basis defined in a statute. This decision involved two different federal statutes, the relevant statute being 28 U.S.C. § 1821. Under that statute, a witness may be paid an attendance fee of $40 per day, actual travel expenses for a witness who travels by common carrier or a travel allowance for a witness who travels by privately owned automobile, and a subsistence allowance when an overnight stay is required. The district court had awarded all fees paid to the expert. The decision required that the amounts be determined consistent with the requirements of 28 U.S.C. § 1821. Submitted by Ralph Frasca and Bill King.

Regional Airport Authority v. LFG, LLC, 460 F.3d 697; 2006 FED App. 0302P (6th Cir. 2006). The 6th Circuit reviewed minority and majority opinions of previous courts about whether Rule 26 requires a testifying expert to disclose all documents provided to the expert, regardless of attorney work product aspects of those documents. The court held with the majority of previous decisions that: “Rule 26 creates a bright-line rule mandating disclosure of all documents, including attorney opinion work product, given to testifying experts.” Suggested by Ralph Frasca.   

        Treatment of Taxes

Perkins v. American Electric Power Fuel Supply, Inc., 91 Fed. Appx. 370; 2004 U.S. App. LEXIS 398 (6th Circuit, 2004). This was a Jones Act admiralty case in which the district court awarded $2,394,887.40 for pain and suffering, based on $200 per day from the date of injury to the date of judgment, plus the present value $200 per day from the date of judgement to the end of Mr. Perkin’s life. The district court also awarded $598,721.85 for loss of enjoyment of life based on $50 per day from the date of judgement to the end of Mr. Perkin’s life. The district court also awarded $7500 for loss of household services, $48,274 for lost income through date of trial, $742,887 for lost income from the date of trial to age 60.4 and $56, 483.66 in prejudgment interest. AEP argued that the award should have been reduced to take income taxation into account. The district court refused to do so because “the only evidence of Mr. Perkins’ future tax liability was too speculative to be relied upon.” Dr. Harold Bryant, the plaintiff’s economic expert answered on cross examination that federal income tax was approximately 7% of Mr. Perkins’ wages and that his state withholding w as approximately 3%. Dr. Bryant also testified that the tax on retirement benefits would have been “a half of a percent, maybe a percent would be appropriate.” The 6th Circuit said: “In our view, the evidence of future taxation did not have the degree of specificity and certainty that   would have required the district court to reduce the award for lost income damages. The 6th Circuit affirmed the district court decision in all respects. 

        FELA/Maritime   

Perkins v. American Electric Power Fuel Supply, Inc., 2004 U.S. App. LEXIS 398 (6th Cir. 2004).  This is an admiralty case under the Jones Act. The trial court refused to reduce the lost income award to reflect taxation in spite of Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523 (1983) on the grounds that the only evidence of Perkins’ federal income tax liability was too speculative to be relied upon. Plaintiff’s economic expert, Harold Bryant, Ph.D. had stated under cross examination that Perkins’ federal income tax was approximately 7 percent of his wages and state income tax withholding was 3 percent and that the tax on Perkin’s retirement benefits was “certainly a half a percent, maybe a percent would be appropriate.” This decision also contains an interesting and somewhat amusing discussion of prejudgement interest.

Rachel v. Consolidated Rail Corporation, 891 F.Supp. 428 (N.D.Ohio 1995). In projecting damages, an economist must calculate loss of actual future benefits and cannot use amounts of employer and employee  Tier I and Tier II  and Medicare taxes as equivalent to lost income. This decision makes it clear that Tier I, Tier II and Medicare taxes are taxes in meaning of Liepelt.

Rischmiller v Dahl, 505 F.2d 517 (6th Cir. 1974). This decision holds that the decision of the United States Supreme Court in Moragne v. States Marine Lines, 397 U.S. 375 (1970), “created for the first time a non-statutory cause of wrongful death based on unseaworthiness.” The Rischmiller  court adopted a standard of loss to survivors and rejected loss to the estate as the standard for this new non-statutory federal cause of action. In one of  the cases at hand the nearest relative was a brother of the decedent who was not receiving financial support from the decedent. In the other paired case, suit was brought by the administrator on behalf of two brothers and four sisters, none of whom was receiving financial support from the decedent. In both cases, the 6th Circuit upheld trial court decisions not to allow pecuniary damages.

        Admission of Expert Testimony

Leap v. Malone, 1996 U.S. App. LEXIS 33965 (6th Cir. 1996). The 6th Circuit affirmed the jury decision to award Christina Leap $100,000 for lost earning capacity. Dr. Anthony Gamboa had projected her earnings loss at between $906,000 and $1.4 million. The Court noted that the former figure had been described as “extraordinarily optimistic.” One of the sources for the appeal was that “Dr. Gamboa’s testimony was ‘unimpeached [and] uncontradicted.’” The court rejected that argument, say: “Defense counsel conducted an effective cross-examination of Dr. Gamboa, exposing apparent weaknesses in his position. And the jury could reasonably have concluded that the dismal picture of Miss Leap’s future presented by Dr. Gamboa was contradicted by other evidence.”  

        Wrongful Termination

Arban v. West Publishing Corp., 345 F.3d 390 (6th Cir. 2003).  The 6th Circuit upheld the trial court decision not to award front pay because the evidence for front pay loss was based entirely on statements of the plaintiff and thus “purely speculative.” The decision cited a testimonial exchange between the trial court judge and economist William King to establish that calculations of front pay loss were based entirely on statements by the plaintiff.  

Hamlin v. Charter Township of Flint, 165 F.3d 426 (6th Cir. 1999). There is reference in this decision to the fact that if an employer paid for insurance that provided benefits after an injury, the value of that insurance can be treated as an offset. However, the thrust of the decision was to hold that the collateral source rule precluded use of disability benefits from Hamlin’s pension from being treated as an offset to earnings loss based on a holding of disability discrimination. Hamlin had suffered a heart attack, but had been able to function as an Assistant Fire Chief afterwards. A new fire chief ordered Hamlin to perform the duties of a front-line firefighter, which he was unable to do. He was then fired and began to receive disability benefits from his pension. The trial court had treated those benefits as an offset, but the 6th Circuit held that this was in error ordered that the trial court not use those benefits as an offset. Suggested by George McLaughlin.

Pollard v. E. I. Dupon de Nemours, Inc. 2005 U.S. App. LEXIS 11949; 2005 FED App. 0274P (6th Cir. 2005). “Pollard explained in considerable detail at the District Court hearing in July 2003 that she would have ‘remained [at DuPont] until I couldn’t perform my duties any longer,’ and went into detail about her 401(K) plan and her need to work to age 65. Dupont’s own expert economist, Dr. Mary Baker, conceded from the statistical chart offered by DuPont concerning retirement that one could not tell when Pollard would have retired and that there was no certainty that Pollard would not have worked to age 65. Based on the testimony before the District Court, we cannot say that its finding on this issue was clearly erroneous.” Pollard had been awarded front pay to age 65 rather than age 58 as DuPont had argued in this wrongful discharge matter.

    District Courts in the 6th Circuit (KY, MI, OH, TN)

        Basis Income and Fringe Benefits for Projecting Earnings Loss

Burden v. Evansville Materials, Inc., 636 F. Supp. 1022 (W.D.Ky 1986). In this case, Robert Ancell was the vocational expert for the plaintiff and Robert Pulsinelli was the economic expert for the plaintiff. Anthony Gamboa was the vocational expert for the defense, but the defense did not offer an economic expert. The judge provided extensive discussion of Dr. Pulsinelli’s calculations. 

E.E.O.C. v. Freemen, 2009 U.S. Dist. LEXIS 50844 (M.D. Tenn. 2009). This was an order of Judge John T. Nixon denying a motion in limine to bar the testimony of Dr. Mark Cohen of Vanderbilt University as an economic expert. The defendant argued for denial on two grounds. The first ground was that Dr. Cohen’s report was incomplete under Rule 26(a)(2)(B). The second ground was that his testimony failed to meet the standards of Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993) and progeny. The first claim was based on the fact that Cohen had not identified an article he had found on the internet describing the labor market in Rutherford County. The court pointed out that this article was made into an exhibit at Dr. Cohen’s deposition. The court went on to say: “[T]he Sixth Circuit held that, ‘Section 26(a)(2)(B) does not limit an expert’s testimony to simply reading his report. No language in the rule would suggest such a limitation. The rule contemplates that the expert will supplement, elaborate upon, explain and subject himself to cross-examination upon his report,’” taking this language from Thompson v. Doane Pet Care Co., 470 F.3d 1201, 1203 (6th Cir. 2006). The Daubert portion of the motion focused on Dr. Cohen’s use of retirement at age 67 as an upper bound for loss of earnings and, allegedly, an average work-life expectancy figure taken from Skoog and Ciecka, “The Markov (Increment Decrement) Model of Labor Force Activity: Extended Tables of Central Tendency, Variation and Probability Intervals,” Journal of Labor Economics (sic), Vol. 11, No. 1, Spring/Summer 2001. The Court described Dr. Cohen’s testimony as follows: “It was clear from Dr. Cohen’s testimony that there is a dearth of published material based on contemporary data with respect to the work life of women. Dr. Cohen testified that the article he used to identify a lower boundary was the best research available, but that it was still unsatisfactory because it was based on historical data. Accordingly, the Court finds that the Daubert factors are not helpful here. A theory about which little has been published cannot have been tested, subjected to peer review  or publication, or analyzed with respect to error rate. However, the Court notes that Dr. Cohen testified to the dearth of available research, and to the phenomenon of women working longer in today’s society, as generally accepted in the labor economics community. Moreover, the Court notes that Dr. Cohen is highly qualified to make hypotheses as to work life expectancy on the bais of his considerable experience and expertise. The record is clear that Dr. Cohen has worked in the field of labor economics for over twenty years as a scholar, professor and private consultant. In the course of his work for bodies such as the United States Sentencing Commission, he has always employed the methodology whcih he used in the current case. (Tr. 422). On that basis, given that the Daubert factors are not entirely applicable to the issue in question, the Court considers Dr. Cohen’s selection of 67 as an upper boundary for Freemen’s work life expectancy to be reliable.”  

          Life Care Plans and Reasonable Value of Medical Expense

Brown v. United States, 2007 U.S. Dist. Lexis 96694 (W.D. Tenn. 2007). The United States had retained Dr. David Sharp as its economic expert. Both sides stipulated before trial to Dr. Sharp’s values for the lost earning capacity of Melody Brown and to Dr. Sharp’s present valuation of the life care plans prepared by Dr. Robert Voogt for the plaintiff and Mr. Robert Jackson for the defendant United States. Judge McCalla’s comparison of the two life care plans was specific and therefore interesting. Since this was an FTCA case, it was tried before a judge without a jury.

Huss v. King Company, 2001 U.S. Dist. LEXIS 19293. (W.D. Mich. 2001). This is a Jones Act case involving Dr. Robert Ancell as a rehabilitation expert and Dr. William King (unrelated) as expert witnesses for the plaintiff. The injury occurred when a boat was dropped on the plaintiff while on land. The plaintiff was held 60 percent responsible for the accident because of negligence for walking under the boat while suspended. The court’s analysis that the case fit under the Jones Act is detailed and useful. The court’s conclusion that the plaintiff was malingering, intended to sue the King Company from the outset, and able to return to work is detailed and sometimes caustic. The court’s manner of indicated that it had little respect for Dr. Ancell’s opinions, pointing to the frequence with which Dr. Ancell testifies and the fact that Dr. Ancell had made no effort to help the plaintiff find alternative employment. There was no criticism of Dr. King, whose opinions depended on the conclusions of Dr. Ancell.  The court held that the plaintiff had not established any loss of past or future earning capacity.  The court held that past pain and suffering had a value of $25,000, future pain and suffering had a value of $5,000 and that there was a past loss of medical expenses of $234.73. 

      Legal Procedure

Cheese v. United States, 2007 U.S. Dist.LEXIS 36045 (E.D.Mich. 2007). The plaintiff was awarded damages in this Federal Tort Claims Act case. This memorandum extensively discusses what expenses are allowed and not allowed under the FTCA. The plaintiff’s economist was John Hanieski. The defendant argued against “expert witness fees” sought by the plaintiff for three witnesses including Hanieski. The Court held that such fees were not provided for in the FTCA other than $40 per day for each day’s attendance at the trial. The Court awarded that amount instead of $21,530 requested by the plaintiff for expert witness fees.

Neview v. D.O.C. Optics Corporation, 2009 U.S. Dist LEXIS 5918 (E.D. Mich. 2009).  From the decision: “Defendant requests that the Court exclude the testimony of Plaintiffs' proposed expert economist, Dr. Calvin Hoerneman. While Defendant suggests that his testimony is unnecessary because it addresses an uncomplicated subject, DefeDavis v. CSX Transportation, Inc., 2008 U.S. Dist. LEXIS 108204 (E.D. Tenn, 2008). CSX requested to the Court that “evidence regarding employer-paid Tier I and Tier II taxes be excluded from evidence pertaining to Plaintiff’s damages.” CSX also wanted the plaintiff to deduct “federal income taxes, social security taxes and railroad retirement board taxes from his damage request. Because Plaintiff did not enroll in CSXT’s health insurance plans, but rather enrolled in his girl-friend’s insurance plans, CSXT seeks the exclusion of health insurance premiums from Plaintiff’s request for damages. Finally, CSXT requests that Plaintiff be required to deduct the business costs and expenses that he will not incur by not working for CSXT from his request for damages.” The Court cited several federal decisions in noting that Social Security taxes should be deducted.  The court then cited a number of decisions regarding whether or not Tier I and Tier II taxes should be deducted, noting that this depends on whether or not the plaintiff was requesting any lost pension benefits. The Court granted the requests regarding taxes and business expenses other than Tier I and Tier II taxes, reserving its decision with respect to those taxes until it sees exactly what fringe benefits the plaintiff has claimed.
Davis v. CSX Transportation, Inc., 2008 U.S. Dist. LEXIS 108204 (E.D. Tenn, 2008). CSX requested to the Court that “evidence regarding employer-paid Tier I and Tier II taxes be excluded from evidence pertaining to Plaintiff’s damages.” CSX also wanted the plaintiff to deduct “federal income taxes, social security taxes and railroad retirement board taxes from his damage request. Because Plaintiff did not enroll in CSXT’s health insurance plans, but rather enrolled in his girl-friend’s insurance plans, CSXT seeks the exclusion of health insurance premiums from Plaintiff’s request for damages. Finally, CSXT requests that Plaintiff be required to deduct the business costs and expenses that he will not incur by not working for CSXT from his request for damages.” The Court cited several federal decisions in noting that Social Security taxes should be deducted.  The court then cited a number of decisions regarding whether or not Tier I and Tier II taxes should Davis v. CSX Transportation, Inc., 2008 U.S. Dist. LEXIS 108204 (E.D. Tenn, 2008). CSX requested to the Court that “evidence regarding employer-paid Tier I and Tier II taxes be excluded from evidence pertaining to Plaintiff’s damages.” CSX also wanted the plaintiff to deduct “federal income taxes, social security taxes and railroad retirement board taxes from his damage request. Because Plaintiff did not enroll in CSXT’s health insurance plans, but rather enrolled in his girl-friend’s insurance plans, CSXT seeks the exclusion of health insurance premiums from Plaintiff’s request for damages. Finally, CSXT requests that Plaintiff be required to deduct the business costs and expenses that he will not incur by not working for CSXT from his request for damages.” The Court cited several federal decisions in noting that Social Security taxes should be deducted.  The court then cited a number of decisions regarding whether or not Tier I and Tier II taxes should be deducted, noting that this depends on whether or not the plaintiff was requesting any lost pension benefits. The Court granted the requests regarding taxes and business expenses other than Tier I and Tier II taxes, reserving its decision with respect to those taxes until it sees exactly what fringe benefits the plaintiff has claimed.

      FELA/Maritime Cases

Davis v. CSX Transportation, Inc., 2008 U.S. Dist. LEXIS 108204 (E.D. Tenn, 2008). CSX requested to the Court that “evidence regarding employer-paid Tier I and Tier II taxes be excluded from evidence pertaining to Plaintiff’s damages.” CSX also wanted the plaintiff to deduct “federal income taxes, social security taxes and railroad retirement board taxes from his damage request. Because Plaintiff did not enroll in CSXT’s health insurance plans, but rather enrolled in his girl-friend’s insurance plans, CSXT seeks the exclusion of health insurance premiums from Plaintiff’s request for damages. Finally, CSXT requests that Plaintiff be required to deduct the business costs and expenses that he will not incur by not working for CSXT from his request for damages.” The Court cited several federal decisions in noting that Social Security taxes should be deducted.  The court then cited a number of decisions regarding whether or not Tier I and Tier II taxes should be deducted, noting that this depends on whether or not the plaintiff was requesting any lost pension benefits. The Court granted the requests regarding taxes and business expenses other than Tier I and Tier II taxes, reserving its decision with respect to those taxes until it sees exactly what fringe benefits the plaintiff has claimed.

Huss v. King Company, 2001 U.S. Dist. LEXIS 19293. (W.D. Mich. 2001). See under Life Care Plans.

      Hedonic Damages and Emotional Services

Hein v. Merck & Co., Inc., 868 F.Supp. 230 (M.D.Tenn. 1994).  This decision granted a motion in limine to bar hedonic damages testimony by Dr. Richard Palfin. The decision quoted Palfin’s report at length, indicating that Palfin had stated the opinion that the reasonable range for the value of an average person’s enjoyment of life was between $2,079,377 and $4,158,753, with a midpoint at $3,119,065. Since this was a personal injury and Birgit Hein was still alive, Palfin opined that the jury should chose a percentage reduction in the midpoint value of life and gave examples for reductions of 25% and 15%. Judge Wiseman used Daubert criteria to evaluate Palfin’s report of hedonic damages, saying: “First, the court must determine whether Dr. Palfin’s theories have been or can be tested. Many of the predictions or assumptions of economists in damages testimony can be validated in retrospect, if not otherwise.  For instance, predicted rates of inflation, predicted salary escalations, average life expectancies, average work life expectancies, average interest rates can all be looked at years down the line to determine if we were correct in allowing expert estimates of economic loss. Such an evaluation after time is a comforting response to the criticism that courts’ decisions to accept or exclude novel scientific evidence may be ‘behind the curve’ or may have a dampening effect on scientific development. No such retrospective validation is possible in Dr. Palfin’s thesis of the valuation of hedonic damages. Speculative assumptions remain speculation.” Judge Wiseman went on to look at the entirety of the Value of Life literature and criticisms of the use of that literature, particularly in Parker Cashdollar and Marsha Cope Huie, “Reliability and Validity of Hedonic Damage Testimony: Judicial Logic about Economic Science in Merrell Dow and Mercado, 3-DEC J. Legal Econ 57, 67 (1993). Judge Wiseman said: “Even at my somewhat advanced age, I’m not ready or willing to put a price on my continued existence. Honest answers to hypothetical questions of this kind are not possible. This methodology is subject to criticism for being based on unreliable, untrustworthy hearsay. It fails the common sense test, as well.”

Kurncz v. Honda Motor Company, Ltd., et al., 1996 U.S.Dist. Lexis 6132 (W.D.Mich.1996). A motion in limine was granted to preclude the hedonic damage testimony of Stan V. Smith.

Pomella v. Regency Coach Lines, 899 F.Supp. 335 (E.D. Mich. 1995). Cites Ayers v. Robinson in rejecting an "eyeballing" selection of a value with a range. The Pomella Court cited Ayers as saying that: "(Court would not accept choosing a midpoint value of $3.5 million as a "benchmark" measure of hedonic, or pleasure, value of life for the statistically average life, the true value of which was estimated to lie somewhere between $500,000 and $9,000,000.) As in that case, the data on which plaintiff relies 'goes to one thing' (friction on snow-covered pavement) while a jury would need information of a very different sort (the abilty to stop on I-94's uneven and potentially icy pavement)." 

     Admissibility of Expert Testimony

Birge v. Dollar General Corporation, 2006 U.S. Dist. LEXIS (W.D.TN 2006). This is a decision of a U.S. District Judge affirming the decision of a Magistrate Judge’s order to exclude the testimony of Dr. David Ciscel. The Magistrate Judge had found that Dr. Ciscel was qualified to offer expert testimony concerning lost future income, but conclude “that Dr. Ciscel’s testimony was too speculative and unreliable to be admissible at trial because it was based on insufficient information about Dexter Birge’s income, both past and future, and B’s Quick Shop’s payment of wages to the decedent. The Magistrate Judge had recited testimony from Dr. Ciscel that $50-a-day wage data provided by Robert Birge, the decedent’s father, was “useless information.” However the appeal requested that Dr. Ciscel be permitted to testify based on either $50-a-day or minimum wage. This request was denied as “untimely.” 

Ogden v. St. Mary’s Medical Center, 2007 U.S. Dist. LEXIS 41853 (E.D. Mich. 2007).  This is a order from Judge Thomas Luddington denying without prejudice a motion to strike plaintiff’s proposed economic expert, Dr. Frank Stafford of the University of Michigan. The memorandum details of the methodology used by Stafford to project losses in an employment discrimination case. Stafford had assumed an earnings basis of “about” $25,000, an assumed rate retirement age of 65, and an inflation rate of 3% which was added to his projection of annual salaries, and a 24 percent fringe benefit rate. Defendants raised a variety of objections under Daubert-Kumho, including his use of a flat 24% rate for fringe benefits, double counting involved with both salary increases and the addition of inflation at 3% and use of a retirement age of 65 instead of work-life expectancy tables. Judge Luddington said: “Although Defendants criticize the selection of certain assumed values or the selection of a particular financial information as relevant over other data, Defendants have not suggested that the fundamental approach taken by Plaintiff’s proposed expert departs from accepted practice in the field of economics. Defendants have not offered any affidavit from another economist, for example, that the proposed expert’s methodology represents a departure from accepted discipline. The proposed expert has not articulated the algorithm employed to produce his projection, but neither have Defendants identified any defect on that point.”

Ogden v. St. Mary’s Medical Center, 2007 U.S. Dist. LEXIS 69181 (E.D. Mich. 2007). This follows a memorandum from Judge Ludington on June 11, 2007 dismissing the motion of defendants to bar the economic testimony of Dr. Frank Stafford without prejudice. This allowed defendants to try to provide a foundation for their motion. They did so in the form of an affidavit from Dr. Calvin Hoerneman, a member of the “National Association of Forensic Economists” (sic), a qualification cited in this memorandum. Judge Ludington said: “Hoerneman, a professor of economics at Delta College in Michigan, attests to all of the purported defects previously argued by Defendants, such as the use of flat rates for fringe benefits and wage increases, almost without elaboration. He states that, in his professional opinion, Plaintiff’s proposed expert’s report ‘is not based upon scientifically valid reasoning and methodology and is not based on sufficient factual data that pertains to . . . Plaintiff’s actual facts, making it misleading and unreliable expert testimony’. . . He further states that the proposed expert ‘appears to be using a data set that is over 25 year sold and, to my knowledge, is not being used by forensic economists in calculating future economic wage losses for a party when actual data on a person’s work life and earning history is known. . .Beyond those statements, Hoerneman offers no further explanation of his disagreement with Plaintiff’s proposed expert.” After some discussion of Daubert and Kumho, Judge Ludington dismissed Defendant’s motion in limine, saying: “At best, Defendants have identified an individual who might offer competing economic testimony. Defendant’s sole substantiated basis for challenging Plaintiff’s proposed expert, Hoerneman’s affidavit, provides the Court little assistance in its role as gatekeeper, with an obligation to assess the reliability of scientific testimony or evidence. The terse contrary assertions of Defendants’ affiant do not, in the Court’s view, prevent the conclusion that Plaintiff’s proposed expert’s report is supported by validation appropriate to the field of economics. On that basis, the Court will deny Defendants’ motion to strike Plaintiff’s expert.” 

Pinkston v. Accretive Health, 2010 U.S. Dist LEXIS 3163 (E.D. Mich. 2010) This was an order granting summary judgment to the defendant. As a part of that order the court said: “Defendant has filed a motion in limine to exclude the expert report and testimony of Plaintiff's expert, Dr. Frank P. Stafford, from trial. Generally, Defendant contends that Dr. Stafford's testimony and report do not meet the reliability requirements of Federal Rule of Evidence 702 and Daubert, and that the report fails to conform to the requirements of Federal Rule of Civil Procedure 26(a)(2)(B). Defendants contends that Dr. Stafford is an economist who is not qualified to provide an expert opinion as a vocational expert, that his report is based on inaccurate data and makes assumptions that have no basis in fact, and that he has not provided the reasons or basis for his opinions. Plaintiff responds that Dr. Stafford's methodology is an accepted methodology among economists and that Defendant's failure to submit expert testimony challenging the methodology is fatal to Defendant's motion. Based on the fact that Defendant is entitled to summary judgment on Plaintiff's claims, this motion will be denied as moot.”

Sokol v. Akron Gen. Med. Ctr., 1997 U.S. Dist. Lexis 22078 (N.D.Ohio 1997). This decision related to the admissibility of an affidavit by David M. Eisenstadt, Ph.d., the plaintiff’s economic expert in an antitrust action.  The court cited Ohio v. Louis Trauth Dairy, 925 F.Supp. 1247 (S.D.Ohio 1996) as applying “a modified Daubert analysis to an economist’s testimony based on a statistical multiple regression analysis” and In re Aluminum Phosphide Antitrust Litigation, 893 F.Supp. 1497 (D.Ka. 1995), in which the court applied a modified Daubert analysis and held that an economist’s testimony regarding price declines attributable to a conspiracy was admissible. The court then concluded that it would review Eisenstadt’s affidavit to determine whether Eisenstadt’s testimony is based on valid economic reasoning, saying, “The court’s focus is on the principles and methodology used by Eisenstadt and not on the resulting conclusions.”

7th Circuit

   Court of Appeals

       Annuities, Periodic Payments and Reversionary Trusts

Nemmers v. United States, 795 F.2d 628 (7th Cir. 1986).  This case discusses the option of the Nemmer parents to purchase an annuity, having rejected a reversionary trust, but remanded to the trial court because the trial court lowered the damages award because of the rejection of the reversionary trust. Judge Easterbrook argued that if damages had been correctly calculated, the award was sufficient to purchase an annuity that would cover the victim for his lifetime.

      Collateral Source

EEOC v. O’Grady, 857 F.2d 383 (7th Cir. 1988 ). Defendants appealed the trial court’s decision not to offset back pay with pension benefits discharged officers had received following forced retirement given that the pensions were paid for in part by the defendant employer.  The Court held that the trial court was correct for several reasons. “First, pension benefits may be viewed as earned by an employee as part of compensation from employment and therefore not paid by the employer at all . . . Second, the payments the Retirement Board (by the employer) were made to carry out a state policy under state law independent of ADEA (Age Discrimination in Employment Act) awards.” (Parenthesis added).  Suggested by Lane Hudgins.

Flowers v. Komatsu Mining Systems, 165 F.3d 554 (7th Cir. 1999). This decision discusses circumstances under which disability benefits can be set off in wrongful termination circumstances. Flowers was disabled and unable to work during certain periods. The Court said: “[J]ust as we hold that back pay must be specifically calculated and tailored to the times when Flowers was a qualified individual, the only social security disability payments which can be set off are the ones he received during periods for which he received back pay.” Suggested by Lane Hudgins.

In re Air Crash Disaster Near Chicago, Illinois, on May 24, 1979, 803 F.2d 304 (7th Cir. 1986). This was a wrongful death action against the McDonnell Douglas Corporation (MDC) based on the death of Walter Lux, pilot for American Airlines, in the air crash on May 24, 1979. It was governed by the Arizona Wrongful Death Act.  Two elements of this decision may be of interest to forensic economists. First, MDC argued that the collateral source rule did not apply to insurance payments received by the widow of the pilot because the insurance was provided by his employer and not purchased by the pilot himself. The Court said: “To obtain life insurance as part of his compensation package, Walter Lux had to forego a higher salary than he otherwise would have received. Thus, for the purpose of Arizona’s collateral source rule, his life insurance policy was purchased as much by him as if he accepted a higher salary and had written a check from his back account to pay the premiums. The Court then went on to point out that Walter Lux was an employee of American and not MDC and that MDC did not in any way underwrite the life insurance. This element of the decision suggests that fringe benefits should be treated as part of the earning capacity of a worker. The second aspect of this decision that is of importance to forensic economists is that the Court held that in spite of the fact that tax liability for lost earnings cannot be introduced in an Arizona personal injury matter with a surviving victim, tax liability should have been introduced in an Arizona wrongful death action because the amount of financial support a decedent might have provided was clearly based on after-tax income. Suggested by Lane Hudgins.

Perry v. Larson, 794 F.2d 279 (7th Cir. 1985). The defendant asked for a reduction in damages based on unemployment compensation payments received after the unlawful discharge of the plaintiff from employment. The Court held that: “ Unemployment compensation is a source of funds independent of the transaction giving rise to the claim and thus is collateral. . .  The purpose of the collateral source rule is not to prevent the plaintiff from being overcompensated, but rather to prevent the tort-feasor from paying twice. . . Under the collateral source rule Larson cannot benefit simply because the state has provided a means of helping those who are out of work, justly or unjustly.” Suggested by Lane Hudgins.

      Life Care and Reasonable Value of Medical Services

Williams v. Pharmacia, 137 F.3d 944 (7th Cir. 1998). This decision held that it was appropriate for a judge to have awarded front pay and a jury to have awarded lost future earnings in an employment discrimination case. The Court provided clear definitions for the two types of awards in reaching its conclusions. The Court argued that the legitimacy of the trial court judge’s award of front pay came from the authorization in Title VII of reinstatement as an equitable remedy saying that “front pay is the functional equivalent of reinstatement because it is a substitute remedy that affords the plaintiff the same benefit (or as close an approximation as possible) as the plaintiff would have received had she been reinstated. . .  Thus, the district court did not err in awarding front pay after it concluded that Williams could not be reinstated to her old position.” With respect to the jury award for lost future earnings, the court said: “To recover for lost earning capacity, a plaintiff must produce ‘competent evidence suggesting that his injuries have narrowed the range of economic opportunities available to him . . . [A] plaintiff must show that his injury has caused a diminution of his ability to earn a living’ (citations omitted). Williams’s expert witness testified that the poor evaluations Williams received and Pharmacia’s eventual termination of her employment taint Williams’s employment record. The jury was entitled to rely on this testimony in finding that Pharmacia’s acts of discrimination diminish Williams’ future earning capacity in the same way that a physical injury may diminish the earning capacity of a manual laborer.” The court then considered the possible overlap between front pay and lost earnings. Front pay, the court argued, is for the limited duration of the period until the plaintiff finds new employment. Lost future earnings take over at that point based on differences between the old and new rates of pay. Suggested by Kent Jayne and Ted Miller.

      Legal Procedure

Carter v. United States, 2003 U.S. App. LEXIS 12743 (7th Cir. 2003). This Richard Posner decision upholds the trial court decision that Maryland law applies because that is where the injury to the Illinois resident occurred. At issue was the Maryland cap on intangible damages, which substantially reduced the amount of the jury award.  This decision is a good example of the biting wit of Richard Posner. (Submitted by Gerald Martin.) 

Gregory v. Oliver, 2002 U.S. Dist. Lexis 24730 (N.D.Ill. 2002). Judge Milton Shadur granted a motion to strike the reports of two experts tendered by the plaintiff that failed to comply with Fed. R. Civ. P. 26(a). The fact that the opposition can depose the witness to discover what he or she was obligated to disclose is beside the point because the purpose of the rule is to give the recipient of the report, not the party that offered it, the option of deposition.

Johnson v. ExxonMobil Corporation, 2005 U.S. LEXIS 22384 (7th Cir. 2005). The 7th Circuit held that a plaintiff’s filing for Social Security Disability (SSDI) benefits was inconsistent with his also maintaining a claim for damages under the Americans with Disability Act (ADA) and the Age Discrimination in Employment Act (ADEA), affirming the trial court’s decision to grant summary judgement to the employer, sua sponte. 

MacGregor v.  Rutberg, 2007 U.S. App. LEXIS 4245 (7th Cir. 2007).  This is a Richard Posner ruling in which one neurosurgeon testified against another neurosurgeon in a medical malpractice suit. MacGregor sought to sue Rutberg for defamation and breach of contract during his testimony, claiming that Rutberg’s prior membership in a professional association created an implied right among members to sue each other for breach of the association’s rules. Subsequently, Rutberg was expelled from the organization, which was not an issue in the current opinion. The district court dismissed MacGregor’s claims and dismissed her case. The 7th Circuit affirmed the dismissal. Suggested by Ralph Frasca.

      Miscellaneous

Indiana Lumbermens Mutual Insurance Company v. Reinsurance Results, Inc. 2008 U.S. App. LEXIS 882 (7th Cir. 2008). This is a Richard Posner decision that ends with a quote economists may wish to use: “A note, finally, on advocacy in this court. The lawyers' oral arguments were excellent. But their briefs, although well written and professionally competent, were difficult for us judges to understand because of the density of the reinsurance jargon in them. There is nothing wrong with a specialized vocabulary--for use by specialists. Federal district and circuit judges, however, with the partial exception of the judges of the court of appeals for the Federal Circuit (which is semi-specialized), are generalists. We hear very few cases involving reinsurance, and cannot possibly achieve expertise in reinsurance practices except by the happenstance of having practiced in that area before becoming a judge, as none of us has. Lawyers should understand the judges' limited knowledge of specialized fields and choose their vocabulary accordingly. Every esoteric term used by the reinsurance industry has a counterpart in ordinary English, as we hope this opinion has demonstrated. The able lawyers who briefed and argued this case could have saved us some work and presented their positions more effectively had they done the translations from reinsurancese into everyday English themselves.” The suggestion for highlighting this passage came from David Jones.

      FELA/Maritime Cases

Howard v. S. Ill. Riverboat Casino Cruises, Inc., 2004 U.S. App. LEXIS 6919 (7th Cir. 2004). This decision interprets the Jones Act not to apply to workers on riverboat casinos that are permanently moored. The district court had ruled that even though the riverboat in question was permanently moored it was capable of navigation and that the Jones Act therefore applied. The 7th Circuit reversed that decision. Submitted by David Jones.   

O'Shea v. Riverway Towing Company, 677 F.2d 1194 (7th Cir. 1982). This decision by Judge Richard Posner may have provided the basis for the Pfeifer decision later that year. The Margaret O’Shea worker had never earned more than $3600 in a full year, but the trial court judge had held that she could have earned $7200 in the first year after her accident. Judge Posner found this reasonable based on changes in O’Shea’s life changes just prior to her injury. Judge Posner also explains his reasoning in finding O’Shea almost totally disabled. The plaintiff economist (apparently Leroy Grossman) had projected inflation (wage increases?) at six to eight percent and used a discount rate of 8.5 percent, based on Municipal bonds.

White v. Indiana Harbor Belt Railroad Co., 1998 U.S. Dist. LEXIS 8994; 1998 WL 323625  (N.D.Ill. 1998). This is a memorandum from Judge Milton Shadur requiring that a calculation of lost earnings of a railroad worker in an FELA case must be net of Tier I and Tier II taxes, based on the decision in Edwards v. Atchison, T. & S.F. Ry., 291 Ill. App. 3d 817 (1997). Suggested by James Ciecka.

     Hedonic Damages and Emotional Services

Arpin v. United States, 521 F.3d 7 69 (7th Cir. 2008). This is a Richard Posner decision holding that an award for non economic losses in a decision by a trial court judge was not adequately explained in the trial court judge’s decision. Posner pointed out that: “When a federal judge is   the trier of fact, he, unlike a jury, is required to explain the grounds of his decision. . . One cannot but sympathize with the inability of the district judge in this case to say more than he did in justification of the damages that he assessed for loss of consortium. But the figures were plucked out of the air, and that procedure cannot be squared with the duty of reasoned, articulate adjudication imposed by Rule 52(a). Posner went on to explain how that should be done: “The first step in taking a ratio approach to calculating damages for loss of consortium would be to examine the average ratio in wrongful death cases in which the award for damages was upheld on appeal. The next step would be to consider any special factors that might warrant a departure in the case at hand. Suppose the average ratio is 1:5–that in the average case, damages awarded for loss of consortium are 20 percent of the damages awarded to compensate for other losses resulting from the victim’s death. The amount might be adjusted upward or downward on the basis of the number of the decedent’s children, whether they were minors or adults, and the closeness of the relationship between the decedent and his spouse and children. . . . We suspect that such an analysis would lead to the conclusion that the award in this case was excessive.” The 7th Circuit affirmed the trial court decision on every issue but the award for lost consortium and remanded that part of the decision back to the trial court judge.

Bell v. City of Milwaukee, 746 F.2d 1205 (7th Cir. 1984). This was the decision before Sherrod v. Berry that created an argument under Section 1983 of the 1964 Civil Rights Act for recovery for the value of lost enjoyment of the life of a decedent, even in states that do not allow recovery for that category of damages in state cases. It covers cases before 1984 that had interpreted Section 1983. The importance to Sherrod v. Berry was that Illinois, like Wisconsin, has no recovery for loss of enjoyment of life in death cases. Thus, the rationale for allowing enjoyment of life damages was the precedent of Bell v. City of Milwaukee. The issue of whether Section 1983 creates a class of cases in which loss of enjoyment of life in death cases supercedes state law standards is still an unresolved matter.

Mercado v. Ahmed, 756 F. Supp. 1097 (N.D.Ill. 1991), aff'd 974 F.2d 863 (7th Cir. 1992). Hedonic damages testimony by Stan V. Smith was properly not admitted.

Sherrod v. Berry, 629 F. Supp. 159 (N.D.Ill. 1985), aff'd, 827 F.2d 195 (7th Cir. 1987), vacated, 835 F.2d 1222 (7th Cir. 1987), rev'd on other grounds, 856 F.2d 802 (7th Cir. 1988). First case in which Stan Smith was permitted to testify about hedonic damages. The trial court judge and the first appeals court judge commented favorably about Smith's testimony, but the case was ultimately reversed on other grounds.

      Admissibility of Expert Testimony

Chapman v. Maytag, 2002 U.S. App. Lexis 15131 (7th Cir. 2002). This short decision provides a particularly clear discussion of how the Daubert decision can be applied to assess scientific validity and reliability. The 7th Circuit overturned the trial court decision because of failure of the trial court judge to act as a sufficiently involved gatekeeper in keeping out expert testimony that would not meet scientific standards.  (Submitted by Ralph Frasca)

Dura Auto. Sys. of Ind., Inc. v. CTS Corp., 285 F.3d 609 (7th Cir. 2002). Judge Posner said: “The Daubert test must be applied with due regard for the specialization of modern science. A scientist, however well credentialed he may be, is not permitted to be the mouthpiece of a scientist in a different specialty. That would not be responsible science. A theoretical economist, however able, would not be allowed to testify to the findings of an econometric study conducted by another economist if he lacked expertise in econometrics and the study raised questions that only an econometrician could answer.  If it were apparent that the study was not cut and dried, the author would have to testify; he could not hide behind the theoretician.” Economic issues were not central to the decision in this case.

Huey v. United Parcel Service, 165 F.3d 1084 (7th Cir. 1999). This decision affirms a trial court decision not to permit the testimony of Q. R. Verdier, referred to by Judge Easterbrook in quotes as a “forensic vocational expert.” Verdier had written a letter to the plaintiff attorney, who had turned it over in discovery as the report of the expert. Easterbrook continued: “As far as this letter reveals, Verdier did nothing but talk to Huey, read documents that Huey’s counsel sent, and write a letter. Verdier does not describe the reasoning used to reach his conclusion. During an offer of proof, Verdier was clear about the limits of his inquiry and the basis of his opinion. Asked if he did more than accept Huey’s view that UPS retaliated, Verdier replied: ‘I think he’s the one that [sic] best knows what happened in the situation.’ This will not do as the work of an expert.” 

In Re Brand Name Prescription Drugs Antitrust Litigation, 186 F.3d 781 (7th Cir. 1999).  This is a classic Richard Posner decision on an appeal of the trial court decision in which the trial court judge excluded most of the testimony of Dr. Robert Lucas, a Nobel prize winning economist under a Daubert standard. Judge Posner wrote: “But what was objectionable about his evidence actually had nothing to do with Daubert, it was that the evidence mainly concerned a matter not in issue – that the manufacturers of brand name prescription drugs engage in price discrimination, showing that they have market power. Everyone knows this. The question is whether the market power owes anything to collusion. (Even if it did, we remind that to obtain damages the plaintiffs would have to separate the price effects of collusion from the price effects of the plaintiff’s lawful market power. Blue Cross & Blue Shield United of Wisconsin v. Marshfield Clinic, 152 F.3d 588, 593-94 (7th Cit. 1998). On that, Lucas had virtually nothing to say. It is irrelevant, therefore, that, as the plaintiffs point out, the district judge erred in excluding Lucas’s testimony on the grounds that he did – that Lucas had not studied the prescription drug industry in depth and had formulated his tentative opinion after working on the case for only 40 hours. His opinion that there is price discrimination in the prescription drug industry is one that an economist of Lucas’s distinction should have been able to reach in even less time. Indeed the existence of price discrimination should have been removed as an issue at trial by a stipulation of the parties. 

Large v. Mobile Tool International, Inc., 2007 U.S. Dist. LEXIS 55463 (N.D. Ind. 2007). This opinion and order of Judge William C. Lee rejected defendant’s motion for summary judgment with respect to a number of issues. One of those issues was that “Large’s claim for future wage loss fails because he has not identified a forensic economist and has not identified any witness who will present admissible testimony regarding a present value calculation of his future economic loss.” The plaintiff identified Mr. Peder Melberg, a vocational rehabilitation expert, regarding future economic loss.  The opinion identified the methods uses by Melberg, which did not include a reduction to present value. Judge Lee held that Large had presented sufficient evidence to meet his initial burden, that the defense was free to demonstrate the weakness of Melberg’s opinions, that 7th Circuit law did not require reduction of a loss claim to present value, and indicated that the defendant could challenge Melberg’s credentials in a Daubert hearing. Judge Lee added: “If the defendants desire present value calculations, the better reasoning is to require them to present such evidence.” “Them” in this context appears to refer to the defendants.

        Miscellaneous

Schiller & Schmindt v. Nordisco Corp., 969 F.2d 410 (7th Cir. 1992) decision that merits being shared with others on this list. Judge Posner said: “For years we have been saying, without much visible effect, that people who want damages have to prove them, using methodologies that need not be intellectually sophisticated, but most not insult the intelligence. (citations.) Post hoc ergo hoc will not do; nor the enduring of simplistic extrapolation and childish arithmetic with the appearance of authority by hiring a professor to mouth damages theories that make a joke of the concept of expert knowledge. The expert should have tried to separate the damages that resulted from particular forms of misconduct allegedly committed by that competitor, of which the theft of a mailing list, however morally reprehensible, was the slightest. No such effort was made.”  Suggested by Chris Pflaum. 

        
Wrongful  Termination

Doll v. Jesse Brown, 75 F.3d 1200; 5 Am. Disabilities Cas. (BNA) 369 (7th Cir. 1996).  This is a  Richard Posner decision characterizing the use of probabilities in a suit for discrimination against the Veterans Administration. Posner was concerned about the either-or conclusion reached by the trial court regarding Doll’s chances for promotion if discrimination had not occurred and invites comparison withe the lost chance of survival approach in medical malpractice cases. “It is an extension of the routine practice in tort cases involving disabling injuries of discounting lost future earnings by the probability that the plaintiff would have been alive and working in each of the years for which damages are sought. It recognizes the inescapably probabilistic character of many injuries. It is essential in order to avoid undercompensation and thus (in the absence of punitive damages) underdeterrence, though to avoid the opposite evils of overcompensation and overdeterrence it must be applied across the board, that is, to high-probability as well as to low-probability cases. If the patient in our example was entitled to 25 percent of his full damages because he had only a 25 percent chance of survival, he should be entitled to 75 percent of his damages if he had a 75 percent chance of survival--not 100 percent of his damages on the theory that by establishing a 75 percent chance he proved injury by a preponderance of the evidence. He proves injury in both cases, but in both cases the injury is merely probabilistic and must be discounted accordingly.” The trial court opinion was reversed with respect to back pay and remanded for further consideration, but affirmed in other respects. Posner instructed the trial court judge as follows: “On remand the district judge should continue to apply the clear and convincing rule, but we do not forbid him to apply it to probabilities as distinct from certainties of loss, as explained in this opinion. So if, for example, the government is able to prove by clear and convincing evidence that Doll had no more than a 20 percent chance of being appointed foreman in lieu of Stein (had the Veterans Administration complied with the Rehabilitation Act), it will be open to the district judge to consider whether to award Doll 20% of the back pay the judge awarded him in the first round of this litigation.”

Mattenson v. Baxter Healthcare Corporation
, 438 F.3d 763 (7th Cir. 2006).This is a Richard Posner decision and, as such, has the clarity and bite of a Richard Posner decision that deals with the effort made by a worker who was allegedly fired because of age discrimination to find post termination employment. “(Front pay is an equitable, not a legal remedy, so is decided by the judge, not the jury. The standard legal remedy of an award for lost future earnings, while indistinguishable as a practical matter from front pay, is not available under the ADEA.) . . Mattison probably won’t be able to find another job that pays him $240,000 a year. But he can’t insist on Baxter’s paying him that amount each year until he turns 65 (his intended retirement age) in order that he can play golf eight hours a day. . . He was required to present persuasive evidence of inability to find a substitute job; the fact that he contacted 23 firms without success does not satisfy that burden, given the range of opportunities open to someone with his back-ground and experience.”

Milam v. Dominick’s Finer Foods, 2009 U.S. App. LEXIS 26595 (7th Cir. 2009). This decision was reached in an employment discrimination suit, but provided a clear statement about how Judge Richard Posner felt that probabilities should be handled in measuring damages. He said: “Loss of a chance--a probabilistic injury--is a proper damages theory. But it requires evidence of the loss of what economists call an ‘expected benefit.’ Suppose you're playing roulette on a 37-number wheel (18 red, 18 black, and 1 green) at the Casino de Monte-Carlo, and after you have placed your $ 1,000 bet on red, which will pay you $ 2,000 if the ball lands on red, the casino collapses through the negligence  of a building contractor, destroying not only the roulette wheel but also your chips, and you cannot get the money you paid for them back because all the casino's records were destroyed when it collapsed. You've suffered a loss equal to a 48.6 percent chance of winning $2,000. So $ 972.73 would be your damages. But the plaintiffs presented no evidence from which any probability between 0 and 100 percent could be assigned to a loss of hours that might have been claimed . .  .”

Sheehan v. Daily Racing Form, 104 F3d 940 (7th Cir. 1997). Judge Richard Posner rejected analysis put forth for evidence of discrimination by a statistician, who analyzed who was fired and retained on a list of 17 persons. Judge Posner said: “Daubert . . . requires the district judge to satisfy himself that the expert is being as careful as he would be in his regular professional work outside his paid litigation consulting.” Judge Posner later said: “The expert’s failure to make any adjustment for variables bearing on the decision whether to discharge or retain a person on the list other than age – his equating a simply statistical correlation to a causal connection (‘of course, if age had no role in termination, we should expect that equal portions of older and younger employees would be terminated’ – true only if no other factor relevant to termination is correlated with age) – indicates a failure to exercise the degree of care that a statistician would use in his scientific work, outside the context of litigation. In litigation an expert may consider (he may have a financial incentive to consider) looser standards to apply. Since the expert’s statistical study would not have been admissible at trial, it was entitled to zero weight in considering whether to grant or deny summary judgment.” Suggested by George McLaughlin

   District Courts in the 7th Circuit (IL, IN, WI)

       
Basis Income and Fringe Benefits for Projecting Earnings Loss

Heron v CSX Transportation, 2009 U.S. Dist. Lexis 7326 (N.D. Ind. 2009). Mr. Richard Bond testified at his deposition that Mr. Heron had an "average annual earning potential" of $ 54,917 before the incident. On the basis of that figure, Mr. Bond concluded that Mr. Heron sustained economic losses of between $ 444,818 and $ 1,578,861 as a result of the February 1, 2005, incident. However, as Mr. Bond admitted, his Rule 26(a)(2) report provided no insight as to how he arrived at the figure of $ 54,917, nor could explain the figure at his deposition or find anything in his file to reflect how he arrived at the $54,917 figure. Federal Rule of Civ. Pro. 26(a)(2)(B)(i) and (ii) require that the written report of an expert witness contain a complete statement of all opinions the witness will express and the basis and reasons for them as well as the data or other information considered by the witness in forming them. Under Rule 37(c), if a party fails to provide information or identify a witness as required by Rule 26(a), the party is not allowed to use that information or witness at trial unless the failure was substantially justified or was harmless. This is a self-executing sanction, which does not require a motion. Fed. R. Civ. P. 37(c) advisory committee's note. Mr. Bond's report should have included an explanation of how he arrived at the monthly potential earnings amount of $4,576 per month (and therefore $54,917 per year). It does not. Accordingly, any testimony based on this figure is excluded.

Kanwar v. United States
, 1990 U.S. Lexis 19820 (S.D. Ind. 1990). This Memorandum of Opinion includes an assessment by Judge Dillan of the reports of the plaintiff economist and “Dr. Becker” (probably William Becker) for the defendant United States in a wrongful death action. The plaintiff economist had provided seven scenarios and the defense economist had provide six. The plaintiff economist had not taken taxes into account and projected future earnings loss based on assumed future earnings as a part owner/manager of a motel. Judge Dillan notes that Dr. Becker “rather makes fun of Kanwar’s low earnings in his first three years in the United States (giving him little credit for his substantial earnings and perquisites in Nigeria), and predicates his projections on Kanwar’s $20,000 salary on October 20, 1987. (‘He was fortunate just to have a job in the hotel industry’ - Becker, Gov. Ex. A, p. 1) This view fails to take into consideration Kanwar’s education, work habits, opportunities, past success in Nigeria, and the urge to succeed demonstrated by Kanwar and all five of his siblings.” The judge goes on to increase Becker’s base earnings from $20,000 to $24,000, proportionately increasing Becker’s present value of lost earnings estimate by 20 percent and then subtracting 4.09 percent for unemployment. The judge then makes his own estimate that the pecuniary value of care, love and affection was $20,000 per year and adds additional values for the parental nurturing of Kanwar to each child. It appears that the judge was more impressed with Dr. Becker as an economist, but was put off by gratuitous negative remarks about the decedent in Dr. Becker’s report.

        Annuities, Periodic Payments and Reversionary Trusts

Robak v. United States, 503 F. Supp. 982 (N.D. Ill. 1980). This decision sanctions the use of a reversionary trust, as agreed to by the parties, to provide for the future maintenance of Jennifer Robak, an injured minor child. Judge Marvin Aspen said: “The reversionary trust will accomplish at least two purposes that are desirable under the unique facts of this case. First, the trust assures that no matter what may occur in the future to the plaintiffs and their relationship, Jennifer will be provided for during her lifetime. Second, although defendant has presented no supportive evidence it has argued that because of Jennifer’s irreversible medical condition, it is highly improbable that she will live the 78.1 years that the insurance life tables project for a healthy child of her present age. The reversionary trust resolves any such possible inequity. It permits this Court to award funds to fully cover 71.8 years of expenses, without being concerned about the possibility of unjust enrichment in the event that Jennifer enjoys a life span shorter than that projected by insurance life tablbes, thereby substantially reducing her maintenance costs to a lesser amount of dollars than the full trust proceeds. This will be accomplished since upon Jennifer’s death the reversionary trust provides that all proceeds will revert back to the defendant.

        Legal Procedure

Collins v. Village of Woodbridge, 197 F. R.D. 354 (N.D. Ill. 1999). This order of Judge Matthew F. Kennelly dealt with the reasonableness of claims for preparation time for their depositions made by experts for the plaintiff. Defendants had conceded that they should pay for preparation time, which Judge Kennelly thought was a close legal question, but one he did not have to deal with given the defendant’s concession. He held that a ratio of 1.5 to 1 in terms of preparation time versus time actually spent in deposition was reasonable and reduced the time defendants had to pay for to that ratio. Judge Kennelly noted that: “[D]efendants requested the depositions promptly after receiving the experts’ reports and did not inordinately delay scheduling the depositions. Thus the experts did not need to completely duplicate their earlier work in order to answer questions about their opinions. It is not our intention to allow the experts to seek compensation for reinventing the wheel. Rather, what we believe appropriate is to permit the expert to be compensated by the opposing party for the time reasonably necessary to refresh the expert’s memory regarding the material reviewed and the opinions reached.”

Mader v. Motorola,
1996 U.S. Dist. LEXIS 4543 (N.D.Ill. 1996). This is a memorandum by Judge Joan B. Gottschall in response to a motion to compel economic expert Stan Smith to answer 13 certified questions Smith had refused to answer at his deposition. Smith had refused to answer whether he knew “to a reasonable degree of economic certainty” whether plaintiff’s income projections were proper, stating instead that , given plaintiff’s lack of training, the projections could not have been prepared to a reasonable degree of economic certainty. The Court said: “Although Smith refused to take a position concerning “economic certainty,” his answer was sufficient. If defendant believes the use of plaintiff’s estimates makes Smith’s analysis defective, that matter may be developed on cross examination.”

Rhee v. Witco Chem. Corp., 126 F.R.D. 45 (N.D. Ill. 1989). Judge Charles Norgle ruled in favor of the defendant with respect to payment for time spent by plaintiff’s expert preparing for deposition. Judge Norgel said: “Plaintiff has refused to produce his expert's report and records or to allow defendant to depose plaintiff's expert, unless defendant agrees both to pay plaintiff's expert "his fee for time spent preparing for and attending a deposition at $ 150/hr. with a four hour minimum and to pay to plaintiff 50% of the costs charged by plaintiff's expert to plaintiff for preparing his opinions. . .There may be some cases where compensation of an expert for time spent preparing for a deposition is appropriate, such as in a complex case where the expert's deposition has been repeatedly postponed over long periods of time by the seeking party causing the expert to repeatedly review voluminous documents. Here, compensation of plaintiff's expert for preparation time is inappropriate. The case is not complex, involving a single plaintiff and defendant, and the expert is testifying only as to damages. Plaintiff's expert has produced a written report with which he may easily refresh any lapses in his memory arising in the intervening period between the completion of his report and his deposition. . . .Moreover, time spent "preparing" for a deposition entails not only the expert's review of his conclusions and their basis, but also consultation between the responding party's counsel and the expert to prepare the expert to best support the responding party's case and to anticipate questions from seeking party's counsel. An expert's deposition is in part a dress rehearsal for his testimony at trial and thus his preparation is part of trial preparation. One party need not pay for the other's trial preparation. The court finds that a deposing party need not compensate the opposing party's  expert for time spent "preparing" for deposition, absent more compelling circumstances than exist here.” Judge Norgel also discussed prior judicial decisions regarding who pays for an expert’s preparation time.

Tremain v. United States, 2008 U.S.  Dist. LEXIS 10035 (S.D.Ill. 2008). This memorandum held that the plaintiff was not required to present evidence of reduction to present value simply because the plaintiff had deposed an expert who had done so. Neither side presented economic testimony at trial. The court said: “Defendant argues that despite both parties' experts having testified that inflation outstripped the discount rate, the Court erred in overruling Defendant's objection to Plaintiff's failure to present economic evidence regarding the discount rate. Defendant seemingly believes that since Plaintiff deposed its economist, she was required to offer that evidence. This is not so and it's hard to see why Defendant presses this point, since the abandoned inflation argument cuts in favor of Plaintiff. Plaintiff argues that the Court should have awarded Toby damages for loss of future earning capacity and that those damages should be reduced to present cash value. Despite Plaintiff's failure to file a motion to amend the judgment, the Court briefly will address this argument. To be clear, the Court did not award damages for loss of future earning capacity and will not do so for the reasons stated in its findings and conclusions. Here Plaintiff relies on figures purportedly calculated by a Dr. Ireland. Dr. Ireland did not testify at trial, and no such evidence was submitted at trial. The Court referred to Toby's non-economic damages as ‘the remaining elements of damages,’ and they need not be reduced to present cash value.

Waters v.  City of Chicago, 526 F. Supp. 2d 899 (N.D. Ill. 2007). This was an order from Judge Milton Shadur, who wrote: “Among the numerous issues on which the litigants have crossed swords, the most recent has to do with the appropriate application of Fed.R.Civ.P. ("Rule") 26(b)(4)(C), which requires a party--in this case the City of Chicago ("City")--to "pay the expert a reasonable fee for time spent in responding to discovery." When City chose to take the deposition of Gary Skoog ("Skoog"), the opinion witness who was retained by Daniel Waters ("Waters") to provide testimony  as to his claimed damages, Skoog itemized his expenditure of 12.87 hours as his "time spent in responding to discovery"--and at $ 290 per hour  that amounts to a total fee of approximately $ 3,731. As City would have it, however, Skoog is not entitled to be paid for his preparation time and travel time--only for 4.32 hours attributable to the deposition time itself, for a total fee of $ 1,252.80. . . [A]ll but a minor portion of Skoog’s itemization is compensable. This Court eliminates from Skoog’s claim only the one hour that his time records show he spent in telephone conversations with Waters’counsel before the deposition. Hence City is ordered to pay Skoog the sum of $3,441.” Judge Shadur discussed also discussed two other decisions on the same issue, one of which he agreed with and one of which he did not.  He agreed with Judge Matthew Kennelly in Collins v. Village of Woodridge, 197 F.R.D. 354 (N.D. Ill. 1999) and disagreed with Judge Charles Norgle in Rhee v. Witco Chem. Corp., 126 F.R.D. 45 (N.D. Ill. 1989). Suggested by Gary Skoog.

      Hedonic Damages and Emotional Services

Ayers v. Robinson, 887 F. Supp. 1049 (N.D.Ill. 1995). This decision rejected hedonic damage testimony by Stan V. Smith. It quoted extensively from Brookshire and Smith, Economic/Hedonic Damages (1990) and extensively evaluated Ted Miller’s “The Plausible Range for the Value of Life–Red Herrings among the Mackerel,” Journal of Forensic Economics, 1990, 3(3) in performing a Daubert test of the admissibility of Stan Smith’s version of hedonic damages testimony.  The Daubert analysis considered Smith’s proffered testimony on the basis of five factors: (1) benchmark, (2) adjustments, (3) pedigree, (4) empirical data and (5) underlying assumptions.  The decision pointed out that the $3.5 million “central tendency” benchmark was based on results “rang[ing] from the high several hundred thousands well into several millions.” The Court said: “In sum, neither the $3.5 million or the $2.5 million benchmark rests upon any scientific method or procedure, so that testimony regarding either one is inadmissible under the scientific knowledge prong of Rule 702.” With respect to adjustments, the Court said: “[T]he low probative value of such testimony (ill fitting data) is substantially outweighed by the danger of unfair prejudice (a false appearance of tailoring to the individual case).” With respect to “pedigree,” the Court criticized Stan Smith for claiming that the source for hedonic damages testimony was Adam Smith. The Court said: “Unfortunately for Stan Smith, the surname Smith seems to be about the only thing they have in common.” The Court went on to suggest that the “willingness to pay” methodology only goes back to Thomas Schelling. With respect to “empirical data” the Court said: “[I]t is franky bogus to massage numbers [from the Value of Life literature], as both Hedonic Damages [Brookshire and Smith] and Plausible Result [Miller] have done, to create a deceptive appearance of precision rather than the true picture of an enormous spread in ‘value,’” which the Court found fatal under Rule 702 and a basis for exclusion under Rule 403. The Court also criticized the underlying assumptions of the “willingness to pay” model. 

Birdsell v. Board of Fire and Police Commissioners of the City of Litchfield, 1990 U.S. Dist. LEXIS 14961. The court granted defendant’s motion in limine to bar the hedonic damages testimony of Stan Smith, saying: “The Court agrees with the Defendants that the testimony on hedonic damages would confuse or mislead the jury and furthermore, would not be relevant. The real basis of the Court’s opinion is that this Court is not aware of any valid legal basis or authority for extending hedonic damages from death civil rights cases to this case, where it is alleged the Plaintiff was terminated from his job without due process. Simply state evidence of such damages is not relevant. Suggested by David Jones.

Bramlette v. Hyundai Motor Company, 1992 U.S. Dist. LEXIS 13080 (N.D.Ill. 1992). Rejected hedonic damage testimony by Stan V. Smith.

Crespo v. City of Chicago, 1997 U.S. Dist. LEXIS 12820. Rejected hedonic damage testimony by Stan V. Smith.

Estate of Sinthasomphone v. City of Milwaukee, 878 F.Supp. 147 (1995). Rejected hedonic damage testimony by Stan V. Smith.

Johnson v. Inland Steel Company, 140 F.R.D. 367 (N.D.Ill. 1992).  Interpreting both Indiana and federal standards for wrongful death damages by a two magistrate judge panel, the court said: “We find that any evidence relating to loss sustained by survivors such as ‘hedonic damages,’ going beyond pecuniary loss are appropriate matters for inclusion in this law suit. Since these matters are appropriate, expert testimony by qualified individuals would certainly be allowed into evidence. Moreover, taking into account that hedonic value of human life is difficult to measure, expert testimony becomes exceedingly important and may be of particular use to the trier of fact in this case. Sherrod v. Berry, 827 F.2d 195 (7th Cir. 1987). Accordingly Inland’s motions seeking to bar expert testimony as to damages for decedent’s loss of quality of life, and for the value of decedent’s services are, DENIED.”

McCloud v. Goodyear Dunlop Tires N. Am., Ltd., 2007 U.S. Dist. LEXIS 1501, (C.D. IL 2007). “Defendant has brought a Renewed Motion to Strike the Second Expert Report of Stan Smith - Plaintiff’s expert on the issue of hedonic damages. Plaintiff does not oppose the merits of the Motion since Plaintiff is no longer pursuing hedonic damages. Accordingly, Defendant’s Motion is GRANTED.”

Richman v. Burgeson, 2008 U. S. Dist. LEXIS 48349 (N.D. Ill. 2008). This was a memorandum by Judge Joan B. Gottschall ruling on a number of motions in limine, including one to exclude the hedonic damages testimony of Stan V. Smith, Ph.D. The motion with respect to Dr. Smith was granted in part and denied in part in a wrongful death case under Section § 1983 of the federal Civil Rights Act. The judge held that Dr. Smith could testify about the concept of the value of life, but could not give dollar values which, the judge held, were not sufficient reliable or helpful to a jury. Dr. Smith was permitted to opine “that ascertaining the value of life requires consideration of Jack Richman’s leadership role in his community, his love of music, and his environmental activism.”    

Wanke v. Lynn’s Transportation Company, 836 F.Supp. 587 (N.D.Ind 1993). The court ruled that the defendant had not shown that the hurdles to preventing the hedonic damage testimony by Dr. James Bernard were insurmountable. The decision went on to say, however, that the hurdles the plaintiff had to showing that Dr. Bernard was an expert in the area of the economic value of love and affection were “unlikely” to be overcome. The court also made the memorable remark earlier:  “That Dr. Bernard is an economist does not entitle him to state an opinion on every conceivable issue of economics.”

       Admissibility of Expert Testimony

Brunker v. Schwan’s Home Service, Inc., 2006 U.S. Dist. LEXIS 77556 (N.D.IN 2006). This is a judicial memorandum from Judge Andrew H. Rodovich granting a motion in limine to preclude the testimony of Dr.  Bruce Jaffe, the economic expert for the defendant. James Bernard, as the plaintiff’s economic expert, had projected that Frank Brunker would be unemployed for 30.5 years following a termination allegedly in retaliation for exercising his rights under the Americans With Disabilities Act. Bernard had projected that Brunker would have had earnings based on $12,480 as a pizza delivery truck driver over that period. Jaffe issues a page and a half report saying that it was unreasonable to assume that Brunker would remain unemployed for 30.5 years and that Jaffe saw no reason why Brunker could not earn mean earnings of a high school graduate in the Unites States of $41,221 in 2004. Brunker’s disability was that he has multiple sclerosis, which Jaffe did not consider in his report. The judge said: “If there is a scientific basis underlying Jaffee’s conclusions, he has not shown it. At most, Jaffee’s admittedly preliminary conclusions are straightforward comparisons of Brunker to broad categories of the population. He does not explain why it is acceptable to disregard Brunker’s medical condition, education level, work experience, or the economic and employment statistics of the regional job market. Jaffe’s testimony provides no basis on which the district court can determine whether it meets the requirement of Rule 702 that expert testimony be the product of the application of ‘reliable principles and methods’ to specific facts of this case.”

Bultema v. Caterpillar, Inc., 1999 U.S. Dist. LEXIS 6301 (N.D.Ill 1999). Motions to bar the testimony of vocational expert Steven Blumenthal, life care planning expert Michael Brethauer and economic expert Phillip Rushing were denied in the case of Blumenthal and granted in part and denied in part in the cases of Brethauer and Rushing. Brethhauer and Rushing were permitted to testify to the extent that their testimony tracked the foundation established at trial.

Peterson v. Union Pacific, 2008 U.S. Dist. LEXIS 52064 (C.D. Ill. 2008). In this memorandum, Judge Jeanne Scott granted motions to limit the testimony of life care planning expert Dr. Craig Lichtblau and Dr. Anthony Gamboa with respect to items in the life care plan for which Dr. Lictblau could not state a probability. She denied a defense request to bar Dr. Gamboa’s testimony based on Dr. Gamboa’s use of a total offset net discount rate, saying that Union Pacific could challenge Dr. Gamboa’s discount rate in arguments to the jury.

Quirin v. Wingfoot Commercial Tire Systems, 2006 U.S. Dist. LEXIS 36472. (C.D. IL, 2006). Economic expert Dr. Leroy Grossman had projected personal injury losses of the Plaintiff on the basis that the Plaintiff was totally disabled or able to earn only the minimum wage. The defense challenged the admissibility of Dr. Grossman’s testimony on the basis that these assumptions were not supported by the facts of the case. The Court agreed with Defendants that expert testimony should be excluded if it is based upon unprovable assumptions. The defendants cited Elcock v. Kmart Corp., 233 F.3d 734 (3rd Cir. 2000) in support of their position. In denying Defendant’s motion, the Court cited differences between Elcock and the case at hand. There was evidence that Mr. Quirin had been unable to obtain work since his injury. “Further, unlike Elcock, Dr. Grossman’s calculations were based upon Mr. Quirin’s actual pre-injury income.”

Thakore v. Universal Machine Co. of Pottstown, 2009 U.S. Dist. LEXIS 87869 (N.D.Ill 2009). Motion 17 [# 160] addressed in this Memorandum Opinion on Motions in Limine from Judge Jeffrey Cole was a motion to bar Plaintiff economic expert Anthony M. Gamboa from testifying under a Daubert standard. The Court declined to bar Dr. Gamboa’s testimony, stating that although Gamboa did not have a background in economics, he had an MBA from the University of Chicago which was “enough to qualify him as an expert for purposes of this case.” The Court described Gamboa’s proposed testimony as follows: “Mr. Gamboa relied on a study conducted by the U.S. Census Bureau, which he has used throughout his career and to which he applies his education and experience to try to account for the admitted limitations of the study. The methodology of using worklife expectancy tables has been peer reviewed. Gamboa has been allowed to testify 35 times in the past two years. Other courts have heard challenges to Mr. Gamboa and have found him competent to render expert opinions. The district court for the Eastern District of Pennsylvania found that ‘the Worklife Expectancy table really represents a statistical exercise constructed to estimate economic loss and is not expected to reflect actuality. The weight and credibility of the data relied upon to construct the table may be challenged on cross-examination at trial.’” 

United States Equal Employment Opportunity Commission v. Rockwell International Corporation, No. 95 C 3824, Memorandum and Opinion Order issued by Judge Robert Gettleman of the U.S. District Court for the Northern District of Illinois, 8/13/99.  This memorandum rejects the vocational testimony of Michael Brethauer on the bases of absent evidence of disability.  This memorandum has no address in case reporting systems that would make it easy to acquire, but copies of this memorandum are widely circulated and commented upon.

White v. Indiana Harbor Belt Railroad Co., 1998 U.S. Dist. LEXIS 8994 (N.D.Ill.1998).  The calculations of past damages by plaintiff’s economic expert Jonathan Crane were challenged on the basis that they included an adjustment of past nominal wages to a higher figure “and that increase appears to be equivalent to an effort to collect prejudgment interest on those claimed past lost earnings. Federal District Judge Milton Shadur held that this appeared to be consistent within the evolution of Indiana’s Roper rule and denied the defense motion.

        Wrongful Termination   

Mattenson v. Baxter Healthcare Corporation, 2004 U.S. Dist. LEXIS 10260 (N.D. Ill. 2004). This decision issued findings of fact and conclusions of law on the issue of front pay damages in an age discrimination case involving a 54 year old plaintiff. Dr. Larry DeBrock was the plaintiff’s economic expert. He calculated front pay damages to retirement at age 65 without mitigation earnings. Dr. Roger Skurski was the defendant’s economic expert. He calculated front pay damages to age 62 and also projected mitigation earnings. The decision provides rates and amounts used by both experts in calculating damages. The court stated: “A plaintiff seeking front pay must provide the court with ‘the essential data necessary to calculate a reasonably certain front pay award’. . . This information includes the amount of the proposed award, the length of time the plaintiff expects to work for the defendant, and the applicable discount rate. . .While front pay awards are often speculative, such awards cannot become unduly speculative. The longer the prospective front pay period, the more speculative damages become. . .Based on the lack of evidence before the court to reasonably calculate front pay, an award of front pay would be unduly speculative.”

Sykes v. Target Stores, 2002 U.S. Dist. LEXIS 6627 (N.D.Ill. 2002).  This is an employment discrimination case. The court said: “Sykes argues that he is entitled to discover the value of the insurance benefits he would have received had he been promoted. In support, Sykes cites an unpublished Sixth Circuit case, Tramill v. United Parcel Serv., 2001 U.S. App. LEXIS 4305, Nos. 99-6297, 996298, 2001 WL 278697, at 2 (6th Cir. Mar. 12, 2001), holding that a successful employment discrimination plaintiff ‘may recover the value of his insurance fringe benefits.’ Target argues that this information is not relevant because the correct measure of damages in the Seventh Circuit is the amount of out-of pocket expense incurred by the plaintiff to replace the coverage. The Court concludes that Target is correct. Best v. Shell Oil Co, 4. F. Supp. 2d 77 0,774 (N.D.Lll. 1998; Muchin v. Lincolnshire Bath & Tennis Club, Inc., 1991 U.S Dist. LEXIS 17950, No. 91 C 746, 1991 WL 254605 at 2 (N.D Ill. Dec. 6, 1991) (denying motion to compel discovery related to fringe benefits on ground that correct measure of damage is plaintiff’s out-of-pocket expenses).” It is not clear how this decision would apply to lost retirement benefits.

8th Circuit

    Court of Appeals

          Basis Income and Fringe Benefits for Projecting Earnings Loss

Villa v. Burlington Northern Santa Fe Railway Company, 2005 U.S. App. LEXIS 1876 (8th Cir. 2005). Villa had two strokes subsequent to his back injury in railroad work. At issue was whether damages should be calculated only to the date of his strokes, or that Villa would have been able at a minimum to do light duty work in spite of the back injury. The 8th Circuit held that since the medical evidence was disputed on this question, this was a question for the jury. However, the 8th Circuit also said that if the evidence was undisputed that a subsequent condition unrelated to an injury would have prevented a worker from working, damages would end at that point, citing previous cases from the First and Sixth Circuits in Harris v. Illinois Central R.R. Co., 58 F.3d 1140, 1144-55 (6th Cir. 1995) and Stevens v. Bangor and Aroostook R.R. Co., 97 F.3d 594, 599 (1st Cir. 1996). Submitted by Gerald D. Martin.

           Wage Growth and Discount Rates

C.M. v. United States, 2006 U.S. Dist. LEXIS 82127 (E.D. MO 2006). This is a memorandum by Judge Steven N. Limbaugh, describing his opinion in a case involving an injured minor child. In the damages section, the life care plans of Robert Voogt and Christy L. Gibson and the economic calculations of Charles Linke for the plaintiff and Thomas Ireland for the defense were described.  Linke had prepared calculations based on a 0% and 1% net discount rates, while Ireland had used a net discount rate of 3%. Judge Limbaugh indicated that the Court found “the rationale of Dr. Ireland more persuasive.”

Harrington v. United States, 2005 U.S. Dist. LEXIS 16185 (S.D. Ia 2002). This decision provides a detailed discussion of the calculation of damages under Iowa law from Judge Robert Pratt. Judge Pratt discusses the assumptions, data considered, and calculations of Dr. Peter Matilla for the plaintiff and Dr. Newkirk for defendants, neither of whose opinions were regarded as satisfactory. The judge agreed that the discount rate used should be based on U.S. Treasury bonds, but did not agree with either expert about the maturity to be used.  Dr. Matilla relied upon a three month discount rate, while Dr. Newkirk relied upon a three year Treasury Bond. Judge Pratt decided that the rate be used is the one year Treasury rate. Judge Pratt’s discussion of how life tables should be used if life expectancy is shortened is particularly thoughtful. Revised listing.

           Worklife Expectancy

Doyle v. Graske, 2008 U.S. Dist. LEXIS 45336. (D. Neb. 2008). Kent Jayne was the economic expert for the plaintiff and Dr. John Scarbrough was the economic expert for the defendant in this judge decided litigation. From the decision, it appears that Jayne did not provide present value estimates for the cost of life care for the plaintiff, but Scarbrough did so. The judge adopted Scarbrough’s figures for lost earnings, but there did not appear to be significant differences regarding lost earnings between the plaintiff and defense economic experts. The judge ruled that the plaintiff’s Social Security age of 66 was the appropriate retirement age, but also accepted Scarbrough’s use of a work-life expectancy of 12.6 years as appropriate to account for non survival and periods of non participation in the labor market. Since the plaintiff was 49 at the time of his injury, there would have been 17 years to age 66. Scarbrough’s 12.6 year figure cited by the judge would imply about a 4.4 year reduction for non-survival and non-participation.  

           Treatment of Taxes

Lindsey v. Commissioner of Internal Revenue, 2005 U.S. App. LEXIS 19027 (8th Cir. 2005). Paul Lindsey had received $2 million “‘in settlement of his claims for tortious interference with contracts, for personal injury including injury to Mr. Lindsey’s personal reputation and emotional distress, humiliation and embarrassment.” He did not declare the $2 million for tax purposes and the Internal Revenue Service sought back taxes and penalties. The 8th Circuit held that Linsey had not identified what percentage of the settlement damages was allocable to physical injury or physical sickness and “the record lacks any evidentiary basis for concluding a specific portion of the $2 million settlement is allocable to Lindsey’s injury or physical illness,”“opting for an all-or-nothing approach.” The 8th Circuit upheld the tax court in charging taxes on the whole amount of the award. Submitted by David Jones.

            Legal Procedure

Caldwell v. TACC Corporation, 2005 U.S. App. LEXIS 19025 (8th Cir. 2005). The plaintiffs filed for and received personal injury and wrongful death damages in a court settlement. Because plaintiffs were not “made whole,” the federal district court held that the right to subrogation by an insurance carrier did not apply, based on the Arkansas Supreme Court decision in General Insurance Co. of America v. Jaynes, 343 Ark. 143, 33 S.W.3d 161 (Ark. 2000). That decision held that the worker’s compensation carrier was not entitled to subrogation lien on the settlement proceeds because the plaintiff had not been “made whole” by the settlement amount. The 8th Circuit upheld the federal district court. Submitted by David Jones.

Williams v. National Medical Services, Inc., 2005 U.S. App. LEXIS (8th Cir. 2005).  This decision interprets Missouri law, which had previously held that a side in litigation employing an expert witness in medicine could sue that witness for malpractice based on professional inadequacy. This decision held that the same cannot be done by opposition parties to whom the expert witness owed no professional duty. Submitted by David Jones. 

           Hedonic Damages and Loss of Society

Westcott v. Crinklaw, 133 F.3d 658 (8th Cir. 1998).  The district court interpreting Nebraska law had refused to instruct the jury that Arden Westcott’s estate could be awarded hedonic damages, relying on Anderson v. Nebraska Dep’t of Social Services, 248 Neb. 651, 538 N.W.2d 732 (Neb. 1995).  Westcott argued that the application of Anderson was in error because Anderson was not a wrongful death case. The 8th Circuit held that the trial court was correct in its interpretation that Nebraska law prohibits treating loss of enjoyment of life as a separate category of nonpecuniary damages.

            Admissibility of Expert Testimony

Blue Dane Simmental v. American Simmental, 178 F. 3d 1035 (8th Cir. 1999). This was a contract violation case, not a personal injury, but the testimony of Dr. Alan Baquet, an agricultural economist, was excluded based on Daubert standards and the exclusion was upheld by the 8th Circuit Court of Appeals. Dr. Baquet was found qualified, but his methodology was found unreliable and "simplistic.

Children’s Broadcasting Corporation v. The Walt Disney Company, 245 F.3d 1008 (8th Cir. 2001). The trial court had granted a new trial based on its own failure under a Daubert standard to have excluded the testimony of Stephen Willis, apparently an accountant. The trial court found that the testimony of Willis was based on an incomplete model and constituted nothing more than speculation based on the ipse dixit of the expert. The 8th Circuit upheld the decision of the trial court judge to grant a new trial on this basis. (Submitted by Frank Tinari.)

Concord Boat Corp. v. Brunswick, 207 F.3d 1039 (8th Cir. 2000). This was an antitrust action, but the trial court judge had admitted the testimony of Dr. Robert Hall.  The 8th Circuit Court of Appeals found that Dr. Hall's model was unreliable for several reasons. This is notable because the "Reference Guide on Estimation of Economic Losses in Damages" in the Reference Manual on Scientific Evidence, first and second editions (1994 and 2000) was written by Robert Hall and Victoria Lazear. Even this kind of credential is not sufficient to avoid not being allowed to testify under Daubert standards.

Johnson v. Serra, 521 F.2d 1289 (8th Cir. 1975). Economist Edward Foster’s projections of future inflationary increases in earnings through the year 2002 should have been inadmissible under Minnesota law according to the 8th Circuit. The court said: “His testimony on future inflationary projections through the year 2002 should . . . have been excluded as speculative and the excessive verdict obviously derived from it must be reduced or, in the alternative, a new trial granted.” The 8th Circuit cited federal cases not allowing inflationary projections to be made, as in Johnson v. Penrod Drilling Co, 510 F.2d 234 (5th Cir. 1975) (en banc).

Meterlogic, Inc. v. KLT, Inc., 2004 U.S. App. LEXIS 10149 (8th Cir. 2004). The 8th Circuit reviewed for abuse of discretion the trial court’s decision to exclude the damages testimony of Lawrence Redler. “Redler was to testify regarding the discounted present value of Meterlogic’s now-defunct business of providing remote monitoring services for business machines. He predicted financial results ten years into the future even though the parties’ contract extended only two years and allowed for termination at any time; he assumed that Meterlogic would be the sole representative of the appellees, even though the contract was a non-exclusive agreement; he assumed that the parties would have 30% market share in the remote monitoring and metering market, but admitted that he had no market research to support that estimate; he assumed 15% annual growth without any data indicating that the estimate was realistic; he admitted to having no data on how many remote monitoring and metering devices would be sold; and he admitted that he based his analysis on the so-called Metzler report, which was prepared for KLT only as an investment planning tool. . . We conclude that the district court did not abuse its discretion by excluding Redler’s testimony.”  Submitted by both David Jones and Ralph Frasca.

Peitzmeier v. Hennessy Industries, Inc., 97 F.3d 293 (8th Cir. 1996).  This 1996 decision of the 8th Circuit Court of Appeals rejected the notion that engineering principles were not novel scientific testimony and therefore not subject to the standards of Daubert v. Merrell-Dow Pharmaceutical, Inc., 509 U.S. 579.  Thus, the 8th Circuit had anticipated the conclusion reached by the United States Supreme Court in Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137 (1999).

        Wrongful Termination
        
Voeltz v. Arctic Cat, Inc., 2005 U.S. App. LEXIS 8221 (8th Cir. 2005).  This decision of the 8th Circuit discusses both back pay and front page issues under the American with Disabilities Act (ADA) and reverses a trial court decision to award actual and front pay damages except for “nominal damages on the reasonable-accommodation” verdict.

     District Courts in the 8th Circuit (AR, IA, MN, MO, NE, ND, SD)

                 Basis Income and Fringe Benefits for Projecting Earnings Loss

Hammes v. Yamaha Motor Corp. U.S.A., 2006 U.S. LEXIS 26526 (D.MN 2006). Dr. Paul Estenson was permitted to testify under Daubert-Kumho standards. The court cited the following credentials: “Estensen is a trained economist with a Ph.D. in economics from the University of Nebraska-Lincoln. He has taught college-level courses, worked in the research department of the Federal Reserve Bank of Minneapolis, and been a member of the research department of the Federal Reserve Bank of Minneapolis.” The court also said: “The methods employed by Estensen have been utilized by other economists. Furthermore, Estensen’s failure to employ a specific test, the “Worklife Estimates by Occupation” which assumes that individuals do not change careers, does not undermine the reliability of his methods. . . Estensen’s technique has been tested and employed by other expert economists; it has been subject to peer review; does not have a known rate of error; and is generally accepted in the economics community.” The Court also ruled that Estensen’s failure to incorportate such factors as the possibility of a previous injury and his use of a Monte Carlo simulation to verify the accuracy of his analysis did not disqualify him. Finally, the Court held that Estenson’s projection that value of Hammes’ household services will increase over time did not undermine the reliability of his conclusions. “This is an issue of fact that goes to the weight of the evidence, not to admissibility.”

Kinnaman v. Ford
, 79 F.Supp. 2d 1096 (E.D.Mo 2000). This is a memorandum of summary judgment, saying: “Plaintiff has failed to demonstrate that she could perform an essential function of the job, namely regular and predictable attendance, with or without an accomodation. She has failed to show any material fact over her ability to show up regularly for work. The undisputed evidence shows that Kinnaman failed to meet her burden of establishing that she was a “qualified individual with a disability” either at the time of her initial termination, or at the time defendant refused to reinstate year. Since plaintiff cannot perform an essential function of the job, she is not a qualified individual under the ADA. Suggested by David Jones.

               Tax Consequences

Arneson v. Callahan, 128 F.3d 1243 (8th Circuit. 1997). This decision deals with three issues: (1) Whether the Back Pay Act, 5 U.S.C.S. § 5596, allowed prejudgment interest to be awarded against the United States; (2) whether the Back Pay Act, 5 U.S.C.S. § 5596, allowed tax enhancement damages based on a lump sum award for back pay to be awarded against the United States; and (3) whether the United States could claim disability awards as an offset to back pay lost earnings. The 8th Circuit held that the Back Pay Act does not allow for either prejudgment interest or tax enhancement damages (grossup) to be awarded against the United States, but that the United States could not claim disability benefits as an offset to lost earnings.

               Legal Procedure

Crane v. Crest Tankers, Inc, 47 F.3d 292 (8th Cir. 1995). The trial court permitted a “Future Damages Calculator” produced by Lawyers & Judges Publishing Company to be taken into the jury room as an exhibit. The 8th Circuit held that this constituted reversible error, saying: “It should be noted that of the three components of the exhibit, the “present value table” section is the most troubling. Future damages, in the form of future pain and suffering and (importantly) future lost wages were at issue in the case. There are numerous ways of presenting a case involving future damages. Typically, the district court will, as here, take judicial notice of the plaintiff’s life expectancy. If the case involves an issue of future lost wages, generally an expert witness is employed who, once qualified, opines on various issues including work life expectancy, future damages, and methods for discounting the same to present value. In the present case, no expert was used by appellee regarding future economic damages. Nor was an instruction given about them, other than the fact that the jury was able to award  future damages if the facts dictated” (emphasis in the original). Suggested by John O. Ward.

Lane v. Stevens Transport, Inc., 2007 U.S. Dist. LEXIS 58964 (E.D. Ark. 2007). Lane had stipulated past medical damages of $109,173.40. Economist Dr. Ralph Scott projected loss of wages and fringe benefits of $663,469.85 and future medical expenses of from $321,868.19 to $638,498.84 for Bruce Lane. Lane settled is claim for $750,000. The Court made a determination that the amount of money necessary to make Lane whole would have been $1,750,000.  The parties were in disagreement about which state’s law applied, Arkansas or Indiana. Lane had accepted worker’s compensation benefits for which a lien on his recovery of damages existed. The question was whether the lien was enforceable given that Lane had not been made whole by the amount of the award he accepted.  The court held that Indiana law applied and that Indiana law required that the lien be reduced by the same proportion as the settlement amount was of the “make whole” amount, or 42.86%. The lien was for $183,028.79 for past worker compensation benefits, which was reduced to $78,446.13.  

Town and Country Appraisals, LLC v. Hart, 2007 Mo. App LEXIS 1617 (Ed. Mo. 2007). The plaintiff appraisal firm sued attorney Alexandra M. Hart for $3,700 in services rendered during a dissolution of marriage action. The client of the attorney did not pay for the services of the appraisal company and the attorney and her corporation argued that the attorney was not obligated to make payment. The trial court ruled in favor of the attorney. The Court of Appeals reversed the trial court and remanded for further proceedings to determine compensation to be made to the appraisal firm. The basis for the decision of the appeals court was a legal principle called quantum meruit, which means that “a plaintiff must show: (1) a benefit was conferred upon a defendant by a plaintiff, (2) appreciation by a defendant of such benefit, (3) acceptance and retention by the defendant of the benefit under circumstances in which such retention without payment is inequitable.” Suggested by Greg Aubuchon.    

Wheeler v. Carlton and Marten Transport, LTD, 2007 U.S. Dist. LEXIS 24594 (D.AR 2007 ). The jury did not hold the defendants liable for the death of Yolanda Wheeler, resulting in Defendants submitting a Bill of Costs. The Court entered a Judgment in favor of Defendants and dismissed the Complaint with prejudice. Plaintiff filed a Motion to Quash the Bill of Costs. Three items in the Bill of Costs were the bill of Robert E. Marsh, the plaintiff’s economist of $490.20, for his deposition, $298.50 for the court reporter’s attendance fee, and $91 for Federal Express mailing of the deposition transcript. Defendants stated that they had used Marsh’s deposition transcript for purposes of cross examination. The court awarded $788.70, which apparently excluded the $91 charge for Federal Express mailing. The Court accepted parts of Defendants Bill of Costs and rejected other parts. This description provided here includes only the Court’s evaluation of costs associated with Plaintiff’s economist.

White v. Cooper Tools, Inc., 2010 U.S. Dist. LEXIS 45730 (D.S.D. 2010). In this case, Dr. George Langelett was the economic expert for the plaintiff and Linda K. Graham was the life care planning expert for the plaintiff. The defense had offered no damages experts, contesting the case primarily on liability. After the testimony of a liability expert for the plaintiff, the defense petitioned for a continuance that included obtaining economic expert Dr. Kenneth Boudreaux and rehabilitation expert Mr. Larry Stokes, whose reports were filed five days after the new deadline. Plaintiff submitted a motion in limine to bar defense experts based on timeliness. The Court held that the delay was “harmless error” and did not impose sanctions on the defense or exclude the testimony of defense experts. 

            Lost Chance of Survival/Recovery

Boody v. United States, 706 F. Supp. 1458 (D. Kan 1989). This is a decision in a case involving lost chance of survival. Judge Theis said: “The most logical approach is to compensate plaintiffs for what they have lost. For example, if a person would have had a thirty percent chance to survive a heart attack with proper treatment but died because of a negligent treatment, the plaintiff recovers thirty percent of the value placed on the decedent’s life. Thus if the jury believed decedent’s life was worth two million dollars, plaintiff would recover $600,000.”

Borgren v. United States, 723 F. Supp. 581 (D. Kan. 1989). Judge Dale E. Saffels held that the appropriate approach for valuing damages when there is a lost chance of survival in a personal injury is “for the court to arrive at a compensatory figure which the court finds would justly and adequately compensate  plaintiff for her damages,” which Judge Saffels describes as the first of three methods. He identified the second method as “to provide full compensation for the loss of life, regardless of the chance of survival,” which he felt was too onerous for defendants. The third method was “to calculate damages by taking the value of the plaintiff’s life and multiplying it by the chance of survival lost,” as had been done in the case of Boody v. United States, 706 F.Supp. 1458, 1465 (D. Kan. 1989). Judge Saffels rejected the third approach as requiring a highly subjective opinion, saying: “We are unconvinced that the mathematical discounting of the subjective value of human life somehow makes that approach any more precise and more accurate than the approach we have chosen (the first approach).”

            FELA and Maritime

Walsh v. Union Pacific Railroad, 2007 U.S. Dist. LEXIS 77379 (D. Neb. 2007). This is an order from Judge Thomas D. Thalken denying defendant’s motion for a new trial. The second of six grounds in the defendant’s the motion for a new trial was that “the court erred in giving jury instruction No. 20 which failed to instruct the jury to reduce any non-economic damages to present value.” The plaintiff contended that both plaintiff’s economic expert Dr. Opp and the defendant’s economic expert Dr. Pflaum had reduced only economic damages to present value. The plaintiff also argued that if the defendant believed that non-economic damages should be reduced to present value, Dr. Pflaum should have addressed that issue. The Court held that the defendant had not objected to jury instruction No. 20 at trial and therefore that the defendant could not now claim that the Court had erred. The Court also cited Chesapeake & Ohio R.  Co. v. Kelly, 241 U.S. 485, 489 (1916) as authority for not reducing non-economic damages to present value.

              Hedonic Damages and Emotional Services

Hernandez v. Flor, 2003 U.S. Dist. LEXIS 1732 (D.Minn. 2003). “Champion and Central Turf challenge Trevino’s testimony because they contend that Trevino, an economist, is not qualified to testify as to the dollar value of emotional services that Cruz provided and would have provided to his family. . . The Court notes that determining damages amounts in a wrongful death case frequently requires a valuation in dollars of the loss of relationship or companionship. . . In many respects, every attempt to calculate damages in a wrongful death suit hinges upon great speculative leaps and assumptions. The Court denies Defendants’ Motions to exclude Trevino’s testimony in its entirety and will determine at trial whether his testimony lacks the requisite foundation or is admissible. 

Sullivan v. United States Gypsum Company, 862 F. Supp. 317 (D.Kan. 1994). Rejected hedonic damage testimony by Stan V. Smith.

Walsh v. Union Pacific Railroad, 2007 U.S. Dist. LEXIS 77379 (D. Neb. 2007). This is an order from Judge Thomas D. Thalken denying defendant’s motion for a new trial. The second of six grounds in the defendant’s the motion for a new trial was that “the court erred in giving jury instruction No. 20 which failed to instruct the jury to reduce any non-economic damages to present value.” The plaintiff contended that both plaintiff’s economic expert Dr. Opp and the defendant’s economic expert Dr. Pflaum had reduced only economic damages to present value. The plaintiff also argued that if the defendant believed that non-economic damages should be reduced to present value, Dr. Pflaum should have addressed that issue. The Court held that the defendant had not objected to jury instruction No. 20 at trial and therefore that the defendant could not now claim that the Court had erred. The Court also cited Chesapeake & Ohio R.  Co. v. Kelly, 241 U.S. 485, 489 (1916) as authority for not reducing non-economic damages to present value.

             Admissibility of Expert Testimony

Hammes v. Yamaha Motor Corp. U.S.A., 2006 U.S. LEXIS 26526 (D.MN 2006). Dr. Paul Estenson was permitted to testify under Daubert-Kumho standards. The court cited the following credentials: “Estensen is a trained economist with a Ph.D. in economics from the University of Nebraska-Lincoln. He has taught college-level courses, worked in the research department of the Federal Reserve Bank of Minneapolis, and been a member of the research department of the Federal Reserve Bank of Minneapolis.” The court also said: “The methods employed by Estensen have been utilized by other economists. Furthermore, Estensen’s failure to employ a specific test, the “Worklife Estimates by Occupation” which assumes that individuals do not change careers, does not undermine the reliability of his methods. . . Estensen’s technique has been tested and employed by other expert economists; it has been subject to peer review; does not have a known rate of error; and is generally accepted in the economics community.” The Court also ruled that Estensen’s failure to incorportate such factors as the possibility of a previous injury and his use of a Monte Carlo simulation to verify the accuracy of his analysis did not disqualify him. Finally, the Court held that Estenson’s projection that value of Hammes’ household services will increase over time did not undermine the reliability of his conclusions. “This is an issue of fact that goes to the weight of the evidence, not to admissibility.”

Hernandez v. Flor, 2003 U.S. Dist. LEXIS 1732 (D. Minn 2003).  Defendants sought to exclude testimony about the valuation of emotional services by economist, Dr. Gene Trevino, based on the arguments that emotional services are not a proper topic for expert testimony and that Dr. Trevino was not qualified to testify as to the dollar value of emotional services that the decedent Cruz would have provided to his family. The District Court allowed the testimony saying that “Defendants can make their objections through cross-examination,” but indicated that it would determine at trial whether various parts of Trevino’s testimony lacks the requisite foundation or is admissible.

Kinnaman v. Ford, 2000 U.S. Dist. LEXIS 235, (E.D.Mo 2000). The court denied the admissibility of vocational expert Sherry Browing under the Daubert standard, saying: [T]here is simply no corroborating evidence of Browning's testimony and exhibits that the methodology she has employed to develop her conclusions is an acceptable methodology and has been tested and is generally accurate. There is nothing in the record to support Browning's methodology other than that she promulgated it, and that it is used by other persons in her discipline. The expert's bald assurance of validity is not sufficient to show that her methodology meets a proper standard of reliability.”

Norwest Bank v. K-Mart, 1997 U.S. Dist. LEXIS 3426 (N.D. Ind. 1997). The Judge Robert L. Miller granted defendant’s motion in limine to exclude the testimony of Dr. Robert Voogt, a life care planning expert. Judge Miller said: “Dr. Voogt’s ‘forecasts’ of Mrs. Frick’s present and future medical needs are not admissible. This leaves the other class of opinions plaintiffs wish to offer through Dr. Voogt: his cost valuation of the life plan he outlined. Cost evaluation does not require medical expertise, and Dr. Voogt plainly has the requisite experience to make his opinion relevant to the trier of fact. It does not appear, however, that those opinions are based on any evidence other than Dr. Voogt’s inadmissible opinions on the care Mrs. Frick will need.  It does not appear from the record that any health care provider will testify that Mrs. Frick will need the course of treatment upon which Dr. Voogt based his cost valuations. Dr. Voogt testified that he has not discussed the plan’s components with Mrs. Frick’s treating physicians, either before or after devising the plan. No other health care provider has recommended all of the plans components, and it does not appear that any other health care provider recommended any single component of the plan other than Mrs. Frick’s current pharmaceutical prescriptions. An opinion without foundation in the record has no probative value, and so is neither relevant with the meaning of Rules 401 and 402 nor helpful to the trier of fact within the meaning of Rule 702.”

Self v. Equilon Enterprises, LLC, 2007 U.S. Dist. LEXIS 47381 (E.D. Mo 2007).  This memorandum grants a motion to strike the reports of two damages experts of the plaintiff. The report of Richard Berliner, a petroleum marketing executive, about the scope of competition between gasoline retail outlets. The court cited Berlyn, Inc. V. The Gazette Newspapers, Inc, 214 F. Supp. 2d 530, 536 (D. Md. 2002) as holding that general business experience unrelated to antitrust economics does not render a witness qualified to offer an opinion on complicated antitrust cases such as defining relevant markets. The court said: “Applying the foregoing to the Berliner report, the undersigned finds that Berliner is not qualified and even if qualified, his opinion is not reliable, in that it is based on insufficient facts and unsound methodology for the reasons set forth. Berliner is not an economist. As noted by Defendants, the Court finds that Plaintiffs concede that Berliner is not qualified to render an opinion as to the relevant geographic market by arguing that they do not ‘rely on Mr. Berliner’s expertise for complicated issues such as defining relevant markets.’ Thus, Berliner’s expert report clearly purports to render an expert opinion defining the relevant geographic market in contradiction to Plaintiffs’ concession that he is unqualified to offer such opinions.”

9th Circuit

    Court of Appeals

                 Basis Income and Fringe Benefits for Projecting Earnings Loss

Simeonoff v. Hiner, 249 F.3d 883 (9th Cir. 2001). This was a Jones Act decision involving an injury to the foot of Simeonoff while crab fishing. “Here, the district court made detailed factual findings to support its economic damage awards. These included assessments of the injury’s impact on Simeonoff’s ability to crab and salmon fish; ability to fish in alternative fisheries that were previously unavailable to him because of an overlap in fishing seasons with crab and salmon fishing; and ability to participate in work unrelated to fishing. The district court also assessed the economic experts’ estimations of lost past and future economic damages. At trial, Simeonoff’s economist estimated economic loss at $500,000. Hiner’s economist estimated economic loss at zero. After considering the evidence, particularly the expert economists’ testimony, the court found that neither expert ‘has presented an entirely reasonable assessment of plaintiff’s past  lost earnings and future loss of earnings.’ The court disregarded the experts’ estimations and, after noting defendant’s payments for maintenance, cure, unearned wages, and an advance payment for loss of the 1996 salmon season, found lost earnings, reduced for taxes, to lie between the experts’ estimates at $6,500 past lost wages and $130,000 in future lost wages.

               Life and Worklife Expectancies

United States v. Theodore Cienfuegos, 462 F.3d 1160 (9th Cir. App. 2006). This decision held that the district court abused its discretion by awarding only $11,629.87 in restitution to the estate of a decedent killed by the defendant under the Mandatory Victims Restitution Act of 1996 (MVRA). The decision held that lost income should be considered in a manner similar to civil wrongful death, but that restitution cannot depend on amounts received by a victim’s estate “from insurance or any other source.”  The 9th Circuit pointed out that “Any amount paid to a victim under an order of restitution shall be reduced by any amount later recovered as damages for the same loss by the victim in – (A) any Federal civil proceeding; and (B) any State civil proceeding, to the extent provided by the law of the State.” The 9th Circuit, however, went on to specify that: “Speculative losses are incompatible with the MVRA’s statutory theme because ‘[o]ne cannot bear the burden of proving the amount of a loss by a preponderance of the evidence when it is no more than possible that the loss will occur at all.’ United States v. Follet, 259 F.3d 996, 1002 (9th Cir. 2001). Suggested by Paul Bjorklund.

               Life and Worklife Expectancies

Holscher v. Olson, 2008 U.S. Dist. LEXIS (E.D.Wash.  2008). This decision denied defendant’s motion in limine under Daubert-Kumho standards to preclude the economic testimony of economic expert Robert Moss and held that retirement benefits are a collateral source that cannot be introduced to show a failure to mitigate earnings loss damages. Judge Edward Shea denied defense arguments to bar testimony by  Moss on the basis that his use of a male work-life expectancy from Bulletin 2254 for Kathleen Holscher on the basis of the facts of her career, on the basis that Moss had used a rounded 15% to estimate loss of fringe benefits, and on the basis that Moss used a 0% net discount rate for reducing future earnings loss calculations to present value, saying: “Defendants’ challenges are appropriately addressed through vigorous cross-examination and presentation of contrary evidence.”

Norris v. Arizona, 671 F.2d 330 (9th Cir.1982). Held that use of sex-segregated life expectancy tables for calculating refund annuity payments (funded solely by employees) violated Title VII of the Civil Rights Act of 1964. See also Henderson v. State of Oregon, 405 F.Supp. 1271 (Ore. 1975); Manhart v. City of Los Angeles, 553 F.2d 581; Reilly v. Robertson, 266 Ind. 29 (Ind. 1977), cert. denied, U.S. Supreme Court; Spirt v. TIAA/CREF, 691 F.2d 1954 (1982); Peters v. Wayne State University, 691 F.2d 330 (1982). Jerry Martin worked as an expert in all of these cases except Norris and his statistical analysis was used in Norris.

Sutton v. Earles, 26 F.3d 903 (9th Cir. 1994). The 9th Circuit held that loss of society awards were available to parents in the death of an adult child even if there was no record to show that they were dependent on the adult child for financial support. This decision goes counter to decisions in the 2nd, 5th, and 6th Circuits. The Court also held, however, that loss of society awards must be based on the presumable shorter life expectancies of survivors and not on the presumably longer life expectancies of decedents, as the trial court had held in this action.

                Wage Growth and Discount Rates

McCarthy v. United States, 884 F.2d 1280 (9th Cir. 1988). This is the second in a string of three cases holding that generalized wage increases could not be used in cases involving an infant. This would arguably include age-earnings data. Trevino v. United States, 804 F.2d 1512 (9th Cir. 1986) had held that: “A plaintiff may be compensated for projected future increases in his wages due to increases in his productivity if he proves that he would have been likely to receive wage increases by reason of his increased productivity. . . Because Sophia [an infant] made no such showing, the district court erred when it used the historical rise in wages as a measure of inflation for the purpose of calculating the discount rate for the lost wage portion of Sophia’s award.” In McCarthy, the 9th Cir. held: “Because Kyile has made no proof of individualized or societal factors, the district court erred if it increased the lost stream of income by the historical growth in wages.  In Scott v. United States (9th Cir. 1989), the 9th Cir held: “Because Jonathan [an infant] made no proof of individualized or societal factors, the district court erred when it used the historical increase in wages as a measure of inflation rather than the generic rate of inflation and the real rate of interest approach analysis for purpose of calculating the discount rate for Jonathan’s lost wage award.”  Suggested by Paul Taylor.

Shaw v. United States, 741 F.2d 1202 (9th Cir. 1984). See under Treatment of Taxes.

Trevino v. United States, 804 F.2d 1512 (9th Cir. 1986). Identifies the 1970's and early 1980's as an anomalous period in American Economic history that should not be used to develop future projections. Rejects total offset. Applies the standards of Pfeifer to FTCA (Federal Tort Claims Act) cases.

                Treatment of Taxes

Biehl v. Commissioner of Internal Revenue, 2003 U.S. App. LEXIS 25119 (9th Cir. 2003). The 9th Circuit upheld the decision of the United States Tax Court in Biel v. Comm’r, 118 T.C. 467, 2002 U.S. Tax Ct. LEXIS 29 (2002). This decision reaffirms the position of the 9th Circuit that federal income taxes must be paid on the entirety of an award for lost earnings due to wrongful termination without regard to amounts paid in attorney fees. Amounts paid in attorney fees may be deducted as an itemized deduction, but doing so frequently triggers the Alternative Minimum Tax, under which itemized deductions are not allowed. This imposes a sizable tax cost on an award winner. The federal circuits are divided on this issue. 

Banaitis v. Commissioner of Internal Revenue, 2003 U.S.App. LEXIS 17913. (9th Cir. 2003). The 9th Circuit, which had ruled in previous cases from Alaska and California that attorney fees could not be deducted from an award for purposes of determining tax liability of an award recipient, ruled that this could be done in Oregon based on differences between Oregon law specifying the rights of law firms to contingency fees and those in Alaska and California. The 9th Circuit goes on to consider at some length decisions by the 5th Circuit in Cotnam v. Commissioner, 263 F.2d 119 (5th Circuit 1959), which was based on Alabama law and the 6th Circuit in Estate of Clarks v. United States, 202 F.3d 854 (6th Cir. 2000), which was based on Michigan Law. The 9th Circuit saw the distinction in the strength of the law firm’s property rights in the award. Submitted by David Jones. 

DeLucca v. United States, 670 F.2d 843 (9th Cir. 1982).  A damages award should be increased by the amount necessary to offset tax obligations created by interest within the loss replacement fund.

Felder v. United States, 543 F.2d 657 (9th Cir. 1976). As a matter of law, income taxes should be deducted from an FTCA (Federal Tort Claims Act) award for lost compensation. Felder held that while substantive state law governs FTCA awards, the calculation of damages is a question of fact. “In this context the state standard is not binding upon a federal court.” The court also added, “We note in passing that most FTCA cases (28 U.S.C. § 2402), one of the main reasons for disfavoring deduction of taxes is avoided, namely, that calculation of the tax would be too confusing for the jury.” Revision suggested by Ed Foster.

Furumizo v. United States, 381 F.2d 965 (9th Cir. 1967). This case was tried under the Federal Tort Claims Act (FTCA), under which the judge made the ruling without a jury. Among other issues on appeal, Mrs. Furumizo argued that her loss should not have been calculated on the basis of after tax earnings. The 9th Circuit said: “Here the question is, what support would have been available to Mrs. Furumizo from her husband’s earnings, if he had lived. The old saw about the certainty of taxes is still good. It is reasonably certain that what would have been available would have been after-tax dollars, not pre-tax dollars. See Southern Pacific Co. v. Guthrie, 9 Cir., 1951, 186 F.2d 926. We think that, at the least, the court could take this fact into consideration, although it might not have erred if it had refused to do so.” 

Hollinger v. United States, 651 F.2d 636 (9th Cir. 1981).  A damages award should be increased by the amount necessary to offset tax obligations created by interest within the loss replacement fund.

Rivera v. Baker West, Inc., 2005 U.S. App. LEXIS 27170 (9th Cir. 2005). The plaintiff appealed tax withholding by the defendant in a wrongful dismissal action on the grounds that the settlement was intended to reimburse the plaintiff for physical injuries and therefore should be excluded from the plaintiff’s gross income. The 9th Circuit held that the district court had reasonably classified the award as for back pay and thus subject to withholding and affirmed the trial court decision. Suggested by Jerry Martin.

Shaw v. United States, 741 F.2d 1202 (9th Cir. 1984). This case evaluates the treatment of taxes in the 9th Circuit. Taxes on the interest on an award must be taken into account. However, a district court may not assume that the failure to deduct taxes on lost compensation will offset taxes on the income generated by the lump sum award unless two conditions have been met: First, the state whose law otherwise applies must also have adopted the offset approach. Second, the district court must be unable to arrive at its own reliable estimates of future inflation from the testimony of expert witnesses.

                  Annuities, Periodic Payments and Reversionary Trusts

Scott v. United States, 884 F.2d 1280 (9th Cir. 1989). “Relying on Taylor v. Burlington N. R.R. Co, 787 F.2d 1309 (9th Cir. 1986), the district court excluded all testimony by the government’s expert on present value as estimated by the costs of annuities. In that case, however, the district court’s decision to reject expert testimony was upheld because the proffered expert ‘was not qualified to testify on the appropriate inflation rate.’ Id. at 1316. Here, the government’s expert, Mr. Walsh, was qualified and testified as to the present value calculation and, contrary to the appellee’s contention, the evidence is relevant to the present value determination. Accordingly, the district court abused its discretion in excluding it.” This decision also discussed at some length how present value should have been calculated in this case. The plaintiff’s economic expert, Dr. Lowell Bassett, had used an historical wage growth rate of 6.3 percent with a market discount rate of 6.4 percent. The court pointed out that this set of rates was flawed under the ruling in Trevino v. United States, 804 F.2d 1512 (9th Cir. 1986) because the historical period used by Dr. Bassett from 1954 to1984 was unrepresentative. Revised listing.

                  Legal Procedure

Schneider v. County of San Diego, 285 F.3d 784 (9th Cir. 2002). Discusses proper procedure for calculation of prejudgement interest in the 9th Circuit. (Submitted by Jerry Martin.)

United States v. 40.50 Acres of Land, 932 F.2d 1349 (9th Cir. 1991). Discusses proper procedure for calculation of prejudgement interest in the 9th Circuit. (Submitted by Jerry Martin.)

United States v. 40.50 Acres of Land, 612 F.2d 459 (9th Cir. 1980). Discusses proper procedure for calculation of prejudgement interest in the 9th Circuit. (Submitted by Jerry Martin.)

                  FELA/Maritime and Warsaw Convention Cases

Burlington Northern, Inc. v. Boxberger, 529 F.2d 284 (9th Cir. 1975). This decision explicitly accepts testimony by an economic expert as to future earnings of a decedent in a death case, the amount the decedent would have spent on personal consumption, and the amount of time the decedent would probably have engaged in nonmarket family services. The decision makes it clear that the measure of damges is pecuniary loss to beneficiaries in FELA litigation.  Taxes should be discussed, but the decision leaves it to the jury where damages should lie between pre tax and after tax earnings, given that future tax rates cannot be predicted. This decision is of  historical interest, but was superceded by Jones & Laughlin Steel  Co. v. Pfeifer, 103 S. Ct. 2541; 462 U.S. 523 (1983). 

Folkestad v. Burlington Northern, Inc., 813 F.2d 1377 (9th Cir. 1987). The issue was whether the district court properly refused to permit an offset of approximately $57,000 that had already been paid to the employee through the railroad industry’s health and welfare plan to which Burlington Northern was a party. The court drew a sharp distinction between insurance coverages whose purpose was to indemnify the employer against FELA liability and other benefits that might be provided to employees as part of compensation. The key to the distinction was whether a stipulation exists to the effect that the insurance benefits are intended to indemnify the employer. If such a stipulation exists, as was true in the Folkestad case, a setoff should have been allowed. If no such stipulation exists, the benefits should be treated as a collateral source that cannot be considered.

Howard v. Crystal Cruises, 41 F.3d 527 (9th Cir. 1994). This decision requires that spousal income be included in a  determination of personal consumption by a decedent in a wrongful death action under the Death on the High Seas Act.  The district court had applied a 30 percent personal consumption rate from the Cheit Table to reduce family income and the decedent’s household services by that percentage. The plaintiff widow argued that the 30 percent rate should not be applied to her income under the collateral source rule and that the 30 percent should not have been applied at all to the calculation of lost household services even though it was the plaintiff economist who introduced the Cheit 30 percent rate. The 9th Circuit upheld the district court’s calculation of damages as not exhibiting clear error. 

Saavedra v. Korean Air Lines, 93 F.3d 547 (9th Cir. 1996).  This relatively short decision discusses the connection between the Warsaw Convention, the Death on the High Seas Act (DOHSA), the U. S. Supreme Court decision in Zicherman v. Korean Air Lines, 116 S. St. 629, 133 L. Ed. 2d 596 (1996), and general maritime law in concluding that loss of society damages were not available, vacating a holding of the district court decision.

Sestich v. Long Beach Container Terminal, 289 F.3d 1157 (9th Cir. 2002). This decision upheld a Benefits Review Board’s decision affirming the Administrative Law Judge’s determination of disability benefits under § 908(c)(21) of the Longshore and Harbor Worker’s Compensation Act (LHWCA). The Act provides compensation payable “in respect of disability” which “results from an injury” and provides benefits equal to two thirds of the difference between an injured worker’s pre-injury “average weekly wages” and his post-injury “wage-earning capacity.” Sestich appealed on the grounds that his pre injury earning capacity was much greater than his pre injury average weekly wages.  The 9th Circuit denied the appeal.

                  Hedonic Damages and Emotional Services

Dorn v. Burlington Northern Santa Fe Railroad Company, 397 F.3d 1183; 2005 U.S. App. 1887 (9th Cir. 2005). This was an appeal of a wrongful death decision under Montana law, not an FELA action. The trial court judge had permitted Stan V. Smith to present hedonic damages testimony, but had not allowed Thomas R. Ireland to testify in opposition to the validity of hedonic damages testimony. As one a number of errors that resulted in a reversal of the trial court decision, the 9th Circuit held that it was in error for the trial court not to have admitted Ireland’s testimony. The 9th Circuit evaluated Montana’s position on hedonic damages and the admissibility of expert testimony on hedonic damages as ambiguous and therefore did not hold that the admission of Smith’s hedonic damages testimony was reversible error. It did, however, express concerns about the validity of that testimony. 

Sutton v. Earles, 26 F.3d 903 (9th Cir. 1994). The 9th Circuit held that loss of society awards were available to parents in the death of an adult child even if there was no record to show that they were dependent on the adult child for financial support. This decision goes counter to decisions in the 2nd, 5th, and 6th Circuits. The Court also held, however, that loss of society awards must be based on the presumable shorter life expectancies of survivors and not on the presumably longer life expectancies of decedents, as the trial court had held in this action.

                  Admissibility of Expert Testimony

Cooper v. Travelers, 113 Fed. Appx. 198, 2004 U.S. App. LEXIS 21324 (9th Cir. 2004). Robert Johnson’s testimony in breach of implied covenant case was properly excluded by the district court under Rule 702. “Johnson himself testified during voir dire that in his normal professional practice he would verify client-provided data before relying on it to reach a conclusion. Yet, Johnson, who intended to base his opinion solely on data provided by Cooper, failed to follow this procedure. Because Johnson’s testimony was not based on the type of data on which experts in economics would reasonably rely, and Johnson admitted as much during voir dire, the district court did not abuse its discretion when it excluded the testimony.”

Daubert v. Merrell Dow Pharmaceuticals, Inc, 43 F.3d 1311 (9th Cir. 1995)(Daubert II). This is the decision following remand from the United States Supreme Court back to the 9th Circuit Court of Appeals. It emphasizes the value of demonstration that theories underlying testimony are used for purposes other than litigation and lays out a more complete list of Daubert standards.

Trevino v. Gates, 99 F.3d 911 (9th Cir. 1996), an unnamed economist projected the lost earnings of decedent Juan Bahena on the basis of an assumption that Bahena was employed as a full time mechanic when he was killed. The plaintiff was Behena’s infant child, whose last name was Trevino and with whose mother Bahena lived.  The court said: “The only foundation laid for this assumption was testimony that (1) Bahena left in the morning and returned in the evening; (2) he gave Trevino’s mother money at fairly regular intervals; and (3) he was observed on a few occasions working on cars.” The economic expert’s testimony was not admitted.

    District Courts in the 9th Circuit (AK, AZ, CA, HI, ID, MT, NV, OR, WA,               Guam, Northern Mariana Islands)

            Basis Income and Fringe Benefits for Projecting Earnings Loss

Oberson v. United States, 2004 U.S. Dist. LEXIS 2591 (D.Mont.2004). Judge Malloy compares the lost earnings calculations of David Johnson, economic expert for the defense, and Joseph Kasperic, economic expert for the plaintiff. Judge Malloy favored the methods used by Kasperick, but lowered the plaintiff’s base earning capacity somewhat from the rate used by Kasperick. Judge Malloy also considered the plaintiff’s claim of a normal life expectancy of 37 years for the injured Brian Musselman versus the opinion expressed by Robert Shavelle for the defendant that Brian Musselman’s life expectancy was now 12.8 years for purposes of determining the present value of the life care plan. He then considers specific elements in the life care plan in detail and primarily relies on the projections of David Johnson in valuing the life care plan. Judge Malloy awarded $100,000 per year of Brian Musselman’s remaining life expectancy to make an undiscounted award of $1,280,000 for “loss of established course of life.” The judge also explained his award of $600,000 for the loss of society with Brian Musselman of his daugher, Devon Musselman.

Routledge v. United States, 2008 U.S. Dist. LEXIS 65107 (D. Guam 2008). This opinion provides a detailed consideration of the opinions of plaintiff’s economic expert, Gary Hiles, Chief Economist for the Government of Guam, Department of Labor, and defendant’s expert, Dr. Laura Taylor. The judge describes in detail why she accepted the assumptions and opinions of Dr. Taylor on what appears to be every issue the judge considered and accepts Dr. Taylor’s estimate of lost earnings.

Sedie v. United States
, 2010 U.S. Dist. LEXIS 39123. (N.D.Ca. 2010). In this opinion, Magistrate Judge Elizabeth D. Laport provided extensive discussion of how she weighed evidence in a personal injury case in which both plaintiff and defendant had retained vocational experts and economic experts. She strongly favored the opinions of vocational expert Andrew O’Brien and was fairly critical of things that Thomas Yankowski did not do. She also favored the analysis of  economist Margo Ogus over Phillip Allman, but the basis appeared to primarily be that Allman had relied on the opinions of Yankowski, which in turn were largely based on one medical doctor whose testimony did not impress Judge Laporte. However, the judge also felt that O’Brien and Ogus had not omitted steps that she felt had been omitted by Yankowski and Allman.

    
       Life  Care and Cost of Medical Services

Dutra v. United States, 2006 U.S. Dist. LEXIS 86332 (W.D. Wash. 2006). The United States requested that the proceeds of the award for future medical and life care expenses to Dutra be put into a reversionary trust, which would be owned by the United States and from which amounts remaining would be paid back to the United States upon death of a severely injured child. Instead, the Court held either that the United States must pay the award in a lump sum or that the United States must purchase an annuity contract that fulfills the precise terms of plaintiff’s proposal 1. This decision would be of interest to someone wanting to understand the differences between a lump sum award, the purchase of an annuity contract, and a reversionary trust to provide for future medical and life care expenses of an injured person.

             
Household Services

McCasey v. U.S. Department of Navy, 201 F.Supp. 2d 1081 (N.D. Cal. 2002). The calculations of the plaintiff’s economic expert Robert Johnson were accepted with respect to damages in this wrongful death action in three categories: household services, home building and repairs, and property management. This decision also took judicial notice of a standard mortality table that was used by Johnson to project the ending point for damages.  Johnson’s estimate for lost household services was $9,048 per year.

Harris v. San Jose Mercury News, Inc., 2006 U.S. Dist. LEXIS 32176 (N.D.CA 2006). The defendant hired a number of experts, including a statistician and an economist, in a copyright infringement case involving a plaintiff photographer who had very limited financial resources. The Court held that the defendant must bear the costs of depositions of the statistician and the economist “if they are kept short” to serve “the integrity of the truth seeking process.”

              Annuities, Periodic Payments and Reversionary Trusts

Peterson v. United States, 469 F. Supp. 2d 857 (D. Hawaii 2007). The Court denied a motion from the United States to place the portion of an award for life care into a reversionary trust. The Court argued that the two sides had agreed to an award for a reduced life expectancy of 27 years such that the award would run out after 27 years even if the plaintiff survived past that age. Unlike an annuity, which shifts the burden of more than expected longevity to the defendant or to an annuity company, a reversionary trust would give the government a benefit from a shortened life expectancy, but would not hold the government responsible for years of life beyond the 27 year life expectancy.

             Legal Procedure 

Gray v. United States, 2007 U.S.  Dist LEXIS 17937 (S.D.CA 2007).  This is an order from Judge Napoleon Jones denying motions in limine to preclude the testimony of defendant’s economist Laura Fuchs Dolan, plaintiff’s vocational expert Carol Hyland, and plaintiff’s economic expert Robert Johnson. Plaintiff’s motion was based on Dolan’s report was not simply a rebuttal report within the meaning of Federal Rule of Civil Procedure 26(a)(2)(C), but introduced new evidence after the joint disclosure date. The rule allows rebuttal reports within 30 days after both sides mutually disclose expert reports. Although Dolan’s report did not specifically mention Johnson’s report, the Court held that its subject matter contradicted and rebutted information in Johnson’s report and was therefore valid. The defendant charged that Hyland had not expressed any vocational opinions of her own but merely summarized the opinions of other people. The challenge to Johnson’s opinions was based on the fact that his opinion directly relied upon Hyland’s report and that if that report was not admitted there was no foundation for Johnson’s opinion. The Court determined that Hyland had expressed opinions of her own based on her own efforts and that her testimony was therefore admissible, also making Johnson’s testimony admissible.

Lake Union Drydock Company v. United States, 2007 U.S. Dist. LEXIS 65386 (W.D.Wash. 2007). This is a memorandum in response to a Daubert motion in limine challenging the admission of Alan Nierenberg on the basis that Nierenberg is not an economist or a certified public accountant and that the formula he used to calculate plaintiff’s damages lacks an adequate foundation. The Court denied the motion to exclude Nierenberg’s testimony (and the testimony of two other experts) saying: “[T]his case is being tried to the Court, and as numerous courts have observed, ‘the Daubert gatekeeping obligation is less pressing in connection with a bench trial’ where ‘the gatekeeper and trier of fact [are] one and the same.’” The memorandum cites three prior decisions that have reached that conclusion.

Mannick v. Kaiser Foundation Health Plan, Inc., 2006 U.S. Dist. LEXIS 38430 (N.D. CA, 2006).  An objection to the testimony of Robert Johnson, Plaintiff’s economic expert, was sustained to the extent that Johnson’s opinions went to the issue of whether the removal of a physical barrier (to a disabled person) was “readily achievable” by the defendant. The court said: “Testimony as to ultimate issues is not permitted when it consists of legal conclusions or opinions.”

                  FELA/Maritime Cases

Sharian v. United States, 2002 AMC 2089 (N.D.Cal. 2002). This maritime decision held that it is proper to deduct Social Security and Medicare taxes from a calculation of lost earnings. It also held that a 0% net discount rate used by Dr. Thaddeus Whalen was improper and substituted a net discount rate of 1.5 % used by Jerry Udinsky for the 0% used by Whalen. 

                  Warsaw Convention

Koirala v. Thai Airways International, 1996 U.S. Dist. LEXIS 9806 (N.D. Ca. 1996). This decision spelled out the damages that can be sought by blood relatives of varying degrees in this wrongful death case under the Warsaw Convention. Spouses can recover loss of support, loss of services, loss of inheritance, loss of society, and funeral expenses. Minor and dependent adult children can recover loss of support, loss of society and parental nurture, and loss of inheritance. Dependent parents and dependent relatives can recover loss of support and loss of society. Relatives were defined as “blood relatives,” not relatives “in law.”  The Court also held that “if a decedent has no potential wrongful death beneficiaries, the decedent’s estate may recover loss of future earnings under a survival action theory.” Whether this loss of future earnings is net of personal expenses was not indicated in the decision. 

             Admissibility of Expert Testimony

Hoyt v. Career Systems Development Corporation, 2010 U.S. Dist Lexis 43584 (S.D. CA 2010).  This judicial memorandum considered nine motions in limine, the seventh of which was to bar the testimony of Gene Konrad, a CPA. The court said: “Plaintiff argues that her economic expert, Gene Konrad, a certified public accountant familiar with personnel and payroll matters, should be able to offer an expert opinion as to whether Plaintiff was an employee or an independent contractor. . . [A]s noted by the Court in the order on summary judgment, the ‘most important consideration’ in determining whether an individual is an employee or an independent agent is the control test, which considers ‘whether the person to whom the services is rendered has the right to control the manner and means of accomplishing the result desired.’ . . . The Court grants Defendant’s motion to exclude Plaintiff’s expert from opining as to whether Plaintiff was an independent contractor or an employee because the testimony would constitute a legal conclusion and invade the jury’s fact-finding role and the Court’s role in instructing the jury on the applicable law. Additionally, the Court finds that the most important factor, the degree of control Defendant exercised over Plaintiff, falls within the common knowledge and experience of the jury and that expert testimony on the subject is excluded.” 

In Re Broadcom Corporation Securities Legislation
, 2005 U.S. Dist. LEXIS 12118 (Central. Dist. Cal. 2005). “The evidentiary hearing showed that the proposed trading model does not satisfy the Daubert test for submission to the jury. The technique has not been tested against “real world”conditions, and probably cannot be so tested unless a different set of test protocols is established. It has not been subjected to the sort of critical peer review and publication that one would expect as a prerequisite for jury acceptance. The potential rate of error is highly questionable, and is based on a set of criteria that undermines the claimed error rate as being truly representative of the facts sought to be proved. Although held out by litigation professionals as useful in securities litigation, most notably as a settlement aid, the technique is not generally accepted in what is the relevant scientific community – professional economists. The Daubert criteria are not exclusive, and the Court has considered others suggested by Plaintiffs, but the Court is unable to find other indicators of reliability or acceptability that would satisfy Daubert’s requirement.

Lake Union Drydock Company v. United States, 2007 U.S. Dist. LEXIS 65386 (W.D.Wash. 2007). This is a memorandum in response to a Daubert motion in limine challenging the admission of Alan Nierenberg on the basis that Nierenberg is not an economist or a certified public accountant and that the formula he used to calculate plaintiff’s damages lacks an adequate foundation. The Court denied the motion to exclude Nierenberg’s testimony (and the testimony of two other experts) saying: “[T]his case is being tried to the Court, and as numerous courts have observed, ‘the Daubert gatekeeping obligation is less pressing in connection with a bench trial’ where ‘the gatekeeper and trier of fact [are] one and the same.’” The memorandum cites three prior decisions that have reached that conclusion.

Lee v. United States Taekwondo Union, 2006 U.S.  Dist. LEXIS 25559 (D. Hawaii 2006). This memorandum denied a motion in limine to exclude the testimony of economic expert Dr. Thomas Loudat based on Daubert-Kumho standards. Judge Mollway found that “Loudat did what economic experts typically do, applying a discount rate to calculate presnt value, as well as examining Lee’s work-life expectancy, and tax consequences. . . Such typical expert testimony is generally relevant to damage claims and helpful to the trier of fact.” She added: “For the most part, Defendants’ claims of unreliability attack the underlying assumptions made by Loudat, rather than his methodology. Defendants’ arguments therefore go to the weight that should be accorded Loudat’s testimony, rather than its admissibility. Defendants’ arguments are analogous to a challenge to an expert’s assumption that a person’s work-life expectancy is 20 years. That assumption is speculative in that it assumes that a person will live and work for 20 years when, in fact, the person could be killed in a car accident the next day. An expert’s assumption that a person’s work-life expectancy will be a certain length and use of that assumption in calculating that a person’s loss of future earnings does not make the expert’s testimony inadmissible under Daubert. Instead, the evidence is admissible and subject to vigorous cross examination. . . The only challenge Defendants make regarding the general acceptance of Loudat’s methodology is to  his use of a 4% discount rate. Although Defendants cite some case law applying a higher discount rate, they admit that a 4% discount rate is used in some situations as the ‘lowest possible rate that could be applied in any situation.’ .  . . Defendants are free to introduce evidence at trial indicating that the appropriate discount rate is higher than 4%.”

Salomon v. Andrea C. Fishing Corporation, 2008 U.S. Dist. LEXIS (S.D.Ca. 2008). This memorandum dealt with dueling motions in limine to bar portions of the testimony of Dr. Patrick Kennedy of LECG for the defendant and Dr. Joyce Pickersgill for the plaintiff. The plaintiff motion was to bar testimony of Dr. Kennedy that relied on U.S. Customs Service data to argue work-lives of persons working on tuna boats out of Samoa are shorter than average for males living in the United States. The plaintiff was a Philippines national. This motion was denied under a Daubert standard.  The defense motion was to bar testimony of Dr. Pickersgill regarding the plaintiff’s lost health benefits. Dr. Pickersgill used costs of American health care as a proxy for lost Filipino health care benefits of the plaintiff. The Court held that using American data as a proxy for Filipino data was irrelevant and unreliable under a Daubert standard and granted this motion in limine.

   
    Hedonic Damages and Emotional Services

Dubose v. City of San Diego, 2002 U.S. Dist. LEXIS 28297 (S.D. Ca. 2002). Judge James Lornenz granted defendant’s motion in limine to exclude the hedonic damages testimony of economic expert Robert Johnson, applying federal Daubert-Kumho standards and precedents rather than California precedents.

   
    Wrongful Termination

Traxler v. Multinomah County, 2008 U.S. Dist. LEXIS 50953 (D. Ore. 2008). Traxler prevailed at trial under the Family and Medical Leave Act (FMLA) and won $250,000 in back pay and $1,551,000 in front pay. Judge King ordered a remittitur of front pay down to $267,000. In doing so, the judge commented on the testimony of economist Michael Sheehan, Ph.D., saying: “Although there was no dispute about Sheehan’s mathematical calculations, his assumptions are questionable and appear to be based on a theoretical worst case without any evidentiary support. The jury apparently accepted Dr. Sheehan’s calculated wage and fringe benefit losses which assumed that Traxler would work to age 65, an additional 16.64 years. There was no testimony from Traxler about her future work plans, whether or not she was still working at the Sheriff’s office. Moreover, Traxler had a statistical work life expectancy of only 12.75 years. There is some indication in the record that Sheehan used incorrect wage information. The evidence was that Traxler had reached the top of her grade and would not have been entitled to future merit increases. Further there was testimony about the yearly budget reductions in the Sheriff’s office so an increase in higher positions was unlikely. Sheehan, however, assumed consistent merit increases in addition to yearly cost of living increases.” The judge also went on to point out that Traxler was 48, had a two year college degree and should have had significant mitigating income. 
 
10th Circuit

    Court of Appeals

        Annuities, Periodic Payments and Reversionary Trusts

Deasy v. United States, 99 F.3d 354 (10th Cir. 1996). The trial court awarded plaintiff $3,993,971, to be placed in a reversionary trust to provide for his future medical expenses outside the VA Hospital system, with any balance at the plaintiff’s death reverting to the United States. The United States appealed the amount and the courts award of free lifetime medical and psychiatric care. The 10th Circuit affirmed the trial court decision.

Hill v. United States, 81 F.3d 118 (10th Cir. 1996). The United States challenged an award of $1,017,500 to the parents of Tasha Hill, a minor child, for services they had provided to Tasha during years in which they were unable to afford professional medical care on the basis that the parents did not have the skills to provide care of that value. The 10th Circuit affirmed the trial court award to the parents. The United States also argued that the entire award to Tasha herself for lost earnings and future care should be put into a reversionary trust, to be returned to the United States if Tasha should die before her normal life expectancy. The 10th Circuit allowed the award for life care to be put into a reversionary trust, but required that Tasha’s lost future earnings be awarded separately. (Revised description after submission by Boyd Fjeldsted.)

Hull v. United States, 971 F.2d 1499 (10th Cir. 1992).  The decision discusses a reversionary trust set up to provide for the care of a handicapped child. The 10th Circuit remanded this case to the trial court because there was no discounting to present value and specifically rejected an argument that total offset could by used as a 0% net discount rate. This case came back to the 10th Circuit in 1995 in Hull v. United States, 53 F.3d 1125 (10th Cir. 1995). After three years, the parents of the handicapped child tried to challenge the reversionary trust arrangement, which was supported by the guardian ad litem.  The court ruled that the parents lacked legal standing to assert this claim and dismissed the appeal. 

           Legal Procedure

Pace v. Swerdlow, M.D., 2008 U.S. App. LEXIS 4631 (10th Cir, 2008). In this case, the plaintiff's expert had issued an affidavit based on his review of medical evidence providing support for the plaintiff's claim of medical malpractice. When confronted with the deposition transcript of the defendant doctor just prior to trial, however, it appears that the plaintiff's doctor decided he was in over his head and recanted his affidavit, causing the judge to grant summary judgment to the defendant doctor. Plaintiff attorneys then sued the recanting expert witness for damages. The federal district court issued summary judgment in favor of the expert witness now acting as defendant. The 10th circuit reversed the district court and remanded the case for further decision. A  parallel situation might be that a forensic economist discovered an error in his calculations on the eve of trial that changed his professional opinion from an opinion of significant damages to an opinion that there were no damages, thus rendering the plaintiff’s case irrelevant. Suggested by Ralph Frasca.

           Collateral Source Rule

Green v. Denver & Rio Grande Western Railroad Company, 59 F.3d 1029 (10th Cir. 1995).  The trial court judge had allowed evidence of Railroad Retirement Board disability payments as an offset to lost earnings of a railroad worker. The 10th Circuit, citing the United States Supreme Court in Eichel v. New York Central R.R., 375 U.S.253 (1963), reversed the trial court decision, indicating that the collateral source rule prevented RRB disability payments from being mentioned. The Court offered an extended justification for the collateral source rule and specified circumstances when it does not apply: “The collateral source rule allows a plaintiff to seek full recovery from a tortfeasor even though an independent source has compensated the plaintiff in full or in part for the loss. The rationale for the rule is at least two-fold: First, public policy favors giving the plaintiff a double recovery rather than allowing a wrongdoer to enjoy reduced liability simply because the plaintiff received compensation from an independent source. (Citation omitted). Second, by assuring a plaintiff’s payments from a collateral source will not be reduced by a subsequent judgment, the rule encourages the maintenance of insurance. Quinones v. Pennsylvania Gen. Ins. Co., 804 F.2d 1167, 1171 (10th Cir. 1986). The collateral source rule generally does not apply ‘when the collateral source is somehow identified with the tortfeasor . . in a suit against the tortfeasor.’ Id. at   1171. Under those circumstances the additional compensation will be used to offset tortfeasor liability because ‘it is as if the tortfeasor himself paid.’ Id. at 1172.”   Revised listing suggested by George McLaughlin.
 
Whatley v. Skaggs Companies, Inc. 707 F.2d 1129 ( 10th Cir. 1983). This was an employment discrimination case. After being discharged, the plaintiff had requested other employment, which the plaintiff subsequently left two years later. The trial court found that “under these circumstances, Whatley’s tenure in the Skaggs warehouse had the same legal effect as if he had permanently left Skagg’s employ on September 17, 1971, and had found employment elsewhere on the same day. Therefore, it was within the court’s discretion to award plaintiff back pay for the period subsequent to June 1973. Plaintiff was injured after being terminated. The Court held that the trial court had not erred in awarding back pay during the period when the plaintiff was disabled an unable to work based on the fact that the plaintiff would not have been disabled if his employment had not been terminated. However, the court also held that it was in error not to deduct plaintiff’s disability benefits from defendant’s back pay liability in making this calculation. Suggested by George McLaughlin.          

          FELA/Maritime Cases

Green v. Denver & Rio Grande Western Railroad Company, 59 F.3d 1029 (10th Cir. 1995).  The trial court judge had allowed evidence of Railroad Retirement Board disability payments as an offset to lost earnings of a railroad worker. The 10th Circuit, citing the United States Supreme Court in Eichel v. New York Central R.R., 375 U.S.253 (1963), reversed the trial court decision, indicating that the collateral source rule prevented RRB disability payments from being mentioned. The Court offered an extended justification for the collateral source rule and specified circumstances when it does not apply: “The collateral source rule allows a plaintiff to seek full recovery from a tortfeasor even though an independent source has compensated the plaintiff in full or in part for the loss. The rationale for the rule is at least two-fold: First, public policy favors giving the plaintiff a double recovery rather than allowing a wrongdoer to enjoy reduced liability simply because the plaintiff received compensation from an independent source. (Citation omitted). Second, by assuring a plaintiff’s payments from a collateral source will not be reduced by a subsequent judgment, the rule encourages the maintenance of insurance. Quinones v. Pennsylvania Gen. Ins. Co., 804 F.2d 1167, 1171 (10th Cir. 1986). The collateral source rule generally does not apply ‘when the collateral source is somehow identified with the tortfeasor . . in a suit against the tortfeasor.’ Id. at   1171. Under those circumstances the additional compensation will be used to offset tortfeasor liability because ‘it is as if the tortfeasor himself paid.’ Id. at 1172.”   Revised listing suggested by George McLaughlin.

        Admission of Expert Testimony

Nielberger v. FedEx Ground Package Sys., 566 F.3d 1184 (10th Cir. 2009). The testimony of life care planning expert Doris Shriver and economic expert Thomas Roney regarding past medical expenses had been excluded at the trial court level based on a failure of the Plaintiff to provide testimony by a treating physician to establish that the Plaintiff’s medical expenses were reasonable and necessary to treat injuries caused by the accident (as compared with a pre-existing scoliosis condition). The plaintiff failed to provide a record of the testimony of Shriver that included Shriver’s testimony, but it appeared that the only basis for past medical expenses was testimony by the plaintiff herself, which the 10th Circuit did not consider qualified. Shriver and Roney were apparently allowed to present testimony about future life care costs. The 10th Circuit upheld the trial court decision.  Suggested by Bob Taylor.

        Hedonic Damages and Emotional Services

Baron v. Sayre Memorial Hospital, 2000 U.S. App. LEXIS 17731 (10th Cir. 2000).  The 10th Circuit Court of Appeals quoted the trial court decision: "It takes a 'discerning mind . . . to make a strict differentiation between hedonic damages and the loss of pleasure of life as a pain and suffering -- mental pain and suffering component, but certainly damages are contemplated in law for the latter.'" This did not involve the admissibility of an expert witness to testify about hedonic damages. 

City of Hobbs v. Hartford Fire Insurance Company, 162 F.3d 576 (10th Cir. 1998). References an hedonic damages report by Brian McDonald being called "bullshit" by defense counsel. The issues, however related to whether an insurance company had bargained in good faith.

Smith v. Ingersoll-Rand, 214 F.3d 1235 (2000). The 10th Circuit described the trial court decision in detail in affirming the trial court decision to allow Stan V. Smith to explain the concept of hedonic damages, but without providing specific calculations for the plaintiff. The 10th Circuit indicated that the trial court had been in error in assuming that Daubert v. Merrell Dow Pharmaceutical, Inc., 509 U.S. 579 (1993) did not apply to Smith’s testimony, but that this was not reversable error because Smith had not provided specific numbers in explaining the conceptual meaning of hedonic damages. The 10th Circuit said: “The concept of hedonic damages is premised on what we take to be the rather noncontroversial assumption that the value of an individual’s life exceeds the sum of that individual’s economic productivity. In other words, one’s life is worth more than what one is compensated for one’s work. The assumption that life is worth more than the sum of economic productivity leads to the equally noncontroversial conclusion that compensatory awards based solely on lost earnings will under-compensate tort victims. The theory of hedonic damages becomes highly controversial when one attempts to monetize that portion of the value of life which is not captured by measures of economic productivity. Attempts to quantify the value of human life have met considerable criticism in the literature of economics as well as in the federal court system. Troubled by the disparity of results in published value-of-life studies and skeptical of their underlying methodology, the federal courts which have considered expert testimony on hedonic damages in wake of Daubert have unanimously held quantifications of such damages inadmissible. . . Here, Stan Smith only testified to the definition of loss of enjoyment of life, which he described as ‘an estimate of the value of a person’s being for enjoyment of life as opposed to the value of a person’s doing or their economic productive capacity, whether it’s in the marketplace, in the business, or in the household as a service.’ . . As the district court correctly noted, New Mexico state law permits both recover of hedonic damages and allows ‘an economist to testify regarding his or her opinion concerning the economic value of a plaintiff’s loss of enjoyment of life. . . The district court also made an appropriate decision regarding reliability, excluding the quantification which has troubled both courts and academics, but allowing an explanation adequate to insure the jury did not ignore a component of damages allowable under state law.”  

         Wrongful Termination

Reed v. Mineta, 2006 U.S. App. LEXIS 4383 (10th Cir. 2006). The 10th Circuit rejected the trial court's method of determining prejudgment interest on back pay in a wrongful termination case. The trial court judge had awarded Colorado's statutory 9% interest on the entire amount of Donald Reed's back pay award from the date of his termination. The FAA did not dispute the Colorado statutory interest rate, but held that prejudgment interest must be calculated from the date the earnings would have been paid, not from the date of the termination.

Whatley v. Skaggs Companies, Inc. 707 F.2d 1129 ( 10th Cir. 1983). This was an employment discrimination case. After being discharged, the plaintiff had requested other employment, which the plaintiff subsequently left two years later. The trial court found that “under these circumstances, Whatley’s tenure in the Skaggs warehouse had the same legal effect as if he had permanently left Skagg’s employ on September 17, 1971, and had found employment elsewhere on the same day. Therefore, it was within the court’s discretion to award plaintiff back pay for the period subsequent to June 1973. Plaintiff was injured after being terminated. The Court held that the trial court had not erred in awarding back pay during the period when the plaintiff was disabled an unable to work based on the fact that the plaintiff would not have been disabled if his employment had not been terminated. However, the court also held that it was in error not to deduct plaintiff’s disability benefits from defendant’s back pay liability in making this calculation. Suggested by George McLaughlin.

    District Courts in the 10th Circuit (CO, KS, OK, NM, UT, WY)

     Basis Income and Fringe Benefits for Projecting Earnings Loss

Griffith v. Mt. Carmel Medical Center, 842 F.Supp. 1359 (D.Kan. 1994). This district court decision interpreted Kansas law regarding pecuniary damages in terms of Wentling v. Medical Anesthesia Services, P.A., 237 Kan 503 (1985) and Cerretti v. Flint Hills Rural Electrical Co-op Ass’n, 251 Kan. 347 (1992). These decisions allow loss of guidance and moral training of a father to be treated as a pecuniary damage. This decision is also of interest because of the way in which the testimony of the plaintiff’s economist, Dr. John Morris, was used to reduce the level of damages.  The court referred to Dr. Morris’ testimony that the total loss of financial support resulting from the death of Jimmy Griffin as “quite credible.” The jury, however, awarded $1,350,00 for lost support and the court reduced damages to the $800,000 testified to by Dr. Morris. How credible his testimony was, however, may be questioned by forensic economists. Jimmy Griffith’s highest earnings in the four years prior to his death, including unemployment compensation, is cited as $9,034. Dr. Morris’ projection depended on the assumption that Mr. Griffin would continue in the profession of truck driver and, in four years, would be working full time and earning average wages for a truck driver

Hernanadez-Cortez v. Hernandez, 2003 U.S. Dist LEXIS 19780 (D. Kan. 2003). This is a memorandum by Judge J. Thomas Martin granting summary judgement to the defendant in the case with respect to one of two illegal aliens, not allowing Hernandez-Cortez to recover lost earnings based on projected earnings in the United States, but allowing Hernandez-Cortez to pursue his claims for injuries and related damages against the defendants. Dr. Gary Baker, as the plaintiff’s economist,  had prepared calculations based on a life expectancy and future earnings in the United States, while neglecting to consider plaintiff’s illegal status.

      Standards for Wrongful Death Calculations

Fanning v. Sitton Motor Lines, 2010 U.S. Dist. LEXIS ( D. Kan. 2010).  This decision granted plaintiff’s argument that the existence in the household of a grandchild who was not adopted until after the decedent’s death should be taken into account in calculating the decedent’s self consumption even though the child did not qualify as an “heir” under Kansas law. Plaintiffs argued that exclusion of testimony regarding N.F. would create an "inaccurate self-consumption rate" for the decedent and lead to a gross underestimation of the pecuniary losses to the decedent's survivors. The court said: “The plaintiffs' economic expert calculated the decedent's self-consumption rate based upon the number of individuals in the household, including N.F. Thus, while the plaintiffs state that they do not seek to make an official claim for damages on behalf of N.F., they argue that they should be permitted to reference N.F. in calculating their own damages, because her presence in the household affected the decedent's self-consumption rate, and because Ms. Fanning must now provide support for N.F. that would previously had been provided by the decedent.” The court went on to say: “[T]he plaintiffs argue that testimony regarding N.F. is necessary to properly calculate damages related to health insurance costs. The decedent provided health insurance for those within the household  and such expenses must now otherwise be taken care of. Therefore, the plaintiffs intend to include N.F. in their calculation of Ms. Fanning's own damages insofar as Ms. Fanning must now provide for her insurance expenses that previously would have been taken care of by the decedent. In sum, while the plaintiffs concede that they do not seek to assert damages claims on behalf of N.F. as an ‘heir,’ they assert that her presence in the household is relevant and affects the amount of damages suffered by Ms. Fanning.”

      Wage  Growth and Discount Rates

Palmer v. ASARCO Inc., 2007 U.S. Dist. LEXIS 59205 (N.D. Okla. 2007).  This is a memorandum and order by Judge Claire V. Eagan precluding testimony by economist Thomas H. Mayor of the University of Houston that was based on a “negative” discount rate of 1 %. Dr. Mayor had provided one calculation at a “discount rate of 1 %” and one calculation at a “negative” (more than offset) “discount rate” of 1%. The memorandum reviewed other court cases that spoke to this issue. “Discount rate” is defined in the memorandum as the difference between the annual rate of salary growth and the rate of return on safe investments so it is a net discount rate and not a real discount rate. Mayor was permitted to provide testimony based on a net discount rate of 1%. 

     Life Care and Cost of Medical Services

Simpson v. Saks Fifth Avenue, Inc., 2008 U.S. Dist. LEXIS (N.D. OK 2008). Judge Claire V. Eagan held that medical bills that were written by Medicare are admissible to prove damages and that payments made by Medicare toward those bills are a collateral source that is not admissible. In what is presumably dicta, however, Judge Eagan suggested that evidence of Medicare payments is admissible in a suit against the United States, citing Overton v. United States, 619 F.2d 1299 (8th Cir. 1980).

      Household Services

Morgan v. Guaranty National Insurance Company, 1999 U.S. Dist. Lexis 1714 (D.Wyo. 1999). Due to injured child’s unpaid medical bills, Mrs. Morgan was forced to take a part time job. She argued that this resulted in a loss of household services at 32 hours per week for 15 months. Economist Jerome Sherman valued this loss at approximately $12,000. The U.S. District court ruled that this argument and calculation should be submitted to the jury. 

       Collateral Source

Watson v. Taylor, M.D., 2007 U.S. Dist. LEXIS 16210 (D. KS 2007). The Court rejected the plaintiff’s appeal for a new trial. One of the grounds for the appeal was a claim that the Court erred in overruling plaintiff’s objections to a line of questioning during the cross examination of economist, Kurt Krueger, Ph.D. The challenged line of questioning involved whether Dr. Krueger was making the assumption that plaintiff was actually paying the drug costs of the medicine she was receiving when he calculated her future costs for prescription medicine. The plaintiff claimed that these questions violated the collateral source rule and were unfairly prejudicial. The Court held that the questions were proper. The extended discussion of the collateral source rule in this decision would be of interest to many forensic economists.

       Treatment of Taxes

Sears v. The Atchison, Topeka & Santa Fe Railway Company, 749 F.2d 1451 (10th Cir. 1984). The 10th Circuit held that adding amounts (gross-up) to an award for back pay based on higher tax rates  applicable to a lump sum payment was within the discretion of the trial court. The Court said: [W]e hold that the district court did not abuse its discretion when it included a tax component in the back pay award to compensate class members for their additional tax liability as a result of receiving over seventeen years of back pay in one lump sum.”

       Legal Procedure

Beller v. United States, 2003 U.S. Dist. LEXIS 25562 (D.N.M. 2003). The plaintiff challenged the defendant’s intention to offer both David Johnson, a C.P.A., and George Rhodes, a Ph.D. economist, as economic experts. Johnson was to testify about lost earnings and household services while Rhodes was to testify about hedonic damages and aggravating circumstances. The Court refused to rule that the defendant could not use two economic experts, saying: “Any prejudice to Plaintiff, and any confusion he may be experiencing at this point, is most likely due to the fact that he has chosen not to depose either Mr. Johnson or Dr. Rhodes, rather than to Defendants’ identification of both these experts, even if they were both to testify on the same category of damages.”  

Kansas Penn Gaming v. HV Properties of Kansas, 2009 U.S. Dist.  LEXIS 103145 (D. Kan. 2009). This is a memorandum by Judge K. Gary Sebelius ruling on whether an $890 per hour billing rate charged by Hugh Stephen Wilson during his deposition was reasonable. Wilson had been retained as an expert witness to testify “about whether Penn reasonably decided not to proceed with the planned Cherokee County casino project. HV Properties had challenged whether $890 per hour was a reasonable fee. Judge Sebelius found that neither party had provided sufficient evidence of the prevailing rates of comparably available experts. Counsel for HV Properties argued that economists, CPA’s and other consultants charge between $250 and $450 per hour and that he was “aware of a sophisticated national financial and economic consulting firm with a rate not exceeding $500 per hour.” HV Properties’ expert was charging $180 per hour. Both sides acknowledged that Wilson was charging his own client the same $890 hourly rate charged to the opposing side for his deposition. Wilson was not a regular expert witness and HV Properties therefore could not find indications of what Wilson had been paid in other cases, but Penn argued that Wilson was being paid at greater than that hourly rate in his regular employment. Judge Sebelius also called attention to the fact that Wilson had not charged HV Properties any amount for deposition preparation even it was customary for experts to do so in that area. 

Spencer v. United States, 2003 U.S. Dist. LEXIS 25277 (D. Kan. 2003). This memorandum partially grant’s Plaintiff’s motion to strike the testimony of life expectancy expert Robert Shavelle, who had refused to answer how much money he made as an expert witness, but had acknowledged that 95% of his income came from litigation consulting. The court held that Shavelle had to provide this information in order to be allowed to testify in that earnings information was relevant to Shavelle’s bias and credibility as an expert witness. The judge indicated, however, that the information would be subject to a protective order.

United States v. Bedonie, 317 F.Supp. 2d 1285 (D. Ut. 2004).  This long decision explains the Mandatory Victims Restitution Act (MVRA), which applies to crimes of violence. It concludes that the MVRA requires a restitution award in homicide cases for lost income of victims and reviews issues relating to the calculation of the award. The court appointed Dr. Paul Randle, an economic expert, to prepare projections of future lost income, which are reviewed in some detail. Dr. Randle’s projections were race and sex neutral. This is a decision any economic expert would need to read before becoming involved in MVRA calculations. Suggested by Paul Bjorklund.

United States v. Redd Rock Serawop, 2004 U.S.Dist. LEXIS 2856 (D.Utah 2004). This memorandum explains the Court’s appointment under Rule 706 of expert economist Paul A Randle to prepare an expert report of lost income of two criminal victims for use of the judge in ordering restitution under the Mandatory Victims Restitution Act of 1996.

Wheeler v. FDL, Inc., 2003 U.S. Dist. LEXIS 21459 (D. Kan. 2003). This is a procedural ruling not striking the testimony of vocational expert Terry Cordray and economist John O. Ward even though their reports were not submitted by a designated deadline. The plaintiff successfully argued that since no oral discovery had taken place between the deadline and submission of the reports and that they had been submitted before the deadline for the defendant to name experts, the defendant “had suffered no legitimate prejudice or surprise by Plaintiff’s failure to disclose the reports in a timely manner.” 

     Admissibility of Expert Testimony

Alvarado v. Loftus, 2007 U.S. Dist. LEXIS 19245 (D. Co. 2007). Judge Blackburn denied defendant’s motion to exclude the testimony of economist John O. Ward. This case involved the wrongful deaths of two Mexican nationals who were visiting the United States. One was a 10 year old male child and the other was a seventy one year old female. Ward had used data from the United States for growth rates, employment data, wage data, and mortality tables. Ward used an “average adjustment factor to deflate potential losses to standards in Mexico.” Judge Blackburn questioned the adjustment factor, but held that: “[T]his conversion constitutes the application of reasonably reliable principles and methods to the facts known to Dr. Ward, and other analyses made by Dr. Ward. Under these circumstances, vigorous cross examination, presentation of contrary evidence, and careful instruction on the burden of proof are the appropriate means for challenging the principles and methods used by Dr. Ward.”

Hayes v. Wal-Mart Stores, Inc., 294 F. Supp. 2d 1249 (E.D. Okla 2003). The court granted defendant’s motion in limine to bar proposed economic expert testimony by Dr. Will Clark on punitive damages. Clark had suggested using total dividends of Wal-Mart as a measure of punitive damages that would not cause irreparable financial harm to Wal-Mart. Citing Voilas v. General Motors Corp., 73 F. Supp. 2d 452, 464 (D. N.J. 1999), the court said: “[H]is opinion amounts to little more than speculation as to what the effect on Wal-Mart will be if the jury were to calculate an award of punitive damages as equal to or less than dividends paid. Such a conclusion (so far as the present record reflects) has not been tested or subjected to peer review, has no known error rate and has not been accepted in the community of economists. There is no methodology revealed by which he reaches his conclusion. Indeed, the Court speculates that if Dr. Clark could, in fact, accurately predict the financial consequences of the suggested punitive damages, he would be making millions by conulsting for Wall Street investment banks. His curriculum vitae, however, does not record such experience

Law v. National Collegiate Athletic Association, 1998 U.S. Dist. LEXIS 6640 (D. Kan. 1998). The testimony of Dr. Robert Tollison was challenged in a motion in limine under a Daubert standard in an antitrust action. Tollison was the plaintiff’s expert and Dr. John R. Umbeck was the defendant’s economic expert. The court began by noting that Dr. Tollison’s credentials “are both undisputed and beyond dispute.” The decision is detailed in its description of Tollison’s methods and the challenges made to them by Umbeck. The court’s treatment of Umbeck is less respectful, noting various things that Umbeck did not do that would have been warranted by his criticism, saying at the end of which: “Therefore, except to the limited extent discussed below, we are left with a hodge-podge of miscellaneous attacks on so-called ‘absurd results’ and ‘faulty assumptions,’ cute rhetorical strategems, and unsubstantiated speculation about problems that may or may not infect Dr. Tollison’s work.” 

North v. Ford Motor Company, 2007 U.S. Dist. LEXIS 4869 (D.UT 2007). Ford had filed an evidence spoliation claim and five motions in limine under a Daubert standard in a wrongful death action governed by Utah law. Judge Stewart provided citations to10th  Circuit decisions regarding the interpretation of Daubert and rejected all but one of the motions in limine, dealing with each of them separately. The memorandum does not give the first names of the experts. The one motion in limine that was granted was for a “Dr. Jorgenson,” who is a psychologist. Vocational expert “Ms. Wilson” an economist “Dr. Philips” were allowed to testify. The judge wrote: “Dr. Philips is an economist. Ford sees to exclude the opinion of Dr. Phillips regarding Steven North’s future economic losses on essentially the same grounds as it challenged Ms. Wilson’s opinion–that it disregards the real facts of Steven North’s employment, education, earnings and training. Ford also seeks to exclude Dr. Philips’ opinion on Nicole North’s economic losses on the ground of lack of foundation. This Court finds that Ford’s objections are matters relating to the credibility of this witness and the weight that the jury may give to his opinions. Having reviewed the record on this Motion, the Court finds that Dr. Phillips’ opinions as to future economic losses meet the Daubert standard for admissibility.”   

Palmer v. ASARCO Inc., 2007 U.S. Dist. LEXIS 59205 (N.D. Okla. 2007).  This is a memorandum and order by Judge Claire V. Eagan precluding testimony by economist Thomas H. Mayor of the University of Houston that was based on a “negative” discount rate of 1 %. Dr. Mayor had provided one calculation at a “discount rate of 1 %” and one calculation at a “negative” (more than offset) “discount rate” of 1%. The memorandum reviewed other court cases that spoke to this issue. “Discount rate” is defined in the memorandum as the difference between the annual rate of salary growth and the rate of return on safe investments so it is a net discount rate and not a real discount rate. Mayor was permitted to provide testimony based on a net discount rate of 1%. 

Sunlight Saunas, Inc. v. Sundance Sauna, Inc., 2006 U.S. Dist. LEXIS 20318 (D.Kan.2006). This is a memorandum by U.S. District Judge Kathryn Vratil, granting a Daubert motion to preclude the economic testimony of Plaintiff’s economic expert Charles Fitch based in part on criticisms of the report of Mr. Fitch by Dr. Christopher C. Pflaum, the economic expert for the defense. Suggested by Robert Taylor. 

     Hedonic Damages and Emotional Services

Anderson v. Hale, 2002 U.S. Dist. LEXIS 28281 (W.D. Ok. 2002).  This memorandum evaluates the admissibility of an economic damages report by Dr. James Horrell that provided projections for lost earnings, lost household services and hedonic damages. Judge Friot sets out a 12 step process for evaluating the admissibility of the lost earnings and lost household services projections of Dr. Horrell under F.R.Civ.P. Rule 26(a)(2). Judge Friot found that the requirements for those calculations were met, however inadequately. Judge Friot then applied Daubert-Kumho standards to Dr. Horrell’s hedonic damages calculation. That calculation consisted of assuming that the value of enjoyment of life had a value of $3,000,000 and that the plaintiff had lost 20% of that amount based on his injury, with a corresponding loss of $600,000. Judge Friot concludes: “[N]either Dr. Horrell’s equation or the numberts he plugs into that equation are substantiated by his report. Moreover, the approach to hedonic damages which Dr. Horrell advocates is demonstrably lacking in “fit” with either the facts of the case or Oklahoma law.”

Garay v. Missouri Pacific Railroad Company, 60 F.Supp.2d 1168 (D. Kan. 1999). The federal district court of Kansas granted a motion in limine to exclude the expert testimony of economist Gary Baker on the lost earnings and the specific value of lost guidance and counsel of a Mexican national who was illegally in the United States when wrongfully killed in Kansas. Baker’s testimony about lost earnings assumed that the decedent would have remained in the United States and Baker admitted knowing very little about earnings in Mexico. Baker’s projection of lost guidance and counsel was rejected on the basis that Baker had no knowledge of the specific amounts of such services the decedent was providing. Baker was permitted to testify as to the unit value (per hour) of such services.

Harris v. United States, 2007 U.S. Dist. LEXIS 96157 (D. N.M 2007). Judge James A. Parker granted a Motion to Preclude Testimony by Plaintiff’s Economic Expert Regarding Computation of Hedonic Damages.” The precluded economic expert was Dr. Brian McDonald. Judge Parker said: “Generally, to be considered reliable, the expert’s proposed testimony must be based on more than a subjective belief or unsupported speculation. Daubert, 509 U.S. at 590.  While the United States Supreme Court in Daubert, 509 U.S. at 592-594, established basic standards by which courts may assess reliability, the Court here need not reach those factors as Dr. McDonald’s description of the proposed benchmark evinces the speculative and subjective nature of that proposed benchmark.” McDonald’s report was described as follows: “Much of Dr. McDonald’s report focuses on various studies concerning the value of a statistical life studies (sic) and the valuation figures contained therein. The brief discussion of the benchmark figure ($50,000 per year for life expectancy) is intermingled with the discussion of statistical life studies despite having ‘no connection’ to them. The report contains no discussion of how Dr. McDonald generated the proposed benchmark figure or any citation to credible sources that support such a figure. As such, the basis of the benchmark figure appears largely arbitrary.” Judge Parker then cites decisions of two other judges in unreported cases as having arrived at similar conclusions with respect to Dr. McDonald’s approach.

McGuire v. City of Santa Fe, 954 F.Supp. 230 (D.N.M. 1996). This order of Judge Bruce D. Black granted defendant’s motion in limine to bar the testimony of Dr. Patricia Murphy, a psychologist, and Dr. John Myers, an economist on hedonic damages in a wrongful termination case. At a Daubert hearing, Dr. Murphy did not testify, but the Court said: “Dr. Myers testified that Dr. Murphy interviewed Plaintiff to determine the extent of Plaintiff’s lost enjoyment of life. Dr. Murphy than applied the data she collected from her interview to her Lost Pleasure of Life Scale and arrived at a percentage value of Plaintiff’s lost enjoyment of life. Dr. Myers testified that it was Dr. Murphy’s role to ‘determine the part of the enjoyment of life that has been lost,’ while it was his role to address what the monetary value of the lost enjoyment is worth.” Dr. Myers testified that the value of a human life varied f rom $928,000 to $18,464,000, and that the reduction in the value of Plaintiff’s enjoyment of life caused by Defendant’s alleged harassment and termination was between $1,430,000 and $2,300,000. Judge Black subjected this method to Daubert tests. He pointed out that neither of the experts had suggested any widely suggested standards for uniformly measuring the value of lost pleasure. The Court also pointed out that the foundations for such analysis had been assailed as lacking any verifiable basis by respected economists, including W. Kip Viscusi, Ted Miller and Thomas Havrilesky, citing papers by those authors in the Journal of Forensic Economics. The Court pointed out that Dr. Murphy’s “Lost Pleasure of Life Scale” had no known error rate. He finally determined by reference to a number of articles that the theory underlying the hedonic damage calculations had not been “generally accepted.  The Court also noted that: “Permitting ‘expert’ testimony on hedonic damages would seem particularly inappropriate in a wrongful termination suit like that at bar.”

Mitchell v. Board of County Commissioners, 2007 U.S. Dist. LEXIS 55674 (D. N.M. 2007). This was a decision that a person who had been injured after arrest could not unilaterally withdraw his demand for a jury trial for the purpose of assessing damages so that the Court did not award damages at the current time. However, Judge Browning’s order described in some detail the damages calculations of “William Jennings Patterson, III, a forensic economist.” The order said: “Patterson has been the sole proprietor of the firm, Legal Economics, since 2000 and has been employed by the firm since 1986. . . Patterson has a bachelor’s degree in economics, and has testified as an expert in state and federal courts in New Mexico and Texas.” The order discusses details of Patterson’s calculations for “incurred and future medical expenses,” household services, and “pleasure of life.” In the latter category, Patterson testified about the value of life literature, testifying that “in calculating the present value of lost value of life, it is his practice to calculate a benchmark similar to the figures he calculated related to medical expenses and household services. . . . Patterson calculated that the present value per $10,000 per year lost is $353,254. . . . Patterson did not, however, calculate the specific value for any pleasure of life Mitchell may have lost; Patterson expressed that, in his opinion, this valuation is an issue for the finder of fact. . . Patterson also stated that he did not compute any value for Mitchell’s pain and suffering, because economists do not have a marketplace or reliable statistical study to base such calculations.” 

     Wrongful Termination

Gray v. Oracle Corp., 2007 U.S. Dist. LEXIS 87637 (D. Utah 2007). This is a memorandum by Judge Ted Stewart granting a motion in limine to bar the testimony of Dr. Gren (first name not given). The defendant argued that Dr. Gren was not qualified because he was not a labor economist and had never performed a front pay or back pay analysis. Judge Stewart held that Dr.  Gren was qualified “by his statistical and business expertise,” but held that no issues of front pay were relevant “at this stage of the proceedings” and therefore Dr. Gren’s front page analysis was excluded as irrelevant. Dr. Gren had presented two models of lost back pay. The court reserved its decision with respect to Dr. Gren’s back pay analysis.

Greco v. Woodcrest Homes, Inc, 2006 U.S. Dist. LEXIS 43662 (D.Co. 2006). This is a short decision in a wrongful termination case. A jury rejected the claim of discrimination based on the worker’s pregnancy, but found in favor of the plaintiff on a claim of promissory estoppel. Both parties had stipulated in advance that the Court would determine damages if the jury found for any of the plaintiff’s claims. The Court rejected any claim for front pay as “entirely too speculative,” but awarded back pay with prejudgment interest of $39,914. An economist had projected fringe benefits on the basis of a national average of 28.9%. The plaintiff sought to add to that percentage a home purchase benefit that was unique to the employment. The Court pointed out that the expert had testified that it would be improper to tailor the national average by deleting benefits that were not provided in the Defendants’ plan. The court considered it inconsistent to then add a benefit not included in the national average and also found that it was “entirely too speculative” to assume that this home purchase benefit would have been used during the past loss period.

     Punitive Damages

Hayes v. Wal-Mart Stores, Inc., 294 F. Supp. 2d 1249 (E.D. Okla 2003). The court granted defendant’s motion in limine to bar proposed economic expert testimony by Dr. Will Clark on punitive damages. Clark had suggested using total dividends of Wal-Mart as a measure of punitive damages that would not cause irreparable financial harm to Wal-Mart. Citing Voilas v. General Motors Corp., 73 F. Supp. 2d 452, 464 (D. N.J. 1999), the court said: “[H]is opinion amounts to little more than speculation as to what the effect on Wal-Mart will be if the jury were to calculate an award of punitive damages as equal to or less than dividends paid. Such a conclusion (so far as the present record reflects) has not been tested or subjected to peer review, has no known error rate and has not been accepted in the community of economists. There is no methodology revealed by which he reaches his conclusion. Indeed, the Court speculates that if Dr. Clark could, in fact, accurately predict the financial consequences of the suggested punitive damages, he would be making millions by conulsting for Wall Street investment banks. His curriculum vitae, however, does not record such experience

11th Circuit

    Court of Appeals

        Standards for Recovery in Wrongful Death

Hiatt v. United States, 910 F.2d 737 (11th Cir. 1990). The 11th Circuit affirmed a 50 percent personal consumption reduction in a wrongful death action under Florida law. See under Florida. 

          Hedonic Damages and Emotional Services

Robertson v. Hecksel, 2005 U.S. App. LEXIS 17201 (11th Cir. 2005). The mother of a 30 year old adult decedent brought an action for her own loss of support, loss of companionship, and pain and suffering resulting from the death of her son in a 42 U.S.C. § 1983 action on the basis of a deprivation of her Fourteenth Amendment right to a relationship with her adult son. This claim was dismissed by the trial count. The dismissal was affirmed by the 11th Circuit on the grounds that there is no constitutionally-protected liberty interest in a continued relationship with an adult child. The 11th Circuit pointedly did not minimize the value of the loss of such a relationship, but said: “[I]t is the province of the Florida legislature to decide when a parent can recover for the loss of an adult child. We will not circumvent its authority through an unsupported reading of the Fourteenth Amendment.”  

Tucker v. Fearn, 2003 U.S. App. LEXIS 11536 (11th Cir. 2003). This decision holds specifically that loss of society damages resulting from the death of a minor child cannot be recovered by a parent under general maritime law. The implication, however, is that loss of society damages are not allowable under any circumstances in maritime law. The decision reviews the different maritime acts that authorize wrongful death litigation and the decisions that have previously been reached to preclude loss of society damages under those acts. In 1978, the U.S. Supreme Court disallowed loss of society damages under the Jones Act in Mobil Oil Corp. v. Higginbotham, 436 U.S. 618 (1978) and under the Death on the High Seas Act (DOHSA) in Miles v. Apex Marine Corp., 498 U.S. 19 (1990). 

       FELA/Maritime Cases

Tucker v. Fearn, 2003 U.S. App. LEXIS 11536 (11th Cir. 2003). See under Hedonic Damages and Emotional Services.

    District Courts in the 11th Circuit (AL, GA, FL)

     Basis Income and Fringe Benefits for Projecting Earnings Loss

Baucom v.  Sisco Stevedoring, LLC, 2008 U.S. Dist. LEXIS 37147 (S.D. Ala. 2008). [D]efendants offered the expert testimony of economist Kenneth J. Boudreaux, Ph.D., for the proposition that to project Baucom's future lost wages, calculated across his remaining work life expectancy on an after-tax basis and reduced to present value, one need only take the annual difference in Baucom's wage earning capacity and multiply that number by 10.57. Dr. Boudreaux and plaintiff's economist, Randolph Rice, Ph.D., provided generally similar lost wage calculations, but disagreed as to the wage base that should be used in those calculations (i.e., the amount the Baucom was earning prior to his injuries). Dr. Boudreaux calculated Baucom's average annual earnings before the SISCO I injury (on a before-tax, after-expense basis) at $ 44,788, while Dr. Rice pegged the figure at $ 61,573. After review of both experts' reports and testimony, the Court finds that Dr. Boudreaux's methodology more accurately captures Baucom's highly variable base wages by examining a longer time frame of income history than Dr. Rice did, and also by taking into account Baucom's proclivity (even in the absence of any injuries or work restrictions) to take several months off from work each year to devote to fishing, hunting and other hobbies. Therefore, to the extent necessary for any lost earnings calculations, the Court will adopt Dr. Boudreaux's wage base calculations of $ 44,788 per year as a starting point for any award. 

     
Life Care Plans and Treatment of Medical Expense

Alphonso v. Esfelder Oil Field Construction, 2009 U.S. Dist. LEXIS 24634 (S.D.Ala. 2009). This order provides Judge Kristi DuBose’s award determination for past and future medical expenses, past and future lost wages and general damages. She awarded $158,489 for past medical expenses, but nothing for future medical expenses since there was no specific evidence of future medical needs and costs to meet those needs. She added: “The court will not fill in the blanks left open by the plaintiff on this issue.” The judge divided past lost wages into two periods – between the injury on 8/8/06 and 6/26/07 when the plaintiff was released by his doctor for light duty and between 6/27/07 and 1/30/09, when wage loss was reduced by wages the plaintiff could have earned in light duty based on the testimony of defense vocational expert Dr. Carla Seyler. For future lost wages, the judge discussed four of plaintiff’s permanent injuries and concluded that “plaintiff has lost future wages of $17,472.00/year.” The court found that plaintiff had a work life expectancy of 20 years based on the testimony of defendant’s economic expert Dr. Dan Cliffe. The Court said: “Accordingly, the court finds that plaintiff is entitled to lost future wages in the amount of $349,000. The court relies on Dr. Cliffe’s testimony to determine that a discount rate of 2.16% should be applied to calculate the present value of plaintiff’s future wage earnings. Thus, based on th is formula, the present value of plaintiff’s lost wages is $281,329.68.” In footnote 12, the Judge DuBose noted that the plaintiff’s economist, Dr. Harold Asher, had “echoed” Dr. Cliffe’s work life expectancy of 20 years by testifying to 20.18 years. Finally Judge DuBose awarded $5,000 for pain and suffering, noting that: “Moreover, as portrayed in the video submitted by the defendant, the plaintiff’s daily activities do not support the extent of daily and excruciating pain described by plaintiff at trial.”

     
Treatment of Taxes

Bravo v. United States, 2005 U.S. Dist. LEXIS (S.D. Florida 2005). [fn. 52.] “Plaintiffs presented testimony by Dr. David Williams, an economist, who performed economic calculations based on Mr. Foreman’s report. The Court found Dr. Williams to be credible and adopts his report and many of his calculations.” [fn 53.] “Defendant United States presented testimony by Dr. Kenneth Clarkson, an economist, whose report the Court finds flawed and inaccurate in many respects. For example, he relied on government data which government openly disclaims in writing on its website as being unreliable for for the very purpose for which Dr. Clarkson used it. He underestimated the 2005 inflation rate by more than 50 percent (estimated 2 percent v. the actual 5 percent) even though the Consumer Price Index information providing the correct numbers was readidly available. He also failed to deduct appropriate exemptions on Kevin’s projected income, which were necessary to reach the accurate tax rate. Because of this failure, he calculated a markedly incorrect tax rate that was more than triple what the actual tax rate should have been, blaming the error on his “Turbo Tax” computer program. As a result, his calculation on this point was wrong – by more than 300 percent.” The decision goes on to describe Dr. William’s damages methodology in some detail. 

       Tax Treatment

Purdy v. Belcher Refining Company, 781 F. Supp. 1559 (S.D.Ala. 1992). Social Security/Medicare payroll taxes should be deducted from lost earnings.

E.E.O.C. v. Joe’s Stone Crab, 15 F. Supp. 2d 1364 (S.D. Fla 1998). This decision in a wrongful discrimination case did not award front pay because the Court determined that each of the claimants would have voluntarily terminated employment prior to the entry of judgment. Back pay was determined through the period when claimants were have been likely to work for Joe’s Stone  Crab. The decision went on to say that it would have been appropriate to take into account negative tax consequences of lump sum payments for back pay. However, the Court also pointed out that the E.E.O.C. failed to provide the Court with “sufficient competent foundation evidence” to make appropriate calculations. Therefore, the Court declined “to award money damages to offset whatever tax liability a claimant will experience by receiving a lump sum.”

       Legal Procedure

Pickett v. IBP, Inc., 2000 U.S. Dist. LEXIS 19500 (M.D.Al 2000). Plaintiff had retained Drs. Robert Taylor and Bernard Siskin to develop econometric models that would produce testimony in support of plaintiff’s position. To establish that the models were both “relevant and reliable,” plaintiffs had submitted the models to other economic experts for evaluation. The defendant contended that the plaintiffs were “shopping” for favorable peer review of the models and intending to use only the experts who were favorable to the models. The defendant therefore wanted to discover the identity of all experts with whom the plaintiff consulted. The Court was not convinced that the plaintiff had engaged in “expert shopping” and held that the defendant could have hired its own experts to examine the models and thus denied the defendant’s motion to compel discovery of the identity of the experts hired by the plaintiff for evaluation.

     Admissibility of Expert Testimony

Kearney v. Auto-Owners Insurance Company, 2007 U. S. Dist. LEXIS 80378 (M.D.Fla. 2007). This memorandum from magistrate judge Thomas G. Wilson recommends denying a motion in limine by the plaintiff to deny the testimony of Dr. Michael Piette. The memorandum discusses Dr. Piette’s methods at some length. Judge Wilson indicated that the arguments used by the plaintiff are arguments that go to the weight of Dr. Piette’s testimony, not its admissibility. One argument made by the plaintiff was that Dr. Piette’s testimony should be excluded because “[t]he determination of a plaintiff’s loss of earning capacity is not something beyond the understanding of the average citizen.” About this argument, Judge Wilson said: “The notion that the testimony of an experienced economist would not assist the jury in determining the plaintiff’s pre-accident earning capacity is, on its face, preposterous, and it is belied by the plaintiff’s proffer of his own expert economist on this issue.”

Matter of the Adventure Bound Sports, Inc. and Andre Smith, 858 F.Supp. 1192 (D.Ga. 1994).  This case was tried under the Death on the High Seas Act (DOHSA). It involves complex issues of lost earnings and fringe benefits based on the projection that the decedent would have remained in the military until eligible for military retirement. He would then have gone to work in the private sector. The court assesses the impact of the death on the family’s access to various military benefits and then the projection of the plaintiff economic expert, Dr. Costen that private employment fringe benefits should be calculated at 15 percent of wages. There is a claim by another woman that the decedent was the father of her child, a child from a previous marriage, claims for lost college educations by the children of his marriage, claims of lost household service, loss of nurture and guidance (which was allowed), gifts to the child from the previous marriage, claim of loss of college education by that child, loss of inheritance, collateral source issues, calculations of taxes, an prejudgement interest. The court also provides an assessment of the impact of Culver II and the fact that it was overridden by Monessen S.W. Ry Co. v. Morgan.  This is a decision that is twenty two pages in single spaced text, but all of which is concerned with matters of damages relevant to a forensic economist. 

      Illegal Aliens

Vincente v. City of Rome, 2005 U.S. Dist. LEXIS 46154 (N.D. Ga. 2005). This was an extended memorandum responding to defendant’s Daubert motions in limine to exclude the testimony of a number of plaintiff’s experts. Plaintiff’s economist, Dr. Bruce Seaman of the economics department at Georgia State University was one of the experts who was challenged. The memorandum provides extensive discussion of Dr. Seaman’s calculations and the basis for those calculations, which included “whole time” loss calculations that cite the symposium issue 14(1) of the Journal of Forensic Economics on that topic. Dr. Seaman’s calculations were premise on the decedent, Hector Lopez, remaining in the United States even though Mr. Lopez had been deported to Guatemala and that Dr. Seaman had assumed that Hector Lopez had only been convicted of a DUI, rather than multiple defenses. The Court said: “The Court directs Plaintiffs to submit a corrected expert report from Dr. Seaman that reflects Hector Lopez’s deportation. At a minimum, Dr. Seaman’s corrected expert report should explain why Dr. Seaman did not calculate Hector Lopez’s lost wages as if Hector Lopez would remain in Guatemala, even though Hector Lopez had been deported to Guatemala prior to his death.”

       FELA/Maritime Cases

Kuithe v. Gulf Caribe Maritime, Inc., 2010 U.S. Dist LEXIS 89661 (S.D. Alabama 2010). The defendant challenged the trial court decision on the ground that the report of the plaintiff economic exert’s reduction of the plaintiff's lost future earnings to present value did not employ the below-market discount method required  by Culver v. Slater Boat Co., 722 F.2d 114 (former 5th Cir. 1983) (en banc) ("Culver II"). The court said: “It is clear that the report of the plaintiff's expert does not employ the below-market discount rate method required by Culver II. Instead, it uses a nominal interest rate of 4.5%. However, the expert in his deposition testimony made clear that he utilized an inflation rate of 3.5% in calculating the plaintiff's lost future income and that, had he used the below-market discount method, he would have used the same inflation rate and a below-market discount rate of 1%. He also testified that, had he used the below-market discount rate method, his figures for the present value of lost income would have been exactly the same (because the 3.5% would have been deducted from both the future income stream and the discount rate). The plaintiff thus presented expert evidence of a below-market discount rate and of lost income using that method. The defendant's motion for judgment on partial findings is due to be denied in this respect.”

      Hedonic Damages and Emotional Services

      Discrimination in Employment

Hudson v. Chertoff, 2007 U.S. Dist. LEXIS 9928 (S.D. FL 2007). This case was tried under the Discrimination Act of 1973, 29 U.S.C. 701 and under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e. A jury returned a verdict in the plaintiff’s favor and recommended $220,000 in back pay, $780,000 in front pay, and $1,500,000 in non-economic damages. The District court increased Back Pay to $264,314. The parties were instructed to confer and attempt to reach agreement as to a sum for eighteen months of front pay. The Court indicated that $47,030 per year should be subtracted from front pay for failure to mitigate. The Court also reduced non-economic damages to $300,000.

Federal Circuit

    Court of Appeals

        Basis Income and Fringe Benefits for Projecting Earnings Loss

Hill v. Iraq, 356 U.S. App. D.C. 142; 328 F.3d 680 (D.C. App. 2003). This case involved a suit brought by six former hostages against the Republic of Iraq and Saddam Hussein under the Foreign Sovereign Immunities Act (FSIA). The trial court had ruled that plaintiffs projections of economic damages were too speculative. The D.C. Court of Appeals reversed on the grounds that the trial court had not applied the normal standard for economic loss, citing Story Parchment Co. v. Patterson Parchment Paper Co., 282 U.S. 555; 75 L.Ed. 544; 51 S.Ct. 248 (1931): “Where the tort itself is of such a nature as to preclude the ascertainment of the amount of damages with certainty, it would be a perversion of justice to deny all relief to the injured person, and thereby relieve the wrong-doer from making any amend for his acts. In such case, while the damages may not be determined by mere speculation or guess, it will be enough to show the extent of damages as a matter of just and reasonable inference, although the result may be only approximate.” Damages must be shown to be “more likely than not,” but the plaintiff need only provide “some reasonable basis on which to estimate damages,” quoting Romer v. District of Columbia, 449 A.2d 1097, 1100 (D.C. 1982). “More probable than not” is defined specifically as more than fifty percent likely.  Submitted by Jerry Martin and Jim Rodgers.

        Standards for Wrongful Death

        Life and Worklife Expectancies

Charles H. Thompson Company vs.Girolami, 566 A.2d 1074 (D.C. Cir. 1989). “Dr. Lurito testified over objection that, based on the Department of Labor work-life expectancy tables, an average person, who was Girolami’s age at the time of the accident, had a future work-life expectancy of 14.1 years; Tompkins contend the testimony should have been restricted to the particular work-life expectancy of Girolami, as it was prior to this accident. . . The trial court did not err in admitting this testimony.” Suggested by Gerald D. Martin. 

        Wage Growth and Discount Rates

Sandstrom v. Principi, 358 F.3d 1376 (D.C. Cir. 2004). Sandstrom had appealed a decision of the Department of Veteran Affairs that Sandstrom was not entitled to be compensated in real dollars for past losses. Rules for the VA prohibit interest on past losses. The Federal Circuit ruled that since cost of living adjustments are part of past interest, past lost dollars cannot be adjusted for changes in the cost of living. 

        Treatment of Taxes

Dashnaw v. Pena, 304 U.S. App. D.C. 247; 12 F.3d 1112 (D.C. Cir. 1994). The D.C. Circuit rejected grossing up an award to account for tax effects. The Court said: “Dashnaw . . . argues that the District Court should have granted him additional compensation to help cover the higher taxes he will have to pay becaus he will receive his backpay in a lump sum rather than as a salary paid out over a period of years. Absent an arrangement by voluntary settlement of the parties, the general rule that victims of discrimination should be made whole does not support “gross-ups” of backpay to cover tax liability. We know of no authority for such relief, and appellee points to none. Given the complete lack of support in existing case law for tax gross-ups, we decline so to  extend the law in this case. We therefore reject Dashnaw’s request for additional compensation to cover his tax liability. 

Fogg v. Gonzales, 407 F. Supp. 2d 79 (D.D.C. 2005). This decision related to protracted litigation involving employment discrimination that had begun in 1995. The District Court reached this decision on remand from the D.C. Circuit. Thus the back pay award in this case was for a ten year period. The Court said: “Fogg requests that any back pay award be grossed up by 14 percent to reflect the adverse tax consequences of a lump sum award. Similarly, Fogg acknowledges that the amount of worker’s compensation payments deducted from the award should be increased by 30% to reflect the tax free nature of those payments. . . Considering that inclusion of a tax component in a back pay award may be appropriate where, as here, the litigation is protracted . . . the court finds it appropriate to adjust both the back pay award and the deduction for workers’ compensation payments received, in accordance with Fogg’s request.”

Murphy v. Internal Revenue Service, 2007 U.S. App. LEXIS 15816 (D.C. Cir. 2007). Reversing a decision from last year, the D.C. Circuit has reversed itself on the question of whether awards for “non-physical” damages in personal injury matters could be taxed. The D.C. Circuit had ruled last year that emotional distress damages could not be taxed, but has now reversed itself in ruling that such damage awards can be taxed. Submitted by Tony Riccardi.  

        Admissibility of Expert Testimony

Frye v. United States, 293 F. 1013 (D.C. Cir. 1923). The source of the Frye test that was replaced by Daubert-Kumho standards as the basis for admissibility of expert testimony.

Joy v. Bell Helicopter Textron, Inc, 999 F.2d 549 (D.C. Cir 1993). Dr. John Glennie had projected four earnings loss scenarios for the decedent, Mr. Joy. Tax returns indicated that prior to his death, Mr. Joy and his wife operated a toy store and had reported $14,680 on his tax returns, with an equal amount reported by his wife.  The lowest of four future earnings rates used for future projections was $35,907, with values ranging up to $97,536 based on a consulting career Mr. Joy had mentioned thinking about on one occasion. The court found all of Dr. Glennie’s projections speculative and did not allow him to testify.

Oldham v. Korean Airlines Co., LTD., 127 F.3d (D.C. Cir. 1997). Testimony by an economic expert was admitted. The trial court had mistakenly treated this case as falling under the Warsaw Convention treaty and held that it should have been decided under the Death on the High Seas Act (DOHSA). The court held that no award for loss of society could be made in a DOHSA case. The decision provides detailed discussion of projections of loss of inheritance calculations of Dr. Thomas C. Borzilleri for the plaintiff and Dr. John John Glennie for the defense.It also provides guidance for loss of guidance, training and advice that decedent parents might have provided to adult children, holding that there had been no evidence in the record to show that the loss of such guidance, training and advice after 1983 had caused any loss to the adult children after the death of their parents. However the court indicated that such an award might be appropriate for the minor child of the parents in a retrial. 

    District Courts in the Federal Circuit (Washington, D.C.)

      Basis Income and Fringe Benefits for Projecting Earnings Loss

Calva-Cerqueira v. United States, 281 F. Supp. 2d 279 (D.D.C. 2003). This decision in an Federal Torts Claim Act (FTCA) action identifies rehabilitation experts for plaintiff and defense, life care planning experts for plaintiff and defense, and three economists, Dr. Richard Lurito for the plaintiff, and Dr. Alan Frankel and Mr. Thomas Walsh. Judge Urbino indicates why he finds the plaintiff’s experts in each instance more credible than the defense experts after detailed discussions of the differences in their methodologies. Judge Urbino also rejects both an annuity approach and a reversionary trust approach based on resistance to those approaches from the plaintiff.  In that sense, this decision is almost a textbook case on damages analysis. 

      Annuities, Periodic Payments and Reversionary Trusts.

Calva-Cerqueira v. United States, 281 F. Supp. 2d 279 (D.D.C. 2003).  See under Basis Income and Fringe Benefits for Projecting Earnings Loss.

Friends For All Children, Inc. v. United States, 563 F.Supp.552 (D.D.C. 1983).  Judge Oberdorfer strongly advocated the instrument of a reversionary trust to fund catastrophic medical payments of a child, saying, “the Court is convince that, contrary to the views of this vocal minority of parents, some children are at risk of substantial future increase in their crash-related symptions. Precise prediction of which children will be affected and to what extent they will be in need of future catastrophe assistance is impossible . . .” The judge advocated setting up a central trust to deal with those costs, with any amounts remaining in the fund after some period reverting to the defendant. 

Wheeler Tarpeh-Doh v. United States, 771 F. Supp. 427  (D.D.C.1991). Provides discussion of annuities and reversible trusts as desirable ways to provide life care plans.

       Legal Procedure


     Admissibility of Expert Testimony

Butera v. District of Columbia, 83 F.Supp. 2d 25 (D. Dist. Col. 1999). Defendants sought a new trial on the grounds that the Court had refused to strike allegedly inadmissible testimony by three experts, including an economist, Dr. Richard Edelman. The Court said: “Defendants state that Dr. Edelman’s testimony was speculative because the lost-future-earnings prediction was not based on Eric Butera’s work history. That argument, however, goes to the weight rather than the admissibility of the testimony. Dr. Edelman explained in great detail how he came to his predictions, and Defendants cross-examined him extensively. In any event, it is not improper for a calculation to be based upon earning potential rather than demonstrated earning capacity.”  

     Wrongful Termination

Wade v. Mash. Metro. Area Transit Auth., 2006 U.S. Dist. LEXIS 16447 (D.D.C. 2006). “WMATA seeks to preclude testimony by Plaintiff’s economist and rehabilitation expert on the issues of front pay and back pay, arguing that because those remedies are equitable, the jury may not award them, and any evidence of them would only serve to distract and prejudice the jury. Because front and back pay is a bench issue, Plaintiff’s experts will be precluded from testifying on that issue. Plaintiff’s economist and vocational rehabilitation expert may still testify at trial regarding Plaintiff’s compensatory damages claim. The Court will hear the evidence of front and back pay at a later hearing on equitable relief, should a verdict be returned in Plaintiff’s favor.”  

Alabama

     Basis Income and Fringe Benefits for Projecting Earnings Loss

Carnival Cruise Lines v. Snoddy, 457 So. 2d 379 (Ala 1984). The Alabama Supreme Court held that the fact that the plaintiff suffered a 13-15% impairment to his body as a whole did not constitute evidence of lost earning capacity.

Ensor v. Wilson, 519 So. 2d 1244, 82 A.L.R.4th 925 (Ala. 1987).  The Defendant had challenged the projection of lost earnings on the basis of the speculativeness of the Plaintiff minor child’s future lost earnings. The Alabama Supreme Court provided a transcript of a portion of the testimony of Dave Saurman, Ph.D, an economist at Auburn University, and affirmed the decision of the trial court. . 

      FELA/Maritime Cases

CSX Transportation, Inc., v. Day, 613 So. 2d 883 (Ala 1993). The plaintiff testified that he had not gotten a pension and his attorney repeated that he doesn’t get a pension in closing argument. CSX argued that this was prejudicial since evidence indicated that Day would be eligible for a pension at age60. The Alabama Supreme Court held that since CSX did not object to plaintiff’s pension testimony at the time and thus the issue was not preserved for appeal.

Drexler v. Seaboard System Railroad, Inc., 530 So. 2d 754 (Ala.1988).  Plaintiff’s economist projected economic damages based on a 2 percent net discount rate. Defendant’s economist projected damages based on a 5.67 percent net discount rate. Defendant’s based his calculations on information about inflation given to him by an unnamed individual in the Government Records Department of the Birmingham Public Library. The Alabama Supreme Court ruled that use of information from this telephone call was “hearsay” evidence that should not have been permitted.  The trial court decision, which had been contested on the basis of a small award by the Plaintiff, was reversed and remanded.

Illinois CentralGulf Railroad Company v. Russell, 551 So. 2d 960 (Ala.. 1989). Evidence was presented indicating that Russell had a 12% anatomical disability rating. Plaintiff’s attorney argued in closing arguments that 12% was a reasonable basis for calculating damages. The defendant railroad argued that this was in error even though the jury’s verdict was considerably less than the amount of damages requested in closing argument. The Alabama Supreme Court said: “[W]e hold that it was permissible for he jury to determine from the evidence, in its fair and enlightened discretion, Russell’s loss of future earnings, and that it was not error for the trial court to allow Russell’s lawyer to suggest, in his closing arguments, that 12% was a reasonable basis for calculating damages. There is discussion in the decision of how Plaintiff’s economist calculated the present value of Russell’s future earnings, but the economist apparently did not make an argument that lost future earnings should be reduced by 12% to determine damages.

Norfolk Southern Railway Company, Inc., v. Bradley, 772 So. 2d 1147 (Ala 2000). The Norfolk Southern raised on appeal the fact that calculations of lost earnings by economist Ted Johnson did not deduct for Tier I and Tier II taxes. The railroad had asked questions of Johnson about these taxes during testimony, as well as deductions for Medicare taxes and union dues. The Alabama Supreme Court therefore concluded that the jury had an opportunity to consider those taxes. During redirect examination, Johnson testified that Tier I and Tier II taxes are retirement benefit concepts that should not be considered in calculating future losses. The trial court decision was affirmed.

Reusch v. Seaboard System Railroad, 566 So. 2d 489 (Ala 1990). “Reusch offered evidence that he had earned an average annual salary of $24,400 in the five years he had worked for the railroad preceding the accident. He testified that in 1984, the year of the accident, he had earned $30,000. He offered no other evidence in support of his claim for lost earnings. He offered no evidence of the future economic value of his future employment, so there was no conclusive evidence of any lost stream of earnings. He did not offer any testimony or other evidence of the amount of income tax he was paying or the effect of taxation on any stream of earnings that he might havae had. Although Reusch did offer mortality tables, he did not offer evidence of worklife expectancy. Furthermore, Reusch did not offer evidence of the interest rate on the best and safest investments as well as an application of a discount rate on any stream of earnings he may have had. At most, Reusch produced only a portion of the evidence necessary to ascertain his stream of earnings. Under applicable federal decisions, we must conclude that he did not produce the evidence necessary to sustain his claim for loss of future earnings. The trial court did not err by instructing the jury that it could not award Reusch damages for lost future earnings and loss of earning capacity. 

Alaska

     Basis Income and Fringe Benefits for Projecting Earnings Loss

Beaulieu v. Elliot, 434 P.2d 665 (Alaska 1967).  The Alaska Supreme Court held that “justice will best be served by permitting the trier of fact to compute loss of future earnings without reduction to present value. The plaintiff is more likely to be restored to his original condition under the rule we adopt than under the prevailing rule which calls for a discounting of the award for future earnings.” The Court went on to suggest that this decision was “fortified” by the fact that future wage increases will tend to offset the discount rate that would used to reduce future earnings to present value. This decision also held that taxes should not be subtracted from awards in tort actions. The portion of this decision that deals with discounting was overruled by the Alaska legislature in the tort reform act of 1986, which also specified that the discount rate used must be a long term rate. Taxes are still not subtracted in Alaska based on Beaulieu. Paul Taylor suggested some points in this description.

        Standards for Recovery in Wrongful Death

Beck v. State of Alaska, 837 P.2d 105 (Alaska 1992).  This decision cites Portwood v. Copper Valley Elec. Ass’n, 785 P.2d 541, 542 (Alaska 1990) in defining the basis for Alaska recovery for wrongful death as “the probably value of the deceased’s estate had ne not prematurely expired less the actual value of the estate at death.” It affirmed Osborne v. Russell, 669 P.2d 550, 560 (Alaska 1983), that “the possibility that the deceased would later have acquired dependants toward whom he would have expended sums has been ruled by this court as to be to speculative a matter for the jury to consider.” It also ruled explicitly that future losses in death cases are to be reduced to present value.

Matter of the Estate of Pushruk, 562 P.2d 329 (Alaska 1977). At issue was the desire of a mother of a decedent son to be declared dependent on her son within the meaning of the Alaska Wrongful Death Act even though she was not dependent on him for financial support. The court rejected that concept, saying “dependency is determined according to the facts and circumstances existing at the time of death.”  (Submitted by Paul Taylor.) 

Maldonado v. Bailey, 2005 Alas. LEXIS 113 (Alaska 2005). This action was brought by Bailey, as executor for the estate of Florian Maldonado, to have the wrongful death award to his widow, Barbara Maldonado, included as part of the estate. The court said: “Because wrongful death proceeds are not property owned by the surviving spouse at the time of the decedent’s death, they should not be included within the augmented estate under the elective share statutes,” reversing the decision of the trial court. 

North Slope Borough v. Brower, 2009 Alas. Lexis 118 (2009). This was an appeal by the defendant of the trial court decision to award damages to the mother of an adult male son under Alaska’s survival of claims statute, AS 09.55.570, and wrongful death statute, AS 09.55.580. The appeal primarily argued that the mother should not have been allowed to recover damages under both statutes. The Alaska Supreme Court affirmed the trial court decision “because Kulawik v. ERA Jet Alaska [820 P.2d 627 (Alaska 1991)] controls most of these issues,” affirming the trial court’s reasoning that “when at least one statutory beneficiary is found to exist, the beneficiary must be able to recover all pecuniary damages to an estate.” The reasoning in this decision was that if a windfall exists, it must go to a statutory beneficiary, not the tort feasor. The Court attached as Exhibit A trial court judge Michael I. Jeffrey’s “Order Denying Motion for a New Trial or Remittatur” that identified Hugh Richards as the plaintiff’s economic expert.

Osborne v. Russell, 669 P.2d 550 (Alas. 1983).  The Alaska Supreme Court explains that with a single person with no dependents, it does not matter in Alaska whether an action is brought under Alaska's wrongful death action under a net accumulations to an estate approach or under Alaska's survival action under a net earnings approach. The court also said: “[T]he possibility that the deceased would later have acquired dependents toward whom he would have expended sums has been ruled by this court to be too speculative as a matter of law for a jury to consider. See Matter of Estate of Pushruk, 562 P.2d at 332.”  (Revised listing submitted by Paul Taylor.)

        Houshold Services

E. M. Babinec v. Yabuki, 799 P.2d 1325 (Alas. 1990). Relating to lost household services, the court said: “We find no double recovery in compensating the Yabukis for the monetary costs of replacing Mrs. Yabuki with paid ‘domestics’ while also compensating Mrs. Yabuki for the lost pleasure she had experienced doing such tasks herself.” 

        Treatment of Taxes

Kulawik v. ERA Jet Alaska, 820 P.2d 627 (Alaska 1991). In this wrongful death action, the plaintiff’s economist initially deducted income taxes to compute personal consumption even though no taxes had been subtracted from lost earnings. The Alaska Supreme court rejected this argument, saying: “Kulawik cannot invoke the rule in Beaulieu as a sword to compute future gross income and simultaneously use Beaulieu as a shield against reducing future disposable income. . . If future tax liability is too speculative to calculate in determining future net income, . ., then it is equally speculative in calculating future disposable income.” Thus, even though the percentage used to calculate a personal consumption percentage was based on personal disposable income and not gross income, that percentage had to be applied to gross income to determine the personal consumption reduction. The decision also indicates that the estate of a decedent may recover for any loss of prospective inheritance from the future estate of a decedent without having to prove that the estate would have been left to the statutory survivors. Suggested by Paul Taylor.

                Allocation of Damages Award

Horsford v. Estate of Horsford, 561 P.2d 722 (Alaska 1977). This decision involves the allocation of an award in a wrongful death action between the decedent’s new wife of four months and the decedent’s two minor children aged 14 and 16 from a previous marriage. There is discussion of the wrongful death award in the decision, primarily to make the point that the record indicates that pain and suffering involved with the death was “momentary” because the death was in an airplane crash. In accepting the lower court’s division of the award, the Court said: “Since the legal obligation to support children ordinarily terminates at approximately the age of majority and because the reasonable expectations of a child for pecuniary contributions from his parents terminates under normal circumstances at about the same time, the formula’s employment as the years of significant damages for a child only between the age of the child at the time of his parent’s death and the age of majority has a rational basis. On the other hand, if there is evidence of circumstances indicating a longer period of dependency or evidence furnishing a basis for finding continued expectation of pecuniary contributions beyond the age of majority, then the formula can be adjusted or, if necessary, abandoned.” The formula awarded the children amounts indicated in the custody arrangement. There was a dissent to the majority opinion by Justice Erwin in which Justice Earwin took note of the fact that while the cutoff for the children at majority based on the end of legal dependency was presumed by the majority, the majority took no note of the wife’s chances of remarriage and thus her legal right to dependency.

                Legal Procedure

Gilbert v. Sperbeck, 2005 Alas. LEXIS 167 (Alaska 2005). “After Lois Gilbert arbitrated a dispute with her insurer, State Farm Insurance Company, she sued the psychologist, Dr. David Sperbeck, who examined her for State Farm and testified as its expert witness in the arbitration. We hold that witness immunity bars Gilbert’s fraud and misrepresentation claims against Dr. Sperbeck. . .” Suggested by Stephen Horner.

Manes v. Coats, 941 P.2d 120 (Alaska 1997). “[F]uture damages may be reduced to present value under AS 09.17.040(b) without the testimony of an expert economist. Accordingly, Manes is not required to present an expert economist to recover future economic damages.” This decision also held that it was reversible error for the trial court to refuse to take judicial notice of the IRS Annuity Table, citing Hinchey v. Hinchey, 722 P.2d 949, 953 n.9 (Alaska 1986), in which the trial court properly took judicial notice of a mortality table. Suggested by Paul Taylor.

Noffke v. Perez, 2008 Alas. LEXIS 37 (Alaska 2008). The Alaska Supreme Court affirmed the decision of the trial court to require both Dr. Richard Peterson and the company he worked for, The Independent Medical Evaluators (TIME), to provide tax returns so that the defendant could determine Dr. Peterson’s potential bias. The court said: “As the trial court noted, while an expert witness might not normally be required to turn over their (sic) financial information, there may be ‘a plausible argument that the witness generates such a significant portion of his or her income from a particular side or particular attorney that the expert’s impartiality can be reasonably questioned.’ In such cases, the trial court reasoned that the tax returns are relevant and thus discoverable under Rule 26.” The Court also spoke of a need for balance between the right of privacy and reasonable need to use tax returns. Defendants did not object to seeing tax returns under a protective order, but plaintiff’s expert had refused to provide tax returns even under a protective order.

     Hedonic Damages and Emotional Services

Buoy v. ERA Helicopters, Inc., 771 P.2d 439 (Alaska 1989). The Supreme Court of Alaska held that the lifestyle of the plaintiff may indicate whether a loss in the enjoyment of life has occurred.

Arizona

     Basis Income and Fringe Benefits for Projecting Earnings Loss

Rossell v. Volkswagen of America, 147 Ariz. 160; 709 P.2d 517 (Ariz.1985). “There is a difference between loss of earnings – not an issue in this case – as an item of special damages and decrease of earning capacity as an item of general damages. . . To sustain an award for the former, the plaintiff must produce evidence of specific losses which are ordinarily reduced to present value. To sustain an award for the latter, the plaintiff must establish only the fact of diminished capacity and its permanence. . . The photographs of plaintiff’s scars create a jury question with regard to whether her disfiguring injuries would affect plaintiff’s earning capacity. It is certain that plaintiff’s ability to perform some job has not been affected and her ability to perform others has been dimished or destroyed. No doubt some interviewers will be able to overlook the scars and some will not, no matter how hard the try. Perhaps plaintiff will overcome the impediment, perhaps not. Such questions are properly left to the jury. Suggested by Paul Taylor.

      Standards for Recovery in Wrongful Death

Taylor v. Southern Pacific Transportation Company, 130 Ariz. 516 (Arizona 1981).  The Arizona Supreme Court held that evidence of remarriage cannot be introduced in a wrongful death action.  While old, this is a good decision to read on this issue in that it reviews decisions for and against such admission in other states as of 1981. It discusses three avenues of thought in support of not allowing such evidence to be admitted: First, damages should be calculated as of the time of death without regard to what happens afterward; second, the decedent’s contributions relative to the contributions of the new spouse would be too speculative to calculate accurately; third, “and most often,” the collateral source rule that disallows evidence of payments to the injured party from other sources to be credited against the tortfeasor’s liability should be invoked to exclude evidence of remarriage.

      Life Care Costs and Collateral Source 

Lopez v. Safeway Stores, Inc., 2006 Ariz. App. LEXIS 23 (Ariz. App. 2006). The decision involved a slip and fall accident in which the medical bills of Lydia Lopez totaled approximately $59,700, but more than $42,000 of the total was “completely written off as adjustments” and only $16,837 was paid to fully satisfy contractually agreed-upon payments. The Arizona Court of Appeals upheld a trial court decision to allow Lopez recovery of the amount billed instead of the amount that was actually paid.

     Admissibility of Expert Testimony

Logerquist v. McVey, 1 P.3d 113 (Ariz. 2000).   The Supreme Court of Arizona retained the Frye standard for admission of expert testimony, rejecting Daubert. More importantly, it held  even Frye does not apply when the nature of the testimony is not novel scientific evidence, saying: “Frye is inapplicable when a qualified witness offers relevant testimony or conclusions based on experience and observation about human behavior for the purpose of explaining that behavior.”  This was a 3-2 decision. The dissents from Justice Martone and Justice McGregor strongly urge the adoption of Daubert and Kumho

     Hedonic Damages and Emotional Services

Ogden v. J.M. Steel,  31 P.3d 806 (2001). Hedonic damages are a separate element of damages from pain and suffering. No issue was raised about whether expert testimony about hedonic damages was allowable.

Quintero v. Rodgers, 2008 WL 4916554 (Ariz. App. Div. 1).   This decision held that Arizona’s survival action statute (A.R.S § 14-3110) does not allow for the estate of a decedent to recover for hedonic damages suffered by the decedent. There is no indication in the decision that an economist had attempted to quantify hedonic damages. 

Arkansas   

                Life and Worklife Expectancies

St. Louis, Iron Mountain & Southern Railway Company v. Hitt, 76 Ark. 227; 88 S.W. 908 (Ark. 1905). See under Annuities, Periodic Payments and Reversionary Trusts.

                Annuities, Periodic Payments and Reversionary Trusts  

St. Louis, Iron Mountain & Southern Railway Company v. Hitt, 76 Ark. 227; 88 S.W. 908 (Ark. 1905). “Objection is made to the admission of testimony of a life insurance agent as to the expectancy of life, as shown by mortality tables, of a man Hitt’s age, and an estimate of the amount required to purchase an annuity equal to Hitt’s income. . . The record fails to show the calculation complained of, but it could not be error, as it was but relieving the jury of labor involved in it. . . It the calculation was made, it was useful only to reach the probable amount required to purchase the annuity to represent his income, and from such amount personal expenses were directed to be deducted.” 

                 Legal Procedure

Yarbrough Johnson v. Cross Oil Refining & Marketing, Inc., 2002 Ark.  App. LEXIS 351 (Ark. App. 2002). The sole question presented in this appeal is whether the circuit judge improperly applied the collateral-source rule in the division of the proceeds to an estate. The widow of the decedent had received $22,296 in workers’ compensation benefits and was scheduled to receive another $52,704. The $22,296 was not at issue, and had to be repaid to Systems Contracting Corporation. The $52,704 would not have to be repaid.  The beneficiaries disagreed as to whether the $52,704 in unpaid benefits should be taken into account in division of the estate among beneficiaries.  The damages projections of Ralph Scott were used in arriving at the damages awarded by the circuit judge for the wrongful death. The circuit court ruled that the $52,704 was covered by the collateral source rule. The appeals court ruled that the collateral source rule has no application in a division of the proceeds of an estate, citing Bell v. Estate of Bell, 318 Ark. 483, 885 S.W.2d 877 (1994).  This decision also offers a clear statement of the factors to be considered in determining pecuniary damages under the Arkansas Wrongful Death Act. 

                 Admissibility of Expert Testimony

Farm Bureau Insurance Company v. Foote, 314 Ark. 105; 14 S.W.3d 512 (Arkansas 2000 ). In this decision, the Arkansas Supreme Court accepted Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, as binding in Arkansas cases. The Court pointed out that: “Two years before the Court’s decision in Daubert, this court adopted a strikingly similar approach to the admission of novel scientific testimony in Prater v. State, 307 Ark. 180, 820 S.W.2d 429 (1991). At issue was the contention of a plaintiff expert that a dog had an ability to detect accelerants in an arson investigation that exceeded that of all scientific tests. This contention was found not to pass muster.

Manus v. American Airlines, Inc., 314 F.3d 968 (8th Cir. 2003). Interpreting Arkansas law, The 8th Circuit upheld the trial court’s admission of testimony by economist, Dr. Ralph Scott. The 8th Circuit said:  “Dr. Scott testified as the earning capacities of cosmetologists, travel agents and high school graduates. He stated that travel agents and high school graduates have approximately the same earning capacity, and that cosmetologists have 60% of the earning capacity of travel agents. He resented the jury with three figures. The first was based on the value of the loss between the accident and trial. The second was the present value of the lost earning capacity of a travel agent for twenty-one years at full employment. The third was half the total of the second, which took into account the possibility that Stephanie might reenter the work force after approximately ten years or that she might work at 50% productivity. Dr. Scott also testified that if the jury wished to reduce the figure to an amount appropriate to a cosmetologist’s earning capacity, it could multiply the figures by 60%.” The court commented: “Although we are inclined to agree with the district court’s observation that the evidence of Stephanie’s loss of earning capacity ‘was not particularly strong,’ we conclude that it was not materially weaker than the evidence in Gibson and Coleman. [Gibson v. Garrison, 824 S.W.2d 829 (Ark. 1992); Coleman v. Cathey, 565 S.W.2d 426.]

Wood v. State, 75 Ark. App. 22; 53 S.W. 3d 56 (Ark. App. 2001). The Arkansas Supreme Court upheld a trial court decision to exclude the testimony of Dr. Ann B. Tracy who would have testified that the prescription drug Paxil caused the plaintiff to rape his two teenaged stepsons, and thus make him innocent of the crime of rape. A Daubert standard was applied. The court said of Dr. Tracy’s proffered testimony that: “She testified that she did not conduct the clinical studies herself, and that she had done no laboratory research. Dr. Tracy opined that Paxil, Zoloft, Prozac and other SSRI antidepressants were very dangerous and should be discontinued.”   

                 Hedonic Damages and Emotional Services

Bailey v. Rose Care Ctr., 817 S.W.2d 412 (Ark. 1991). Hedonic damages were not allowed under the state death statute. This was before a new state law in 2001 that established the right of an estate to sue for "loss of life."

Durham v. Marberry, 356 Ark. 481; 156 S.W.3d 242 2004 Ark. LEXIS 179 (Ark. 2004). The Arkansas Supreme Court held that a 2001 Arkansas survival action Ark. Code Ann. § 16-62-101 (Supp. 2003) created a new element of damages in circumstances of wrongful death called “loss of life” and that an injured plaintiff did not have to have survived beyond the fatal injury to have the right to recover this loss element. The Court indicated that “loss of life” and “loss of enjoyment of life” are different elements even though “both are hedonic.” In doing so, the Durham court cited Sterner v. Wesley College, Inc., 747 F. Supp. 263 (Del. 1990) and Willinger v. Mercy Catholic Medical Center, 482 Pa. 141, 393 A.2d 1188 (1978) as drawing a distinction between “loss of life” and “loss of enjoyment of life.” Willinger has been interpreted as not allowing recovery for lost enjoyment of life in death cases in Pennsylvania and Sterner is one of the decisions that precluded an economist from offering hedonic damages testimony in Delaware. The Durham Court appeared to indicate that it would probably not allow expert testimony about the amount of damages to be awarded for “loss of life.” The Court cited its own decision in Clark & Sons v. Elliot, 251 Ark. 853 (1972), as indicating that “there is no hard and fast rule to determine compensatory damages for non-pecuniary losses.” Revised listing.

McMullin v. United States, 2007 U.S. Dist. Lexis 77933 ( E.D. Ark. 2007). This is a judicial ruling in a Federal Tort Claims Act (FTCA) case involving a medical malpractice wrongful death action. An economist was apparently not involved in this case. Judge Eisele held that the Arkansas Survival Action statute applies to medical malpractice in spite of some controversy in the Arkansas Courts about whether the Arkansas Medical Malpractice Act changed this application. This meant that Judge Eisele had to make an award under Ark. Code. Ann. § 16-62-101(b), which says: “In addition to all other elements of damages provided by law, a decedent’s estate may recover for the decedent’s loss of life as an independent element of damage (as modified in 2001).” Judge Eisele reviewed the decision in Durham v. Marberry, 356 Ark, 481 (2004) which is the only appellate interpretation of the 2001 addition to the Survival Act. He found no guidance in that decision. He indicated that he had found two U.S. District Court decisions in which interpretations of this section were made. In one of the two, the judge awarded $400,000, but spoke of the vagueness of the new statutory language. In the other, the judge had permitted the testimony of Dr. Stan V. Smith, but that judge did not find Smith’s testimony “persuasive” and awarded amounts of $81,068.91 and $71,463.91. Judge Eisele also discussed a 2006 Note by Ali M. Brady, “The Measure of Life: Determining the Value of Lost Years after Durham v. Marberry,” 59 Ark. L. Rev. 125 at some length. After extensive discussion, Judge Eisele awarded $600,000 for loss-of-life damages. 

One National Bank v. Pope, 2008 Ark. LEXIS 62 (Ark. 2008). This decision does not yet have addresses that would allow proper citations, but is important in determining the meaning of Arkansas’s new 2005 survival action language in Ark § 16-62-101(b) (Repl.2005), which says: “(b) In addition to all other elements of damages provided by law, a decedent’s estate may recover decedent’s loss of life as an independent element of damages.” The Court referenced its own decision in Durham v. Marberry, 356 Ark. 481 (2004) as maintaining a distinction between “loss-of-enjoyment-of-life damages” and “loss-of-life damages” as damages that are “pre-death” and damages that “only begin accruing when life is lost, at death[.]” The Court noted that in the Durham decision it had quoted Katsetos v. Nolan, 170 Conn. 637 (1976) as being instructive about how the Court viewed “loss-of-life” damages. The Court also indicated that the interpretation made in McMullin v. United States, 515 F. Supp. 2d 914 (E.D. Ark. 2007) of the Durham decision was correct in that “many types of evidence may be presented as evidence of loss-of-life damages.” The Court held that “an estate seeking loss-of-life damages pursuant to section 16-62-101(b) must present some evidence that the decedent valued his or her life from which a jury could infer and derive that value and on which it could base an award of damages.” There was no indication in the decision that the estate had tried to present an economic expert to place a dollar value on “loss-of-life” damages, nor that the Court would have felt it appropriate for the estate to have done so.

Phillips v. Sugrue, 800 F.Supp. 789 (E.D. Ark. 1992). The federal district court interpreted Arkansas law as allowing an award for hedonic damages in a personal injury case. The Court said: “Viewing the allegations contained in the plaintiff’s complaint in a light favorable to the plaintiff’s motion for summary judgment, the Court is of the view that plaintiff has suffered severe emotional distress resulting in great mental suffering, permanent injury and “hedonic damages,” stated differently, unpleasurable states of consciousness. Suggested by David Jones. 

California

     Basis Income and Fringe Benefits for Projecting Earnings Loss

Allen v. Vega, 2004 Cal. App. Unpub. LEXIS 3082 (Cal.App. 2004). This decision held that it was not speculative to assume that a student had the earning capacity to complete her education degree and become a teacher, citing earlier decisions to the same effect. Suggested by Jerry Martin.

Elsenheimer v. Elsenheimer, 124 Cal. App. 4th 1532; 22 Cal. Rpter. 3d 447 (Cal. App. 2004).  The trial court reduced  the amount of child support to be paid by the father based on the mother’s receipt of Supplemental Social Security Income (SSI) benefits. The mother, who had custody of the couple’s two children 51 percent of the time, was unemployed due to a disability. The trial court ruled that the mother could not be paid child support out of the SSI benefits, but that those benefits could still be considered part of her income for purposes of determining child support payments. The Court of Appeals held that “the practical effect of the court’s ruling was to transfer a significant portion of the father’s burden of meeting the childrens’ needs to the government, presumably requiring mother to apply for additional aid for the children” and reversed the trial court decision and remanded for determination without regard to the mother’s SSI benefits.  Suggested by Gerald D. Martin.

Faerber v. The Hyde Law Corporation, 2004 Cal. App. Unpub. LEXIS 3791. The testimony of Larry Dineen with respect to lost wages and as a vocational expert were discussed in the context of a legal malpractice claim by the plaintiff in a previous action.

Goehring v. Chapman University, 2004 Cal. App. LEXIS 1267 (Cal. App. 2004). This was a suit by three law students over alleged loss of earnings due to fraud on the part of a new law school. Tamarah Hunt, an economist for the plaintiff Yeomans, projected that a year’s delay in graduation caused Yoemans damages of between $129,695 and $321,014. Robert Trout, economist for the defendant, testified that if Hunt’s assumptions were correct, Yoemans’ damages were approximately $3,500. The jury awarded no compensable damages and the lack of an award was upheld by the appeals court. 

Heiner v. KMART Corporation, 84 Cal. App. 4th 335; 100 Cal. Rptr. 2d 854 (Cal. App. 2000). The plaintiff had retained. An expert on dental practice had projected a rapid growth in plaintiff’s dental practice, with a present value of $8 million. The plaintiff had also retained Phillip Allman as its expert economist to project lost income. Dr. Allman had a much lower value than the expert on dental practice. This case is cited as an indication that damages may be awarded for lost earning capacity without any proof of actual loss of earnings. Submitted by Jerry Martin. 

Hooper v. Capobianco, 2004 Cal. App. Unpub. LEXIS 5001 (Cal. App. 2004). This unpublished decision provides extensive discussion of the standards in California for claiming loss of earnings verus loss of earning capacity. Kirk Blackerby was the economic expert for the plaintiff. He presented two scenarios for the earnings loss of the plaintiff. One scenario was based on the plaintiff’s actual earnings rate while the other was based on wages paid by the plaintiff’s primary employer in construction to other employees with similar expertise and abilities as the plaintiff. The jury based its award on the second scenario, which the Court of Appeals upheld with the following observations: “Lost earning capacity is inferred from the nature of the injury, without proof of actual earnings or income before or after the injury. . . Indeed, a person may recover for past loss of earning capacity even if the person was not gainfully employed at the time of injury. . . If one does not work every day or all of the time, damages may be estimated upon the injured person’s ability to earn money, rather than upon what one was either earning or has actually earned. . . Here, Blackerby’s testimony, the testimony of plaintiff’s former employers, and the evidence of earnings by a persons in a comparable position are substantial evidence of the amount of money plaintiff had the ability to earn prior to his injury. The award of damages was not excessive under this argument.” The Court, however, rejected Blackerby’s assumption that the plaintiff could never work again in the construction industry and correspondingly reduced Blackerby’s projection for future loss of earning capacity for that reason.

In Re Marriage of Nizenkoff, 65 Cal.App.3d 136 (1976). Indicates that Social Security benefits are not a vested right, but a program the U.S. Congress can change at will because of section 1304 of the Social Security Act, which had been retained in the 16 years since Fleming v. Nestor, 363 U.S. 603 (1960). This can be cited in support of not including lost Social Security benefits in a damage loss calculation in California.

Overly v. Ingalls Shipbuilding, Inc. 74 Cal. App.4th 164 (1999). Rejects consumption reduction for “lost years” when an injury has shortened the life expectancy of the individual.  The “lost years” argument is that there should be a reduction for the personal consumption an indivdiual does not need because his or her life expectancy has been shortened. That is considered and rejected in this decision. This decision also confirms that spousal income is not to be considered in calculating the personal consumption reduction. This issue was also discussed and the same conclusion reached in Fein v. Permanente Medical Group, 38 Cal. 137 (Cal. 1985). (Submitted by Jerry Martin.)

Silong v. United States, 2007 U.S. Dist. LEXIS 67498 (E.D. Cal. 2007). This case involves a shoulder dystocia birth injury. Dr.  Alex C. Willingham was the vocational expert for the plaintiff and Andrew Michael O’Brien was the vocational expert for the defendant. The economic expert for the plaintiff used Dr. Willingham’s impairment rating of 10% to project a loss of earning capacity of $130,000 to $280,000. Defendants asked for summary judgment on the earnings loss claim and were rejected. Defendant’s also asked for summary adjudication that impairment ratings cannot be used in this way and were “not denied.” Plaintiffs were given nine days to identify what, if any, damages were still claimed after the Court’s rulings.  

       Illegal Aliens

Rodriguez v. Kline, 186 Cal.App.3d 1145; 231 Cal.Rptr. 157 (1986). The California Court of Appeals held that if the defense established that the plaintiff who was illegally in the United States was subject to deportation, lost earnings must be calculated on the basis of expected earnings in the illegal alien’s country of origin. Submitted by Jerry Martin. 

       Lost  Years

Fein v. Permanente Medical Group, 38 Cal. 3d 137; 695 P.2d 665; 211 Cal. Rptr. 368 (CA 1985). This decision discusses the “lost years” issue in connection with periodic payments, saying: “Although in general lost future earnings are a type of future damage particularly suitable to a periodic payment judgment, this case presents a somewhat unusual situation because the damages awarded are solely attributable to the earnings of plaintiff’s lost years. If the trial court had ordered such damages paid periodically over the time period when the loss was expected to be incurred, the damages would have been paid in their entirety after plaintiff’s expected death, and thus – if the life expectancy predictions were accurate – plaintiff would not have received any of this element of damages. Had defendant presented evidence by which the jury could have determined what proportion of the lost years’ earnings would be likely to be spent for the support of plaintiff’s defendants rather than the plaintiff himself . . ., and had it raised the periodic payment issue in a timely fashion so that the jury could have made special findings on that question, there might be a strong argument that the dependants’ share of the lost earnings should be subject to periodic payment. In the absence of any such apportionment, however, we conclude that the trial court properly determined that section 667.7 did not call for the periodic payment of this element of plaintiff’s award.” (Italics as in the original.)

Overly v. Ingalls Shipbuilding, Inc. 74 Cal. App.4th 164 (1999). Rejects consumption reduction for “lost years” when an injury has shortened the life expectancy of the individual.  The “lost years” argument is that there should be a reduction for the personal consumption an indivdiual does not need because his or her life expectancy has been shortened. That is considered and rejected in this decision. This decision also confirms that spousal income is not to be considered in calculating the personal consumption reduction. This issue was also discussed and the same conclusion reached in Fein v. Permanente Medical Group, 38 Cal. 137 (Cal. 1985). (Submitted by Jerry Martin.)

       Wage Growth and Discount Rates

Canavin v. Pacific Southwest Airlines, 148 Cal. App. 3d 512 (1983). This is a decision in a wrongful death matter. The trial court had admitted evidence of the decedent’s future income tax liability and permitted the jury to consider this evidence in determining the amount of future financial support the decedent would have provided to surviving beneficiaries. The plaintiff presented expert testimony on a before tax basis and the defendant presented expert testimony on an after tax basis.This was held not to be prejudicial error even though a majority on the Appeals Court expressed the belief that it is in error to compute lost support based upon the decedent’s net income after taxes. However, the trial court refused to give plaintiff’s proffered instruction that, in reducing the award of future damages to present value, the jury should consider the discount rate on tax-free bonds. This was held to be prejudicial error, saying: “The prejudice in this record arose only because the trial court refused to instruct the jurors to use the lower discount rate of an appropriate tax-free investment when reducing the award to present value if they based their computation of lost future support on projected net earnings. . . The use of a tax-free discount when relying on net after-tax income in arriving at lost future earnings approximates the result obtained by using decedent’s net income, applying a discount rate based upon a taxable investment and increasing the lump-sum award proportionately to offset the amount of income tax payable on the future earnings generated from investing the award.”
 (Submitted by Jerry Martin.) (Revised listing.)

Wearmouth v. Oberndorf, 2003 Cal. App. Unpub. LEXIS 5687. [This decision may not be cited because it has not been certified for publication.] The primary issue on appeal was that an instruction on present value was not given with respect to non economic damages. The court ruled that the defense had not preserved its objection on this grounds. The plaintiff economist was Patrick Mason, who used some sort of argument based on “rental income” of 5 percent to justify total offset based on a 5 percent discount rate in his calculations. The decision seems to say that the defense economist Michael Nakada apparently accepted the 5 percent increase, but argued for a 7.65 percent discount rate.  The jury apparently believed the plaintiff economist. (This decision seems somewhat confused.) 

         Life and Worklife Expectancies

Lindberg v. California Department of Education, 2005 Cal. App. Unpub. LEXIS 99844 (Cal. App. 2005). Economist John Hancock projected that a 62 year old man who had just had a heart attack would have worked to age 72 based on the plaintiff’s testimony that the plaintiff “expected” to retire at age 72. The Court said: “A plaintiff may recover for detriment reasonably certain to occur in the future. (Civ. Code, § 3283; Noble v. Tweedy (1949) 90 Cal. App. 2d 738, 744-645 (Noble).) However, such an award must be predicated on something more than possibility or conjecture. (Metcalf v. Drew (1947) 78 Cal. App. 2d 226, 232.) The fact that the amount of future damages may be difficult to measure or subject to various possible contingencies does not bar recovery. However, there must be evidence showing a “‘reasonable probability’” that the paintiff will suffer the loss in the future and that the amount awarded is not unreasonable. . .   For these reasons, the economic damages award, which was based solely on Hancock’s caculations relecting loss of future earnings, must be vacated.” The Court also held that non-economic damages premised on the plaintiff working to age 72 was also grounds for reversal.

Stone v. Center Trust Retail Properties, Inc., 146 Cal. App. 4th 1435 (Cal. App. 2007). “Here, the lost wages evidence supported the jury's award. Up to the time of trial, Stone's injuries made her unemployable. Her expert economist calculated her lost past wages as $ 78,561. He also calculated the present value of lost future income of at least $ 267,971 if she had worked until she was 62 years old. He explained that he assumed retirement at 62 based on government statistics that showed a woman of Stone's age worked on average only 11 more years. We note, however, that the jury was free to reject the economist's assumption about the number of years Stone had intended to work, particularly given her testimony that she had hoped to work until she was 65. Arithmetic shows that three more working years from age 62 to 65 raises Stone's lost future wages by $ 73,083. ($ 267,971 / 11 years equals $ 24,361 lost annually in future wages; $ 24,361 x three additional working years equals $ 73,083.) Adding $ 73,083 for three extra years of lost future wages to $ 267,971 (11 years, lost future wages) and $ 78,561 (lost past wages) equals $ 419,615, which is enough to support the economic damages award of $ 391,000. (We note our discussion does not even include possible future medical expenses of $ 15,000 to $ 20,000, which could raise Stone's economic damages even more.)”

        Standards for Recovery in Wrongful Death

Barth v. B.F. Goodrich, 265 Cal.App. 2d 228 (Cal. App. 1968). “It is the well established rule in most states, including California, that the remarriage of a surviving spouse is not admissible on the issue of damages in a wrongful death case (cites omitted) and this court is neither inclined nor does it have the authority to change this rule.” 

Bouley v. Long Beach Memorial, 2005 Cal. App. LEXIS 364 (Cal. App. 2005). The decision held that California statutes authorize a domestic partner to sue for damages in a wrongful death action. Submitted by David Jones.

Emery v. Southern California Gas Company, 72 Cal. App. 2d 821 (Cal. App. 1946). In an action for wrongful death, it was prejudicial error to exclude testimony of an actuary as to the amount of money needed, if invested at various rates of interest, to yield a particular monthly return for a period of time and be exhausted at the end of such time, and also to exclude annuity charts showing such information. “The annuity tables or charts should have been received in evidence, assuming that a proper foundation for their admissibility had been laid. When the damages are to be awarded for wrongfully causing the death of a person are compensation to designated relatives for prospective pecuniary loss, the gross amount should be reduced to its present worth.”

Fox v. Pacific Southwest Airlines, 133 Cal.App.3d 565 (Cal.App.1982). This decision makes it clear that the income or wealth of a surviving spouse is not to be considered in making the personal consumption deduction in a wrongful death action. Previous cases cited to the same effect are: Gilmore v. Los Angeles Railway Corp., 211 Cal. 192 (Cal. 1930); Johnson v. Western Air Express Corp., 45 Cal.App.2d 52 (Cal.App.1941); Stathos v. Lemich, 213 Cal.App.2d 52 (Cal.App.1963); Webb v. Van Noort, 239 Cal.App.2d 472 (Cal.App.1966).  (Submitted by Jerry Martin.)

Harrison v. Sutter Street Railway Company, 116 Cal. 156; 47 P. 1019 (Cal. 1897). In the wrongful death of a 69 year old man, the California Supreme Court said: “According to the Carlisle mortality tables, he had an expectancy or probable lease of life of a fraction over nine years and a half. He had dependent on him a wife and an adult unmarried daughter.”  The Court reversed the jury verdict as excessive because: “The jury would seem to have proceeded upon the theory that the deceased’s expectancy of life would be fully realized, and that he would continue to the end with the same earning capacity as that possessed by him at the time of his death. . . Such a result does not accord with ordinary human experience. The deceased’s expectancy of life was not a certainty, but a mere probability. It is true that he might have lived even longer than the limit of such expectancy, but the chances were very much against it. He might also have retained his vigor and ability to labor to the last, but ordinary experience reaches that the weight of advancing years, after the age attained by the deceased, bears strongly against such a result.”  The trial court judge had reversed the jury’s verdict and the California Supreme Court upheld the reversal. 

Wiezorek v. Ferris, 176 Cal. 353; 167 P. 234 (Cal. 1917).  The California Supreme Court reversed $10,000 award to parents in the death of a child on the grounds that: “There was no averment or proof of special damage, nor anything to show that the pecuniary value of the child to his parents would have been any greater than that of the ordinary boy of his age. For a number of years to come he would have been a source of expense to them; his pecuniary value to his parents after that could by no permissible rule of compensation have equaled the award made by the jury. Even conceding that the child would have been of help to his parents after minority, which is only conjectural, the verdict is still excessive.” (Submitted by Jerry Martin.)

         Legal Procedure

Padilla v. Greater El Monte Community Hospital, 129 Cal. App. 4th 667; 28 Cal Rptr. 3d 636 (Cal. App. 2005). Maria Padilla was determined by the jury to be in a persistent vegetative state as the result of medical malpractice. The jury awarded Padilla 12 annual payments, starting at $250,000 in the first year and increasing at 6% per year thereafter. The jury calculated that the present value of that award was $2,095,000. Two years after final judgement was entered on that basis, plaintiff’s attorney filed an appeal on the ground that the jury had miscalculated the present value based on having mistakenly used an interest rate table for payments of the constant amount of $250,000 per year. This was discovered because the plaintiff attorney had billed his fee on the basis of the correct present value for a stream of 12 payments increasing at 6% per year and not on the basis of the constant stream used by the jury. The court refused to reopen a final judgment that had been reached two years earlier.  The decision does not indicate what happened with respect to the attorney’s fee. This decision suggests that it is always useful to have a financial expert look at award amounts. Suggested by Jerry Martin and Ralph Frasca.

Shandralina v. Homonchuk, 147 Cal. App. 4th 395 (Cal. App. 2007). The trial court disqualified plaintiff’s counsel in a medical malpractice and wrongful death case. The court of appeals reversed that disqualification. At issue was the fact that plaintiff counsel unknowingly had attempted to retain a medical expert previously retained by the defense. The Court of Appeals held that there was no evidence of disclosure of confidential information. Footnote 9 indicated that the plaintiff doctor had named economists on expert designations without having first spoken to them. 

         Collateral Source

Lovett v. City and County of San Francisco, 2004 Cal. App. Unpub. LEXIS 8615 (Cal. App. 2004). The Court held that: “We agree with the trial court and cases holding that a pension benefit is a collateral source, separate from the employer’s status as a tortfeasor. Like insurance, such payments are secured by the plaintiff’s efforts as a part of the employment contract, and the tortfeasor is generally entitled to no credit for them.”
 
         Household Services

Gotsch v. Market Street Railway, 89 Cal. App. 477; 265 P. 268 (Cal. App. 1928). The court held that a full time homemaker could recover for damages. “While the evidence does not show that plaintiff was engaged in any direct gainful employment for which she received a specific wage, it does show that she was capable of and did perform her family and household duties. Such services have value. The impairment of the power of a woman to work is an injury to her personal rights wholly apart from any pecuniary benefit the exercise of this power might bring, and if he injury has lessened this power she ought to recover damages therefor regardless of whether she worked or not. The vicissitudes of life might call upon her at any moment to avail her capacity to work, and jurors may be presumed to be reasonably familiar with such services.” This decision also upholds the right to use mortality tables in a personal injury action. This decision was upheld in Marshall v. Smith, 131 Cal.App.258; 21 P.2d 117 (Cal. App. 1933) and, through Marshall, in McCormack v. City and County of San Francisco, 193 Cal. App. 2d 96; 14 Cal. Rptr. 79 (Cal. App.1961). Each of these decisions emphasizes that loss of the ability to provide household services is compensable and concurrently represents a loss of earning capacity. Suggested by Stephanie Rizzardi Pearson.

        Treatment of Taxes

Canavin v. Pacific Southwest Airlines, 148 Cal. App. 3d 512 (1983). Covers treatment of income taxes, earnings, discount rates, and sets the date for calculating worklife and life expectancy. (Submitted by Jerry Martin.)

Cox v. Superior Court of Los Angeles County, 98 Cal.App.4th 670 (2002). Covers issues of collateral source and taxation in California. This case specifically refers to medical malpractice cases tried under MICRA (Medical Injury Compensation Reform Act of 1975). It does not apply to other types of cases.  For tax issues in most cases, see Rodriguez v. McDonnell Douglas Corporation, 87 Cal.App.3d (Cal.App. 1978). The relevant passage is the final comment in the case: “We conclude that the trial court did not commit error in refusing to admit evidence of future tax consequences to affect the determination of the amount of the awards to plaintiffs.” (Submitted by Jerry Martin.) 

Sharian v. United States, 2002 AMC 2089 (N.D.Cal. 2002). This maritime decision held that it is proper to deduct Social Security and Medicare taxes from a calculation of lost earnings.

        Life Care Plans

Crenshaw v. County of Los Angeles, 2004 Cal. App. Unpub. LEXIS 4377 (Cal. App. 2004). This case involves a failure to diagnose a blood clot in a 60 year old woman’s leg, resulting in an amputation. The decision discusses the life care need testimony of Sara Guentz, a registered nurse who practices as a certified rehabilitative nurse/consultant and, briefly, of David Barker, an economist who determined a present value for the life care needs. There was no claim of lost earnings.

Hanif v. Housing Authority of Yolo County, 200 Cal. App. 3d 635; 246 Cal. Rptr. 192 (Cal. App. 1988). This decision held that the right to recover for past medical costs was limited to the actual amounts accepted by medical service providers and not the amounts originally billed by medical providers. The trial court had found that amounts originally billed represented the “reasonable value” of the services provided even though Medi-Cal had paid only about 60 percent of the amounts charged. There was no evidence that the plaintiff was or would become liable for the difference. The Court of Appeals said: “[A] person injured by another’s tortious conduct is entitled to recover the reasonable value of medical care and services reasonably required and attributable to the tort. . . . The question here involves the application of that measure, i.e., whether the ‘reasonable value’ measure of recovery means that an injured plaintiff may recover from the tortfeasor more than the actual amount he paid or for which he incurred liability for past medical services. Fundamental principles underlying recovery of compensatory damages in tort actions compel the following answer: no.”  Suggested by Jerry Martin 

Howell v. Hamilton Meats & Provisions, Inc., 200 Cal. App. LEXIS 1874 (Cal. App. 2009).  This decision held that the collateral source rule in California allowed the plaintiff Howell to recover for the full amount billed ($189,978.83) for her medical services following an automobile accident even though her medical insurance provider had paid a significantly smaller amount ($59,691.73) to fully satisfy the debt owed by the injured party. In reaching this decision, the Court held that Howell had received two collateral benefits from her insurer PacifiCare. One benefit was a payment of $59,691.73 to medical care providers. The other benefit was the reduction in the amount she owed to medical care providers from $189,978.83 to $59,691.73. In reaching its decision, the Court held that one prior case, Hanif v. Housing Authority, 200 Cal.App.3d 635 (1988) did not apply. The Hanif case had held that the injured person could only recover the amount paid, not the amount originally billed. The Howell Court pointed out that the plaintiff in Haniff was not legally responsible to pay bills for his treatment and thus that case was  inapposite.  The Howell Court also indicated disagreement with the decision in Nishihama v. City and County of San Francisco, 93 Cal.App.4th 298 (2001) that had also limited recovery to the amount actually paid by a third party provider. The Howell Court went on to argue that it was up to the California legislature to abrogate the collateral source rule to deal with the complexities of medical insurance, as had happened twice in the past, including the enactment of the Medical Injury Compensation Reform Act (MICRA). Suggested by David Jones.  

        Lost Chance of  Recovery or Survival

Dumas v. Cooney, 235 Cal. App. 3d 1593; 1 Cal. Rptr. 2d 584 (Cal. App. 1991). The decision rejected a “lost chance of survival” claim in a personal injury action, holding that since death had not ensued, allowing recovery would permit tort compensation for a mere possibility of harm.

Werner v. Blankfort, 36 Cal.App. 4th 298; 42 Cal. Rptr. 2d 229 (Cal. App. 1995). The case involved a claim of harm by a living plaintiff for the emotional harm caused by a reduction of the plaintiff’s chances to survive a melanoma from 40 percent to 13 percent. The plaintiff did not claim lost income and the California Court of Appeals held that recovery for the emotional stress of the reduced chance of survival did not require that the court determine whether a “lost chance of survival” is a special class of tort actions in California because the court’s ruling in this case was consistent with traditional California tort law. This was because that the harm caused by stress from the reduced chance of survival had definitely occurred, regardless of the future outcome.

        Collateral Source    

Helfend v. Southern California Rapid Transit District, 2 Cal. 3d 1; 465 P.2d 61; 84 Cal.  Rptr. 173 (Cal. 1970).  This decision with respect to a vehicular accident is a companion case to McKinney v. California Portland Cement Company, 96 Cal.App. 4th 1214 (2002) concerning the application of the collateral source rule in California in cases that do not involve medical malpractice. It upheld the decision of the trial court not to admit collateral sources on the grounds that to do so would be punitive. The Helfend court defined the collateral source rule as follows: “The Supreme Court of California has long adhered to the doctrine that if an injured party receives some compensation for his injuries from a source wholly independent of the tortfeasor, such payment should not be deducted from the damages which the plaintiff would otherwise collect from the tortfeasor.” The decision provides several reasons for this rule. “The collateral source rule expresses a policy judgment in favor of encouraging citizens to purchase and maintain insurance for personal injuries and for other eventualities. . . Defendant should not be able to avoid payment of full compensation for an injury inflicted merely because the victim has had the foresignt to provide himself with insurance.” In this instance, subrogation of payments was an issue and part of the awards paid for by collateral sources had to be repaid after a judgment to those collateral sources. “We also note that generally the jury is not informed that plaintiff’s attorney will receive a large portion of the plaintiff’s recovery in contingent fees.” The court also discussed the role of the collateral source rule as an integrated part of a system that includes both fault and no fault elements. Submitted by Gerald D. Martin.

Hiller v. United States, 2007 U.S. Dist. LEXIS 85536 (N.D.Ca. 2007). This decision held that a loss of a future pension benefit was speculative because it depended on the assumption that the plaintiff would not have any pension benefit in new employment. The Court went on to say: “However, even assuming that there would be a pension loss, the lost pension is at most valued at $278,000. This amount is the difference between the present value of the lost service connected pension ($537,000) according to Mr. Hiller’s economist . . and the present value of Mr. Hiller’s disability retirement pension from 2029 to the end of his life expectancy in 2051 ($259,000). . . Rotolo Chevrolet v. Superior Court, 105 Cal.App.4th 242, 247, 129 Cal. Rptr.2d 283 (2003) (‘[T]here is no justification for allowing [plaintiff] to claim he has been ‘damaged’ by the loss of his regular pension when he is actually receiving the disability payments.’)

Katiuzhinsky v. Perry, 2007 Cal. App. LEXIS 1104 (Cal. App. 2007). The California Court of Appeals reversed the trial court decision based on the trial court’s misplaced reliance on several previous California decisions that the reasonable value for which the defendant was liable was the amount a medical care provider was willing to accept for services provided to a plaintiff. The Katiuzhinsky court reviewed decisions in Hanif v. Housing Authority, 200 Cal App. 3d 635 (1998), Nishihama v. City and County of San Francisco, 93 Cal.App.4th 298 (2001), and Parnell v. Adventist Health System/West, 35 Cal.4th 595 (2005), pointing out that in each of those cases, payments by a third party provider extinguished the plaintiff’s liability for further payment. In Katiuzhinsky, Mercy General Hospital sold its $144,000 medical lien to MedFin for $72,000 and several other doctors sold their liens at a discount to MedFin at lower prices. MedFin is a financial service company works with plaintiff law firms to purchase medical accounts and liens  from medical service providers, usually at 50 cents on the dollar. Prior to treatment, MedFin makes a pre services determination whether it would be willing to make this purchase. After services are provided, the medical service provider decides whether or not to sell the account and liens. The Court of Appeals pointed out that the plaintiff was still responsible for the full amount of the bill and that the sale of rights did not take place until after medical services were provided. Therefore, since plaintiffs were still liable for the full amount of the bill, the reasonable value was determined to be the amount owed, not the amount received by medical provides from MedFin.

McKinney v. California Portland Cement Company, 96 Cal.App. 4th 1214 (2002). Provides a clear description of how the collateral source rule is applied in California, with cites to other cases, some in other states, on collateral source going back to 1946. At issue was whether a wife’s widow’s benefits from a union pension and Social Security could be treated as an offset to the loss of a decedent husband’s earnings. The court held that the widow’s benefits, even though from the same source as the husband’s payments, were a collateral source that could not be introduced. The court also held that a projection of an average husband’s household services from “the Cornell study” by economic expert Dr. Barry Ben-Zion was admissible evidence.(Revised listing. Originally submitted by Jerry Martin.) 

Ortner v. Enterprise Rent-A-Car Company of Los Angeles, 2008 Cal. App. Unpub. LEXIS 6107 (Cal App. 2007). This decision involves the attempt by Enterprise to claim an offset for financial support claimed by Marilyn Ortner, widow of a decedent in a California Wrongful Death action, based on her receipt of a death benefit in lieu of financial support from her husband’s future lost pension benefits. The Ortner Court cited McKinney v. California Portland Cement Co., 96 Cal.App.1214, 1222 (Cal. App. 2002) as holding that a defendant could not claim widow benefits as a reduction from lost pension benefits of her decedent husband, invoking the collateral source rule to that effect. The Ortner Court went on to explain the logic of the McKinny decision in some detail and said: “Similarly, James Ortner constructively “paid for” the pension death benefit Marilyn Ortner received. It was part of the compensation he earned during his employment wiht the Orange County Transportation Agency. . .The death benefit did not exist until James Ortner’s death, and his labor “earned” it for Marilyn Ortner. It is a collateral source that Enterprise may not use as an offset against the damages for which it is liable.” The court rejected the effort of Enterprise to rely upon Rotolo Chevrolet v. Superior Court, 105 Cal.App.4th 242 (2003). The Ortner Court indicated that there was a limited superficial appeal based on Rotolo, but that the difference was that: “[T]he death benefit was not an alternative to Ortner’s pension payments. Like the benefits in McKinney , the death benefit did not exist before James Ortner’s death. It is a new benefit flowing to Marilyn Ortner as a direct result of the death. It is therefore specious to argue that James Ortner could not have received both his regular pension and the death benefit. Indeed, it is possible that Marilyn Ortner would have received a death benefit from her husband’s pension even if James Ortner had retired, received pension payments and then died. This further distinguishes the death benefit Marilyn Ortner received from the disability pension in Rotolo, in that Staudt could under no circumstances retire for disability and subsequently receive his regular pension, or vice versa.

Rotolo Chevrolet v. The Superior Court of the County of San Bernadino, 105 Cal.App.45h 242; 129 Cal. Rptr. 2d 283 (Cal.App. 2003). This decision is focused on the application of the collateral source rule in California.  The court held that, in this case because of its circumstances, if Rotolo was unable to introduce evidence of disability payments, Straud, the injured party, would receive benefits based on lost income, additional damages based on his lost “regular” retirement benefits, and his actual disability retirement benefits, thus triple recovery.  There was no issue about the fact the collateral source rule prevented the introduction of disability benefits as an offset to lost earnings. The issue was whether the disability benefits were an offset to allegedly lost “regular” retirement benefits. The Rotolo court said that “the fact that the employer provides two potential types of pension benefits does not make one type ‘collateral’ to the other, which is already ‘collateral’ to Straud’s lost earnings,” and that “a pension is a pension is a pension.”  Thus, the disability retirement benefits were deemed as an offset to future lost retirement benefits, but not lost earnings. Submitted by Jerry Martin. 

        Miscellaneous

Holguin v. Flores, 2004 Cal. App. LEXIS 1534. Under California law, gay persons may register domestic partnerships. Doing so conveys the right to bring a wrongful death action if the one partner is wrongfully killed. Cohabiting persons of opposite sexes can marry, but not register as domestic partners. In this decision, the California Court of Appeals held that cohabiting persons of opposite sexes are not entitled to bring wrongful death actions if one of the partners is killed. Submitted by David Jones.

        Suits Against Expert Witnesses

Forensis Group, Inc. v. Franz, Townsend & Foldenauer, 2005 Cal. App. LEXIS 929 (Cal. App. 2005). Forensis Group had been retained to provide expert witness services by Franz, Townsend & Foldenaur. After an unfavorable result, the ultimate client sued Forensis Group, but not Franz, Townsend & Foldenaur.  Forensis Group then sued Franz, Townsend & Foldenauer for indemnification. That suit was dismissed in summary judgment. The California Court of Appeals reversed the summary judgment and remanded for a consideration of the issues.
 
        Legal Procedure

Gutierrez v. Antonacci, 2006 Cal. App. Unpubl LEXIS 11607 (Cal. App. 2006). This decision involved a trial court defense verdict, after which the defendant filed a motion to recover expert witness fees. The plaintiff appealed on several grounds, one of which was that the expert fees paid to defense economist David Weiner were excessive. The plaintiff economic expert was Jennefer Pohlemus, whose fee was $3,800, while David Weiner’s fee was $16,479. Weiner billed for 60 hours of work in this case. The plaintiff charged that both economists had done essentially the same work and that therefore Weiner’s fee was excessive. The court reviewed accounts of the work that had been done by both experts and concluded that: “Plaintiff did not show that Pohlemus’s work was equally extensive, nor has he offered any other evidence that shows defendant’s expert witness fees are excessive.” There is no discussion in this decision that provides the opinions of either economic expert. There is also no suggestion that either expert was deficient in the work that he or she did or that the outcome was dependent on the work of either expert. 

Hastings v. Steamer Uncle Sam, 10 Cal. 351 (Cal. 1958). “To arrive at the damages sustained by the plaintiff . . . the witness Hubbs was permitted, against the objection of the defendants, to give his estimate of the value of the plaintiff’s services per day. These the witness place as high as one hundred dollars; and, as ground for his opinion, stated that the plaintiff was a speculator, possessed of a large property, money invested in stocks, r ents and other sources of income, and frequently made from one to five hundred dollars a day. The witness was unable to state the value of the plaintiff’s services in any other capacity or employment. This testimony was clearly improper. The opinions of witnesses are generally admissible only when they relate to matters of science, or art, or skill in some particular profession or business. The estimate of witness Hubbs was but his judgment from facts, and could not be substituted for that of the jury. Suggested by Stephanie Rizzardi Pearson.

Macias v. Super Taqueria Mexico MEI, Inc., 2006 Cal. App. Unpub. LEXIS 5408. (CA App. 2006). This decision draws a distinction between a “Golden Rule” argument, which is not permissible in California, and a per diem argument, which is permissible. A “Golden Rule”argument is to ask a jury how much they would want to receive if in the position of the plaintiff. The per diem argument was to ask the jury to award money based on the number of hours the plaintiff had to endure in pain and suffering. The attorney, however, had not specified a particular dollar amount per hour for the 94,170 waking hours the attorney discussed with the jury. Since the jury awarded $950,000, the Court said that there was good reason to suppose that the jury had multiplied 94,170 by $10/ per hour and rounded up to $950,000. The fact that this decision was “unpublished” means that it cannot be cited in California legal actions.  

       Wrongful Termination or Earnings Loss Due to Contract Violation

Parker v. Twentieth Century Fox, 3 Cal. 176; 474 P.2d 689 (Cal. 1970). Parker is the real name of actress Shirley Maclaine. She had a contract to lead in a musical, but the contract was cancelled and she was offered an alternative lead in a movie western. She sued and won $750,000 in damages. The California Supreme Court said: “[B]efore projected earnings from other employment opportunities not sought or accepted by the discharged employee can be applied in mitigation, the employer must show that the other employment was comparable, or substantially similar, to that which the employee has been deprived; the employee’s rejection or fairly to seek other available employment of a different or inferior kind may not be resorted to in order to mitigate damages.” Submitted by Jerry Martin. 

Toscano v. Greene Music, 124 Cal. App. 45th 485; 21 Cal. Rptr. 3d 732 (Cal. App. 2004). This decision involved damages resulting from the fact that an employee left at will employment on the basis of the promise of a job with another employer that was not fulfilled. Toscano sued the other employer for breach of promise of new employment. Economic expert Roberta Spoon projected earnings loss damages from the date the plaintiff left prior employment to his retirement. The court ruled that “the evidence was too speculative to lend support to the trial court’s award of Toscano’s future earnings from September 1, 2001 to his retirement. . . Spoon’s testimony does not establish Toscano had a definite expectation of continued employment with Fields for any particular period of time. Even drawing all inferences in Toscano’s favor, it is evident her supposition was based only on Toscano’s history of remaining with his employers until offered new employment. However, Toscano’s intentions or practices are not relevant to whether he could expect to remain with Fields until his retirement, where his employment with fields was at will. . . An expert’s opinions must not be based on speculative or conjectural data. If the expert’s opinion is not based upon facts otherwise proved or assumes facts contrary to the proof, it cannot rise to the dignity of substantial evidence.” Suggested by Peter Formuzis.

      FELA/Maritime Cases

Lund v. San Joaquin Valley Railroad, 2003 Cal. LEXIS 4419 (CA. 2003).  A trial court in an FELA action should not be told that an injured employee is not entitled to workers’ compensation benefits under state law. Prejudgement interest is not permitted under FELA law. (Submitted by Jerry Martin.)

Sharian v. United States, 2002 AMC 2089 (N.D.Cal. 2002). This maritime decision held that it is proper to deduct Social Security and Medicare taxes from a calculation of lost earnings. It also held that a 0% net discount rate used by Dr. Thaddeus Whalen was improper and substituted a net discount rate of 1.5 % used by Jerry Udinsky for the 0% used by Whalen.

      Admissibility of Expert Testimony

Crenshaw v. County of Los Angeles, 2004 Cal App. Unpub. LEXIS 4377. This decision admitted the life care testimony of Sara Gruentz, a certified rehabilitation nurse, and rejected arguments that the testimony of economist David Barker should have been excluded. The defense had argued that Gruentz was not qualified to testify about what was required based on medical diagnosis. The challenge to Barker was based on the inadmissibility of testimony by Gruentz

People v. Leahy, 882 P.2d 312 (Calif. 1994). The Supreme Court of California emphatically retained the Frye standard for admission of expert testimony, rejecting Daubert.

      Hedonic Damages and Emotional Services

Dubose v. City of San Diego, 2002 U.S. Dist. LEXIS 28297 (S.D. Ca. 2002). Judge James Lornenz granted defendant’s motion in limine to exclude the hedonic damages testimony of economic expert Robert Johnson, applying federal Daubert-Kumho standards and precedents rather than California precedents.

Fields v. Riley, 1 Cal.App.3d 308 (Cal.App.3d 308).  In a case involving the death of a four year old child, the court held that the jury was required to treat the costs to a parent of raising the child as an offset to an award for the lost “society, comfort and protection” of the child. (Submitted by Jerry Martin.)

Garcia v. Superior Court of Los Angeles County, 42 Cal. App.4th 177 (1996). This decision held that the testimony of Stan V. Smith was not admissible because hedonic damages are not allowed under the California survival action and therefore also not available under Section 1983 of the federal Civil Rights Act. (Revised listing.)

Loth v. Truck-a-way Corporation, 60 Cal. App. 4th 757 (1998). This decision held that the hedonic damages testimony of Stan V. Smith was not admissible because: “A plaintiff’s loss of enjoyment of life is not ‘a subject that is sufficiently beyond common experience that the opinion of an expert would assist the trier of fact[.]’ . . . No amount of expert testimony on the value of life could possibly help a jury decide that difficult question. A life is not a stock, car, home, or other such item bought and sold in some marketplace. Smith’s impersonal method of valuing life assumes that for the most part, all lives have the same basic value. That has democratic appeal, but Smith used no democratic process in reaching that conclusion or selecting which benchmark figures to consider in setting the baseline figure. There is no statute Smith could have turned to for guidance. Our legislature has not decreed that all injured plaintiffs of the same age and with the same degree of disability should recover the same hedonic damages; nor has it assigned set values in referring to the amounts of jury verdicts in other cases. (Citations omitted). Because counsel may not ask the jury to give the same amount of damages in another case, it would be inconsistent to permit an expert witness to do so.”  

      
Wrongful Termination

Mayer v. Multistate Legal Studies, 52 Cal. App. 4th 1428 ; 61 Cal. Rptr. 2d 336 (Cal. App. 1997).
The trial court had held that Mayer was only entitled to recover front pay for the period from termination until the plaintiff had begun to receive disability benefits based on Hodgkin’s disease in the amount of $11,526. The Court of Appeals held that Mayer was entitled to $71,818.37, which was the amount of lost wages during the contract period from which Mayer had been wrongfully terminated. This was for the balance of a three year contract period. It was uncontested between the parties that the amount of disability payments should be deducted from the individual’s lost earnings. Suggested by George McLaughlin.

Six Flags, Inc., v. Worker’s Compensation Appeals Board, 2006 Cal.  App. LEXIS 1855. “Labor Code 4702, subdivision (a)(6)(b) provides that when a worker without dependents suffers fatal injury during the course and scope of employment, the employer must pay $250,000 to the deceased worker’s estate as a worker’s compensation death benefit. . . we hold that section 4702, subdivision (a)(6)(b), is unconstitutional because the enabling provision, article XIV, section 4 of the California constitution (article XIV, section 4), does not identify states as a class of beneficiaries.” Suggested by David Jones.

Colorado

         Instruction for Calculating Damages in General

Good v. A.B. Chance,  39 Colo. App. 70; 565 P.2d 217 (Colo.App. 1977).  A.B.Chance challenged the admission of the plaintiff’s expert economic testimony “based on hearsay and facts not in evidence and that the expert’s opinion was improperly based on inflationary trends affecting Good’s anticipated earnings.” The economist had projected wage increases of 6 percent per year, but had deducted the inflationary part of those increase, which the court found acceptable. The defendant had tried to question the expert about taxes, but was not permitted to do so.  This case parallels some federal decisions in the same time period, notably Johnson v. Penrod Drilling Co, 510 F.2d. 234 (5th Cir. 1975) which had prohibited taking  inflation into account in damages calculations, but is quite opposite State of Indiana v. Daley, 153 Ind. App. 330; 287 N.E.2d 552 (Ind. App. 1972), which did allow an economic expert to take inflation into account.  The decision is based on hearsay rules that existed before the Colorado Rules of Evidence were adopted in 1980. (Submitted by Tim Tracy.)

          Standards for Recovery in Wrongful Death

Aiken v. Peters, 899 P.2d 382; 19 BTR 1173 (Colo. App. 1995).  The jury awarded plaintiff’s $804 for economic damages and $990,000 for non economic damages. The defendant claimed that the trial court erred in refusing to let the defense present expert testimony that the decedent would have consumed more of her estate if she had not been killed.  The court pointed out that only economic damages claimed or compensated was funeral expenses, so that the refusal to admit evidence with respect to the anticipated ultimate value of the estate was harmless error, if error at all.  This decision also provides extensive discussion of the cap on non economic damages in Colorado, which in this case should have been limited to $250,000, but which the trial court judge reduced to $500,000. 

           Life Care Plans and Future Medical Expense

Edward Kraemer & Sons v. Downey, 852 P.2d 1286 (Colo.App. 1992). This is an appeal from the Industrial Claim Appeals Panel (worker’s compensation) of an order by an Administrative Law Judge (ALJ) awarding compensation to an catastrophically injured man’s wife for providing life care assistance.  The man’s wife had been providing needed assistance with eating, bathing, preparing him for bed at night and turning him to prevent bedsores from developing.  The ALJ ordered that the petitioners “either contract with the claimant’s wife, compensating her at the rates paid to certified home health aides that were utilized during the hours when she was at work, or hire additional professionals to provide the reasonable and necessary home health care services that the wife is presently performing. The Colorado Court of Appeals affirmed. (Submitted by Tim Tracy.)

Reyner v. State Farm, 2007 Colo. App. LEXIS 1846 (Colo. App. 2007).  Reyher was injured in an automobile accident and was treated by Dr. Brucker, who sent his bills to State Farm Insurance who sent them to Sloans Lake for “repricing.” State Farm paid Dr. Brucker only for those portions of his bills it deemed reasonable. State Farm then contacted the Colorado Department of Insurance (DOI), which held only that the data in the database used by State Farm was “current, accurate and sufficient to make recommendations regarding the reasonableness of charges in compliance with regulation 5-2-8,” but made no other recommendations. The Court held that the DOI had not determined whether State Farm had compensated Reyher for all of her “reasonable” medical expenses. It also said: “Moreover, it is not clear that the DOI could have made such determinations in the proceedings before it. See DOI Reg. No. 5-2-8(2) (“This regulation is not intended to define reasonable and necessary expenses as such terminology is used in the Act.”) 

Vitella v. Corrigan, 2009 Colo. App. LEXIS 1477 (Colo. App. 2009). This decision involved an appeal by the plaintiff that the lost earnings of an injured child should not fall under a statutory limit capping damages in medical malpractice cases under Colorado’s Health Care Availability Act (HCAA). The cap limits damages to $1 million plus expenses that could be awarded “upon good cause finding.” The trial court held that $6.7 million awarded for life care and medical expenses of the child met the “good cause finding” standard, and set damages at $7.7 million before fault apportionment. The plaintiff appealed that $970,000 for future lost earnings should also meet the “good cause finding” standard. The court rejected that argument as follows: “The trial court here issued a written opinion that found there was ‘no need to compensate [the child] for loss of future income when her daily living expenses were already included in’ the uncapped multi-million dollar award for future ‘life care’ and medical expenses. Plaintiffs challenge this finding by citing their expert economist’s opinion that the ‘life care plan’ developed by another expert ‘does not provide [for] food, clothing and other expenses.’ After reviewing the trial testimony of plaintiffs’ expert witness Helen Woodward, we conclude that there was record for the trial court’s finding that the child’s life care plan provides for her basic necessities. As to food, for example, the plan assumes that child will remain on a feeding tube for the rest of her life and for the expenses of modifying a wing of the family home or possibly an apartment across the street to accommodate the child’s special needs. Plaintiffs have not shown any clear error or abuse of discretion in the trial court’s finding that the life care plan sufficiently provides for the child’s future needs” 

           Household Services

Hillen v. Tool King, 851 P.2d 289; 17 BTR 428 (Colo.App. 1993). This decision restores the determination of the administrative law judge (ALJ) that a workers compensation award should not include the cost of lawn care made necessary by the amputation of the plaintiff’s left leg.  The Industrial Claim Appeals Board had reversed the ALJ on this issue and provided compensation for lawn care. The Colorado Court of Appeals restored the decision of the ALJ. The court drew a distinction between household services directly “needed” by an injured person and lawn care, which is more optional, saying: “Cooking, along with certain other household chores, bears a direct relation to a person’s physical needs. Here it has not been shown that lawn care is a direct ‘medical treatment, medical [supply or] apparatus within the meaning of the statute.’” (Submitted by Tim Tracy.) 

          Treatment of Taxes

In Re: Hoyal v. Pioneer Sand Company, 2008 Colo. LEXIS 452 (Colo. 2008). The Colorado Supreme Court held that income taxes that would have been owed on a decedent’s lost earnings should not be taken into account by a jury in awarding wrongful death damages in Colorado. The decision cites legal decisions in other states that both agree and disagree with this conclusion. It also reviews the use of the term “net pecuniary loss” in previous Colorado decisions. The Court particularly cited the decision of Hinzman v. Palmanteer, 81 Wn.2d 327, 501 P.2d 1228 (Wash. 1972) in providing its own rationale that taxes are “a matter between the plaintiff and the taxing authority and of no legal concern to the defendant.” A dissent signed by two justices argued against this conclusion, citing two papers by Tyler Bowles and Chris Lewis in Kaufman, et al, eds, Economic Foundation of Injury and Death Damages (2005), and other sources, as providing guidance about how taxes should be taken into account. 

          Wrongful Termination

Shannon v. Colorado School of Mines, 847 P.2d 210 (Colo.App. 1992). This is a breach of contract action (wrongful termination) concerning prejudgment interest.  The issue at hand is whether the $400,000 awarded by the jury included prejudgment interest.  The economic expert had calculated back pay with prejudgment interest. The jury had not awarded the specific amount recommended by the economic expert for the plaintiff. The court notes that the award of $400,000 “is not so large as to compel the jury included within its verdict prejudgment interest.”  On this basis the court of appeals rejected the defendant’s claim that prejudgment interest was double counted. (Submitted by Tim Tracy.)

         Legal Procedure

Gall v. Jamison, 44 P.3d 233 (2002). Colorado's Supreme Court ruled that any attorney work product seen by an expert is discoverable. Reviews decisions in other legal jurisdictions on this matter.

        Admissibility of Expert Testimony

Lindsey v. People, 892 P.2d (Colo. 1995). The Colorado Supreme Court retained the Frye standard, but noted that its version of Frye "is not far removed from evaluation required under FRE..702," which is the basis of the Daubert decision. 

Schultz v. Wells, 13 P.3d 846, 2000 Colo. J.C.A.R. 4821 (Colo.App. 2000). This decision discussed the relative standings of the Frye test and Colorado’s Rule 702 (which parallels the FRE 702) in providing the basis for admission of expert testimony. After extensive discussion, the court said: “Accordingly, we agree with the defendant that Colorado Rules of Evidence, rather than the general acceptance test required under Frye, provided the appropriate framework to determine the admissibility of the evidence at issue here. However, the trial court did not rely exclusively on Frye, but also analyzed the issue in depth under CRE 402 and 702. Thus, we conclude that the court’s consideration of the Frye test here was not inappropriate.”  There were several witnesses in question not in economics, but a vocational rehabilitation expert had projected earnings loss. The testimony of that expert was allowed to stand. 

        Hedonic Damages and Emotional Services

Scharrel v. Wal-Mart Stores, Inc, 949 P.2d 89 (Colo. App. 1997). Cert. denied by Colo. Supreme Court. Hedonic damage testiomony by Stan V. Smith  was improperly admitted at the trial court level.

Connecticut

     Basis Income and Fringe Benefits for Projecting Earnings Loss

Earlington v. Anastasi, 293 Conn. 194 (Conn. 2009). This is an appeal of a medical malpractice award. The Connecticut Supreme Court held that the trial court should have ordered a remittitur for a portion of economic damages award on the grounds that the jury’s award of $1,588,000 for economic damages was not supported by the evidence. The plaintiff had presented testimony by Lawrence Forman, a rehabilitation expert, and Gary Crakes, an economist, the present value of lost earnings was $565,519 and that the present value of a life care plan was $524,355, for a total of $1,045,874. Crakes had testified that his present value figures were the midpoints of ranges, but did not indicate the size of the range for which his present values were midpoints. The Supreme Court gave the plaintiff 10 days to accept a remittatur of $542,126, the difference between the jury award and the present value testified to by Crakes.

Nunez v. Palmer, 96 Conn. App. 707 (Conn. App. 2006). This decision provides instruction with respect to the meaning of  “earning capacity” in Connecticut, but also addresses the question of whether the plaintiff’s lost earning capacity ceases when the plaintiff was subsequently injured in an unrelated accident during the course of his employment, and was found to be 100 percent disabled by a workers’ compensation commissioner. The decision cites Jerz v. Humphrey, 160 Conn. 219, 221, 276 A.2d 884 (1971). “Loss of earning capacity is . . .an . . . uncertain area for the assessment of damages . . . In determining whether there is a loss of earning capacity [t]he ‘essential question is whether plaintiff’s capacity to earn [has been] injured.” The Nunez court goes on to say that “such damages do not depend on the plaintiff’s receipt of any wages at all.” “In order to recover for an impairment of earning capacity, there must be a reasonable probability that the injured person did sustain such an impairment and that the evidence allows a finding of the reasonable estimate of the dollar amount. The focus of the question about the subsequent injury was on whether workers’ compensation payments constituted an offset to damages the defendant was liable to pay, not on whether the subsequent injury, by eliminating the worker’s earning capacity subsequent to the first injury affected should be taken into account in the determination of damages. The court held that workers’ compensation payments from the subsequent injury were a collateral source that should not have been taken into account. The Nunez court also said in footnote 8: “There was no actuarial table of the plaintiff’s life expectancy introduced as an exhibit. It is, however, not his life expectancy that controls the lost earning capacity in this case but the duration of his working life. It is common knowledge that on average, people in the United States work until at least age 65. If a fact is within the common purview of the populace, a juror may take it into account.”  Suggested by Allan McCausland.

         Standards for Recovery in Wrongful Death

Carrano v. Yale-New Haven Hospital, 279 Conn. 622; 904 A.2d 149 (CT 2006). Expert testimony was not provided to prove economic damages. The defendant had appealed the trial court decision on the basis that expert testimony was required to prove economic damages to a “reasonable certainty.” The Connecticut Supreme Court said: “We conclude that testimonial evidence is sufficient to establish economic damages to a reasonable certainty. We further conclude, however, that the evidence of economic damages in the present case was insufficient because plaintiff failed to introduce any evidence, expert or otherwise, concerning the decedent’s income taxes and personal living expenses.” The court went on to say: “[T]he decedent’s income consisted solely of disability payments, rather than wages salaries and tips. Regardless of the validity of this claim as it extends to other sources of income, we can perceive no reason to conclude that the rate of taxation of disability income is within the common knowledge and experience of the average juror. Second, although the concept of self maintenance may be within the common knowledge and experience of the average juror, personal living expenses are measured by ‘the standard of living followed by a given decedent. . .’ Because the amount of money necessary to feed, clothe and shelter an individual will differ dramatically depending on the lifestyle of the individual and the cost of living in the location in which the individual lives, we conclude that a plaintiff seeking to recover damages for the decedent’s lost wages or earning capacity must present evidence of the decedent’s probable personal living expenses.” Suggested by Steve Shapiro.

Chase v.  Fitzgerald, 132 Conn. 461; 45 A.2d 789 (Conn. 1946). This decision involved the wrongful death of a homemaker. The court said: “The rule for measuring damages resulting from death may . . . be briefly summarized as follows: It is that sum which would have compensated the deceased so far as money could do so for the destruction of life’s activities as he would have done had he not been killed, including the destruction of earning capacity, for such time as he would probably have lived, but with due allowance to the effect which the ordinary vicissitudes of life might have had upon his continued employment or those capacities and, as far as destruction of earning capacity is concerned, for the fact that a present payment will be made in lieu of sums which, had he lived, would have been received at periodic times in the future. In this state ‘damages due to the incapacity of a wife by reason of a personal injury are recoverable by her and not her husband.’ Hansen v. Costello, 125 Conn. 386, 390, 5 Atl(2d) 880.The decedent at the time of her death was not gainfully employed and there is no evidence indicating that she was likely thereafter to become a wage earner. In estimating damages properly allowable for her death, loss of earning capacity might not be a very material element to be considered. There remains, however, the destruction of her capacity to carry on life’s activities as wife and homemaker in the way she would have done had she lived. The determination of just damages for the death of such a one requires a ‘fair consideration of all the evidence tending to show the condition, capacity, ability and efficiency of the deceased in the discharge of her domestic duties, not only as a laborer performing menial service, but also as the housewife and head and administrator of the internal affairs of her home. . . The best that can be done is to prove the facts and circumstances of the woman’s life and service in these capacities, her age, her health and strength, her expectancy of life, and all that may appear to enlighten the minds and aid the judgment’ of the trier in reaching is decision. Bridenstine v. Iowa City Electric Ry. Co., 181 Iowa 1124, 134, 165 N. W. 435. Suggested by Steven Shapiro.

Feldman v. Allegheny Airlines, Inc., 524 F.2d 384 (2nd Cir. 1975). This decision of the 2nd Circuit was decided under Connecticut law involving the wrongful death of Nancy Feldman. The 2nd Circuit said: “The trial judge found that Mrs. Feldman’s professional earnings in her first year of employment would have been $15,040, and that with the exception of eight years during which she intended to raise a family and work only part time, she could have continued in full employment for forty years until she retired at age 65. The judge further found that during the period in which she would principally occupied in raising her family, Mrs. Feldman would have remained sufficiently in contact with her profession to maintain, but not increase, her earning ability. Pointing out that under Connecticut law damages are to be based on ‘the loss of earning capacity,’ not future earnings per se . . . (382 F. Supp. At 1282)(emphasis in original), the judge concluded that when a person such as Mrs. Feldman, who possesses significant earning capacity, chooses to forego remunerative employment in order to raise a family, she manifestly values child rearing as highly as work in her chosen profession and her loss of the opportunity to engage in child rearing ‘may thus fairly be measured by reference to the earning capacity possessed by the decedent’ (382 F.Supp. at 1283). Applying this rationale, the trial court judge made an award for the eight year period of $17,044 per year, the salary which he computed Mrs. Feldman would have reached in the year preceding the first child-rearing year, but did not increase the amount during this period.” The 2nd Circuit found the trial court judge to be in error for valuing Mrs. Feldman’s loss during the child bearing period at the level of her salary and that her loss of the ability to engage in child bearing and rearing was actually a “loss of capacity to carry on life’s non-remunerative activities. The 2nd Circuit held that the award for loss of earning capacity during the eight child bearing years should have been 25 percent of her salary. The 2nd Circuit recognized that the shift from loss of earning capacity to “loss of enjoyment of life’s activities” might result in an award similar to “that already made,” but concluded that the conceptual framework the court had just described was required by “Connecticut’s distinctive law of damages.” The 2nd Circuit went on to point out that a deduction should be made for “the expense of self maintenance,” but that the trial court’s determination of the cost of Mrs. Feldman’s personal living expenses were too low at $2,750 per year and raised the amount to $4,000 per year, increasing at 3% per year. Suggested by Steve Shapiro.

Floyd v. Fruit Industries, Inc., 144 Conn. 659 (Conn. 1957). This decision defines damages for which recovery can be made for wrongful death in Connecticut as the destruction of the decedent’s capacity to carry on life’s activities, including his capacity to earn money, as if he had not been killed. It holds that taxes must be subtracted from lost earnings, saying: “It would be difficult to conceive of a more unjust, unrealistic or unfair rule than one that would lead a jury to base their allowance of reasonable compensation for the destruction of earning capacity on the hypothesis that no income taxes would be paid on net earnings. For all practical purposes, the only usable earnings are net earnings after payment of such taxes.” The decision also required the subtraction of the decedent’s personal maintenance expenditures as follows: “The phrase ‘personal living expenses’ has never been exactly defined, and because of its inherent nature probably it never can be. It refers to those personal expenses which, under the standard of living followed by a given decedent, it would have been necessary for him to incur in order to keep himself in such a condition of health and well-being that he could maintain his capacity to enjoy life’s activities, including the capacity to earn money. Personal expenses would not ordinarily include recreational expenses, nor that proportion of living expenses properly allocable to the furnishing of food and shelter to members of his family other than himself. The whole problem of assessing damages, however, defies any precise mathematical calculation.” Suggested by Steve Shapiro.

Katsetos v. Nolan, 170 Conn. 637 (Conn, 1976). The Court defined damages in Connecticut for a wrongful death as follows: “In actions resulting in a death, a plaintiff is entitled to ‘just damages together with the cost of reasonably necessary medical, hospital and nursing services, and including funeral expenses.’ General Statutes § 52-555. ‘Just damages’ include (1) the value of the decedent’s lost earning capacity less deductions for her necessary living expenses and taking into consideration that a present cash payment will be made, (2) compensation for the destruction of her capacity to carry on and enjoy life’s activities in a way she would have done had she lived, and (3) compensation for conscious pain and suffering. . . It has been stated that our rule for assessing damages in death cases gives no precise mathematical formulas for the jury to apply; . . and that the assessment of damages in wrongful death actions ‘must of necessity represent a crude monetary forecast of how the decedent’s life would have evolved.’ Suggested by Steve Shapiro. 

Milligan v. Gundeck, 2005 Conn. Super. LEXIS 1831 (Conn. Super. 2005). This is a memorandum of the trial court judge, explaining his reduction of the jury’s award of $1.3 million in economic damages to the estate of Bernard Milligan to $943,784, his acceptance of $7.25 million in non economic damages, and his reduction of $6.25 million of a $7.25 million award to the widow, Lynette Milligan for loss of consortium. The discussion of economic damages includes discussion of the testimony of Dr. Gary Crakes, an economist, whose highest projection of economic damages was $943,784. 

Moffa v. Perkins Trucking Company, 200 F. Supp. 183 (D.Conn.1961). This decision interprets Connecticut law as it affects damages in wrongful death circumstances. The Court said: “Under our statute the cause of action which the executor or administrator is permitted to pursue is not one which springs from the death. It is one which comes to the representative by survival. The right of recovery for the death is one of the consequences of the wrong inflicted on the decedent.  The cause of action is a continuation of that which the decedent could have asserted had he lived. . . . In measuring a person’s actual loss from a permanent and total destruction of earning capacity, whether by death or injury, there is an important factor which must be offset against probable net earnings. That factor is any savings in income tax liability which can properly be attributed to a cessation of earned income. . .For all practical purposes, the only usable earnings are net earnings after payment of taxes. . . The probable cost of future ‘personal living expenses’ must be deducted from the allowance otherwise made as reasonable compensation for the total destruction of his capacity to carry on life’s activities. Personal living expenses mean those expenses which, under the standard of living followed by a given decedent, would have been reasonably necessary for him to incur in order to keep himself in such a condition of health and well being that he could maintain his capacity to enjoy life’s activities, including the capacity to earn money. Personal expenses would not ordinarily include recreational expenses, nor that proportion of living expenses properly allocable to the furnishing of food and shelter to members of his family other than himself.” Suggested by Steven Shapiro. 

        Household Services

Chase v. Fitzgerald, 132 Conn. 461; 45 A.2d 789 (Connecticut 1946).  This decision discusses the treatment of wrongful death in the context of a homemaker, saying: “Under our statute, differing from Lord Campbell’s Act in England and statutes in this country of like purport, the cause of action “which the executor or administrator is permitted to pursue is not one which springs from the death. It is one which comes to the representative by survival. The right of recovery for the death is as for one of the consequences of the wrong inflicted upon the decedent. . . . It is . . . a continuation of that which the deceased would have had if he had lived. He could have recovered for pain and suffering and for any expense that resulted from the injury. He could also have recovered for any injury; the loss from that cause, aside from certain subjective elements, would consist essentially of the impairment or destruction of his ability to carry on his wanted activities; . . .and, as incidental to that, he could have recovered for the destruction or any limitation upon his earning capacity. . . In this state ‘damages due to the incapacity of a wife by reason of a personal injury are recoverable by her and not her husband.’. . The decedent at the time of her death was not gainfully employed and there is no evidence indicating that she was likely thereafter to become a wage earner. In estimating damages properly allowable for her death, loss of earning capacity might not be a material element to be considered. There remains, however, the destruction her capacity to carry on life’s activities as wife and homemaker in the way she would have done had she lived. The determination of just damages for the death of such a one requires a ‘fair consideration of all of the evidence tending to show the condition, capacity, ability and efficiency of the deceased in the discharge of her domestic duties, not only as a laborer performing menial service, but also as the housewife and head and administrator of the internal affairs of the home. . .The best that can be done is to prove the facts and circumstances of the woman’s life and service in these capacities, her age, health and strength, her expectancy of life, and all that may appear to enlighten the minds and judgment” of the trier in reaching his decision.” Suggested by Steve Shapiro.

        Treatment of Taxes

Gorham v. Farmington Motor Inn, Inc., 159 Conn. 576 (Conn. 1970). This decision involved a personal injury to a surviving plaintiff. The defendant had asked for a jury instruction that the award would not be subject to income tax, but was turned down by the trial court. This was one basis for the appeal. The Gorham Court rejected that argument, citing particularly the decision of the Illinois Supreme Court in Hall v. Chicago & N.W. Ry. Co., 5 Ill. 2d 135, 152, 125 N.E.2d 77: “It is a general principle of law that in the trial of a lawsuit the status of the parties is immaterial. Thus what the plaintiff does with the money, or how the defendant acquires the money with which to pay the award, is of no concern to the court or jury. Similarly [sic], whether the plaintiff has to pay a tax on the award is a matter that concerns only the plaintiff and the government. The tort-feasor has no interest in such question.” The Gorham court distinguished between the treatment of taxes in a personal injury with a surviving plaintiff and the treatment of taxes in computing damages for wrongful death, in which case “an savings of income tax liability which can be attributed to a permanent and total cessation of earned income must be considered.” Note, however, that Katsetos v. Nolan, 170 Conn. 637 (Conn, 1976) indicates that income taxes should be subtracted in both wrongful death and personal jury cases. Suggested by Allan McCausland. 

        Hedonic Damages and Emotional Services

Katsetos v. Nolan, 170 Conn. 637 (Conn, 1976). The Court defined damages in Connecticut for a wrongful death as follows: “In actions resulting in a death, a plaintiff is entitled to ‘just damages together with the cost of reasonably necessary medical, hospital and nursing services, and including funeral expenses.’ General Statutes § 52-555. ‘Just damages’ include (1) the value of the decedent’s lost earning capacity less deductions for her necessary living expenses and taking into consideration that a present cash payment will be made, (2) compensation for the destruction of her capacity to carry on and enjoy life’s activities in a way she would have done had she lived, and (3) compensation for conscious pain and suffering. . . It has been stated that our rule for assessing damages in death cases gives no precise mathematical formulas for the jury to apply; . . and that the assessment of damages in wrongful death actions ‘must of necessity represent a crude monetary forecast of how the decedent’s life would have evolved.’ Suggested by Steve Shapiro. 

Mather v. Griffin Hospital, 207 Conn. 125 (1988). The Supreme Court of Connecticut held that an award for loss of the enjoyment of life did not duplicate the award for other damages and was not a windfall for the family of the the plaintiff. Whether an economist could testify about hedonic damages was not addressed.

        Admission of Exert Testimony

State v. Porter, 241 Conn. 7; 698 A.2d 739 (Connecticut 1997). This very long decision adopts the standards of Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993) for Connecticut.  The decision entailed admission of polygraph evidence in Connecticut. It provided detailed discussion of the standards for admitting evidence and provided conclusions similar to those the U.S. Supreme Court adopted two years later in Kumho Tire Co., Ltd v. Carmichael, 509 U.S. 579; 119 S.Ct. 1167 (1999) that no one test, by itself, determines admissibility.

Delaware

     Basis Income and Fringe Benefits for Projecting Earnings Loss

Foley v. Elkton Plaza Associates, LLC, 2007 Del. Super. LEXIS 81 (Del. Super, 2007). The court rejected an appeal of the size of the damages award, saying: “In Delaware, there are several cases in which this Court has determined that the jury's verdict was a compromise. This case, however, is not one them. Although there was a close question of liability presented in this case, as is evidenced by the jury's finding that each party was 50 percent negligent, the jury's ultimate award of damages was not grossly inadequate. Foley is to receive $ 312,500, or 50 percent of the jury's $ 625,000 award. This amount is nearly twice as much as Foley's claimed damages of $ 34,000 for past medical bills and $ 134,000 for past lost wages. While Foley expected much more for future special and general damages, given her claims that she will incur future medical expenses, life care expenses, and loss of earnings, the Court finds that the jury's remaining award allocated for future damages is not inadequate. The evidence presented by Foley, which attempted to show that she will incur a significant amount of future expenses and losses, such as the testimony of the life care planner and economist, was likely offset in the minds of the jury by evidence revealing that she may not be as debilitated in the future as she claims. Defendants' expert's testimony discounting the extent of Foley's disability and testimony that she has a relatively normal social life, extensively travels, and is away from home for extended periods of time, all serve to minimize the impact of her dire health projections. The damages award is, therefore, not inadequate given the evidence presented at trial.”

        Collateral Source

Sears, Roebuck and Co. v. Midcap, 893 A.2d 542 (Del. 2006). This decision defined the application of the collateral source rule to pension benefits when a death results in reduced benefits to the spouse of a decedent. The Delaware Supreme Court said: “Generally, courts exclude Social Security and Air Force Pension benefits under the collateral source rule. This case, however presents a different factual scenario than in cases, such as Davis and Nanticoke [citations provided in a footnote], that apply the collateral source rule, because in those cases the plaintiff did not make a claim for lost Social Security or Air Force pension benefits. Rather, those cases involved the traditional application of the collateral source rule. That is not this case. The facts   in this case are more analogous to those in Rotolo Chevrolet v. Superior Court, a California case where the plaintiff made a claim for lost pension benefits due to his early retirement. . . [T]he court held that ‘even if [the plaintiff] may recover for a reduction in his pension benefits, he cannot use the collateral source rule to prevent [the defendant] from introducing evidence that he is, in fact, receiving a pension.’ . . Similarly, there plaintiffs here cannot use the collateral source rule to prevent the defendant from introducing evidence that the plaintiff was in fact still receiving, at least in part, the decedent’s Air Force pension or Social Security benefits. That is, the collateral source doctrine should not bar evidence being offered to show that a payment that is represented to the jury as a benefit that the plaintiffs lost , either in whole or in part, and is actually being received.”

        Admission of Expert Testimony

Bowen v. E. I. Dupont de Nemours & Co., 906 A.2d 787. (DE 2006). The trial court had excluded the testimony of two of the Plaintiff’s expert witnesses, prompting a Daubert review by the Delaware Supreme Court, which affirmed the decision of the trial court. The Court quoted Dura Auto. Sys. of Ind., Inc. v. CTS Corp., 285 F.3d 609 (7th Cir. 2002) to the effect that: “A scientist, however well credentialed he may be, is not permitted to be the mouthpiece of a scientist in a different specialty. That would not be responsible science. A theoretical economist, however able, would not be allowed to testify to the findings of an econometric study conducted by another economist if he lacked expertise in econometrics and the study raised questions that only an econometrician could answer.  If it were apparent that the study was not cut and dried, the author would have to testify; he could not hide behind the theoretician.” Economic issues were not central to the decision in this case. 

M.G. Bankcorporation, Inc. v. Le Beau, 737 A.2d 513 (Del. 1999). In this decision, Delaware adopted Daubert v. Merrell Dow, 509 U.S. 579 (1993) and progeny, saying that Delaware’s Rule Rule of Evidence 702 was identical to Federal Rule of Evidence 702. Kumho Tire Co., LTD v. Carmichael, 526 U.S. 137 (1999) had been reached two weeks after oral argument in Le Beau and was cited prominently. The decision upheld the decision of the Court of Chancery that appraised the fair value of Petitioner’s stock at $85 per share, but remanded for further proceedings regarding whether simple or compound interest should have been used. Both sides had used economic experts, both of whom had been found qualified by the Court of Chancery. Clarke had used a 12% discount rate and Reilly had used an 18% discount rate with differences “attributable primarily to their different estimates of MGB’s cost of equity capital, and their different assumptions of the company specific risks confronting MGB at the time of the merger.” The issue regarding use of simple or compound interest on the award from the date of the loss to the date of trial was based on the legal question of whether a simple or compound interest rate should have been used. The Delaware Supreme Court pointed out that while an award of compound interest was allowed under Section 262, an award including compound interest is the exception rather than the rule. The Supreme Court felt that the Court of Chancery had not adequately explained its decision to award compound interest.

Porter v. Turner, 2008 Del. LEXIS 280 (Delaware 2008). The Delaware Supreme Court affirmed several trial court decisions, one of which was to allow the economic damages testimony of Andrew Verzilli for the plaintiff. One challenge to the testimony of Verzilli was that the medical expert had never clearly stated that life care would be needed throughout the plaintiff’s lifetime.  The Court indicated that the record did indicate that medical expert had expressed that opinion. The second challenge was based on the fact that Verzilli had been unaware of the plaintiff’s income from a “side job.” The Court indicated that the defendant had never produced any reliable figure to quantify Turner’s additional income at the side job and said: “To be sure, Verzilli’s failure to include an estimate of income from his ‘side job’ casts some doubt about the accuracy of his assumptions underlying his opinion about future lost income. That failure does not require a wholesale exclusion of his opinion about future lost income, however Porter’s contention that Verzilli’s opinion should be barred in toto clearly is a misplaced attack on the verifiability of Verzilli’s methodology based on Daubert. Porter challenges only Verzilli’s underlying assumptions, not the methodology that is based on the assumptions. Moreover, by vigorous cross examination, Porter’s counsel could highlight the inaccuracy or unreliability of Verzilli’s estimates based on his failure to consider the “side job” income. Porter’s counsel could and did attack the validity of the assumptions about Turner’s capacity to work that Verzilli relied upon when formulating his ultimate opinion. We note that the jury must have understood the significance of the assumptions’ questionable validity, because the jury discounted a portion of Verzilli’s projections, and awarded less than Verzilli’s combined estimates for future care and lost income.” 

        Hedonic Damages and Emotional Services

Ferguson v. Valero Energy Corp., 2009 U.S. Dist. LEXIS 34888 (E.D. Pa. 2009). This is an opinion by Judge Mary A. McLaughlin interpreting Delaware’s Wrongful Death Act and Survivor’s Act as they apply to categories of damages. There is no discussion of an economic expert in the decision. The case involved the death of a single adult man who was living with, but not financially supporting his father. The father was suing for damages under the Delaware Wrongful Death Act. The decedent’s brother was suing for damages under Delaware’s Survival Act. The judge held that there was sufficient evidence that the decedent had provide household services to assist his father, but no evidence to suggest that the decedent had financially supported his father. The judge also said: “Delaware courts have consistently held that the Wrongful Death   Act allows the recovery of that portion of the decedent’s lost earnings that would have been saved, over and above the decedent’s spending on his maintenance, and passed on to his estate.” The plaintiff’s had sought “any and all hedonic damages allowed for the loss of the decedent’s life and enjoyment of future life as permitted by Delaware law or as evidence of the pain and suffering and mental anguish” of the decedent. Judge McLaughlin’s discussion of hedonic damages under the Survivor’s Act relied heavily on the decision in Sterner v. Wesley College Inc., 747 F. Supp. 263 (D.Del. 1990). Under Delaware law, any claim for hedonic damages has to be as a part of pain and suffering and not as an independent category of damages “at least under circumstances like those in Sterner and here, where only a brief interval occurred between decedent’s injury and death. . . .The Court therefore predicts that if Delaware law were to allow for the recovery of hedonic damages for life’s pleasures and loss of enjoyment of life, then the Survivor’s Act would allow recovery of such damages only to the extent they were suffered for the period of time between the injury at issue and the decedent’s death.  

District of Columbia

    Standards for Recovery in Wrongful Death

Burton v. United States, 2009 U.S. Dist. LEXIS 104029 (D.D.C. 2009). This decision of the U.S. District Court for the District of Columbia provided interpretation of both the Wrongful Death Act and the Survival Act of the District of Columbia and how they work together. Burton’s survivors and his estate were allowed to recover damages under both statutes. The court said: “Under the Wrongful Death Act . . . recovery by the decedent’s survivors is comprised of economic damages to the decedent’s spouse – in this case compensating the lack of pension and Social Security payments, the lack of household services rendered , and funeral expenses – and non-economic damages to the decedent’s spouse – in this case compensating loss of consortium.” The Court also allowed Burton’s estate to recover for “his bodily injury, mental anguish, and discomfort he experienced until his death.”

        Hedonic Damages and Emotional Services

Lucy v. Washington Metropolitan Transit Authority, 1989 U.S. Dist. LEXIS 6453 (D.D.C. 1989).  The court granted a defense motion to exclude hedonic damages on the ground that Maryland’s survival statute does not provide for hedonic damages. 

Florida

     Basis Income and Fringe Benefits for Projecting Earnings Loss

Atlantic Coast Line Railroad Company v. Braz, 196 So.2d 109 (Florida 1967). Held that a plaintiff widower whose wife had worked in plaintiff’s business without direct compensation could recover for the costs of replacing those services.

BellSouth Telecommunications v. Meeks, 2002 Fla. LEXIS 1730 (Fla. 2003).  The Florida Supreme Court held that damages recovered by a minor child are not limited to the period of minority, but “should be calculated based on the joint life expectancies of the minor child and the deceased parent.” The exact mechanism by which this should be done is not made clear.  Under Florida’s wrongful death act, a minor child is defined as a child under the age of 25 if the spouse of the decedent is still living. The decedent left a surviving spouse, a daughter aged 28 and a son aged 24. The son, being under 25, was permitted to recover for losses throughout his life expectancy while the daughter could not sue for any damages.  Submitted by Ralph Frasca and David Jones. 

Builder's Square, Inc. v. Shaw, 755 So. 2d 721; 24 Fla. L. Weekly D. 2166 (Fla. App. 1999). An unnamed economic expert projected lost earnings at three different hourly wage rates, $16.00 per hour, $8.00 per hour and $6.50 per hour. The plaintiff had worked at $12.50 per hour at one time as a carpenter, which the expert had increased to $16 per hour based on expected wage increases through 1997. The plaintiff was working at $6.50 per hour at the time of his injury. The jury based its damages on the $8.00 figure, for which there was no particular justification except that it was between $6.50 and $16.00. The defendant sought a remittatur to the $6.50 rate or a new trial. The court found the jury was free to choose an intermediate figure and rejected the appeal. This case was also interesting because the tort at issue was "spoilation of evidence." The plaintiff had been injured by a product defect in a ladder, for which the plaintiff sought worker sought damages.  Builder's Square had disposed of the ladder after the injury, which resulted in the worker accepting $250,000 in settlement of injury damages with the manufacturer. The harm alleged in the spolation of evidence claim was that damages from the product failure would have been larger if the ladder had been kept as evidence. Another issue in the decision was whether the $250 settlement was a set off to damages being claimed in this case. The plaintiff argued that the injury tort an the spolation of evidence tort were separate matters. The court held that the spoilation claim was derivative and thus that the $250,000 should be subtracted from the award in the spoilation claim. The partial dissent argued that the $250,000 should not have been treated as a set off, but that the jury could be told of its existence.  The dissent also includes a good discussion of the tort of spoilation of evidence. (Decision from Catherine Reitz.) 

McElhaney v. Uebrich, 699 So.2d 1033 (Fla. App. 1997).  Held that the loss of a wife’s earning capacity could be based on what appellee wife could have earned in the open market could be used to calculate her earning capacity despite the fact that she worked unpaid for her husband in their industrial cleaning business. 

Wendel v. Wendel, 805 So. 2d 913; Fla. L. Weekly D 2557 (Fla. App. 2001). This two page decision in a child custody and child support matter deals with how to measure the husband's earning capacity. The husband had a "master's degree in tax law," but had not been employed full time as an attorney since 1994. At the time of the modification hearing, the former husband had been employed for two to three months as a real estate sales person and had only earned $10, 300 in the prior year as a part time attorney doing real estate work. Dr. Hartley Mellish, an economist presented by the former wife, testified that average earnings for an attorney were $79,159 and trial court had accepted this figure. The court of appeals rejected Mellish's testimony, saying: "Expert testimony establishing the prevailing earnings for holders of a particular degree does not constitute evidence sufficient to impute that amount of income to a party." The court also pointed out that Mellish had not conducted a survey, nor did he have information concerning actual employment availability in the local area. The appeals court remanded to the trial court for further consideration of evidence of the former husband's earning capacity. (Decision from Catherine Reitz.) 

    Standards for Recovery in Wrongful Death

Bould v. Touchette, 349 So. 2d 1181 (Florida 1977).  This case was tried under earlier versions of Florida’s Wrongful Death and Survivor Statutes and the Florida Wrongful Death Act as of 1977 was not applied. The suit was brought by the elderly mother of a married couple killed in an automobile accident who was dependent on the couple for her sole support.  The District Court of Appeals had suggested that the jury was legally bound to make a mathematically precise and minimal award, and had reduced the jury’s verdict reached at the trial court level. The Florida Supreme Court held that the verdict of the jury was within the reasonable range allowed by Florida law, reversing the District Court. 

Hiatt v. United States, 910 F.2d 737 (11th Cir. 1990). The 11th Circuit affirmed a 50 percent personal consumption reduction in a wrongful death action under Florida law, saying: “The record indicates that the Hiatt’s marriage, while never formally terminated, was far from ideal, with suspicions of infidelity and periods of separation. . . . The district court based its finding that Hiatt would have worked only to age 65 on evidence of his increasing interest in recreational activities and on an expert economist’s testimony based on work-life expectancy tables. The district court also heard evidence that Mr. Hiatt enjoyed a somewhat luxurious lifestyle such that it would be reasonable to expect his personal consumption rate to be well above average.”

Delta Airlines, Inc. v. Ageloff, 552 So. 2d 1089 (Florida 1989). Delta admitted liability and this short decision was exclusively involved with damages under the Florida Wrongful Death Act. The sole issue for the jury was to determine the loss of prospective net accumulations to the estate of a single decedent with no dependents. Plaintiffs presented expert testimony of Dr. Irving Goffman, an economist and Dr. Jonathan Cunitz, a financial consultant. The defense presented Dr. G. Hartley Mellish, an economist.  The differences were large. Dr. Goffman projected lost accumulations at $1,974,190; Cunitz at $2,829,688; and Mellish at $279,878.  The Florida Supreme Court cited Jones & Laughlin Steel Co. v. Pfeifer, 462 U.S. 523 (1983), in refusing to take a position on how inflation should be taken into account and sent the decision back to the United States Court of Appeals, who had certified the question about whether lost accumulations should be included as a damage and how they should be calculated.

Robertson v. Hecksel, 2005 U.S. App. LEXIS 17201 (11th Cir. 2005). The mother of a 30 year old adult decedent brought an action for her own loss of support, loss of companionship, and pain and suffering resulting from the death of her son in a 42 U.S.C. § 1983 action on the basis of a deprivation of her Fourteenth Amendment right to a relationship with her adult son. This claim was dismissed by the trial count. The dismissal was affirmed by the 11th Circuit on the grounds that there is no constitutionally-protected liberty interest in a continued relationship with an adult child. The 11th Circuit pointedly did not minimize the value of the loss of such a relationship, but said: “[I]t is the province of the Florida legislature to decide when a parent can recover for the loss of an adult child. We will not circumvent its authority through an unsupported reading of the Fourteenth Amendment.”  

Seaboard Coast Line Railroad Company, 270 So. 2d 359 (Florida 1972). This case holds that evidence of remarriages cannot be introduced into evidence in a wrongful death action in Florida. The case itself was interesting in that the surviving widow had been married three times between the death of her decedent husband and the trial. In dissent, Justice Dekle said: “The rapid fire of three successive marriages within four years after what may well have been a very successful one would really seem to demonstrate the gravity of the loss of a very fine husband and mate.  It also may not, depending upon all of the evidence and the jury’s finding, but that is just the point; it is a matter for the jury to weigh all of the evidence in reaching its conclusion as to the extent of the loss.” 

Synergy Gas Corporation v. Johnson, 627 So. 2d. 539 (Fla. App. 1993).  In Florida, “net accumulations to an estate” must be based on evidence of the savings habits of a decedent. An economic expert had projected 6 percent of earnings would have been invested for the next 26 years in spite of the fact that the decedent had no record of savings. The Court of Appeals upheld other aspects of the jury’s verdict, but reversed the award for net accumulations to the estate.

Wadsworth v. Friend, 201 So. 2d 641 (Fla. App. 1967). The plaintiff in a wrongful death case was the 42 year old daughter who had suffered from rheumatoid arthritis since the age of 15 and had depended on her decedent mother for full support. The Florida Court of Appeals ruled that dependency depended on circumstances and must be determined by the facts in the case. It also ruled that Florida recognizes the collateral source rule and rejected a defense argument that $14,800 received from the woman’s ex-husband after the decedent’s death to pay off arrears in alimony should be treated as an offset.

Wilcox v. Leverock, 548 So. 2d 1116 (Florida, 1989). In answer to a certified question from the 11th Circuit Federal Court of Appeals, the Florida Supreme Court indicated that “net accumulations to an estate” based on passive earnings that did not result from the skill or effort of the decedent could not be recovered.  In this case, the estate consisted of trusts that were inherited by the plaintiffs. The words “net accumulations” had first appeared in the Florida Wrongful Death Act of 1972.  The Florida Supreme Court considered “net earnings” and “net accumulations” theories in some detail and concluded that it would be double recovery for investment income to allow future accumulations in addition to the transfer of the trusts to the survivors.

           Life Care Plans and Medical Expense

Colomar v. Mercy Hospital, Inc., 461 F. Supp. 1265 (S.D.Fla. 2006). This decision denied Mercy Hospital’s motion to dismiss plaintiff’s second amended complaint in a breach of contract claim involving allegations of deceptiveness on the part of Mercy Hospital. Plaintiff was billed at rates charged to uninsured patients for medical services. Colomar claimed she was charged nearly $12,863 for medical services that actually cost $2,098; that Catholic Health Care hospitals, including Mercy Hospital. generally charge uninsured patients at 370% of Medicare reimbursement rates; that Mercy Hospital in particular charges uninsured patients rates at 450% of Medicare Reimbursement Rates; that CHE’s cost-to-charge ratio is 394%, meaning that on average CHE hospitals charge almost four times their costs to uninsured patients; and that CHE hospitals rank in the top 10% of hospitals nationwide in terms of cost-to-charge ratio. The Court said: “Mercy’s premise, that unreasonable pricing claims can only be established by showing that prices grossly exceed the market, is far too restrictive a test of reasonableness.” The court also held that the relevant market comprises both uninsured patients and patients covered by insurance policies and federal program and added: “[S]imply looking at the rates charged by other hospitals can give a false sense of value. That is, if other hospitals grossly overcharge for services relative to their costs, then a mere side-by-side comparison of hospitals’ unreasonable charges would make them appear reasonable. Such consistency, standing alone, is not synonymous with reasonableness.”

          Collateral Source

Goble v. Frohman, 901 So. 2d 830 (Fla. 2005). This decision upheld both the trial court and the Florida Court of Appeals, which had held that amounts paid by third party providers could be recovered, but not amounts before billing prices were discounted. This is explicit in Section 768.76, which says: “In any action to which this part applies in which liability is admitted or determined by the trier of fact and in which damages are awarded to compensate the claimant for losses sustained, the court shall reduce the amount of such award by the total of all amounts which have been paid for the benefit of the claimant, or which are otherwise available to the claimant, from all collateral sources; however, there shall be no reduction for collateral sources for which a subrogation or reimbursement right exists. . .” In this case, Goble’s medical providers billed for $574,554.31. Aetna was able to arrange to discount the bills to $147,970.76, for which Aetna had the right of subrogation. The trial court held that $147,970.76 could be recovered, but not $574,554.31.  

Grell v. Bank of America
, 2007 U.S. Dist. LEXIS 33280. (M.D.Fla 2007). This is an order making a small reduction in the award for past medical expenses, but holding that expenses for which Grell was liable both for the past and in the future should not be discounted. The decision made it clear that the standard under Florida law that a plaintiff can only recover for amounts actually paid or for which the plaintiff is liable, including amounts subject to subrogation. The Court cited Goble v. Frohman, 901 So. 2d 830 (Fla. 2005) as holding that contractual discounts,  should be set off against amounts recoverable by plaintiffs, as acknowledged by Grell. However, amounts still owed were not subject to such reductions.

         Legal Procedure

Allred v. Chittenden Pool Supply Inc., 289 So. 2d 361 (Florida, 1974). This decision addressed whether it was proper for counsel to use per diem arguments in closing statements to a jury. The Court said: “Argument of a plaintiff’s counsel to the jury regarding various elements of damages, especially where pain and suffering are involved, based on a mathematical formula of calculable value or on a per diem basis may be helpful to the jury in its final deliberations. . .Such argument  is not unfettered and is not evidence. Furthermore, opposing counsel has an equal chance to advance his suggestions, leaving the ultimate decision of the award to the jury.”   

Cowen v. Thornton, 621 So. 2d 684 (Fla.App. 1993). At the trial court level, the jury had held the defendant 25 percent liable for the medical expenses of an injured disturbed teenager and held the plaintiff 75 percent liable. The two sides had agreed that medical expenses were $28,260.77. The plaintiff’s economist projected Cowen’s future earnings loss at between $619,263 to $645,167. The jury awarded $0 for damages and the plaintiff asked for a remittatur. The court ordered a new trial limited to the amount of damages. The decision discusses special provisions in Florida law relating to cases in which a defendant was found liable, but the jury awarded $0 damages. (Submitted by Catherine Reitz.)

Elkins v. Syken, 672 So.2d 517 (Florida 1996). This was an appeal of the Court of Appeals in Syken v. Elkins, 644 So.2d 539 (Fla. App.1994). The Florida Supreme Court strongly endorsed that lower court decision and repeated the eight guidelines from that decision, which were: “1. The medical expert may be deposed either orally or by written deposition. 2. The expert may be asked as to the pending case, what he or she has been hired to do and what the compensation is to be.   3. The expert may be asked what expert work he or she generally does. Is the work performed for the plaintiffs, defendants, or some percentage of each?  4. The expert may be asked to give an approximation of the portion of their professional time or work devoted to service as an expert. This can be a fair estimate of some reasonable and truthful component of that work, such as hours expended, or percentage of income earned from that source, or the approximate number of IME's that he or she performs in one year. The expert need not answer how much money he or she earns as an expert or how much the expert's total annual income is. 5. The expert may be required to identify specifically each case in which he or she has actually testified, whether by deposition or at trial, going back a reasonable period of time, which is normally three years. A longer period of time may be inquired into under some circumstances. 6. The production of the expert's business records, files, and 1099's may be ordered produced only upon the most unusual or compelling circumstance. 7. The patient's privacy must be observed. 8. An expert may not be compelled to compile or produce nonexistent documents.” 

ITT Hartford Insurance Co. v. Owens, 816 So. 2d 572 (Florida 2002). This is an appeal for either a new trial or an additur from a trial court decision that had been affirmed by the Florida Court of Appeals. The jury had decided that the amount of future damages for the medical expenses of Jerry Owens was one million, eight hundred thousand dollars over a 25 year period, but apparently also said that the present value of that sum was seventy two thousand dollars. Presumably, the jury missed a zero and the present value was supposed to have been $720,000. The arguments of the defendant that $72,000 really is the jury’s view of the present value of $1.8 million makes for interesting reading. 

Olges v. Dougherty, 856 So. 2d 6; 28 Fla. L. Weekly D. 2019 (Fla. App. 2003). At issue was a trial court’s order that the plaintiff “submit to an examination. . . including a psychological clinical review and . . .psychological testing” by Michael Shahnasarian, Ph.D. Dr. Shahnasarian had been retained by the defendant as a life care planning expert and wanted to be permitted to perform a battery of psychological tests.  The Florida appeals court evaluated Dr. Shahnasarian’s credentials and quashed the order of the trial court judge, saying: “Neither as a psychologist or as the wearer of his many other hats was Dr. Shahnasarian shown to possess the ‘knowledge, skill, experience, training, or education’ necessary to qualify as an expert on the standard of care required of a medical doctor who recommends that a spinal column stimulator be implanted.” The court went on to add, however, that: “Although a psychologist’s testimony is not competent evidence of the standard of care required of a medical doctor, a physician may be qualified to testify as to the standard of care required of a psychologist. 

Syken v. Elkins, 644 So. 2d 539 (Fla. App. 1994) The trial court judge had required a defense medical expert to provide an extraordinary amount of personal practice and tax information in order to be allowed to testify. Dr. Richard Glatzer had been ordered to provide a complete and accurate list of his billings for IME (Independent Medical Examination) services performed since November 23, 1992, to be produced within 7 days. Dr. Glatzer was also required to provide his 1099's for the past three years that reflect in whole or in part income derived from IME work, or to provide plaintiff with an authorization for the plaintiff to get these materials from the Internal Revenue Service or from payor insurance carriers. The trial court judge also held that Dr. Glatzer would have to maintain complete records of all IME services provided after November 23, 1992, if he was to testify in any future case before the trial court judge, which would include a complete and accurate listing of each and every IME performed, every dollar billed for IME work, specifying in each case whether the money was paid by the defendant, the defense lawyer, or by some other person or entity, each and every 1099. The trial judge also ordered that this list would be made available for inspection and copying by any interested party of Dr. Glatzer was to be allowed to testify in his court. The Court of Appeals held that: “[I]n order to demonstrate the possibility of bias, it is sufficient for a doctor to be asked to give an approximate estimate for IMEs and total patients seen in a year. The figures given need only be an honest estimate, and do not have to be an exact number. We find no sound reason to require disclosure of exact income figures. The doctor should not be required to disclose the amounts of money he or she earns from expert witness work, or disclose their total income.” The Court also said: “In Syken, the court ordered additional discovery which, in light of the doctor’s affidavit, is only duplicative, annoying and oppressive.” The Court also provided eight specific guidelines for what can be asked of an expert, which were specifically endorsed by the Florida Supreme Court in Elkins v. Syken, 672 So. 2d 517 (Florida 1996).

       Household Services

Etheridge v. Piper Aircraft Corporation, 559 F.2d 1027 (5th Cir. 1977). This decision interprets Florida law.  There was a dispute between the appellants whether Florida or Georgia law applied. This was not resolved by the 5th Circuit on the basis that it was unnecessary to do so to resolve the questions before the court. At issue was whether evidence that lost services were replaced was necessary for recovery of past damages. The Etheridge Court cited Smyer v. Gaines, 332 So.2d 655 (Fla. App. 1776) as authority for ruling that “it is unnecessary for any . . . dependent to have to hire someone to perform . . . services as a condition of recovery.” 

       Collateral Source

Barlow v. North Okaloosa Medical Center, 2004 Fla. LEXIS 185 (Fla. 2004). This decision addresses the meaning and substance of “lost accumulations to an estate” in the Florida Wrongful Death act.  The decision itself was that the Wrongful Death Act was not relevant to an award under a new Florida medical malpractice statute in which different damage rules apply if a claimant agrees to arbitration rather than filing a tort action. This case was filed in a window of time between the adoption of the medical malpractice statute and a later modifying statute that would have held that the Wrongful Death Act applied.  The difference was that the decedent’s lost Social Security payments did not have to be offset by the decedent’s personal expenses.  Submitted by Jerry Martin.

      Admissibility of Expert Testimony

Castillo v. E.I. Du Pont De Nemours & Co., 2003 Fla. LEXIS 1159; 28 Fla. L. Weekly S 538 (Fla. 2003).  The Florida Supreme Court reemphasized its commitment to the Frye standard rather than Daubert in quashing a Court of Appeals decision to reverse on the basis of the insufficiency of plaintiff’s expert testimony at the trial court level. Much of the emphasis was on the difference between rejecting testimony based on the conclusions that were reached versus the legitimacy of the method used to reach conclusions. The court cited the Illinois decision in Donaldson v. Central Illinois Public Service Co., 313 Ill. App. 3d 1051, 740 N.E. 2d 68 (Ill. 2000) as drawing a similar distinction between the legitimacy of the methodology compared with the correctness of the opinion derived from the methodology. 

Flanagan v. State of Florida, 625 So. 2d 827 (Fla. 1993). This decision reaffirmed “the basic principle that novel scientific evidence is not admissible in Florida unless it meets the test established in Frye v. United States, 54 App. D.C. 46, 293 F. 1013 (D.C. Cir. 1993).  The Court said: “[P]ure opinion testimony, such as an expert’s opinion that a defendant is incompetent, does not have to meet Frye, because this type of testimony is based on the expert’s personal experience and training. While cloaked with the credibility of the expert, this testimony is analyzed by a jury as it analyzes any other personal opinion or factual testimony of a witness. Profile testimony, on the other hand, by its nature necessarily relies on some scientific principle or test, which implies an infalliability not found in pure opinion testimony.  The jury will naturally assume that the scientific principles underlying the expert’s conclusion are valid. Accordingly, this type of testimony must meet the Frye test, designed to ensure that the jury will not be misled by experimental scientific methods which may ultimately prove to be unsound.”

Florida Power & Light Company v. Tursi, 729 So. 2d 995 (Fla. App. 1999). The Florida Court of Appeals held that a treating physician’s testimony was admissible based on his knowledge and experience without requiring a Frye test that only applies to novel scientific evidence. 

Kallas  v. Carnival Corporation, 2009 U.S. Dist. LEXIS 33797 (S.D. Fla. 2009). District Judge Edwin G. Torres granted defendant’s Daubert motion in limine to exclude the expert witness testimony of economic expert Dr. Nitin Paranjpe on the subject of the lost earnings of Hailey Kallas alleged to have been caused by the death of Jonathan Kallas, the father of Hailey Kallas. Judge Torres described Dr. Paranjpe’s method of calculation as follows: “Dr. Paranjpe . . . purported to measure the loss in parental training and guidance to Hailey. . . He calculated the loss as the difference between obtaining a high school degree and a college degree. He based this measurement on the premise that children who lose a parent suffer from the loss of parental guidance and support conducive to achieving higher education. In other words, Hailey is at risk for not going to college because she has lost her father and his presumably positive influence; accordingly, she is entitled to the amount of money she may lose out on because of that risk. Dr. Paranjpe calculated Hailey’s projected compensation to age 67 based on her attaining a college degree at $7,839,003 and her projected compensation based on her obtaining a high school degree at $4,115,982 . . He explained that ‘the loss of her father has put her at risk, as measured by the difference between the college degree and high school compensation of the magnitude of $3,723,022 over four years, or an average of $930,755 per year.” After extended analysis of the literature, Judge Torres said: “We find that Plaintiffs have failed to satisfy the reliability prong of Daubert with regard to their expert’s opinion that the proper measure of the loss of parental guidance and support to a child whose father is deceased is the difference between her projected college degree compensation and her projected high school compensation. Common sense tells us that the loss of a parent may have an impact on a child in many ways, or, as Dr. Paranjpe testified, ‘[t]he loss of a parent in the household puts a child at risk.’ . . But the rest of Dr. Paranjpe’s theory is not supported by any data or analysis that has been provided to us. 

Ramirez v. State, 2001 Fla. Lexis 2304 (Fla. Sup. Ct., Dec. 20, 2001). The Florida Supreme Court Court, while formally retaining the Frye standard, expressly incorporated some Daubert factors into Frye jurisprudence.

      Hedonic Damages

Brown v. Seebach, 763 F.Supp. 574 (S.D. Fla.1991). U.S.District Court, interpeting Florida law, held that hedonic damages are not available under the Florida Wrongful Death Act.

Georgia

     Basis Income and Fringe Benefits for Projecting Earnings Loss

Elliot v. United States, 877 F. Supp. 1569 (M.D. Georgia 1992). This FTCA decision under Georgia law involved carbon monoxide poisoning of a young couple in a housing unit maintained by the military. The judge provides extensive commentary about how he arrived at damages to be awarded for medical expenses,  pain and suffering, loss of earning capacity, permanent disability, and loss of consortium for the wife and husband. The plaintiff had retained Dr. Michael Daniels an economic expert and the defense had retained Dr. Seaman (first name not given) as an economic expert to consider both medical expenses and lost earnings. Both experts had accepted an assumption that the wife’s earning capacity had been reduced by 20 percent and apparently differed only in their assumptions about worklife expectancy. Both used a 5 percent discount rate to reduce future damages to present value. (A 5 percent discount rate is mandated in Georgia law, but the legal requirement was not discussed in the decision.) No explanation was given for the 20 percent reduction. The economic experts also had different projections for the present value of future medical expenses (including attendant care) that were based on the fact that Dr. Daniels assumed standard life expectancy for all males, while Dr. Seaman used a life expectancy for black males. It does not appear that Dr. Seaman based his lower life expectancy on the post injury medical condition of the husband. The court accepted the longer worklife expectancy assumption for the wife and the longer life expectancy assumption for the husband that were testified to by Dr. Daniels.

        Standards for Recovery in Wrongful Death

Childs v. United States, 923 F.Supp. 1570 (S.D. Georgia 1996). This decision involved the wrongful deaths of an adult woman, a six year old girl and an unborn male fetus under the FTCA, subject to Georgia law. The plaintiffs retained Dr. Robert D. Costen of Georgia Southern University on behalf of the six year old girl and Dr. Francis W. Rushing for the adult woman and male unborn fetus. The defense retained Dr. David R. Kammerschen of the University of Georgia.  The decision is notable for its relatively detailed explanation of the methodologies, assumptions, and data sources used by the three economists, providing an assessment of their testimonies. It also explains Georgia’s approach to wrongful death analysis in some detail. It specifically held that lost earnings or lost household services were too speculative to attribute to a young child or unborn fetus under Georgia law. It also held, quoting another case, that: “[A]s to infants of tender years, it is impossible to give evidence of the pecuniary value of the probable loss, and therefore the question of damages for loss on account of impairment of future earning capacity is left to the sound judgement, experience, and conscience of the jury without any proof thereof whatever...”  It is also notable in that it rejected David Kammerschen’s reliance on statistical workife expectancy tables in favor of an age 65 retirement age because the women was an unmarried mother who would have had to work.

Collins v. McPherson, 91 Ga. App. 347; 85 S.E.2d 552 (Ga. App. 1954).  This decision involved the wrongful death of a seven year old female child. Describing the earlier decision of the Georgia Supreme Court in Betts Co. v. Hancock, 139 Ga. 198 (Ga. 1913), the Court said: “[I]t is impossible to give evidence of the pecuniary value of the probable loss, and therefore the question of damages for loss on account of impairment of future earning capacity is left to the sound judgement, experience, and conscience of the jury without any proof thereof whatever.” The Court went on to say: “The general rule is recognized, and adhered to, that the full value of the life of an adult, or of a minor child who has a known earning capacity and is actually producing income which may form the basis for calculation of the value of the life, or of an adult person who, although not gainfully employed, is rendering services capable of measurement in monetary terms, should be ascertained and reduced to present value. . . What is held here is merely that, when there is no evidence whatever on earnings or earning capacity, and where such evidence is not necessary to recovery, and where the jury has not been instructed by the trial court to determine the full value of the life of the deceased child, it is not in error for the trial court to . . . leave the full value of the life of the child to the enlightened conscience of an impartial jury, based on evidence of the child’s age, her precosity, the services rendered by her up to the time of her death, the circumstances of the family, and from experience and knowledge of human affairs on the part of the jury, and to fail to charge that any amount awarded the plaintiff as the full value of the life of her deceased daughter should be reduced to present value.”

Consolidated Freightways v. Futrell, 201 Ga.App. 233; 410 S.E.2d 751 (Ga. App. 1991). The Georgia Court of Appeals held that in a wrongful death action damages may be awarded for the full value of the deceased’s life. “Generally, these damages may be categorized as: (1) those items having a proven monetary value, such as lost potential lifetime earnings, income, or services, reduced to present cash value. . ., or (2) lost intangible items whose value cannot be precisely quantified, such as a parent’s ‘society, advice, example and counsel . . .’ as determined by the enlightened conscience of the jury.” The court found no error in the admission of the decedent’s veteran’s disability benefits in proving the economic component of the full value of his life.  “Regardless of whether compensation paid to a veteran is characterized as arising from the services rendered by the decedent, or as compensation for a disability, the benefits constitute readily provable income which ceased because of his death. The trial court properly admitted this evidence.” 

Elsberry v. Lewis, 140 Ga. App. 324; 231 S.E.2d 789 ( Ga. App.1976).  This is an early case that defines what is and is not allowed under the provision of the Georgia Wrongful Death Act that allows recovery for the “full life of a decedent.”  The Georgia Court held that it is well settled that Georgia does not allow recovery for solatium, citing Bullock County Hospital Authority v. Fowler, 124 Ga. App. 242; 183 S.E.2d 586 (Ga. App. 1971). “Solatium” generally refers to mental anguish caused by grief and emotional distress caused by injury to a relative. The Fowler decision specifies that the jury should determine the gross sum that the decedent would have earned to the end of his life if he had not been killed, reduced to its present cash value. However, the measure of damages does not include any allowance for the loss of a husband’s providing for “the wants and needs of his family,” “nor does it include a recovery for the mental suffering, grief or wounded feelings of the wife and children, or for solatium.” The Elsberry decision includes reference to the fact that “loss of society, comfort and companionship” by survivors is not compensable under the Georgia Wrongful Death Act. 

Georgia Department of Transportation v. Baldwin, 2008 Ga. App. LEXIS 874 (Ga. App. 2008). In addition to other elements, this decision held that personal consumption did not have to be subtracted from the household services of a decedent wife. The court said: “Under OCGA § 51-4-2(a), Baldwin is entitled “to recover for the homicide of [his] spouse . . . the full value of the life of the decedent, as shown by the evidence.” “‘Full value of the life of the decedent, as shown by the evidence’ means the full value of the life of the decedent without deducting any of the necessary or personal expense of the decedent had [s]he lived.” OCGA § 51-4-1 (1). The Court went on to give the following example:  “That the wife was a co-beneficiary of a meal she cooked for the household did not discount the value to the other members of the household of the time the wife spent cooking that meal.”

OB-GYN Associates of Albany v. Littleton, 259 Ga. 663; 386 S.E. 146 (Ga. 1989). The Supreme Court of Georgia held that recovery for emotional distress is not available in a wrongful death action, citing sections 19-7-1; 51-4-4; and 51-4-1. “Recovery for wrongful death in Georgia is limited to the full value of the life without reduction for necessary or personal expenses of a decedent and does not include recover for mental anguish or emotional distress.”  The court also specified that “Georgia follows the so-called ‘impact rule,’ which requires that, there must have been actual bodily contact with plaintiff as a result of defendant’s conduct for a claim for emotional distress to lie.”  This is important with respect to defining what Georgia means by allowing recovery for the “full value of the life” of a decedent..

Reliance Insurance Company v. Bridges, 168 Ga. App. 874; 311 S.E.2d 193 (Ga. App. 1983). This decision involved the death of a seven year old female child. The court affirmed the decision of the trial court, saying: “The charge given as to the measure of damages in its entirety was as follows: ‘Now, if you should find that the death of Tracey Bridges was the result of the negligence of the defendants or any of them, then I charge you should award plaintiffs in an amount equal to the full value of the life of Tracey Bridges as shown by the evidence, without deduction for necessary or other personal expenses of Tracy Bridges had she lived. Damages in a wrongful death action are assessed from the deceased’s standpoint, not from the plaintiffs.’ The true value of the measure of damages is the value of the life of Tracey Bridges to herself had she lived.”  The court went on to add that: “In arriving at such amount it is the ‘enlightened consciences’ of the jury which will leald to the fixing of the damages, where the child is too young to have provided a basis for otherwise determining a financial loss to the plaintiffs.”

Savannah Elec. Co. v. Bell, 124 Ga. 663, 688 (53 SE 109). “The statute [Georgia Wrongful Death Act] is . . . one that is intended to inflict a punishment upon wrongdoers who bring about the death of a human being by negligence. Lord Campbell’s act and various statutes based upon it area nothing more than a method of punishing negligence by civil action. The multiplication of fatal accidents and the practical impossibility for securing the punishment of mere carelessness by means of criminal proceedings were the causes that brought about the passage of Lord Campbell’s act as well as those which have followed it. . . This is nothing more than a legislative imposition of a penalty upon the person who causes the death of another by negligence, the penalty to go to the person injured. While such legislation is punitive so far as the defendant is concerned, it is compensatory so far as the plaintiff is concerned; but exact compensation for the loss sustained is not the primary object of the statute, though in any cases this result may be brought about . . . The damages recovered by the plaintiff are intended incidentally to compensate her for the loss she has sustained, but primarily to punish the defendant for its negligence in bringing about the death of a human being.”

Woods vs. Anderson, 145 Ga. App. 492; 243 Ga. App. 492 (Ga. App. 1978). This case involved the wrongful death of a six and a half year old. An economic expert had based his calculation of losses based on a high school graduate education in spite of the fact that the child’s mother was a school teacher and the child’s father was a lawyer. The expert had based his projection “partly upon United States Department of Labor and Bureau of the Census research statistics concerning average wages of people in various categories of age, education, occupation, etc. The Court of Appeals affirmed the decision of the trial court to admit this testimony. 

    Legal Procedure

CGU Life Insurance Company v. Singer Asset Finance Company, 250 Ga. App. 516 (Ga. App. 2001).  The Georgia Court of Appeals held that the recipient of a structured settlement could not sell his rights to receive payments because of uncertainty about whether doing so would expose the owner of the structure, CGU Life, to difficulties with the Internal Revenue Service because of possible IRS violations. This decision was upheld by the Georgia Supreme Court in Singer Asset Finance Company v. CGU Life Insurance Company, 275 Ga. 328; 567 S.E.2d 9 (Ga. 2002).

     FELA/Maritime Cases

CSX Transportation v. Williams, 230 Ga. App. 573; 497 S.E.2d 66 (Ga. App. 1998). This decision contains two key holdings. Plaintiff’s medical expenses as a result of his injury in the amount of $23,594.51 had been fully paid by medical insurance provided by CSX. The trial court ruled that the medical insurance under contract GA-2300 was a collateral source. The Williams court held that such payments could be offset because the collective bargaining agreement specified that such offsets were allowed and indicated that the $23,594.51 should be subtracted from the award. The second holding of importance is that the requirement under FELA law that taxes should be subtracted from lost earnings was conditional upon the defendant providing expert testimony that would assist the jury in making these reductions. The Court drew a distinction between the right of a defendant to ask for a jury instruction that an award is not taxable and a defendant’s right to have taxes subtracted from lost earnings was distinguished as follows: “Unlike the general charge that the award is not taxed and that the jury should not inflate its award to make up for any potential taxes, a charge directing the jury to reduce that portion of its verdict representing lost income so as to calculate an after-tax figure requires that the jury have facts as to what tax rate to apply. Instructing a jury not to do something does not require evidence, whereas instructing it affirmatively to calculate numbers requires that the jury have the tools to perform that calculation. It cannot simply guess, or fashion an arbitrary formula.” 

Norfolk Southern Railway Company v. Perkins, 224 Ga. App. 553; 481 S.E.2d 545 (Ga. App. 1997). In an FELA case, the Georgia Court of Appeals held that the trial court did not err in excluding reference to Perkins’ receipt of railroad retirement benefits as requiring income taxes to be subtracted from lost earnings. It quoted an earlier Georgia decision, CSX Transp. v. Levant, 200 Ga. App. 856 (1991), rev’d on other grounds, 262 Ga. 313 (1992) as follows: “Since the railroad retirement taxes would ultimately be paid directly to [Perkins] upon his retirement, we find no error with the trial court’s exclusion of this evidence.” 

      Admissibility of Expert Testimony

Hawaii

      Life Care Plans

Bynum v. Magno, 101 P. 3d 1149 (Hawaii, 2004.) The U.S. District Court for Hawaii had certified these questions to the Hawaii Supreme Court: “Where a plaintiff's healthcare expenses are paid by Medicare and/or Medical, does the discounted amount paid to a healthcare provider by [Medicare n3] and Medi-Cal constitute [*2]  the amount that should be awarded as medical special damages to a plaintiff in a negligence action? In this circumstance, is evidence of amounts billed in excess of the amount[]paid irrelevant and inadmissible?” The Hawaii Supreme Court answered “no” to both questions and provided extended discussion of the collateral source rule applications in this case. A plaintiff can sue for damages in Hawaii based on the stated costs of medical treatment even if the medical providers agreed to accept a discount under Medicare and Medicaid rules. Submitted by Ralph Frasca.

      Hedonic Damages

Montalvo v. Lapez, 884 P.2d 345 (Hawaii 1994). The Supreme Court of Hawaii ruled that hedonic damages in a personal injury are recoverable, but used Hawaii's Rule 702 to reject expert testimony by Louis Rose about hedonic damages based on the willingness-to-pay methodology. 

Ozaki v. Association of Apartment Owners of Discovery Bay, 954 P.2d 652 (1998). Louis Rose had projected future lost earnings, but had not been allowed to testify. This Intermediate Court of Appeals decision reversed the trial court and  allow admission of that testimony. Under the Hawaii survival action, evidence of lost enjoyment of life should have been admitted. Expert testimony on loss of the enjoyment of life was not at issue. Dr. Rose had not provided such testiomony in this case.

Idaho

     Standards for Recovery in Wrongful Death

Pfau v. Comair Holdings, Inc., 135 Idaho 152 (Id. 2000). The Idaho Supreme Court ruled that loss of accumulations to an estate is  not recoverable under the Idaho Wrongful Death Act. The Court said: “[W]e decline to extend the measure of damages to include loss of inheritance, loss of net accumulation and loss of earnings because these damages are too speculative for purposes of ascertaining the pecuniary loss to the beneficiary. This Court recognizes the speculative nature of support damages, and does not preclude recovery solely on that basis. . . However, a measure of loss of inheritance is not only speculative in determining the numerical amounts but is compounded by the limitless number of contingencies that would preclude a beneficiary from receiving an inheritance from the decedent if the decedent had lived out his or her natural life. Because there is a legal right to support by parents of their minor children, and a legal right of parents to the earnings and services of a child, a court need not determine whether a child or parent would receive such benefits absent the premature death. We presume damages based on those legal rights. There is no corresponding legal duty of the decedent to leave the beneficiary an inheritance. Therefore, a court would not only have to determine the speculative amount of those benefits, but would also have to determine whether the decedent would have accumulated or increased an estate, the nature of the family relationship, and the probability that the decedent would have left some or all of the increased value of the estate to the beneficiary.” 

      Legal Procedure

Holladay v. Lindsay, 2005 Ida. App. LEXIS 86 (ID 2006). This decision involves a claim that prejudgment interest should have been compounded. The Idaho Court of Appeals upheld the trial court decision not to allow compounding of prejudgment interest, but provided extended discussion of a possible exception on the basis of a claim of unjust enrichment. “The essence of a cause of action for unjust enrichment is ‘the claim that the defendant has been enriched by the plaintiff and that it would be inequitable for the defendant to retain that benefit without compensating the plaintiff for the value of the benefit.” The Court went on to describe several prior legal decisions in which that argument had been made, but pointed out that the plaintiff’s evidence in those cases was based on the market rate of interest. Holladay’s economist had used the legal rate of 12% interest to prepare his compound interest calculations and did not profess to uses market rates. “Therefore, Holladay’s evidence was inadequate to show any actual or presumed benefit conferred on Lindsay.” This decision seems to suggest that the plaintiff had a choice between using the legal rate of interest as a simple rate of interest or the market rate of interest with compounding.

      Admissibility of Expert Testimony

Sanchez v. Galey, 112 Idaho 609 (Idaho 1986).  The Idaho Supreme Court upheld a trial court decision to admit the testimony of Dr. Barry Ben-Zion, both about lost earnings and about lost household services.  The discussion of data sources used by Dr. Ben-Zion makes this an interesting decision. 

Illinois

         Basis Income and Fringe Benefits for Projecting Earnings Loss 

Carlson v. City Construction Company, 239 Ill. App. 3d 211; 606 N.E.2d 400 (Illinois App. 1992). The Illinois Court of Appeals held that personal consumption should have been deducted from lost earnings. The Court also rejected a second scenario developed by Dr. Walter Johnson based on the decedent having become a civil engineer. The court discussed prior cases at some length to indicate the level of probability of a future career that renders a particular scenario speculative. However, Carlson Court relied on testimony by Dr. Johnson regarding his first scenario and the percentage range for personal consumption that Dr. Johnson considered reasonable to determine the amount of remittatur it required of the plaintiff and did not reverse the trial court decision. 

Dotson v. Sears Roebuck & Co, 199 Ill.App.3d 526 (Illinois App. 1990).  Relying on prior cases, this decision held that losses of consortium, which includes household services, terminate upon remarriage.  However, in Pfeifer v. Canyon Construction Company, 253 Ill.App.3d 1017, it was made clear that remarriage did not terminate a claim for financial support from a decedent spouse. The Dotson Court said: “The concept of consortium, as it emerges from the cases, consists primarily of intangible elements which are unique, and very personal, to any given marriage. . .That relationship and those benefits cannot be duplicated. As for material services, we note first that the courts speak of a wife’s ‘services in the home,’ services ‘as [the spouse’s] wife,’ and ‘personal services.’ Too, while some material services are clearly more tangible in nature than such things as affection and companionship, they are also highly personal to, and generally flow from, the particular relationship between specific spouses. As such, they are properly part of consortium.”

Hall v. Chicago & N.W. Railway Company, 5 Ill. 2d 135 (1955). This case was tried under Illinois standards rather than FELA standards, as would have been required after Pfeifer.  However, it correctly interprets what is still the Illinois position on subtraction of taxes from lost earnings. Taxes are not subtracted in either personal injury or wrongful death actions in Illinois on the bases that "whether the plaintiff has to pay a tax on the awardd is a matter that concerns only the plaintiff and the government."

            Wage Growth and Discount Rates

Richardson v. Chapman, 175 Ill. 2d 98; 676 N.E.2d 621 (Ill. 1998). The Illinois Supreme Court held that Charles Linke’s use of net discount rates of 0% and 1% was appropriate and allowable in light of O’Shea v. Riverway Towing Co, 677 F.2d 1194 (7th Cir. 1982). The defendant had tried to argue that Dr. Linke should have used “neutral figures” based on a provision in Illinois law that figures specific to the parties in that case. Since that prohibition no longer existed, the Richardson court found no problem with the fact that Dr. Linke’s calculations were specific to the case at hand. The defendant also tried to argue that Dr. Linke’s calculations had erroneously included inflation and real growth in reducing future values to their present cash value. The court went on to describe the fact that Dr. Linke had used a net discount rate method, which considered the differential between wage growth rates and the discount rate for ease of presentation. The court found no problem with that “methodology” and stated that Dr. Linke was consistent in his treatment of inflation. (Revised listing)

            Standards for Recovery in Wrongful Death

Pfeifer v. Canyon Construction Company, 253 Ill.App.3d 1017 (Ill. App.1993), it was made clear that remarriage did not terminate a claim for financial support from a decedent spouse. The Pfeifer Court strongly distinguished between lost financial support, which is clearly tangible, and lost consortium, including household services, which is not. 

Simmons v. University of Chicago Hospital and Clinics, 162 Ill. 2d 1; 642 N.E.2d 107 (Illinois 1994). The Illinois Supreme Court noted that remarriage terminates a claim for a surviving spouse for loss of consortium, citing among other cases not listed at this site Dolan v. Gawlicki, 628 N.E.2d 1188 (Ill.App. 1994). At issue in this case was a loss of consortium claim due to the death of a child. The Simmons Court found that the subsequent birth of two children to the parents of the decedent child did not terminate the parents loss of consortium claim with respect to the decedent child, saying: “Defendants also argue that this conclusion is contrary to the principles applicable to the analogous area of loss of consortium. Defendants note that appellate decisions have held that evidence of a subsequent remarriage is relevant in loss of spousal consortium claims and, in fact, terminates the right of a widower or widow to recover for loss of consortium. . . We disagree and note that the relationship between parent and child is different from that of husband and wife. The parent-child relationship is not replaceable and is not limited to the society of only one child. Every child is unique, and the loss of society a parent suffers upon a child’s death cannot be replaced with the society of a child subsequently born.

Watson v. Fischbach, 54 Ill. 2d 498; 301 N.E.2d 303 (Illinois 1973).  Ruled that wife could not use her prior married name in wrongful death action if she had since remarried and taken her new husband's name. The issue in this case was whether she was entitled to present herself to a jury with her previous married name to avoid the inference that she had remarried. The court ruled that she could not misrepresent the truth of her new name to a jury. “We believe the judicial process in its search for truth need not resort to the condonation of perjury to accomplish its objective.” 

            Collateral  Source

Brumley v. Federal Barge Lines, 78 Ill. App. 3d 799; 396 N.E.2d 1333 (Ill. App. 1979).  In this Jones Act case, Brumley was a river barge pilot who testified that he intended to work beyond his 65th birthday and presented another river pilot at age 72 to testify that this was possible. The defendant attempted to present evidence based on Social Security and retirement benefits to show that Brumley was unlikely to work beyond the age of 65. The court held that the collateral source rule prohibited introduction of retirement benefits, citing Eichel v. New York Central R. R. Co., 375 U.S. 34 (1963) as reflecting “a strong policy against the admissibility of this kind of collateral  source evidence in F.E.L.A. and Jones Act cases.”    

First Midwest Trust Company v. Rogers
, 296 Ill. App. 3d  416; 701 N.E.2d 1107 (Ill. App. 1998).  This decision held that third party payments for past medical care provided by an HMO were a collateral source, particularly when the HMO had subrogated rights to recover its costs in the event of a damage award in a tort action.

            Life Care Plans and Future Medical Expenses

Arthur v. Catour, 345 Ill. App. 3d 804; 803 N.E.2d 647 (Ill. App. 2004). An Illinois Court of Appeals determined that an injured plaintiff may recover as damages the entire amount billed for medical services, not to the discounted amount actually paid by her insurance carrier. The Court said: “[S]imply because medical bills are often discounted does not mean that the plaintiff is not obligated to pay the billed amount. Defendants may, if they choose, dispute the billed amounts as unreasonable, but it does not become so merely because plantiff’s insurance company was able to negotiate a lesser charge. For the same reasons, plaintiff receives no ‘windfall’ when she is compensated for her reasonable medical expenses. To the extent that she receives an amount greater than that paid by her insurer in satisfaction of the bill, that difference is a benefit of her contract with the insurer, not one bestowed on her by defendants. Suggested by Stephanie Rizzardi Pearson.

Arthur v. Catour, 216 Ill. 2d 72; 833 N. E.2d 847 (2005). An Illinois Court of Appeals in Arthur v. Catour, 345 Ill. App. 3d 804; 803 N.E.2d 647 (Ill. App. 2004) had determined that an injured plaintiff may recover as damages the entire amount billed for medical services, not to the discounted amount actually paid by her insurance carrier. The Court said: “[S]imply because medical bills are often discounted does not mean that the plaintiff is not obligated to pay the billed amount. Defendants may, if they choose, dispute the billed amounts as unreasonable, but it does not become so merely because plaintiff’s insurance company was able to negotiate a lesser charge. For the same reasons, plaintiff receives no ‘windfall’ when she is compensated for her reasonable medical expenses. To the extent that she receives an amount greater than that paid by her insurer in satisfaction of the bill, that difference is a benefit of her contract with the insurer, not one bestowed on her by defendants.” The question of whether a plaintiff can claim loss of amounts initially billed was then certified to the Illinois Supreme court, which said: “We hold that a plaintiff may present to a jury the amount the plaintiff’s health-care providers initially billed for the services rendered.  Suggested by Boyd Fjeldsted.

Jones & Adams Company v. George, 227 Ill. 64; 81 N.E. 4 (Ill. 1907). The Illinois Supreme Court held that it was in error for a trial court to give an instruction that: “authorized a recovery for the expense of nursing appellee after his injury, when there was no evidence in the record that appellee had paid out any sum or had become liable to pay for nursing. Appellee testified that he had employed no one to nurse him; that he was taken care of by his family, and that it was worth between $15 to $20. Appellee was not entitled to recover for the value of services rendered to him by his family.”

Peterson v. Lou Bachrodt Chevrolet, 76 Ill. 2d 353; 392 N.E.2d 1 (Ill. 1979). The Court said: “The final issue raised by the parties is whether the plaintiff may recover the value of free medical services rendered by the Shriners’ Hospital for Crippled Children in performing surgery on Mark Peterson’s leg. Contrary to plaintiff’s argument, we believe that the holding in Jones & Adams Co. v.  George (1907), 227 Ill. 64, 669, is still good law and is controlling. In the George case, the court held that a personal injury plaintiff could not recover for the value of nursing services rendered by the plaintiff’s family. The reasoning of the decision is sound and, we believe, fully applicable here. An individual is not entitled to recover for the value of services that he has obtained without expense, obligation, or liability. (Accord, see Coyne v. Campbell (1962), 11 N.Y.2d 372, 183 N. E.2d 891, 230 N.Y.S. 2d 1.)  The Peterson Court also said: “We refuse to join those courts which, without consideration of the facts of each case, blindly adhere to ‘the collateral source rule, permitting the plaintiff to exceed compensatory limits in the interest of insuring an impact upon the defendant.’. . it is not the purpose of compensatory tort damages to punish defendants or to bestow a windfall upon plaintiffs. The view that a windfall, if any is to be enjoyed, should go to the plaintiff . . .borders too closely on approval of unwarrented punitive damages, and is not a view espoused in our cases. The argument has also been made that one who renders services gratuitously intends to bestow a gift, and that allowing a defendant to mitigate damages in this situation effectively shifts the benefit to the defendant. We do not believe, however, that presumed intentions should play so important a role in our analysis. We are concerned more with discerning the actual effect upon the parties, and we believe that justice is better served in this way.

Wills v. Foster, 2007 Ill. App. LEXIS 406 (Ill. App. 2007). This decision held that a jury’s personal-injury award for compensatory damages should be reduced from $80,163.47 to $19,005.50, based on payments of that amount for medical services by Medicare and Illinois Medicaid fully disposing of the plaintiff’s liability for those services. The decision cited Peterson v. Lou Bachrodt Chevrolet Co., 76 Ill. 2d 353, 392 N.E.2d 1 (Ill. 1979) in doing so, and distinguished this case from Arthur v. Catour, 216 Ill 2d 72, 833 N.E.2d 847 (Ill. 2005) in doing so. The court pointed to the fact that the Arthur decision involved a private insurance company that had bargained with health care providers on behalf of the plaintiff in that case, where subrogation was possible, but Arthur did not apply when the plaintiff had paid no premiums as a result of any contractual arrangement, as in the current case.  

            Lost Chance of Recovery or Survival

Liebig-Grigsby v. United States, 2003 U.S. Dist. LEXIS 3682 (N.D.Ill 2003). Interpreting Illinois Law, the District Court held that a “lost chance of recovery” case should follow the formula in Doll v. Brown, 75 F. 3d 2100 (7th  Cir. 1996): “The trier of fact will estimate the probability that the patient would have survived but for the physician’s negligence – say it is 25 percent – and will award that percentage of the damages the patient would have received had it been certain that he would have survived but for the negligence.” The Illinois Supreme Court had held that the “lost chance theory” applied in Illinois in Holton v. Memorial Hospital, 176 Ill.2d 95 (1997). In Liebig-Grigsby, the Court held that testimony indicated that there was a 70-80 percent chance of halting further deterioration in the plaintiff’s condition and multiplied damages based on 100 percent causation by the average of 75 percent. The decision also mentions, but does not discuss calculations of economist Dr. Charles Linke.  (Submitted by Gary Skoog.)

             Treatment of Taxes

Hall v. Chicago and Northwestern Railway Company, 5 Ill. 2d 135 (IL 1955). This decision is often cited when state courts hold that income taxes should not be subtracted from lost earnings. The decision said: “It is general principle of law that in the trial of a lawsuit the status of the parties is immaterial. Thus, what the plaintiff does with an award, or how the defendant acquires the money with which to pay the award, is of no concern to the court or jury. Similarly, whether the plaintiff has to pay a tax on the award is a matter that concerns only the plaintiff and the government. The tortfeasor has no interest in such question. And if the jury were to mitigate the damages of the plaintiff by reason of the income tax exemption accorded him, then the very Congressional intent of the income tax law to give an injured party a tax benefit would be nullified.”

Klawonn v. Mitchell, 105 Ill. 2d 458; 475 N.E.2d 857 (Ill. 1985). The Illinois Supreme Court held that defendants were not entitled to a jury instruction that tort awards are not subject to federal or state income taxes. The court said: “In our opinion proof of pecuniary loss, not simple under the best of circumstances, should not be rendered more complex by injecting the question of income tax or other extraneous factors.” Since the legal action in question involved both wrongful deaths and personal injuries to surviving injury victims, the decision applies to both types of actions. 

Suich v. H & B Printing Company, Inc., 185 Ill. App. 863 (Ill. App. 1989). This decision cited McCann v. Lisle-Woodridge Fire Protection District, 115 Ill. App.  3d 702, 450 N.E.2d 1311 (Ill. App. 1983) as holding that “evidence of the effect of taxes on income loss should be prohibited in a personal injury action.” The decision also held that evidence of activated post injury fringe benefits such as Social Security payments could not be introduced. Suggested by Gary Skoog. 

                Annuities, Periodic Payments and Reversionary Trusts

Singh v. Air Illinois, 117 Ill. App. 3d 923; 520 N.E.2d 852 (Ill.App. 1988). The trial court excluded testimony about the cost of an annuity. “While we recognize that our supreme court has sanctioned the use of annuity tables in determining present case value (Allendorf v. Elgin, Joliet & Eastern Ry. Co. (1956), 8 Ill. 2d 164, 133 N.E.2d 288, cert. denied (1956), 352 U.S. 833, 1 L. Ed. 2d 53, 77 S. Ct. 49), the validity of such evidence does not signify that the cost of a particular annuity is likewise admissible, or that it is representative of the present value of lost earnings. On the contrary, the Allendorf court cautioned that expert testimony should be used only with neutral figures to describe to the jury a mathematical process which would simplify the jury’s task determining present value.”

             Legal Procedure

Caley v. Manicke, 24 Ill. 2d 390; 182 N.E.2d 206 (Illinois 1962). This decision addressed the per diem issue of “whether the scope of proper jury argument permits the use of a mathematical formula from which counsel may argue that his client should be awarded a specific sum per day, or any other fixed unit of time, for pain and suffering.” The Illinois Supreme Court reviewed decisions in other states regarding this question and ruled that such argument is improper, saying: “Pain and suffering have no commercial value to which a jury can refer in determining what monetary allowance should be given to a plaintiff for the pain and suffering he has experienced and is reasonably certain to suffer in the future. This determination, like many others that a jury must make, it left to its conscience and judgment. While a jury cannot translate pain and suffering into monetary units with the precision that it would employ in converting feet into inches, we do not believe that its determination of reasonable compensation for pain and suffering can be characterized as a 'blind guess.'  To reduce the aggregate into hours and minutes, and then multiply by the number of time units involved produces an illusion of certainty, but it is only an illusion, for there is no more precision in the one case than in the other. A determination reached by a subjective process which is easier to comprehend than to define and upon which just and wise men may not agree does not indicate that it is a “blind guess.” The divergence of opinion among the many able jurists who have fully and thoroughly considered the very issue here presented illustrates the point.”

Fairley v. Andrews, 2008 U.S. Dist. LEXIS 28325 (N.D. Ill. 2008). This memorandum deals with claims for costs in what was ultimately a non-suit by the plaintiffs. Judge Castillo recused himself after 32 months of handling this case, after which Judge Amy J. St. Eve took over the case for the remaining 18 months. Dr. Charles Linke was the economic expert for the plaintiff and Dr. Gary Skoog was the economic expert for the defendant. One of the many contentious issues during this extended non-suit was that plaintiff’s required that Dr. Skoog issue a redacted report, for which Judge St. Eve refused to order costs to the defendant who had retained Dr. Skoog. Another issue was the awarding of per page charge of $5.50 per page and a daily attendance rate of $105 for Dr. Linke’s deposition, resulting in an award of $638.50 to one of the  the defendants.

In Re Marriage of Rogers, 2004 Ill. LEXIS 1676 (Illinois 2004). The Illinois Supreme Court held that gifts and “loans” from the parents of Mark Rogers constituted income under section 505 of the Illinois Marriage and Dissolution of Marriage Act for the purpose of calculating the Mark Rogers’ statutory child support obligations.

Mader v. Motorola, 1996 U.S. Dist. LEXIS 4543 (N.D.Ill. 1996). Defendants had certified 13 questions to the judge based on testimony given by Stan Smith in his deposition. The Court refused to compel Stan Smith’s answers. The Court held that Smith had answered four of the questions and that since two of the questions were out of his area of expertise Smith had properly refused to answer them. Two of the questions focused on the fact that Smith had refused to say that his results “were to a reasonable degree of economic certainty.” The Court said in response to those questions: “Although Smith refused to take a position concerning ‘economic certainty,’ his answer was sufficient. If defendant believes that the use of plaintiff’s estimates makes Smith’s analysis defective, that matter may be developed on cross examination.”

Trower v. Jones, M.D., 121 Ill. 2d 211; 520 N.E.2d 297 (Illinois 1988). This upheld the right of defense counsel to question a specific expert about the frequency that expert testified for a particular class of part (plaintiffs) and the amount of annual income derived from testifying as an expert witness. The Court said: “We have long recognized that the principle safeguard against errant expert testimony is the opportunity of opposing counsel to cross examine, which includes the opportunity to probe bias, partisanship of financial interest.” The Court also said: “[W]e reach our decision based on an appreciation of the fact that the financial advantage which accrues to an expert witness in a particular case can extend beyond the remuneration he received for testifying in that case. A favorable verdict may well help him establish a ‘track record’ which, to a professional witness, can be all-important in determining not only the frequency with which he is asked to testify but also the price he can demand for such testimony. The Court also said, however, that: “Evidence that a witness makes substantial income from serving as a witness does not necessarily imply that his fees are unreasonable, but such evidence does illuminate the financial interest the expert has in giving such testimony. We think that an explanation by the witness as to how he determines his fees (such as with regard to fees charged by his colleagues for rendering testimony in similar matters) should be sufficient in most situations to avoid unfair prejudice.”  The court upheld, in summary, that the trial court (which had been reversed by the court of appeals) did not abuse its discretion by permitting defense counsel to inquire regarding (1) the annual income derived from services relating to serving as an expert witness and (2) the frequency with which the witness’ testimony in prior cases had been for ‘people suing doctors.’

             FELA/Maritime Cases

Brumley v. Federal Barge Lines, 78 Ill. App. 3d 799; 396 N.E.2d 1333 (Ill. App. 1979). See under collateral source. 

Dixon v. Union Pacific, 2008 Ill. App. LEXIS 542 (Ill. App. 2008). The Court of Appeals upheld an award challenged by the plaintiff of $131,318.66 for pain and suffering and $54,500 for economic loss, but remanded with respect to the jury’s failure to award any amount of damages for the plaintiff’s disability. The Court provided details about the loss projections of plaintiff’s economic expert Dr. Malcolm Cohen: “Assuming a retirement age of 62, Cohen estimated the present value of his economic loss at $1,479,179; and assuming a retirement age of 65, Cohen estimated the present value of loss at $1,655,932. Cohen testified that for the year 2001, he used plaintiff's "annualized wage." For the years 2002 through 2004, Cohen used the actual "average of [plaintiff's] peers." Starting in 2005, Cohen used the average of the years 2002 and 2004, and adjusted 3% per year for inflation. From these ‘estimated wage[s],’ Cohen then subtracted ‘all the things that [plaintiff] would have had to pay had he been working," such as taxes, to arrive at "net wages.’ To the net wages, Cohen then added the value of employment benefits. However, Cohen subtracted medical benefits, because plaintiff was still receiving them from the railroad. Cohen also added the value of pension benefits, calculated at ‘a number the Railroad Retirement Board provides, times the number of years of service, times his average salary.’On cross-examination, Cohen testified that, in his calculations, he assumed that plaintiff was totally disabled, based on information received from a  secretary in plaintiff's law firm. Cohen testified that he did not have any conversations with plaintiff Cohen also testified that the minimum wage in the United States is $5.15 per hour and that in his calculations, he had assumed that plaintiff would never earn money again in his lifetime. For the year 2001, plaintiff's annualized wages were $33,889, which were approximately $16 per hour. For the year 2002, Cohen assumed that plaintiff's wages would increase 69% to $57,420, based on the average of his coworkers. Cohen also testified that light and medium duty jobs exist both with the railroad and throughout the United States economy, and that those jobs can pay minimum wage. Cohen admitted that his calculations were only as good as his assumptions.”

Edwards v. The Atchison, Topeka and Santa Fe Railway Company, 684 N.E.2d 919; 291 Ill.App.3d 817 (1997). The Appelate Court of Illinois held that lost pension benefits must be calculated by the formula used by the Railroad Retirement Board and that tax payments by employer and employee for Tier I, Tier II and Medicare taxes cannot be treated as equivalent to the value of lost income or lost benefits by an injured worker.

Oltersdorf v. Chesapeake & Ohio, 83 Ill.App. 3d 457; 404 N.E.2d 320 (1980). The trial court decision had been reached shortly before Norfolk & Western Railway Company v. Liepelt, 444 U.S. 490, 100 S. Ct. 755 (1980). The defendant filed an appeal based on the fact that federal income taxes, state income taxes and railroad retirement taxes were not taken out of lost earnings in the plaintiff’s calculation of damages. The Illinois Court of Appeals remanded for a new trial on damages without indicating any exception for railroad retirement taxes.

      Admissibility of Expert Testimony

Branum v. Slezak, 289 Ill. App. 948; 682 N.E.2d 1165; 1997 Ill. App. LEXIS 480 (Ill.App.1997). The Illinois Court of Appeals held that Walter Johnson’s projection of lost earnings for an iron worker with certainty to age 65 had been correctly excluded by the trial court’s judge’s acceptance of the defendant’s motion in limine. The court also commented on the greater reasonableness of the testimony of Stan Smith because it had a foundation from the expert testimony of a vocational expert Fisher that the plaintiff would have been able to earn $9 to $10 per hour in electrical assembly work. The decision is unclear about whether what the court thought lacked foundation is Walter Johnson’s projection of Branum’s earnings as an iron worker without the foundation of a vocational expert or Johnson’s projection of earnings to age 65. It is also not clear what assumptions Stan Smith made about worklife expectancy in this case. The LEXIS version of this decision indicates that the discussion of Johnson and Smith were “unpublishable” under Illinois Supreme Court Rule 23.

Donaldson v. Central Illinois Public Service, 199 Ill. 2d 63; 767 N.E.2d 314 (2002). The Illinois Supreme Court said: “Illinois law is unequivocal: the exclusive test for the admission of expert testimony is governed by the standard first expressed in Frye v. United States, 54 App. D.C. 46, 293 F.1013 (D.C. Cir. 1923). . . The Frye standard, commonly called the ‘general acceptance’ test, dictates that scientific evidence is only admissible at trial if the methodology or scientific principle upon which the opinion is based is ‘sufficiently’ established to have gained general acceptance in the particular field in which it belongs.” The Court defines and rejects a “Frye-plus-reliability” standard as requiring that “having determined that a technique or methodology is generally accepted, the court must still consider whether the opinion is reliable.” The Court said: “[A] technique is not generally accepted in the scientific community if it is by nature unreliable.” 

      Hedonic Damages and  Emotional Services

Bullard v. Barnes, 102 Ill.2d 505 (Ill. 1984). The Illinois Supreme Court allowed recovery for “companionship, comfort, instruction, guidance, counsel, training and support” of one family member for another in a wrongful death action. In the death of a minor child: “juries must be instructed not only to assign a dollar value to the loss of the child’s society, but also to arrive at a figure, based on the evidence presented to them, which represents expenditures the parents would have been likely to incur had the child lived. Jurors should be instructed to deduct these projected child rearing expenses from any award for loss of society and any proved loss of income.” 

Dralle v. Ruder, 124 Ill.2d 61; 529 N.E.2d 209 (Illinois 1988). This decision establishes that parents may not claim loss of consortium in Illinois as a damage in a case involving an injured child that remains alive. This is in contrast to the Ohio case of Gallimore v. Children’s Medical Center, 67 Ohio St.3d 244 (1993), which does allow such damages. The Dralle Court draws strong distinction between lost consortium claims in a personal injury case and a death case and a claim of lost consortium resulting from an injury to a child and a lost consortium claim resulting from an injury to a spouse, which is allowed in Illinois.  The court said: “The chief distinction between the claim for loss of society in a wrongful death action and its assertion here is that the nonfatally injured child retains his own cause of action against the tortfeasor. Thus, there is no danger that the injury caused by the tortfeasor will go uncompensated, or that similar conduct in the future will be deterred. In contrast, an action under the Wrongful Death Act affords the sole remedy for the surviving family members.” The court also said: “To succeed in their action, parents of a nonfatally injured child would be required to provide evidence of the diminution of their child’s society and companionship resulting from the injury; the jury or judge would then be required to perform the sensitive, and perhaps impossible task of evaluating – and assigning a monetary figure to – the reduced value of the parents relationship with the affected child.”

Gonzales v. City Wide Insulation, 1990 U.S. Dist. Lexis 6360. U.S. District Court, interpreting Illinois law, ruled that the Illinois Wrongful Death act does not provide for the recovery of hedonic damages.

Kaufman v. Cserny, M.D., 856 F. Supp. 1307 (S.D. Ill. 1994). This decision held that damages for loss of enjoyment of life (hedonic damages) is allowed in an Illinois survival action, but not in an Illinois wrongful death action. The decision explains that an Illinois survival action in a wrongful death context applies from the moment of injury to the moment of death. The court held that loss of enjoyment of life is allowed under the survival action for that period of time.

Mister v. Illinois C. G. R. Co., 790 F. Supp. 1411 (S.D. Ill. 1992). This case was brought as a class action under Title VII of the Civil Rights Act of 1964. The class was allowed to recover back pay and for emotional distress, but not hedonic damages. The court said: “In this case. . . the only hedonic loss is caused by the lack of a job. The back pay award fully compensates the class  for any hedonic damage. Once the class is awarded back pay, the past lost ability to enjoy life is fully restored, since the class has received the object which caused the deprivation. For example, a plaintiff who has lost an arm may have a claim for hedonic damages. However, if the arm is restored to him, his claim for hedonic damages would disappear, since he could no longer claim that he cannot enjoy the more subjective pleasures of life to the fullest. Similarly here, the plaintiff class has been made whole by an award of back pay. To allow hedonic damages on top of back pay would be equivalent to double recovery.”  

Patch v. Glover, 618 N.E.2d (Ill.App.1 Dist. 1993). An Illinois Court of Appeals upheld a trial court decision not to admit hedonic damage testimony about loss of society Stan V. Smith. The court said: “The type of evidence Smith offered would, out of necessity, provoke an extended line of inquiry into Patch’s relationships with family members and friends, who are not entitled to recover under the [wrongful death] act, so that their loss of society could be factored out of the gross value of the loss of society. All of which would serve no purpose other than to distract the jury from its real task which is to apply their common sense to assess the value of society lost by the plaintiff and the children. Moreover, Smith’s testimony on this issue would mislead the jury into believing the false notion that the distinct and personal relationship that one has with his wife and children has commercial value which can be determined by a comparison to the value that society places on the non-monetary contributions of the statistically average person. It is our belief that the type of evidence that plaintiff sought to introduce through Smith’s testimony would be the antithesis of a reasonable and practical consideration of the fair and just compensation for the loss of society suffered by the spouse and next of kin of a decedent under the peculiar facts of any given case.”   

Fetzer v. Wood, 211 Ill.App.3d 70 (Ill.App.2 Dist. 1991). The  Illinois Court of Appeals upheld a trial court decision not to admit hedonic damage testimony about loss of the enjoyment of life to be provided by Stan V. Smith. The court reasoned from the fact that expert economic testimony is not permitted with respect to pain and suffering and said: “Here, the proposed economic expert testimony would be overly speculative and would serve to invade the province of the jury, and we see no abuse of discretion in the exclusion of such evidence.” 

      Wrongful Termination

Mister v. Illinois C. G. R. Co., 790 F. Supp. 1411 (S.D. Ill. 1992). This case was brought as a class action under Title VII of the Civil Rights Act of 1964. The class was allowed to recover back pay and for emotional distress, but not hedonic damages. The court said: “In this case. . . the only hedonic loss is caused by the lack of a job. The back pay award fully compensates the class  for any hedonic damage. Once the class is awarded back pay, the past lost ability to enjoy life is fully restored, since the class has received the object which caused the deprivation. For example, a plaintiff who has lost an arm may have a claim for hedonic damages. However, if the arm is restored to him, his claim for hedonic damages would disappear, since he could no longer claim that he cannot enjoy the more subjective pleasures of life to the fullest. Similarly here, the plaintiff class has been made whole by an award of back pay. To allow hedonic damages on top of back pay would be equivalent to double recovery.”  

Indiana

         Basis Income and Fringe Benefits for Projecting Earnings Loss

State of Indiana v. Daley, 153 Ind. App. 330; 287 N.E.2d 552 (Ind. App. 1972). At issue was whether the $400,000 in damages awarded to the plaintiff was so excessive as to be contrary to law. The Court said, “An awareness of general inflation and a constant depreciation and cheapening of money is within the discretion given to the trier of facts when assessing damages.” It also found that there was a basis for the $400,000, saying, “The uncontroverted testimony of an expert economist, Professor Roberts, projected that had the Deceased remained in his capacity as a truck driver until retirement his anticipated earnings discounted to present value would have been $59,000 in excess of the $400,000 damages awarded. The jury apparently accepted Professor Roberts’ projection as accurate and a fair calculation of the Deceased’s expected earnings had he remained alive until retirement age.” (Submitted by Ann Neff.)

            Life and Worklife Expectancies

Reilly v. Robertson, 266 Ind. 29 (Ind. 1977), cert. denied, U.S. Supreme Court. Held that use of sex-segregated life expectancy tables for calculating refund annuity payments (funded solely by employees) violated Title VII of the Civil Rights Act of 1964.  Jerry Martin worked as an expert in this case. 

            Standards for Recovery in Wrongful Death

Boland v Greer, 409 N.E.2d 1116 (Ind. 1980) and 422 N.E. 2d 1236 (Ind.1981).  The first decision is the decision of the Indiana Supreme Court. The second citation is a dissent from a majority opinion to transfer the case. Both discuss the “lost investment theory” for awarding damages to parents based on Wycho v. Gnodtke, 361 Mich. 331 (1960) in Michigan. This theory treats parental expenditures on a child up to the date of the child’s death as an “investment” in the child that is recoverable to the parents. The majority decision expresses sympathy for this theory, but indicates that it is contrary to Indiana law. 

Elmer Buchta Trucking, Inc. v. Stanley, 744 N.E.2d 939 (Indiana 2001). This decision reverses both the trial court and Court of Appeals and remands for a new trial. In 1965, the Indiana legislature had adopted a modification of its Wrongful Death Act, with new language saying that “damages shall be in such an amount as may be determined by the court or jury, including, but not limited to, reasonable medica, hospital, funeral and burial expenses, and lost earnings of such deceased person resulting from said wrongful act or omission.” The plaintiff argued that this language required no reduction for personal consumption. The Indiana Supreme Court discussed the history of wrongful death acts in the state of Indiana, starting from the first act in 1852 and determined that the intent of the act was focused at the right of pecuniary recovery of survivors not the estate of the decedent. Thus, it ruled that the personal consumption of the decedent should have been considered and remanded to the trial court for a new trial. George Launey was the economist for the plaintiff. (Submitted by Ann Neff.)

Lustic v. Hall, 403 N.E.2d 1128 (Ind.App. 1986). Wrongful death damages must be based on actual conditions and actual contributions made by decedent prior to his death.

Wallace v. Woods, 149 Ind. App. 257; 271 N.E.2d 487 (Ind. App. 1971). The Court of Appeals of Indiana rejected the parental investment theory in the death of a minor child, though describing the appellant’s argument as based on “vast research” and presenting “an interesting question.” The Court upheld the existing standard for recovery as “value of the child’s services from the time of death until he would have attained his majority, taken in connection with his prospects in life less the cost of his support and maintenance during that period, including board, clothing, schooling and medical attention.” This would include “the pecuniary value of all acts of kindness and attention that the deceased child might reasonably be anticipated to render until its majority.” The appellant parents had argued that they should be allowed to recover the cost of raising the child. The rejection of the parental investment theory in Wallace was cited favorably by the Indiana Supreme Court in Boland v. Greer, 422 N.E.2d 1236 (Ind. 1981).  Expanded listing. 

         Legal Procedure

Ashland Pipeline v. Indiana Bell Telephone, 505 N.E.2d 483 (Ind.App. 1987). This was a commercial damage case involving a judgement of $2,762.50 for the severance of Indiana Bells underground cable by Ashland. It does not appear that Indiana Bell had retained an economist to calculate damages. Nevertheless, the Court of Appeals of Indiana said: "The use of economists, who rely upon statistical analysis, has been utilized in wrongful death and personal injury suits for some time, and damage awards based on their testimony have been approved by the courts. .. (citations).. Factors such as mortality tables (used to project life expectancy), rate of inflation, present value, and projected wages and earnings are relevant and admissible evidence. Based upon these factors, an economist is permitted to testify as to the economic value of the tort victim, though the factors relied upon may never come to pass. The person may not live to the average life expectancy. He may have become unemployed. The rate of inflation may drastically fluctuate. Nevertheless, such analysis is permitted and utilized."

Griffin v. Acker, 659 N.E.2d 659 (Ind. App. 1995). The defendant appealed a jury verdict in favor of Acker, raising the question of whether the defendant was entitled to a jury instruction that Plaintiff’s damages for future medical expenses and future pain and suffering should be reduced to present value and whether the defendant should be allowed to introduce evidence to aid the jury to assess the present value of future medical expenses and pain and suffering. Specifically, the defendant wanted the trial court judge to take judicial notice of interest rate tables based on the 30 Year Treasury Bill (sic).  The trial court judge refused to take judicial notice of the tables and would not allow that rate to be admitted into evidence.  The appeals court said: “This Court will not presume to dictate a proper discount rate for present value purposes, though agreeing that present value is a proper consideration in the determination of an appropriate award. The appeals court ruled that the trial court improperly refused to take judicial notice of the interest rate tables, but that the refusal did not constitute reversible error. The discussion by the appeals court of the degree to which inflation is reflected in nominal interest rates seems clear and correct. The Court also ruled specifically that present discounting applies to pain and suffering as much as other damages.

        Annuities, Periodic Payments and Reversionary Trusts

Southlake Limousine and Coach, Inc. v. Brock, 578 N. E.2d 677 (Ind. App. 1992).When Southlake attempted to cross examine Stan V. Smith, the plaintiff’s economic expert, on annuities, the trial court sustained plaintiff’s objections to this line of questioning. The Indiana Court of Appeals reversed the trial court decision on the grounds that Mr. Smith should not have been permitted to testify about hedonic damages, but said: “Plaintiff argues that Professor Smith never discussed annuities during direct examination and therefore, he did not “open the door” for this subject for cross-examination. However, annuities were a permissible subject for cross examination in this case. Professor Smith testified as to the present value of plaintiff’s damages during direct examination. Annuities are another way of calculating present value of damages. Since Professor Smith is an economist, he should have been familiar with this type of calculation. Therefore, a discussion of present value on direct examination will allow cross-examination of the expert on other methods of present value calculation."

        FELA/Maritime

CSX Transportation v. Gardner, 2007 Ind. App. LEXIS 2125 (Ind. App. 2007). The Indiana Court of Appeals held that both federal precedents and federal common law indicate that the CSX railroad is not entitled to a setoff for the amount it contributed to the fund from which Gardner was receiving a disability annuity.

Eversole v. Conrail, 551 N.E.2d 846 (Ind.App.1990). In this case, the court affirmed a set off of his award for his health and insurance benefits received after plaintiff’s injury and for voluntary disability payments made by Conrail following the plaintiff’s injury. The decision is unclear about the exact nature of the health and insurance benefits, but it appears that the benefits took the form of costs of the injury that were paid for by the heath insurance benefits that were still in place at the time those expenses were incurred. In other words, since health costs were paid for by health insurance provided by Conrail, Conrail was allowed a set off for those costs. Disability offsets were apparently for payments made for salary maintenance after the injury under the union contract. Eversole argued that because the decision was not enumerated, payments that applied only to lost earnings should not be deducted. The court allowed both set offs. The decision also involved the trial court’s jury instructions about how to calculate present value. The trial court had provided interest rate tables for interest rates at 6%, 7%, 8%, 9% and 10%. Eversole argued that the trial court erred in admitting the present value tables without the benefit of expert testimony. This court relied heavily on Monessen Southwestern Ry. Co. v. Morgan, 485 U.S. 330, 100 L.Ed 349, 108 S.Ct. 1837 (1988) to state that a jury decides what is the present value of the losses. The fact that Eversole did not offer expert testimony in that area was cited in rejecting this argument.

     Hedonic Damages and  Emotional Services

Frye v. Akron, 759 F. Supp. 1320 (N.D. Ind. 1991). This decision held that plaintiffs in a Section § 1983 action involving a wrongful death “may properly claim as an element of damages the decedent’s loss of enjoyment of life.” However, the court held that Indiana law applied to claims by the decedent child’s surviving parents for their own pain and suffering occurring as the result of their child’s wrongful death.  Section § 1983 did not apply to the decedent’s parents because they were not claiming that their own constitutional rights were violated.  The Indiana Wrongful Death Act did not allow recovery for the pain and suffering of the parents resulting from the death of the child. There was no discussion in this decision about whether an economist could testify about the hedonic damages of the decedent.

Johnson v. Inland Steel Co., 1992 U.S. Dist. Lexis 19733 (N.D.Ill. 1992).  Interpreting Indiana law, the court ruled that expert testimony about hedonic damages was inadmissible. The expert was not named in the decision. 

Southlake Limousine and Coach, Inc. v Brock, 578 N.E.2d 677 (1991). Indiana's 3rd District Court of Appeals ruled that the trial court decision to admit hedonic damage testimony by Stan V. Smith was improper and should not be allowed in a retrial. The court said: “Expert testimony on the value of life should not have been admissible in a wrongful death case. It could not provide a measure of the loss of love and affection to the surviving spouse nor of the loss of parental guidance and training to the surviving children. Professor Smith even testified to that effect. The most Professor Smith could do was place a value on the life of the decedent. His testimony regarding the loss felt by survivors was inadmissible speculation.”  This case also contains very interesting commentary about testimony by economists about annuities.   

      Admissibility of Expert Testimony

Tube City  v. Matthews, 2009 Ind. App. LEXIS 190 (Ind. App. 2009). From the decision: “At the jury trial, . . . Dr. Gamboa, a vocational economist, testified that the present value of Matthews’s future lost earning capacity was between $656,412 and $821,056. In addition, Dr. Gamboa concluded that Matthews was occupationally disabled and would lose seven years of his working life.” The Court went on to quote and affirm the trial court judge as saying: “[Dr. Gamboa is translating what the doctors have said . . . and putting it into work life and economic loss based on a reduced work life and, in addition, based on reduced earning capacity as represented by his physical condition. Which, as a vocational economist, he’s allowed to consider and to evaluate, because that’s what vocational counselors do.” The decision went on to add that: “Dr. Charles Linke, an economist and Tube City’s expert, used the same methodology as Dr. Gamboa, including the same percentage for fringe benefits, the same interest rate growth rate (sic), and the same data from the Current Population Survey that is gathered by the U.S.  Bureau of the Census.  Therefore, Tube City cannot now complain that Dr. Gamboa’s methodology is unreliable.”   

Kempf Contracting and Design, Inc., v. Holland-Tucker, 892 N.E.2d 672 (Ind App. 2008). Kempf argued that the trial court abused its discretion in allowing the testimony of John Tierney of Vocational Economics based on “sound scientific principle” under a Daubert standard. According to the Court Tierney had based his opinion that Tucker suffered a permanent disability under the definition used by the American Community Survey (ACS). “Tierney then used databases compiled by the government to determine the earning capacity of people with a physical disability who have attained a bachelor’s degree, as Tucker had, and to determine the work life expectancy of people in the same category. He did not look at data regarding people with a physical disability in Tucker’s specific profession of engineering, as that information was not available in the databases he utilized. Tr. at 43. The databases Tierney used in reaching his opinion were also not specifically geared to Tucker’s specific disability as defined by the ACS. . . . Tucker failed to present any evidence to establish the scientific reliability of Teirney’s methodology in determining Tucker’s reduction in earning capacity and work life expectancy. As the proponent of the expert testimony, Tucker had the burden of establishing the reliability of the scientific tests upon which the expert’s testimony is based. Tucker presented no evidence, however, that this process had been tested or subject to peer review, or whether there was a known or potential error rate. Further, no testimony was given that standards existed to control how the process was utilized by people in the vocational economic field. At the motion to exclude hearing, Tierney testified that database and methodology he used to determine Tucker’s future earning capacity were well known in the field of vocational disability and that private parties have written on the effect that disability has on earnings and employment. Tr. at 37, 40. However, Tierney did not name any peer-reviewed publication or provide any citation to authority that supported his bald assertion that his methodology to determine Tucker’s lost future earnings was generally accepted in the field of vocational economics. Additionally, even though Tierney may have testified previously regarding this methodology, such fact does not establish that his methodology was scientifically reliable.” The court, however, added the footnote: “We do not hold that the methodology utilized by Mr. Tierney is not scientifically reliable. Rather, we hold t hat Tucker failed to produce sufficient evidence to establish such reliability.”

Ollis v. Knecht, 751 N.E. 2d 825 (Ind. App. 2001).  Dr. Terrence Parks used a “mirror image approach” for projecting the plaintiff’s loss of earnings. Dr. Parks assumed that the plaintiff’s death caused a loss of fourteen years of earnings and therefore used a fourteen year period from the past to project future wage increases and the future discount rate. In a 702(b) hearing, Dr. Parks was unable to name a peer reviewed publication that supported the mirror image approach, though he claimed that Gerald Martin’s book (unidentified by title) supported the mirror image approach. Dr. Parks did not provide a full citation to Martin’s book.  Since Dr. Parks was unable to provide any citation to support his assertion that this method was generally accepted within the filed of economics, his testimony was not allowed. (Submitted by Ann Neff.)

Shafer & Freeman Lakes Environmental Conservation Corporation v. Stichnoth, 2007 Ind. App. LEXIS 2680 (Ind. App. 2007). This was an appeal of a jury verdict awarding negligence damages to Justin Stichnoth. Dr. Edward Berla testified for the plaintiffs about Justin’s impaired earning capacity, denying defendant’s motion in limine to bar the testimony of Dr. Berla. The failure of the trial court to bar Dr. Berla’s testimony was one of the issues in the appeal filed by the defendant. The defendants had hired Dr.Gary Skoog, who testified that “he and several peers believed that VEI’s use of the BLS data sets constituted ‘junk science.’ . . . In short, Dr. Skoog opined that the data sets were not designed to be used in forecasting future earning capacity impairment.” The Indiana Appeals Court held that the trial court’s decision to permit Dr. Berla’s testimony was not an abuse of discretion. The Court quoted the trial court from the transcript at length, as follows: “I think I have questions about the data, but I, and I haven’t actually seen the report itself. I’m still inclined to let the witness testify. I’ll tell you why. I don’t think this is real science. I think it’s something one can be an expert about. I think most experts who are social science experts gain their credibility and their ability to be an expert from some discipline that they’re particularly trained at intellectually and have experience at by writing or studying or doing research or running surveys or something.  And I think you can be qualified as an expert if you can demonstrate on the record that you have an ability based on your experience and your training, your education, to given an opinion that recognizes all sides of the issue and because of what you know and study and thought and believe that you’re on the correct side of the issue.”

Iowa

         Basis Income and Fringe Benefits for Projecting Earnings Loss

Beeck v. Aquaslide ‘N’ Dive Corp., 350 N.W.2d 149 (Iowa 1984). Warren Adams, “a qualified actuary and professor at Drake University” provided opinions about the loss of Mr. Beeck’s future wages and future medical expenses in present value terms based on total offset. The Iowa Supreme Court held: “Sufficient support existed for the finding that future inflation rate and the discount rate offset each other. We likewise find sufficient support for the finding that Beeck would have worked until age sixty-five but for the injuries, and that he is totally disabled.” 

Harrington v. United States, 2005 U.S. Dist. LEXIS 16185 (S.D. Ia 2002). This decision provides a detailed discussion of the calculation of damages under Iowa law from Judge Robert Pratt. Judge Pratt discusses the assumptions, data considered, and calculations of Dr. Peter Matilla for the plaintiff and Dr. Newkirk for defendants, neither of whose opinions were regarded as satisfactory. Judge Pratt’s discussion of how life tables should be used if life expectancy is shortened is particularly thoughtful.

Vasconez v. Mills, 651 N.W.2d 48 (Iowa 2002). One of the elements in this appeal was a defense argument that Vasconez should not have been permitted to testify concerning future economic loss stemming from his alleged inability to obtain a masters or doctorate in education. The Iowa Supreme Court upheld the trial court’s determination that the defendant’s arguments went to the weight of Vasconez’ testimony and not its admissibility. The Court pointed out that there was abundant evidence concerning the impairment of Vasconez’ physical capacity and that a jury could infer from such evidence that there was a reduction in earning capacity. The Court also reaffirmed Carradus v. Lange, 203 N.W.2d 565, 569 (Iowa 1973) in holding that the expert testimony of an economist is not necessary “in order to generate a jury issue on the question of projected economic loss.”

            Standards for Wrongful Death Analysis            

Adams v. Deur, 173 N.W.2d 100 (Iowa 1969). This decision held that lost earnings for the purpose of calculating lost financial support and lost accumulations to an estate in a wrongful death action should be based on after tax income. “It is to us self-evident future probable taxes are no more speculative than any other element a trier of the facts is permitted, if not required, to consider in the determination of wrongful death damages. Reference to a relatively few factors will suffice: Determination of anticipated living costs; life expectancy; future earnings or income; prospective value of the dollar; and expected interest rates. . . Mindful of the foregoing, we find that if loss of estate damage is determined in light of estimated income, after taxes and other attendant recognized factors, the result will more nearly effectuate actual loss. State otherwise, if plaintiff administrator’s present value of estate loss were to be calculated, exclusive of probable future tax obligations, the resultant award would be an amount on which decedent would have had to pay taxes if received as wages or other income, thus allowing recovery to plaintiff of more than was lost. 

Beems, Adm’r, v. The C., R.I. & P.R. Co, 58 Iowa 150; 12 N.W. 222 (Iowa 1882). This decision held that it was in error for the trial court to have admitted testimony about the number of children a man had in making an award to the estate of a decedent in a wrongful death action, saying: “It is competent to show what a party earned during his life, as that has bearing upon the probable loss to his estate by his death. It may also be competent to show that the deceased was a married man, for from observation and experience it may be fairly assumed that a married man will be more frugal and industrious, and hence will accumulate a larger estate, than a single man. But observation and experience do not teach that one’s income is likely to increase in the same ratio as the number of his children. There is no rule of law under which the estate of a deceased father of a dozen children can properly recover on account of his death, more than the estate of such a father of one child or none. The real question in this case is, what was the value of the deceased’s life to his estate? The number of his children can have no legitimate bearing upon that question, although it may furnish the ground of an earnest appeal to the sympathy of the jury, and we have no doubt that this was the real purpose for which such testimony is offered.” 

Brophy v. Iowa-Illinois Gas and Elec. Co, 119 N.W.2d 865 (Iowa 1963). This decision involved  an appeal of the award of $30,000 in the wrongful death of a pipelayer, which the Iowa Supreme Court upheld. The Court said: “The measure of damages in cases of this kind is the present worth or value of that which the decedent would reasonably be expected to save and accumulate as a result of his efforts if he had lived out the natural term of his life, to which may be added interest on reasonable funeral expense for such time as it was prematurely incurred. . . .This rule is vague, uncertain and speculative, if not conjectural, but it is the best which judicial wisdom and experience have been able to formulate. No evidence is possible of the time deceased would have lived but for the injury complained of. Had he avoided this injury, death may have met him the next day, week or year in some other form. In business he might have become a phenomenal success and accumulated millions or he might have lived to old age and died a pauper. From a man of good habits, prudence and industry, he might have become a spend-thrift or a tramp, or if a man of dissolute habits he might have reformed into an efficient and prosperous citizen. But the demands of justice will not tolerate the taking of human life by the tort of another without the wrongdoer answering therefore in damages, and the rule we have stated is the one which has been devised for that purpose. The difficulty in its practical application lies in the fact that it calls for an estimate which must be arrived at by a balancing of mere probabilities which a jury must infer from the age, character, habits, condition, education, employment, surroundings and apparent capacity of the deceased.”

Haumersen v. Ford Motor Co., 257 N.W.2d 7 (Iowa 1977). A jury had awarded loss of accumulations to the estate of a seven year old boy in the amount of $100,000. An economist the court described as well qualified (but did not name) had projected a maximum value of the estate of $108,343, which the economist described as a “conservative maximum estimate.” The Iowa Supreme Court affirmed the amount of the award.

Iowa-Des Moines Nat’l Bank v. Schwerman Trucking Co.,
288 N.W.2d 198 (Iowa 1980). Wrongful death awards in Iowa are not subject to reduction for federal estate taxes because the accumulation period runs only to the death of the decedent. Taxes assessed after death should not be relevant to the crucial period. Taxes on income are taken into account in calculating lost financial support and lost accumulation to an estate, but not taxes on the estate itself. This decision also cited Schmitt v. Jenkins Truck Lines Inc., 170 N.W.2d 632 (Iowa 1969) as indicating at adult children can claim loss of financial support and services in cases involving decedent parents. 

Miller v. YMCA, 2004 Iowa App. LEXIS 800. (Ia. App. 2004). The Iowa Court of Appeals affirmed that reasonable jury could have concluded that the present worth of the estate of Britteny Bronnenberg, aged 9, was $175,000. The Court indicated that the Iowa Supreme Court had acknowledged that “this measure of damages was necessarily somewhat of an approximation with each case turning on its own facts” in Brophy v. Iowa-Illinois Gas and Elec. Co, 119 N.W.2d 865 (Iowa 1963). The Iowa Supreme Court in that case had pointed out that while the amount of uncertainty is even greater when the loss to an estate is due to the wrongful death of child, but that this reason alone should not deny the estate any recovery. The Miller Court then proceeded to point out that the evidence showed that: “Britteny was an intelligent child who received excellent grades, with near perfect school attendance. She was well liked by her peers and was in good health. From this evidence and other evidence offered at trial a reasonable jury could conclude that the present worth of the value of Britteny’s estate was $175,000. 

Schmitt v. Jenkins Truck Lines Inc
., 170 N.W.2d 632 (Iowa 1969). This decision provides a description of how damages in a wrongful death case in Iowa are calculated and is frequently cited in other Iowa decisions. The court listed the following allowable damage items: (1) The present worth or value of the estate which decedent would reasonably be expected to have saved and accumulated as a result of his efforts between time of his death and end of his natural life; (2) An award of interest on the reasonable funeral expenses of decedent for such length of time as it was prematurely incurred, not to exceed either the reasonable cost of a funeral for a person of decedent’s social and financial standing or the amount claimed therefore; (3) Recovery for all elements of damages sustained by the wrongfully injured person from the time of injury until the date of his death including those elements of damages permitted by Fitzgerald v. Hale, 247 Iowa 1194,78 N.W.2d 509; (4) The present worth of the services and support which he presumably  would have contributed to his wife and children, or both, but for his untimely death. The decision involved a death of a homemaker, but the court held that she had the capacity to work outside the home, saying: “A person may not have worked or may have had no income prior to a fatal injury but still suffer destruction of future earning capacity.” Finally, the court also indicated that adult children could recover for loss of services and, potentially, support. “Parental affection for children probably will not cease after minority and the father may still contribute to his children’s support. . . The jury in considering loss to the children by their parents’ deaths is not limited to the time during which they are minors if it can conclude from the evidence such services would have continued after they attained majority.”

Tedrow v. Fort Des Moines Cmy. Serv., Inc, 117 N.W.2d 62 (Iowa 1962). This was a wrongful death action based on the death of a 12 year old girl. The jury awarded $22,500 in damages to her estate. The defendant challenged the award as excessive. The Iowa Supreme Court upheld the award, saying that: “No amount of money can compensate for a life wrongfully taken. Nor can any sum or any device known to man restore it. The law, faced with this absolute fact, can only say that in a proper case an award may be made which will compensate for the financial loss. The rule is the measure of recovery for a wrongful death is the reasonable value of the decedent’s life to his estate; which means the present worth of the estate he would reasonably be expected to accumulate between the time of his death and the end of his natural life if he had lived.”  The Court also said: “[T]here is not a great deal that can be shown in regard to the future earning and accumulating capacities of a twelve-year-old girl. Yet for that reason alone her estate is not to be denied a recovery in damages.” The Court upheld the award of $22,500.

Wolbers v. Finley Hospital, 2003 Iowa Sup. LEXIS 230 (Iowa 2003). The decision allows an award to stand for “loss of function of mind and body” between the time of injury and the time of death “even though the time between a negligent act impeding a patient’s bodily functions and the time of death is brief.”  The decision also clearly discusses the nature of adding interest to an award: “Interest on past damages accrues from the date the lawsuit was filed. . .Interest on damages awarded for future losses begins accruing on the date judgement is entered. We agree that the hospital's contention that the $30,000 awarded for loss of function of body and mind and physical and mental pain and suffering was the only recovery for past damages. The other elements of damage must be separately computed on past and future damages in accordance with our determination.” The decision did not mention an economic expert. Submitted by John O. Ward. 

            Household Services

Bridenstine v. Iowa City Elec. R. Co., 181 Iowa 1124, 165 N.W. 435 (Iowa 1917). “The services of a competent wife and mother cannot be weighed in the scales of the money changer. And indeed it would seem almost frivolous to call witnesses to estimate their monetary value. The best that can be done is to prove the facts and circumstances of the woman’s life and service in these capacities, her age, health and strength, her expectancy of life, and all that may appear to enlighten the minds and aid the judgment of jurors, and leave them to assess such recovery within the statutory limit as they find and believe to be just.”

        Life and Worklife Expectancies 

Ehlinger v. State of Iowa, 237 N.W.2d 784 (Iowa 1976).  The decision read: “Thus trial court could have properly concluded that because of his severe injuries plaintiff would not live out his 48.55 year life expectancy. Thus far we have followed the minority rule that shortened life expectancy caused by the injury may be used to reduce damages when determining loss of earning capacity...Of course a shortened life expectancy may also be considered when determining future pain, suffering, nursing and medical expense.”  The decision cites prior Iowa decisions holding that a shortened life expectancy after an injury may be considered in determining an individual’s lost earning capacity. There is no extended discussion of this issue.

           Legal Procedure

Gleason v. Kueker, 641 N.W.2d 553 (Iowa App. 2001). This decision provides an examination of  “the theory and practice behind present value reductions of future damage awards” in Iowa, holding that “Iowa law requires an award for future damages in a personal injury action be reduced to present value.” The court said: “Although our highest court has not explicitly mandated a particular methodology, it has affirmed the use of the total offset approach where there is evidence from which to conclude that the discount and inflation rates are the same. The discount rate should be one “found by the jury from the evidence to be fairly expected from reasonably safe investments which a person of ordinary prudence, but without particular financial experience or skill, could make in the locality.” This is a quotation from Von Tersch v. Ahrendsen, 251 Iowa 115, 121, 99 N.W.2d 287, 291 (1959).  The court also said: “While certain courts have questioned the wisdom of relegating such a complex calculation to a jury, others have noted that the use of economics is in any event less than exact and the determination should be left to the sound discretion of the jury.”

Orkin Exterminating Co. v. Burnett, 160 N.W.2d 427, 430 (Iowa 1968). “Courts have recognized a distinction between proof of the fact that damages have been sustained and proof of the amount of those damages. If it is speculative and uncertain whether damages have been sustained, recovery is denied. If the uncertainty lies only in the amount of damages, recovery may be had if there is proof of a reasonable basis from which the amount can be inferred or approximated.

            Miscellaneous

In Re the Marriage of Gahagen, 2004 Iowa App. LEXIS 926 (Iowa App.2004). This decision discusses what happens to a divorce order if a military retiree converts part of his military retirement to disability payments. Under the Uniformed Services Former Spouses Protection Act (USFSP), disability payments to an injured veteran cannot be divided in a divorce decree, but retirement benefits can and routinely are divided. Since retirement benefits are taxable but disability payments are not, there is an incentive for military retirees to convert retirement benefits to disability benefits. The Iowa Court of Appeals held that a divorced military person can be made to make up the spouses share of retirement benefits when conversions to disability benefits occur. The make up share must be from sources available to the retiree other than his disability benefits. Gerald Martin assisted with this description.

            Wage Growth and Discount Rates

Schnebly v. Baker, 217 N.W.2d 708 (Iowa 1974). The Iowa Supreme Court upheld a trial court decision that the cost of life care for a child would increase at the same rate as the discount rate. The decision appeared to assume that the rate of inflation and the rate of the cost of care for the child were the same growth rate. This was a case cited in Paducah Area Public Library v. Terry, 655 S.W.2d 19 (1983) as having allowed a total offset assumption by the trial court. However, the essence of the decision was that inflation could be considered, but that future values should be reduced to present value. The trial court had offset future inflation with the discount rate and the Schnebly court held that was permissible based on the evidence in the Schnebly case.  

         Legal Procedure

Vasconez v. Mills, 651 N.W.2d 48 (Iowa 2002). “[I]t is not necessary to produce the expert testimony of an economist in order to generate a jury issue on the question of projected economic loss.”

         Admission of Expert Testimony

Sallis v. Lemansky, 420 N.W.2d 795 (Iowa 1998). This decision responds in part to an appeal by a defendant that resulted in the reversal of the decision of a trial court and the granting of a new trial. As part of the decision, the Iowa Supreme Court considered at some length the question of whether testimony from the plaintiff’s unnamed economist should have been admitted. The court pointed out that the economist had not considered time off for illness or vacation “beyond what was reflected in 1979-80 earnings” and had not worked as an over-the-road truck driver for approximately two years before the injury to the plaintiff. The court pointed out that the standard in Iowa is earning capacity so that if the plaintiff had taken a lower paying job to be close to his children, he could still have recovered for his earning capacity in trucking. The court pointed out, however, that: “Defendants had the opportunity to present evidence concerning the trucking industry, plaintiff’s driving record, and plaintiff’s work history to discredit the economist’s opinion. Plaintiff is correct that these factors go to the weight of the evidence and not its admissibility.” On this aspect of the appeal, the Iowa Supreme Court held that the trial court judge had not abused his discretion by admitting the testimony of the economist.

         Hedonic Damages

Poyzer v. McGraw, 360 N.W.2d 748 (Iowa 1985). The Iowa Supreme Court held: “W recognize loss of enjoyment of life as a factor to be considered as a part of future pain and suffering. . . To whatever extent recover for such a loss should be allowed, it is already recognized, under Mabrier, as a factor in other elements of damages. It would be plainly duplicative to allow a separate award for loss of enjoyment of life. Although we recognize there is a contrary view, we join the states which refuse to allow the submission of loss of enjoyment of life as a separate element of damages. [Citing Mabrier v. A. M. Servicing Corp. of Raytown, 161 N.W.2d 180 (1968)]

Kansas

     Basis Income and Fringe Benefits for Projecting Earnings Loss

Hernandez-Cortez v. Hernandez, 2003 U.S. Dist. LEXIS (D. Kan. 2003). Hernandez-Cortez was an injured illegal alien. His economic expert, Dr. Gary Baker, projected his lost earnings and life expectancy based on assuming he remained in the United States. The Court cited Flores v. Amigon, 233 F. Supp.2d (E.D.N.Y. 2002) as allowing recovery for any past wages owed, but Garay v. Missouri Pacific R. Co., 60 F. Supp. 2d 1168 (D. Kan. 1999), as prohibiting recovery of future lost earnings on the assumption that the illegal alien would have been able to remain in the United States.

        Standards for Recovery in Wrongful Death

Fudge v. City of Kansas City, 239 Kan. 369 (Kansas 1986). Evidence of remarriage of a surviving spouse is inadmissible in a wrongful death action in Kansas.

       Household Services

Huffman v. Thomas, 26 Kan.App. 2d 685 (Kan.App. 1999). Referencing lost household services, the Kansas Court of Appeals held: “Plaintiffs in wrongful death actions are not required to prove their losses with mathematical certainty. In many instances, the burden of proof can be satisfied simply by showing the nature and extent of the loss asserted.”

Cerretti v. Flint Hills Rural Electric Cooperative Association, 251 Kan. 347 (1992). This case involved the death of a wife and mother. The defense argued that the only pecuniary loss due to the death of the wife was $11,687 spent to hire a substitute bookkeeper, housekeeping services and a baby sitter since the wife had not yet returned to work and contended that the report of the plaintiff’s economist, Dr. Gary Baker, “relied exclusively on hypothetical, speculative, hearsay assumptions as to the possible future economic benefits.” The court held that Dr. Baker’s testimony was sufficiently reliable to support the jury’s verdict, saying: “There can be no doubt that Cerretti and his children actually suffered losses, and there can be no serious contention that the care, guidance, and services of a spouse and parent lack monetary value. The reports and the testimony of Dr. Baker and the testimony of Randall Cerretti support the verdict. Under the applicable standard of appellate review, the verdict as to pecuniary damages will not be disturbed.” Suggested by Kurt Krueger.  

      Life Care and Future Medical Expenses

Wagner v. SFX Motor Sports, Inc., 2007 U.S. Dist. LEXIS 87446 (D. Kan. 2007). Magistrate Judge James P. O’Hara held in this case that Wagner was entitled to recover $647,875 for past medical expense and $213,750 for anticipated future medical expenses resulting from his injury even though Wagner did not present evidence of specific amounts of his anticipated future medical expenses. In contrast, Judge O’Hara held that $253,381 awarded for future loss or impairment of services of a spouse (household services) was not shown to be separate from other forms of non-economic loss and thus must be included with $758,161 for non-economic loss, for a total of $1,286,157. That amount was reduced to $250,000 based on the Kansas statutory cap on non-economic damages. Judge O’Hara said: “There was some evidence about the types of household services in this case. But there was no evidence at trial about the monetary value of household services in this case. Accordingly, the court finds the statutory cap applies to the entire loss of consortium award (italics as in original).”

      Annuities, Periodic Payments and Reversionary Trusts

Gregory  v. Carey, et al., 246 Kan. 504 (1990). Rejection of testimony by an annuitist by the trial court judge was within the discretion of that judge, with discussion in the decision suggesting that the Kansas Supreme Court agreed with the trial court judge. There is also discussiion of legislative changes in the collateral source rule in medical malpractice cases in Kansas. 

     Hedonic Damages and Emotional Services

Brick Co. v. Fisher, 79 Kan. 576; 100 P. 507 (KS 1909). This early Kansas decision discussed pecuniary losses suffered by his parents as a result of the death of James Lareau, their unmarried 21 year old son. The Court said: “We have here a relationship that naturally leads to the conferring of pecuniary benefits – a willing disposition to contribute, a capability to contribute likely to increase, contributions actually made, and a definite plan from which further contributions were likely to result. It is not only reasonable to suppose but it is quite certain that these parents would have been pecuniarily advantaged by the continued life of their son, and under all the decisions of the court sufficient data appeared from which the jury, taking into consideration the knowledge and experience common to all men, could compute the damage they suffered from his death.”

Calvert v. Rothlisberger, 268 Kan. 698 (Kan. 2000). The Kansas Supreme Court specifically rejected the parental investment approach for valuing parental loss in the death of a child, saying: “The lost investment of infant care, clothing, support, and education of the deceased child do not fit into any of the [K.S.A. 1999 Supp.] 60-1903 categories. Rothlisberger’s argument is inconsistent with 60-1903 and against the clear weight of authority.” 

Cochrane v. Schneider National Carriers, Inc, 980 F.Supp. 374 (D.Kan 1997), Dr. Gerald Olson was permitted to testify about all normal pecuniary losses, but not permitted to advance a projection of the value of lost “emotional services” the decedent would have provided to his family.  Dr. Olson had calculated an average of the salaries of teachers, social workers, psychologists and counselors as being in the range of $25,000 to $30,000 per year. He had then projected that the decedent father had provided “emotional services” in this range. The court ruled that such services by a high school graduate could not be valued by amounts paid to persons with more advanced degrees. The court also rejected this testimony because Dr. Olson provided no specific times during which these services were being provided.

Leiker v. Gafford, 245 Kan. 325; 778 P.2d 823 (Kan. 1989). This decision held that hedonic damages cannot be recovered as a separate element of damages in Kansas, saying: “[L]oss of enjoyment of the pleasurable things in life is inextricably included within the more traditional areas of damages for disability and pain and suffering. While it is true that a person may recover from the physical pain of a permanent injury, the resultant inability to carry on one’s normal activities would appear to fall within the broad category of disability. In the majority of cases loss of enjoyment of life as a separate category of damages would result in a duplication or overlapping of damages. . . However, we also point out that evidence of loss of enjoyment of life  is definitely admissible and proper for the jury’s consideration as it relates to disability and pain and suffering, and may certainly be argued by counsel to the jury. We hold that in Kansas, loss of enjoyment of life is not a separate category of nonpecuniary damages in a personal injury and that it is in error to submit a separate instruction, or provide a separate verdict form entry, on loss of enjoyment of life. However, in a proper case it is a valid subcomponent or element of pain and suffering and/or disability.”  The decision also held that “Kansas generally follows the majority rule that damages are recoverable only for pain and suffering which is consciously experienced.”  The decision cited Wentling v. Medical Anethesia Services, 237 Kan. 503, 507-09, 701 P.2d 939 (199); K.S.A. 1988 Supp. 60-1904 to the effect that: “There was testimony by plaintiff’s expert witness that a conservative estimate of the present value of Shawn’s anticipated lifetime earning capacity alone exceeded $1,000,000. The expert testified that the present value of the household and family care services she would have provided between the ages of 24 and 70 was $556,335. He reduced the totals by $213,303 as the estimated present value of Shawn’s lifetime personal consumption, concluding that the total pecuniary loss for earning capacity and household and family care was $1,633,055. There was sufficient evidence to support the jury verdict of $1,000,000 for pecuniary loss in the wrongful death action.” 

The Atchison, Topeka & Santa Fe Railway Company v. Fajardo, 74 Kan.314 (1906). “No questions of greater difficulty are presented than those involving the pecuniary loss which next of kin suffer in the death of a child. No precise measure has ever been found, nor is it easy to state the quantum of proof that will give a basis of recovery. It is said that ita must be left largely to the discretion of the jury; but it is also ruled that damages cannot be rested on the conjecture of jurors, but must be supported by proof tending to show pecuniary benefits already realized or in reasonable expectation from the continuance of the life. . . Where the deceased was a minor child and lived with his parents, who would have been entitled to his services if he had lived, there is an implication of pecuniary loss, but a substantial amount cannot be recovered unless the circumstances proved, as to age, intelligence, conduct and relationship, furnish a basis of reasonable expectation of pecuniary benefit. It is not essential to a recovery in the case of a child that there should be proof of valuable services already rendered, nor direct evidence of the exact value of the services which would have been rendered had it lived, nor yet a fixed amount of pecuniary loss sustained in its death. This is not practicable.” Suggested by Kurt Krueger.

Wentling v. Medical Anesthesia Services, 237 Kan. 503 (Kan. 1985). This is the key case in Kansas concerning relational services as household services.  Lloyd Durham was the economist for the plaintiff that the value of the loss of conventional household services was $586,071. He also testified about what elements of loss were not included in his figure for lost household services. These additional pecuniary losses that he could not value in specific dollar terms incuded: “[M]oral training, social training, educational assistance (particularly with a handicapped child), a mother’s role as nurturer and counselor, companionship, services to her husband, and more.”  The court held that the jury could award damages in these areas even if the plaintiff did not provide a precise estimate of damages. (Revised listing.) 

      Admissibility of Expert Testimony

Armstrong v. City of Wichita, 21 Kan. App. 2d 750; 907 P.2d 932 (Kan. App. 1995).  This decision holds that neither the Frye or Daubert standards apply to decisions of an administrative law judge or the Workers Compensation Board admission of testimony from a treating physician, nor must “occupational disease” be precisely defined.  The Armstrong court quoted Chinn v. Gay & Taylor, Inc., 219 Kan. 196, Syl. P 3, 547 P.2d 751(1976) as follows: “The existence, nature and extent of the disability of an injured workman is a question of fact. Medical testimony is not essential to the establishment of these facts and it is not necessary that a workman’s disability be given a medical name or label.” (Emphasis added in the Armstrong decision). 

Kuhn v. Sandoz Pharmaceuticals Corporation, 270 Kan. 443; 14 P.3d 1170 (Kan. 2000).  This was the most recent affirmation that Kansas retains the Frye test instead of recognizing Daubert. It also emphasizes that the Frye test does not apply to “pure opinion” expert testimony, citing Florida Power and Light Co. v. Tursi, 229 So. 2d 995 (Fla. Dist. App. 1999) as a reference to the “pure opinion” exception to the Frye test. It also cited Logerquist v. McVey, 196 Ariz. 470 (Arizona 2000) in its extensive discussion of the “pure opinion” exception to the Frye test. In this case, the issues had to do with the admissibility of medical testimony, which the Kuhn court felt did not employ “a new or experimental scientific technique” in a way that would trigger the Frye test of general acceptance. 

State v. Warden, 891 P.2d 1074. (Kan. 1995). Retained Frye standard, rejecting Daubert as more liberal than Frye.

Kentucky

             Basis Income and Fringe Benefits for Projecting Earnings Loss

Bolen v. Howard, 452 S.W.2d 401 (Ky. App. 1970). This decision speaks to the earning capacity of an individual when evidence is unclear what that capacity might be. The Court said: “Despite Coburn’s age and non-work status at the time of his death, together with ample defensive testimony that he was not in physical condition to earn a livelihood, there was proof that he had worked in West Virginia shortly before he came to live with the Howards in Kentucky and could have resumed the same work. It will be recalled that he was able to go hunting, which reflects some degree of physical stamina. He was able to drive a motor vehicle. His earning power may have been minimal, but at the very least his estate is entitled to nominal recovery. Certainly it would not have been proper to direct a verdict for the defendant.” 

Boland-Maloney v. Burnett, 2009 Ky. App. LEXIS 169. One of the sources of appeal of the trial court decision awarding damages to Burnett for a personal injury was a claim that John Tierney, a vocational expert (employed by Vocational Economics) had based his projections on “proxy” measures for future earnings rather than the plaintiff’s actual earnings record. The court rejected that argument, saying: “[I]t has long been the law in Kentucky that damages for loss of earning capacity are not strictly measured by actual loss or earnings but by the impairment of the plaintiff’s power to earn money. Although Tierney’s testimony was not based on Doug’ actual earnings at the time of his injury, nothing precludes testimony by a vocational expert on the impairment of a plaintiff’s power to earn money, or the use of a “proxy” to do so where current earnings are not indicative of the plaintiff’s earning power. As such, the trial court did not abuse its discretion.”  

O. J. Schultz v. Chadwell, 558 S.W.2d 183 (Ky. App. 1977). This decision held that the trial court had not erred in submitting the issue of the plaintiff’s “lost time” to the jury. Muriel Chadwell had been working for the family business even though she was not paid a salary for that work. Evidence that her daughter was paid $150 per week to provide the same services the plaintiff had been providing provided the basis for valuing the lost time spent working on the family business. However, the appeals court reversed the trial court decision permitting both the value of lost time and the cost of a replacement worker to be counted as damages. With respect to household services, the Court said: “Recovery for the expense of household help should be limited to those cases in which it is clear that the expense would not otherwise have occurred, and it should be limited to the period of recuperation. If there is permanent impairment of a person’s ability to perform household services, that item of damage would be included within the claim for permanent impairment of earning capacity.”  

Reffitt v. Hajjar, M..D., 892 S.W.2d 599 (Ky. App.1994). This decision speaks to the earning capacity of a child when parental achievement is minimal. Citing Turfway Park Racing Association v. Griffin, Ky., 834 S. W. 2d 667 (1992), the court said: “While Turfway makes it clear that a jury is ‘not compelled to return a verdict dictated by economic expert testimony,’ neither is it proper in a wrongful death action to award nothing for destruction of earning power ‘unless there is evidence from which the jury could reasonably believe that the decedent possessed no power to earn money.’ Id. at 671. (Emphasis added). The evidence referred to in Turfway to defeat a claim for these damages is evidence “of a disability so profound as to render him incapable of earning money upon reaching adulthood. Id. (Emphasis added.). The evidence in this case is uncontroverted that, but for the failure of the defendants to recognize the fetal distress Chad was suffering during the labor process and to timely intervene to prevent permanent brain damage, Chad would be a normal, healthy child like his identical twin Colby. While the jury was seduced by Hajjar’s argument that Chad would never amount to anything because of his parents’ values and life style, we find this argument to be repugnant as a matter of law and offensive to cherished, although oft fanciful, principles upon which our society is based. Thus, on retrial the jury will be required to award some amount to compensate Chad’s estate for his destruction to earn money (sic), and Hajjar may not be allowed to argue for a zero award.”

            Wage Growth and Discount Rates

Calarie v. United States, 1984 U.S. Dist. LEXIS 16202 (W.D.Ky 1984). This is a decision in a Federal Tort Claims Act (FTCA) in the Western District of Kentucky by Judge Ballantine. The plaintiff claimed that damages should be calculated based on total offset based on the Kentucky state decision in Paducah Area Public Library v. Terry, 655 S.W.2d 19 (1983). The judge cited Doca v. Marine Mercante Nicaraguense, S.A., 634 F.2d 30 (3rd Cir. 1980) in adopting what he called a 2 percent “real rate of interest” but appears in context to have been a net discount rate since he apparently did not separately consider a real growth rate.

Paducah Area Public Library v. Terry, 655 S.W.2d 19 (1983). The Court of Appeals in Kentucky held that the trial court had not erred in excluding testimony about reduction to “present worth” or the refusal to advise the jury that an award was free of Federal and State income tax. The court emphasized that the emphasis of tort law in Kentucky was compensation, not retribution. It said: “The law recognizes the fundamental importance of the ability to earn, and therefore mandates that the impairment of earning power should be fully compensated..” On that basis, the held that personal consumption should not be subtracted in death cases and that federal and state income taxes, which were essentially similar to personal consumption of a decedent, should also not be subtracted. In a death case, the estate was entitled to recover for the same amount of lost earnings that a living personal injury victim could recover.  The Court held that awards for lost future earnings must be in the form of present worth, but suggested that juries understand both discounting to present worth and the impact of future inflation. For that reason, it upheld and favorably commented upon the decision of the trial court judge to preclude testimony about both discounting to present worth and increasing future damages because of inflation. It also said, however, that: “The injection of such matters is not prejudicial but irrelevant and non-essential; all however within the discretion of the trial court.” This decision has been interpreted by some as establishing a requirement for a total offset assumption between inflation and the discount rate in projecting damages in Kentucky. In reviewing case law in other states, the court relied heavily on a series of Alaska decisions based on Beaulieu v. Elliot, 434 P.2d 655 (Alaska 1967), an Iowa decision, Schnebly v. Baker, 217 N.W.2d 708 (Iowa 1974), and the Pennsylvania decision of Kaczkowski v. Bolubasz, 491 Pa. 561 (1980) to reach the conclusion that there was “expanding recognition of the total offset rule.” However the court also cited Doca v. Marina Mercante Nicaguense, S.A., 634 F.2d 30 (2nd Cir. 1980) to this same effect even though the Doca court had held that a 2 percent net discount rate was appropriate to reduce future values to present value.

Winston v. United States, 11 F. Supp. 2d 948 (W.D. Ky. 1998). In this case, the plaintiff brought a motion in limine to preclude testimony about damages that were not calculated by total offset, as recommended in Paducah Library v. Terry, 655 S.W.2d 19 (Ky. App. 1983). The judge held that the Paducah Library decision was a Kentucky evidence case and thus not binding in federal court. Judge Charles R. Simpson III clearly defined what “total offset” meant and why the judge considered such calculations inaccurate. He also pointed out that he considered the logic of the Paducah Library court to be weak and that the Paducah Library court had “pulled back” from adopting its total offset recommendations as “absolute.” Suggested by Gil Mathis.

            Standards for Recovery in Wrongful Death

Charlton v. Jacobs, 619 S.W.2d 498 (Ky. App.1981). The Court of Appeals said: “[W]e now hold that since the circuit court cannot instruct a jury on personal use reductions in reaching an award, then counsel should not be permitted to make any reference whatsoever thereto at any stage of the proceedings. . .The judgment will be reversed as to the trial for damages with instructions that the trial court prohibit any reference to the decedent’s items of personal consumption.”

Louisville & Nashville R. R. Co. V. Eakin’s Adm’r, 103 Ky. 465; 45 S.W. 529 (Ky. 1898). The Kentucky Supreme Court reversed a wrongful death trial court decision in which the trial court had “directed the jury to find for the plaintiff ‘the damages sustained by the widow and children, not exceeding the amount sued for.” The Court said: “They were not parties to the action and this part of the instruction, when considered with the testimony which was permitted to go to the jury over the objection of appellant,  – that decedent was a married man and left three children, – it was extremely prejudicial, as it diverted the attention of the jury from the duty of fixing the actual sum of money which would fairly compensate the decedent for the destruction of his power to earn money and directed it to the affliction which had overtaken the family by reason of his death. ‘There is no rule of law under which the estate of a deceased father of a dozen children can properly recover, on account of his death, more than the estate of a father of one child or none. The real question in this case is, what is the value of decedent’s life to his estate, a nd the number of his children can have no legitimate bearing upon that question. And the great weight of authority supports this view.’ (See Beems v. Chicago R. R. Co., 58 Iowa 150.)” 

Spangler's Adm'r v. City of Middlesboro, 191 S.W.2d 414 (Ken. App. 1945). "In this state the cause of action for wrongful death accrues to the estate of the deceased and the measure of damage is the destruction of the deceased's power to earn money." 

Stewart’s Admr v. L. & N. R. R. Co, 136 Ky. 717; 125 S.W.154 (Kentucky 1910). This decision explained the meaning of the Kentucky Wrongful Death Act: “This court has uniformly held that in cases like this the measure of recovery is such a sum as will reasonably compensate the estate of the deceased for the destruction of the power to earn money; but it does not follow that this is to be computed by simply multiplying the earning power of the deceased by his expectancy of life as shown by the life tables. . . The value of a piece of machinery is not to be determined by multiplying its present earning power by the length of its probable use, but the cost of maintenance must be subtracted. The value of the human machine to his estate must be determined in like manner. It must be maintained – that is, it must be fed, clothed and supplied with other necessities. What the estate would lose would be the net gain.

Turfway Park Racing Association v. Griffin, 834 S.W.2d 667 (Kentucky 1992 ). This decision of the Kentucky Supreme court reversed a jury’s decision to award $0 for the “lost power to earn money” to the estate of a decedent four year old child. Dr. Michael Brookshire was the plaintiff economic expert and had projected losses for lost earning capacity of between $1 million and $3 million. The Court offered this description of the response of the defense: “Appellant chose not to present testimony of an economist. The witness admitted that the decedent was analyzed as an economic machine which never lost a day or hour of work and was paid whether or not he worked. Whether the child would survive, become educated, work and participate were factors presented to the witness who then placed the child in a statistical class and expressed opinions based on that class. In sum, appellant attempted to poke holes in the testimony of Dr. Brookshire and create the impression that his testimony was exaggerated or incredible.” The Court held that it was in error no to have awarded some amount for the child’s lost earning capacity, but rejected the plaintiff’s argument that Dr. Brookshire’s testimony should have been accepted as uncontradicted,  saying: “While Dr. Brookshire’s testimony was uncontradicted, it was not free of challenge on grounds of exaggeration or poor scholarship. The use of economic testimony is an acceptable way of proving wrongful death damages . . ., but the jury retains the right to judge the weight of such testimony and under no circumstances may it be compelled to return a verdict dictated by economic expert testimony.” 

            Wrongful Birth or Wrongful Life

Grubbs v. Barbourville Family Health Center, 2003 Ky. LEXIS 178 (Ky 2003). The decision holds that “wrongful birth” or “wrongful life” damages may not be awarded in Kentucky.  The decision provides a review of decisions in other states and suggests that the majority view among the states is that such causes of action can be brought. Thus, the Kentucky Supreme Court apparently sees itself in the minority in its ruling. The decision discusses a number of decisions from other venues on this issue.

            Lost Chance of Survival/Recovery

Gordon v. Kemper, 2005 Ky. App. LEXIS 85 (Ky. App. 2005). The Court said: “We now hold that a lost chance of recovery/survival should be recognized as a legally compensable injury in medical malpractice cases where the chance of recovery/survival is 50 percent or less before the negligent act or omission. In cases where the chance of recovery/survival was greater than 50 percent, the traditional all-or-nothing approach would apply and the compensable injury would still be viewed as the underlying injury.” In explaining the “less than 50 percent” threshold for lost chance claims, the court explained that under the regular all-or-nothing rule, causation of harm depends on proving the harm with “reasonable probability.” Since a negligent act when the probability of recovery/survival was greater than 50 percent would result in “reasonable probability” of harm, the traditional all-or-nothing rule would be satisfied. The Court said explicitly: “From a statistical standpoint, we equate reasonable probability with a greater than 50 percent chance.” The Court also said that for a “lost chance” claim, “It must be stated with specificity that the compensable injury is viewed as a lost chance of recovery/survival.” 

Kemper v. Gordon, 2008 Ky. LEXIS 153 (Kentucky 2008). The Kentucky Supreme Court rejected “lost chance of survival”as a new damages element in Kentucky. A “lost chance of survival” damages calculation involves placing a value on the altered probability of survival due typically to a late diagnosis. The Court pointed out that a growing number of states have adopted the lost or diminished chance doctrine in malpractice lawsuits, but rejected that concept in favor of continuing Kentucky’s “all or nothing” approach based on a standard of “more probable than not,” or 51%. The Court said: “It is argued that a plaintiff would still be required to show, within a reasonable probability, that the negligence cause the loss of the chance of survival. However, a close look at the semantics of this argument makes it clear that this amounts to a concept chasing its own tail. When the dew leaves a rose, it is still a rose. The reasonable probability of a chance of survival is still just a possibility. . . We are troubled by the potential financial burden that might be spread upon the shoulders of millions of people if we adopt this new concept of lost or diminished chance of recovery. Further, we see many difficulties in adopting the lost or diminished chance of survival doctrine. For instance, what is a “late diagnosis?” Does a diagnosis missed this week, but made next week, rise to the level of diminished chance? A whole new and expensive industry of experts could conceivably be marched through our courts, providing evidence for juries that an MRI misread on Monday, but accurately discerned on Friday, perhaps gives rise to an infinitesimal lost chance to recover. Yet, under this doctrine, even a small percentage of the value of a human life could generate substantial discovery and place burdensome costs on healthcare providers. This additional financial load would be passed along to every man, woman, and child in this Commonwealth.”

            Legal Procedure

Allegiant Hospitals v. Benham, 105 S.W. 3d  473 (Ky. App. 2003). Zachary Benham, was born on July 23, 1999. His parents won three million dollars in an award for his losses, including almost two million for his future life care. On February 16, 2002, after entry of judgment but while timely post-trial motions were pending, Zachary died. The hospital moved to sever the part of the award that was designated for life care, but the trial court refused to do so, based on the jury verdict. The Kentucky Court of Appeals affirmed the trial court decision, allowing Zachary’s parents to keep the entire award.

            FELA and Maritime

CSX Transportation v. Moody, 2007 Ky. App. LEXIS 208 (Ky. App. 2007). The Court held directed that $200,000 awarded by the trial court for future medical expenses be subtracted because while there was reasonable medical certainty that there would be such expenses, the plaintiff had offered no evidence upon which the jury could determine that the reasonable cost would be $200,000. The court also cited CSX Transportation, Inc. v. Williams, Ga. App. 573 (1998) to hold that the defendant must provide a sound basis for how the subtraction of taxes should be made. The Court went on to apply similar reasoning to reductions to present value. The court held that a defendant could ask for a jury instruction that future values should be reduced to present value only if the defendant provided some evidence as to how this should be done.

            Hedonic Damages and Emotional Services

Adams v. Miller, 908 S.W.2d 112 (1995). Kentucky is a state in which losses in a wrongful death action are losses to the estate, not to survivors. The Kentucky Supreme Court in Adams cited the standard as in Louisville and N. R. Co. V. Eakins’ Adm’r, 103 Ky. 465, 530 (1898) as follows: “The damages recoverable in [a] wrongful death action have been clearly defined and limited almost from its inception. The damages are such sum as will fairly and reasonably compensate the decedent’s estate for the destruction of the decedent’s earning power and do not include the affliction which has overcome the family by reason of the wrongful death (emphasis in original).” On that basis, the Adams court held that loss of parental consortium is nor recoverable in a wrongful death action. The Adams court also held that: “This court recognizes that there is measurable value to one’s life other than his or her earning capacity. However, this value is already recoverable in the recognized category of mental suffering. There is no need to allow for the recoupment of hedonic damages as a separate category of loss.”

Estate of Shearer v. T & W. Tool and Die Corporation, 2010 WL 2870266; 2010 U.S. Dist. LEXIS 73197 (E.D.KY 2010). The Court held that the hedonic damages testimony and loss of relationship testimony of economic expert Dr. Stan V. Smith was not admissible under Federal Rule 702 and Daubert Standards. The reason given for non-admissibility, however, was that there is no right to recover for loss of enjoyment of life or loss of relationship in a Kentucky wrongful death action. Thus, Smith’s testimony was precluded as irrelevant to the issues to be resolved in litigation. There was no assessment of the scientific merits of hedonic damages testimony.

Louisiana

         Basis Income and Fringe Benefits for Projecting Earnings Loss

Batiste v. New Hampshire Insurance Company, 657 So. 2d 168 (La. App. 1995). This decision affirmed a decision of the trial court to increase a jury’s award for Batiste’s lost earning capacity from $13,000 to $250,000. The Court said: “Loss of earning capacity is not the same as lost wages. Rather, earning capacity refers to a person's potential. Earning capacity is not necessarily determined by actual loss. While the plaintiff's earnings at the time of the accident may be relevant, such figures are not necessarily indicative of his past or future lost earning capacity. The plaintiff need not be working or even in a certain profession to recover this type of award. What is being compensated is the plaintiff's lost ability to earn a certain amount, and he may recover such damages even though he may never have seen fit to take advantage of that capacity. In determining whether a personal injury plaintiff is entitled to recover for the loss of earning capacity, the trial court should consider whether and how much plaintiff's current condition disadvantages him in the work force. The trial court should thus ask itself what plaintiff might be able to have earned but for his injuries and what he may now earn given his resulting condition. The very nature of lost earning capacity makes it impossible to measure the loss with any kind of mathematical certainty. The facts of each case must take into account a variety of factors, including the plaintiff's condition prior to the accident, his work record prior to and after the accident, his previous earnings, the likelihood of his ability to earn a certain amount but for the accident, the amount of work life remaining, inflation, and the plaintiff's employment opportunities before and after the accident.” 

Bell v. Penney, 2009 U.S. Dist. LEXIS (W.D. La.  2009). This decision denied an appeal by the defendant based on the Report and Recommendation of the Magistrate Judge previously filed as Bell v. Penney, 2009 U.S. Dist LEXIS 95182 (W.D. La.  2009). In that report, the magistrate judge said: “Defendants argue that plaintiff’s expert economist, Dr. Christensen, should be excluded because his one-paragraph report is based on plaintiff’s own testimony of her lost wages rather than ‘actual wage records,’ because his testimony is not based on the opinions of any vocational rehabilitation expert, and because there is no medical evidence as to plaintiff’s limitations.” . . . Plaintiff’s testimony is a sufficient factual basis for the expert’s opinions to be admitted. The trier of fact, however, is entitled to accept or reject the plaintiff’s self -serving testimony and, in turn, any expert economic testimony based on it. As plaintiffs point out [i]t is ‘the r ole of the adversarial system, not the court, to highlight weak evidence.’ . . . Nor is there a requirement that vocational rehabilitation testimony be presented in every case. It is entirely proper for the expert to base his report on the assumption that the plaintiff has medical thus work limitations  – otherwise, his testimony would be immaterial. However, if at trial, there is no testimony supporting that assumption, then the district judge can consider excluding Dr. Christensen’s testimony at that time.”

Boulet v. Guidry, 2004 La. App. LEXIS 2317 (La. App. 2004). “The reports of two economists were introduced into the record. Dr. Bernard Pettingill projected Bouley to have a work-life expectancy beyond trial of 26.8 years and based his calculation of loss of future wages on earnings of $150 per week, or $7,800.00 per year. He found the present value of her loss of future wages to be $169,074.00. Dr. Kenneth Boudreaux calculated Bouley’s work-life expectancy at 15.01 years. He also used a calculation of $7,800 per year as Boulet’s annual income. He calculated the present value of her loss of income at a low rate of $87,503.02 and a high rate of $99,518.84. We find that an award of $87,503.02 for future loss of wages is supported by the evidence. We will amend the judgment accordingly.” The injured plaintiff was a 33 year old woman who was a high school drop-out with a sporadic earnings record.Brewer v. J.B. Hunt Transport, 2009 La. App. LEXIS 407 (La. App. 2009). In this case, the Court of Appeals reversed a trial court decision holding the plaintiff 100% responsible for the automobile accident in which the plaintiff was injured. The Court held defendants 60% responsible and the plaintiff 40% responsible for $10,677,635 in special damages and $2,500,000 in general damages. The process by which the Court determined damages amounts for various categories of damages is very detailed and relied upon opinions of Robert Gisclair, a vocational and life care planning expert for the plaintiff and defense economist Dan Cliffe, in reaching its award of damages. For several categories of life care costs, the Court assumed 7.3% price inflation with a 4.5% discount rate. Lost earnings were based on testimony of the defense economic expert and apparently used a 1.8% net discount rate.

Brewer v. J.B. Hunt Transport, 2009 La. App. LEXIS 407 (La. App. 2009). In this case, the Court of Appeals reversed a trial court decision holding the plaintiff 100% responsible for the automobile accident in which the plaintiff was injured. The Court held defendants 60% responsible and the plaintiff 40% responsible for $10,677,635 in special damages and $2,500,000 in general damages. The process by which the Court determined damages amounts for various categories of damages is very detailed and relied upon opinions of Robert Gisclair, a vocational and life care planning expert for the plaintiff and defense economist Dan Cliffe, in reaching its award of damages. For several categories of life care costs, the Court assumed 7.3% price inflation with a 4.5% discount rate. Lost earnings were based on testimony of the defense economic expert and apparently used a 1.8% net discount rate.

Cagle v.Harrah’s Lake Charles, 07-653 (La.App. 3 Cir. 12/12/07); 2007 La. App. LEXIS 2250 (La. App. 2007). This is a Jones Act case involving a slot machine technician. This memorandum provides extensive discussion of the rationale of the Court for accepting the trial court’s award of past wages and rejecting defendant’s “barefoot and pregnant” argument that as a wife and mother the plaintiff should not have been in the workplace. The Court also rejected the plaintiff’s cross appeal that a minimum wage offset to her lost earnings should not have been made. The plaintiff’s economist was Dr. Rice, who was quoted as testifying that “female workplace is in fact progressing and changing”as part of the Court’s rejection of the “barefoot and pregnant” argument of the defendant.

Crane v. Larocca, M.D., 2005-0283 (La. App. 4 Cir. 01/18/06; 2006 La. App. LEXIS 588 (La. App. 2006). “Kenneth Boudreaux, an economist, testified that Crane’s past and future lost wages, assuming he would have worked until age 60, would be $1,241,172.00. If Crane could work until age 65, his lost wages would be $1,459,247.00. The PCF did not put on the testimony of any expert witness to contradict these calculations. Although we recognize that the PCF’s position is that Crane is able to work, we accept the jury’s determination that he is unable to work and find that the award for lost wages is consistent with the expert testimony presented to the jury.” The appeals court affirmed the decision of the trail court. 

Delton Coutee v. Global Marine Drilling Company, 895 So. 2d 631 (La. App. 2005). This decision is interesting because of the discussion of the opinions of vocational experts on each side, Glenn Hebert for the plaintiff and Margo Hoffman for the defense. Margo Hoffman had failed to discover that Delton Coutee could not read and her opinion was described as “flawed.” The plaintiff’s economic expert was Dr. George Randolph Rice. The defendant’s expert was Dr. Kenneth Boudreaux. The court summarized the testimony of the two economists as follows: “Essentially, the two economists who testified used different methodologies to calculate Mr. Coutee’s loss of earning capacity as well as his past/future lost wages. Dr. Rice calculated Mr. Coutee to have a work life expectancy beyond trial of 25.63 years, loss of past wages of $100,284.00 and loss of future earnings of $563,174.00. Dr. Boudreaux calculated Mr. Coutee to have a work life expectancy beyond trial of 27.96 years, lost of past wages of $34,274.00 and loss of future earnings of between $212,000.00 and $311,000.00. We find the loss of past wages in the amount of $60,000 and a loss of future earnings in the amount of $300,000.00 is supported by the evidence.

Dolores v. Southern Farm Bureau Casualty Insurance, 44,883 (La.App. 2 Cir. 01/06/10); 2010 La. App.  LEXIS 4 (La.App. 2010). This decision upheld the JNOV decision of the trial court judge to increase the jury’s award of damages for a brain injury to a child to $600,000. The testimonies of Bob Gisclair and Barney Hegwood, vocational experts for the plaintiff and defense, respectively, are described, but no economists were mentioned. Testimony of the vocational/rehabilitation experts related to the percentage of “lost access” to the job market that was caused by the injury, not a projection of the lost earnings that would result from the lost access to the job market. Gisclair argued for between 50% and 60%. Hegwood argued for 20%. There was no mention of how these percentages were translated into a specific amount for lost earnings.  There were also life care plan elements for transportation and counseling. The round number of $250,000 in damages for “future economic loss and training and medical expenses” suggests that no specific method was  used to convert a percentage of “lost access to the job market” into a specific present value of lost earning capacity. The plaintiff had retained an economist who is mentioned as having reduced Gisclair’s life are plan to a present value of $814,416, but there was no mention of the economist reducing the child’s lost earnings to present value.

Fox v. Anderson, 924 So. 2d 414 (La. App. 2006). In this personal injury action, the opinion provides analysis leading to the decision of the court of appeals to increase the trial court award for loss of earnings and earning capacity from $150,000 to $290,120.90. Both the plaintiff and defendant retained economists, but only the defense economist was named in the decision. The court said: “In particular, we reference the report of the defendant’s economist, Dr. Kenneth Boudreaux, doing so as his report includes more detail and explanation than does the two-page report of the plaintiff’s economist.” The court decided that one of the post injury earnings assumptions in Dr. Boudreaux was more reasonable, based particularly on the fact that assumption was based on medical testimony about the plaintiff’s probable work life, the court added Dr. Boudreaux’s past earnings loss of $131,171.83 and his $158,949.07 for loss of future earning capacity to arrive at $290,120.90.  

Freeland v. Bourgeois, 950 So. 2d 100 (La.App. 2007).  This is a reversal of a jury decision not to award damages to Jerome Freeland. The Court found jury confusion and manifest error in evaluating the evidence as the basis for the reversal and awarded $50,000 in general damages and special damages in the amount of $394,832.40. In arriving at the figure for special damages, the court relied extensively on the testimony of Dr. Michael Kurth, department head of Finance and Economics at McNeese University in Lake Charles, accepting parts of that testimony and rejecting other parts. Kurth had projected a loss of household services based on 10 hours per week at $12.00 per hour at $113,993. The court noted that: “The record indicates that Mr. Freeland and his son lived with Mr. Freeland’s sister for a while after the accident, but the period of time is uncertain. At the time of trial over four years after the accident, Mr. Freeland was buying very small house, 900 square feet, with a very small yard. Mr. Freeland no longer has rental properties to maintain and does very little yard work. Accordingly, we find the record too indefinite on this element of damages and decline to make a separate award for non-market services.”  The court pointed out that Dr. Kurth had used “a present value discount” of 2.5 percent and a projected work life of 16.5 years. The court said: “[Dr. Kurth] stated that the work expectancy tables still being used to project income are twenty years old and use the age of 65 as the end point of work life. Yet work life expectancy is now beyond 65, and Mr. Freeland’s loss would be greater if the tables were current.”  The details about Dr. Kurth’s methods and the court’s reasoning about those methods make this decision worth reading.

Freeman v. Harold Dickey Transport, Inc., 467 So.2d 194 (La. App. 1985). This decision involved economic testimony from Dr. Earl G. Thames for the plaintiff and Dr. Kenneth J. Boudreaux for the defendant. It sets out the following as standards for damages calculations in Louisiana: “Future loss of earnings is speculative and can not be calculated with absolute certainty...Damages for loss of earnings or loss of future earning capacity is based on the injured person’s ability to earn money, rather than on what he actually earned prior to the injury...Actual earning capacity at the time of injury, although relevant, is not necessarily determinative of the injured person’s future ability to earn...In computing wage loss it is proper to based the economic computations on gross income.” Having described the standards, the Louisiana Court of Appeals reduced the trial court’s award of earnings loss damages from a calculation to age 70 to a calculation at age 65, a period of 5.8 years, which the court described as Freeman’s “actuarial worklife expectancy.” The court did not indicate how it was determined that 5.8 years was Freeman’s “actuarial worklife expectancy,” but said: “[W]e cannot say that Freeman proved by a preponderance of the evidence that he could have worked beyond his actuarial life expectancy. The possibility of working past age 65 must be regarded as speculation...Fellow union workers said it was not uncommon for someone in the pipeline industry to work to age 70; however, we find that the medical evidence taken as a whole does not establish with such a certainty that Freeman could have worked beyond his projected work life expectancy.” Suggested by Marc A. Weinstein.

Graham v. Offshore Specialty Fabricators, 2009 0117 (L.A.App. 1 Cir. 01/08/ 10); 2010 La. App. LEXIS 13 (La. App. 2010). This decision involved economic damage calculations by Drs. Randolph Rice and Hugh Long for the plaintiff and Dr. Kenneth Boudreaux for the defendant. The decision describes the assumptions underlying each expert’s calculations for lost earnings resulting in present values of $227,473 for Rice, $129,744 for Long and $8,943.51 for Boudreaux. Rice projected lost future annual earnings on the basis of $29,200 while Boudreaux argued that the plaintiff could still earn minimum wage and that there was no future loss. Long’s calculations were not described in the same detail. The Court pointed out that the plaintiff had admitted that he had not filed federal tax returns in at least ten years because he was not making enough to have to file and the plaintiff’s Social Security earnings record showed that for 22 of the 30 years shown he had reported income of less than $1,000 per year. However, the Court said: “While this court might believe that Boudreaux’s estimate was more reasonable, based on Graham’s work attitude and inconsistent employment history, Rice’s decision to base the estimate of lost wages on Graham’s actual wages that he was earning with Offshore at the time of the accident and for the preceding three months was not unreasonable. Therefore, we conclude that the jury’s acceptance of that estimate and its award of $44,700 for past wage loss was not manifestly erroneous. Similarly, we must defer to the jury’s decision concerning the award for lost future earning capacity. Before his accident, Graham had the capacity to earn the wages that he was making with Offshore as a deckhand. The evidence establishes that after his accident, he no longer had that capacity. His injury deprived him of a capacity he would have been entitled to enjoy even though he might never have profited from it monetarily. Therefore, the jury’s award of $125,000 for loss of future earning capacity was well within its discretion and must be upheld.”

Jones v. Martinez, 2007 La. App. LEXIS 1930 (La. App. 2007). This decision affirmed a trial court’s decision not to award damages for lost earning capacity  to Dawn Jones based on a determination that her earning capacity would be the same in the future as it was in the past. The trial court awarded $31,789 for past medical expenses, $95,950 for future medical expenses, and $59,256 for nine months of  past wages and nine months of future lost wages, and $70,000 in general damages.. The decision cited Batiste v. New Hampshire Insurance Company, 657 So. 2d 168 (La. App. 1995) regarding standards for projecting lost earning capacity in rejecting the claim for lost earning capacity, but increased the award for general damages to $125,000.

Lewis v. Seacor Marine, Inc, 2002 WL 34359733 (E.D.La.).  This order granted a defense motion in limine to limit the testimony of rehabilitation expert Cornelius Gorman and economic expert Douglas Womack with respect to the possibility that the plaintiff would have risen to the rank of captain “in the maritime world” at some uncertain point in the future.  The court said, referring to Womack’s projection: “The plaintiff’s economic analysis extrapolating his future lost earnings for the greater part of his worklife expectancy is both unreliable and not grounded in the facts of the plaintiff’s work history, which presents dabbling in very different industries, as well as absence of work from time to time. The analysis is also devoid of any consideration of the fact that the plaintiff had only worked as deckhand for approximately one month before the accident. The opinion’s assumption – except for the first eight years  plaintiff would in fact earn the salary of a seafaring captain for the remainder of his worklife – is devoid of any basis in fact, and thus unreliable, misleading and irrelevant. Although the case law makes it clear that absolute certainty is impossible, considerations of reliability require that any economic analysis be ensconced with some semblance of reality. . .  The slender reed on which Womack’s projection rests warrants no credence from the gatekeeper.” Suggested by Stephen Horner. 

Linnear v Centerpoint Energy Entex, 2006 La. App. LEXIS 1619 (LA App. 2006). The Louisiana court of appeals reversed the trial court decision, rendered judgment in favor of the plaintiff and awarded damages. The decision mentions that Dr. Melvin Harju, an economist, projected future costs of medical expenses for a plaintiff homemaker and for her loss of household services. The decision mentions and rejects a claim for loss of earning capacity, but does not indicate whether Dr. Harju prepared calculations for that prospective element of damages. The decision provides a clear statement of the distinction between special and general damages: “General damages are those which cannot be fixed with pecuniary exactitude. . .Special damages are those which have a ready market value and can be determined with relative certainty, such as medical expenses.” On household services, the Court said: “Mr. Linnear’s claim for loss of consortium also included a specific request for loss of household services. Our law allows recovery of reasonable housekeeping expenses necessitated by the incapacity of an injured spouse. . . [T]he record establishes that Mr. Linnear performs four or five hours of household work a week that Mrs. Linnear can no longer do. Dr. Harju, the economist, made a number of calculations based on an hourly wage of $6.52 for maid or housekeeping services. However, an award for such services must take into account that Mrs. Linnear’s ability to function may vary from day to day and that health factors other than her back injury may play a future part in how much assistance is needed with household chores.” The Court awarded $75,000 for loss of consortium, which included but was not limited to loss of household services.  

Molina v. City of New Orleans, 830 So. 2d 994 (LA App. 2002). This was a decision in an appeal by the City of New Orleans that the amount awarded to the Molina children ($142,638.83 each) was “abusively high because the testimony regarding Roberto Molina’s lost wages was completely speculative.” The court disagreed, saying: “Expert economist Dr. Kenneth Boudreaux testified that the combined total loss of support, both past and present, to the Molina children was $285, 277.00, nearly exactly the amount awarded by the trial court. Dr. Boudreaux’s testimony was uncontradicted, and was based upon Mr. Molina’s two most recent tax returns showing an average annual income of approximately $7300, plus the testimony of Ms. Zulli and Mr. Molina’s father that Roberto had typically earned an additional $8,000 to $14,000 a year in unreported income by oystering, shrimping and boiling seafood. It is well settled that a plaintiff’s uncorroborated testimony is sufficient to prove lost wages as long as the testimony is uncontradicted and reasonably establishes the claim.”

Parfait v. Transocean Offshore, Inc., et al., 2007 La. App. LEXIS 51 (LA App. 2007).  This case involved Drs. G. Randolph Rice as the economic expert for the plaintiff and Dr. Kenneth Boudreaux for the defense. The plaintiff economist projected work-life expectancy at 10.21 years, past lost earnings at $147,345 and future lost wages at between $305,911 and $396,730, while the defense economist projected work-life at 9.8 years, past lost earnings at $140,544, and future wage loss at $260,000. (These figures do not include fringe benefits or moderate future medical needs.) Boudreaux also testified that Mr. Parfait suffered no future loss of wages if you considered his award of $376,293 for lost wages in a prior suit and the fact that Mr. Parfait had returned to work after that suit. The Court held that the prior award should be considered, but pointed out that Mr. Parfait’s earnings had increased since the time of the prior award and awarded $125,035 in past losses and $150,000 in future losses. 

Ryan v. Zurich American Insurance Company, 2007 La. App. LEXIS 1992 (La. App. 2007).  The trial court jury had not awarded an amount for lost earning capacity given a failure by the plaintiff of a drug test. The Louisiana Court of Appeals determined that this was jury error and awarded $1,188,298 for future lost earning capacity. The court reviewed the economic testimony of Dr. Charles Bettinger for the plaintiff and Dr. Kenneth Boudreaux for the defendant. The Court accepted the $60,622 testified to by Dr. Boudreaux for past lost wages and the $1,188,298 testified to by Dr. Bettinger for future lost wages and benefits. Dr. Bettinger assumed that the plaintiff would work to age 65 and used a real interest rate of 2.5 percent. Dr. Boudreaux had not included fringe benefits, which were included in Dr. Bettinger’s calculations, including employer “contributions”of Social Security taxes. Dr. Bettinger had also projected a higher rate than Dr. Boudreaux for earnings increases.  

Theodile v. Delmar Systems, 2007 U.S. Dist. LEXIS 64729 (W.D.La 2007). This is an appeal of a jury verdict by the defendant. Both sides had introduced economic testimony, Lamar Jones for the plaintiff and an unnamed expert for the defense. The judge rejected an argument that the 1.36% below market discount rate used by Jones based on short term U.S. Treasury notes was less in conformance with Culver II than the discount rate based on Treasury Inflation Indexed Bonds (not identified in the decision) that was used by the defense economic expert. The defense also challenged the use of a 25.4 year work-life expectancy used by the plaintiff expert in comparison with 19.63 years used by the defense expert. The judge said that both experts used the same tables that were “modified in the Journal of Forensic Economics in 2001, 2002.” The judge also said: “Plaintiff’s expert testified the modified tables excluded race as a factor, in order to make the table more accurate. He further testified he used the modified tables because the original tables were issued by the Department of Labor in 1986, and since that time there has been ‘considerable controversy about whether it [the original Department of Labor tables] understated the labor market participation of African-Americans.’ [Doc. 124-2, Ex. A, p. 16] Defendant claims the exclusion of race and educational factors results in an inaccurate work-life expectancy in this case. Work-life expectancy is a finding of fact. The jury weighed the evidence   provided by both experts and awarded an amount in conformity with the testimony of plaintiff’s expert. Defendant has provided no authority convincing this court it should reverse the jury’s award.”

            Standards for Recovery in  Wrongful Death

Marks v. Pan American World Airways, Inc., 785 F.2d 539 (5th Cir.1986). This decision interprets Louisiana law regarding whether damages can be sought for loss of accumulations to an estate/loss of inheritance. The court held that loss of inheritance cannot be claimed in Louisiana, citing the vintage case of Eichorn v. New Orleans C.R. Light & Power Company, 114 La. 712, 38 So. 526 (1905).  The Marks Court interpreted Eichorn as holding that “the decedent’s earnings factored into the question of damages only insofar as those earnings would be available to a child during minority.” The court pointed out that no evidence was offered about the spending habits, commitments to savings plans, asset growth plans or other estate building plans for the children were offered and thus that any projection of loss of inheritance would be mere speculation.

Scott v. Pyles, 770 So. 2d 492 (La.App. 2000).   In this wrongful death action, both sides had presented economic experts to calculate loss of financial support to survivors. The plaintiff had retained G. Randolph Rice, Ph.D. Rice used a worklife expectancy from the date of the trial of 18.7 years, an earnings base of $48,525, a growth rate of 3.0 percent, a discount rate of 5.25 percent to calculate total lost earnings of $1,044,404, which was adjusted for personal consumption expenditures to a loss of $886,413. The defense had retained Kenneth Boudreaux, Ph.D., who had used 17.15 year of worklife expectancy, annual growth factors between 2 and 4 percent, discount factors from 4.35 percent to 5.0 percent, for a range of total lost earnings of between $674,936.48 and $697,684.92, and lost support between $439,435.55 and $448,959.06. The trial court had awarded $808,206.50 and the defense had appealed that the court had “blindly” relied on the report of the plaintiff expert. The Court of Appeals held that the award fell between the figures of the plaintiff and figures of the defense, and thus did not represent an abuse of discretion by the trial court judge.

Sims v. Liberty Mutual Insurance Company, 897 So. 2d 835 (La. App. 2005). This decision discusses the operations of Louisiana’s wrongful death and survival action. The survival action applies only from the moment of injury to the moment of death. The decision describes the amount of economic damages as follows: “Dr. William Culbertson, an economist, calculated Wayne’s loss of earnings. He concluded that at the time of his death, Wayne had seven and eight-tenths years of estimated work life remaining, at which time he would have been seventy years old. In computing loss of wages, Dr. Culbertson did not have the benefit of tax returns but was told by Wayne’s family that he worked for a cab company making $50 to $75 a day. Dr. Culbertson testified that he reviewed Terry’s deposition and understood that Wayne had a falling out with the cab company, but he was also under the impression there was an understanding that Wayne was to be hired back again. He took into consideration that Wayne worked six days a week. Dr. Culbertson did not take into account any income for the mechanical work that Wayne performed because there was no clear indication as to how much Wayne earned. Dr. Culbertson performed three different calculations based on earnings of $50 a day, $75 a day, and minimum wage. Earning $50 a day six days a week, Dr. Culbertson concluded that the total loss for past and future economic loss was $156,494.00. This [Pg 14] is obviously the basis for the trial court’s award. Dr. Culbertson took into account that Wayne would have used some of this income on himself and included a deduction of $46,833 for personal consumption. We find that the evidence supports awarding loss of wages at $50 a day for six days a week and affirm the trial court’s award.” 

Smith v.  Louisiana Farm Bureau Casualty Insurance Company, 45,013 (La.App. 2 Cir. 04/23/10); 2010 La. App. LEXIS 563 (La. App. 2010). This decision reduced the trial court amount, but held the Louisiana Farm Bureau Insurance Company liable for a $122,000 award to the plaintiff in a Louisiana wrongful death circumstance. Dr. W. Patton Culbertson was the economic expert for the plaintiff and Dr. Melvin Harju was the economic expert for the defendant. The court described the calculations of each expert and adjusted the amount of lost support based on Dr. Culbertson’s figure after correction for Dr. Culbertson’s misunderstanding of the amount of monthly payments on a monthly car note. The decision also described the interaction of the Louisiana survival action and wrongful death action. After reviewing whether the decedent had survived for even an instant after his fatal accident, the Court approved an award of $250,000 for damages in the survival action in addition to the $122,000 in damages under the wrongful death action, saying: “If there is even a scintilla of evidence showing any pain and suffering by a victim prior to his death, damages are warranted in a survival action.”  

              Life Care and Future Medical Expense

Locke v. Young, 42,703 (La.App. 2 Cir.12/12/07); 2007 La. App. LEXIS 2227 (La. App. 2007). With respect to future medical expenses, the court said: “Zoe Meeks, the plaintiff’s expert in economics, testified that the plaintiff would be entitled to future medical costs of $838,105 or $822,105 if the court found that the plaintiff would not require a patellectomy and elbow replacement.  These computations included a discount rate of five percent and average annual growth rates ranging from 4.5 percent to 9.4 percent, depending  on the types of medical expenses. Dr. Melvin Harju, the defendant’s expert economist, testified that the growth rate for medical services used by Ms. Meeks is unsustainable. In its oral reasons for judgment, the trial court stated that it found Dr. Harju’s testimony persuasive and noted that the record indicated that the ‘raw costs’ for the plaintiff’s future medical expenses would be about $411,000.” With respect to general damages, the court said: “General damages are those which are inherently speculative and cannot be fixed with mathematical certainty, including pain and suffering. . . The discretion vested in the trier of fact is great, and even vast, so that an appellate court should rarely disturb an award of general damages.” With respect to hedonic damages, the court said: “The trial court also awarded $250,000 for loss of enjoyment of life. Loss of enjoyment of life, sometimes known as hedonic damages, refers to the detrimental alterations of a person’s life or lifestyle or a person’s inability to participate in the activities or pleasures of life that were formerly enjoyed. Loss of enjoyment of life is conceptually distinct from other components of general damages, including pain and suffering. Pain and suffering, both physical and mental, refers to the pain, discomfort, inconvenience, anguish and emotional trauma that accompanies an injury. Loss of enjoyment of life, in comparison, refers to detrimental alternations in a person’s life or lifestyle or the person’s inability to participate in the activities or pleasures of life that were formerly enjoyed prior to the injury. In contrast to pain and suffering, whether or not a plaintiff experiences a detrimental lifestyle change depends on both the nature and severity of the injury and the lifestyle of the plaintiff prior to the injury. McGee v. A C and S, Inc., 2005-1036 (La. 7/10/06), 933 So. 2d 770.”

              Household Services

Warren v. Sabine Towing and Transportation Company, 831 So.  2d 517 (La. App. 2002). One of the elements on appeal was a claim by the widow of James Warren for her own loss of household services and that of her children as the result of the death of her husband. The court held that she was entitled to such damages, but said that: “Mrs. Warren presented no evidence of actual pecuniary loss in this regard. Thus Mrs. Warren is not entitled to recover for the loss of household services as an item of special damages. We do note that there is general evidence in the record to support that Mrs.Warren did in fact sustain a loss of household services, although the actual amount of the loss is not in evidence. Therefore, we find no error in the trial court’s failure to award special damages for loss of household services or in the amount of general damages awarded for wrongful death.

            Annuities, Periodic Payments and Reversionary Trusts

Linares v. Louisiana Department of Transportation, 582 So. 2d 879 (La. App. 1991). “Dr. Wolfson, Ms. Linares’ economic expert, testified that if she was terminated as of the date of the trial, the present value of an amount needed to fund an annuity equal to his present $22,000 per year salary would be $293,603. The record shows that Ms. Linares’ earning capacity has been reduced. The trial court acted within its much discretion (sic) by awarding $50,000 for this element of damages.”

Orso v. Canfield, 283 F.3d 686 (5th Cir. 2002). The Fifth Circuit Court of Appeals, interpreting Louisiana law, ruled that Orso's annuity contract could not be invaded in bankruptsy, expressly overruling two precedents that pointed in the opposite direction. Section E of the decision provides a description of a unique circumstance of Louisiana law as a "hybrid Civil Law/common law jurisdiction," alone among the 50 states.

             Lost Chance for Recovery or Survival

Anderson v. Sharp, M.D., 1998 U.S. Dist. LEXIS 9564. Judge Schwartz admitted the testimony of Melville Wolfson in a “lost chance of survival” action. The defendant argued that since the decedent had a less than fifty percent chance of survival, the action should have been brought under the Louisiana Wrongful Death Act. It provides discussion of how “lost chance of survival” cases should be handled in Louisiana. 

Smith v. State, 676, So.2d 543 (La. 1996). This case sets out the framework for “lost chance of survival” claims in medical malpractice cases in Louisiana. In the process it reversed a decision of the Louisiana Court of Appeals in Smith v. State, 647 So.2d 653 (La.App.2nd Cir. 1994) that applied the probability of survival to a calculation of wrongful death damages to determine damages. The Louisiana Supreme Court said: “Our point of disagreement with the court of appeal’s method of computing damages for the loss of a chance of survival is its rigid use of a precise mathematical formula, based on imprecise percentage chance estimates applied to estimates of general damages that never occurred, to arrive at a figure for an item of general damages that this court has long recognized cannot be calculated with mathematic precision.” This decision reviews three different methods that have been used by other states or described in law review papers for valuing “lost chance of survival” as an element of damage. One of those methods is leaving the decision to the jury, which is the decision elected by the Court.

            Legal Procedure

Bachemin v. Anderson, 717 So. 2d 677 (La.App. 1998).  The jury did not abuse its discretion by failing to accept the testimony of Mel Wolfson about lost of earnings and loss of earning capacity even though the defense did not present alternative testimony. 

Barocco v. Ennis, Inc., 2004 U.S. App. LEXIS (5th Cir. 2004). Interpreting Lousiana law, the court held that the failure to provide vocational and economic experts was not fatal to maintaining a claim for lost earning capacity.

Crane v. Larocca, M.D., 2005-0283 (La. App. 4 Cir. 01/18/06; 2006 La. App. LEXIS 588 (La. App. 2006). See under Basis Income and Fringe Benefits for more details.  “The PCF did not put on the testimony of any expert witness to contradict these calculations. Although we recognize that the PCF’s position is that Crane is able to work, we accept the jury’s determination that he is unable to work and find that the award for lost wages is consistent with the expert testimony presented to the jury.”

Falik v. Hornage, 2010 Md. LEXIS 110 (Md. App. 2010).  This decision involved appeals relating to two trial court decisions relating to extensive information sought by the plaintiff about the defense medical expert’s financial records. Plaintiff attorneys in Falik v. Hornage wanted copies of all of Dr. Falik’s 1099's for the past 5 years, a list of all cases in which he had provided expert testimony to include the name and contact information for both the party and the party’s attorney who had retained him, federal and state income tax returns, both personal and business, for the past five years, a copy of Dr. Falik’s calendar reflecting appointments for defense related medical examinations, and occasions on which Dr. Falik had testified live in any court for any defendant. After the Circuit court granted plaintiff’s motion in part, Dr. Falik appealed that decision, but ultimately withdrew from that case, rendering the appeal moot. Similar demands were made in Falik v. Holthus.  The circuit court in Holthus granted plaintiff motions, but limited the time frame to two years and issued a confidentiality order.  That decision was also appealed. Falik v. Hornage was then consolidated with Falik v. Hornage for purposes of the current decision. The Maryland Court of Appeals provided extensive discussion of prior cases involving personal financial records of expert witnesses in Maryland and Pennsylvania, with the court citing Wrobleski v. de Lara, 353 Md. 509, saying: “[W]e conclude that the trial court in Holthus followed thoughtfully our guidance in Wrobleski to allow only a controlled inquiry into whether a witness offered as an expert earns a significant portion or amount of income from applying his or her expertise in a forensic nature and is thus in the nature of a ‘professional witness.” The Court of Appeals went on to comment that even though the case of Falik v. Hornage had been rendered moot by the withdrawal of Dr. Falik, the Court of Appeals felt that the trial court in Hornage had not tightly controlled the amount of information that Dr. Falik was required to provide in the manner indicated in Wrobleski.

Gautro v. Sullivan, 2008 La. App. LEXIS 660 (La. App. 2008). This was an appeal of the verdict at the trial court level by the plaintiff, challenging that the jury’s award of $20,000 in past medical damages, $45,000 in past earnings, and $25,000 in general damages for pain, suffering and disability were an abuse of the jury’s discretion. The Court of Appeals affirmed the plaintiff’s appeal and increased the awards to $63,315.64 for past medical damages, $125,767 for  loss of past earnings, and $150,000 for pain and suffering. The figure for past lost earnings was the figure testified to by plaintiff’s economist, Dr.  Charles Bettinger.

Masariegos v. Morgan, M.D., 2008 0605 (La.App. 1 Cir. 02/13/09; 2009 La. App. Unpub. LEXIS 88 (La. App. 2009). This was a medical malpractice case following a work injury that was not directly at issue in the litigation. The decision discusses in useful detail the distinction between special damages and general damages, saying: “Special damages are those which have a ‘ready market value,’ such that the amount of the damages theoretically may be determined with relative certainty, including medical expenses and lost wages. . . A plaintiff is required to prove special damages by a preponderance of the evidence, and the findings of the trier of fact are subject to the manifest error standard of review. . . General damages are those which may not be fixed with any degree of pecuniary exactitude, but which instead involve mental or physical pain and suffering, inconvenience, the loss of gratification or intellectual or physical enjoyment, or other losses of lifestyle, which cannot readily be measured definitively in terms of money.” The decision also provides useful discussion concerning the testimony of Bobby Roberts, “a vocational evaluator,” on behalf of the plaintiff. Opinions of economist Dr. Pat Culbertson were based on the opinions of Roberts as the vocational expert. The Court cited Roberts’ testimony as indicating that the work injury would have terminated the earning capacity of the plaintiff even if the subsequent medical malpractice had not occurred. Thus, the Court held that the medical malpractice did not cause the loss of earning capacity and vacated the portion of the jury’s award for lost wages.

Mire v. O’Shee, 2008 La. App. LEXIS 787 (La. App. 2008).  The first issue in an appeal of trial court decision was whether an award for loss of services and funeral expenses should have been allowed because those items of damages were not sought in pleadings. The court held that they were included in a settlement letter and that: “We also note in this regard that the State’s economist testified at length about his calculations as to loss of services, thus showing further that the demand for these items did not surprise the State.” The Court continued: “The second issue is whether the $112,000 for loss of services was included in the award for loss of support. Plaintiff’s expert, Cynthia Lee Sheng, testified that her calculations showed the value of loss of services to be $112,00. She then proposed three scenarios based on different wage levels for Ricky Mire. At the time of his death, he was an assistant fire chief for the city of Kenner. Based on his salary at that job, the loss would be $603,490 in lost wages and $112,000 in lost services, or $715,490. If he were to have gone into private fire protection work, his expected salary would produce a loss of $690,183 and $112,000 in lost services, or $802,183. If the would have been promoted to fire chief in Kenner, the loss would be $1,156,837 and $112,000 in lost services, or $1,268,837. Based on this testimony the jury awarded $112,000 for loss of services, and $1,200,000 in lost wages. The only discrepancy in these awards is that the jury awarded $43,163 more in lost wages than Ms. Sheng’s figure. It is clear to this court that the jury properly awarded the separate item of $112,000 for loss of services, base as it was on expert testimony. It is equally clear that there was no duplication of this amount in the loss of support award because the difference in the expert’s estimate and the actual award does not correspond in any way with the $112,000 figure.”  

Todd v. Delta Queen Steamboat Company, 2007-1518 (La.App 4 Cir. 06/17/09); 2009 La. App. LEXIS 1280 (La. App. 2009). In a rehearing, the Court said: “The district court set forth the various reasons why it did not award Mr. Todd damages for future earnings and/or loss of future earning capacity; 1) he did not present an economist in support of his claim; 2) he failed to present adequate evidence to support such an award; and 3) his extrapolation of future wage loss was inaccurate as it failed to take into account tax consequences and use of a discount rate. We do not find that the district court abused its vast discretion in not awarding Mr. Todd damages.”

             FELA/Maritime Cases

Cagle v.Harrah’s Lake Charles, 07-653 (La.App. 3 Cir. 12/12/07); 2007 La. App. LEXIS 2250 (La. App. 2007). This is a Jones Act case involving a slot machine technician. This memorandum provides extensive discussion of the rationale of the Court for accepting the trial court’s award of past wages and rejecting defendant’s “barefoot and pregnant” argument that as a wife and mother the plaintiff should not have been in the workplace. The Court also rejected the plaintiff’s cross appeal that a minimum wage offset to her lost earnings should not have been made. The plaintiff’s economist was Dr. Rice, who was quoted as testifying that “female workplace is in fact progressing and changing”as part of the Court’s rejection of the “barefoot and pregnant” argument of the defendant.

Cappiello v. Exxon Corp., 695 So. 2d 1097 (LA. App. 1997). The Louisiana Court of Appeals held that Social Security taxes should be subtracted from lost earnings in a calculation of damages in a maritime action.

Gaston v. G & D Marine Servs., 631 So. 2d 547 (LA. App. 1994). The Louisiana Court of Appeals held that it was correct to reduce the award by the amount of Social Security taxes in a maritime action.

Lee v. Lee, 727 So. 2d 622 (La App. 1998). This decision provides extensive discussion of the meaning of Hisquierdo v. Hisquierdo, 439 U.S. 572; 99 S.Ct. 802; 59 L. Ed. 2d (1979). The court held the railroad retirement disability payments of Mrs. Lee could have been treated as community property, but that the husband had not preserved his right to make that claim. The court noted: “As in a social welfare or insurance scheme, the taxes paid by and on behalf of an employee do not necessarily correlate with the benefits to which the employee may be entitled.

Lopinto v. Crescent Marine Towing, 2004 U.S. Dist LEXIS 15019 (E.D.La 2004). This Jones Act decision provides a clear statement of the “featherweight” burden of proof under the Jones Act for establishing liability of an employer for earnings loss. It provides detailed discussion of how past and future damages should be calculated under the Jones Act, including a requirement for mitigation of damages by surgery. Dan Cliffe testified as an economic expert for the plaintiff and John Theriot testified as an economic expert for defendants. Both were accepted as experts, but the court accepted Theriot’s estimate of reduced worklife expectancy.

Jenkins v. Kerr-McGee Corporation, 778 P.2d 590 (1989). The Court of Appeal of Louisiana held that "the trial court erred . . . in adding employer FICA contributions to the net past lost wages amount....The lost income stream must be computed after deducting income taxes and social security taxes the worker would have paid had he continued to work " 

Parks v. Pine Bluff Sand & Gravel Co., 712 So.2d 905 (La. App., 3 Cir. 1998). “Furthermore, while only persuasive, we note that social security, or F.I.C.A., taxes are not deducted from the gross wages used to calculate the estimated lost wages and future income in non maritime personal injury cases..[Citations to a number of Lousiana cases were provided. ]. We can see no overriding public policy reason why the rule should be different in maritime cases. Accordingly we hold that Dr. Rice’s inclusion of Parks’ social security contributions, or F.I.C.A.taxes in his calculations of Parks’ lost wages and future lost wages was not in error, but that his failure to include those of his employer was.”

Todd v. Delta Queen Steamboat Company, 2007-1518 (La.App 4 Cir. 06/17/09); 2009 La. App. LEXIS 1280 (La. App. 2009). In a rehearing, the Court said: “The district court set forth the various reasons why it did not award Mr. Todd damages for future earnings and/or loss of future earning capacity; 1) he did not present an economist in support of his claim; 2) he failed to present adequate evidence to support such an award; and 3) his extrapolation of future wage loss was inaccurate as it failed to take into account tax consequences and use of a discount rate. We do not find that the district court abused its vast discretion in not awarding Mr. Todd damages.”

Williams v. City of New Orleans, 897 So. 2d 744 (La. App. 2005). This is an FELA decision. “Finally, the defendant contends that, in adopting the work-life expectancy of 28.46 years utilized by the defendant’s economist in calculating the plaintiff’s lost future wages, the trial court erred because the plaintiff had only been employed by the defendant for less than three months at the time of his accident, his work history prior to NOPB employment was “sketchy,” and the railroad industry has a high turnover rate. In her reasons for judgment, however, the trial court judge specifically noted that she found the plaintiff to be a credible witness and that his work history showed that he had consistently attempted to take advantage of opportunities and better his circumstances. Accordingly, we cannot find that the trial judge was manifestly erroneous in basing her calculations of future lost wages on the work-life expectancy utilized by the defendant’s economist.

          Admissibility of Expert Testimony

Anderson v. Sharp, 1998 U.S. Dist. Lexis 9564 (E.D. La. 1998). Melville Wolfson was permitted to testify about “sums for lost income, fringe benefits, loss of support, loss of household services and medical expenses in this case even though the claim was a “lost chance of survival” claim, interpreted under Louisiana law. The defense maintained that Mrs. Anderson [was] not entitled to bring a wrongful death action because Mr. Anderson did not have a greater than fifty percent chance of survival absent any [alleged] negligence of the defendants.” The District Court relied the Louisiana Supreme Court in Smith v. State, 676 So.2d 543 (1996), as providing the framework for “lost chance of survival” cases in Louisiana and admitted Wolfson’s testimony.

Bell v. Penney, 2009 U.S. Dist. LEXIS (W.D. La.  2009). This decision denied an appeal by the defendant based on the Report and Recommendation of the Magistrate Judge previously filed as Bell v. Penney, 2009 U.S. Dist LEXIS 95182 (W.D. La.  2009). In that report, the magistrate judge said: “Defendants argue that plaintiff’s expert economist, Dr. Christensen, should be excluded because his one-paragraph report is based on plaintiff’s own testimony of her lost wages rather than ‘actual wage records,’ because his testimony is not based on the opinions of any vocational rehabilitation expert, and because there is no medical evidence as to plaintiff’s limitations.” . . . Plaintiff’s testimony is a sufficient factual basis for the expert’s opinions to be admitted. The trier of fact, however, is entitled to accept or reject the plaintiff’s self -serving testimony and, in turn, any expert economic testimony based on it. As plaintiffs point out [i]t is ‘the r ole of the adversarial system, not the court, to highlight weak evidence.’ . . . Nor is there a requirement that vocational rehabilitation testimony be presented in every case. It is entirely proper for the expert to base his report on the assumption that the plaintiff has medical thus work limitations  – otherwise, his testimony would be immaterial. However, if at trial, there is no testimony supporting that assumption, then the district judge can consider excluding Dr. Christensen’s testimony at that time.”

Broussard v.  Lafayette Insurance Company, 2008 La. App. LEXIS 757 (La. App. 2008). This was an appeal based on trial court admission of testimony by vocational expert Glen Hebert and economist Dr. Douglas Womack. The appeals court affirmed the trial court ruling that these witnesses could testify, quoting its own decision in Rowe v. State Farm Mutual Automobile Insurance Company, 670 So2d 718 (La. App. 1996) as follows: “As a general rule, the factual basis of an expert’s opinion goes to the credibility of the testimony, not to its admissibility, and it is up to the opposing party to examine the factual basis of the opinion in cross examination. Loudermill v. Dow Chemical Co., 863 F.2d 566 (8th Cir. 1988). However, if an expert opinion is so fundamentally unsupported that it can offer no assistance to the jury, then the testimony should not be admitted at all.”

Brown v.  City of Madisonville, 2007 2104 (La.App. 1 Cir. 11/24/08); 5 So. 3d 874 (La. App. 2008). This decision rejected an appeal based on a defense appeal that the trial court had erred in denying its motion in limine to exclude the testimony of Dr. Charles Bettinger, an economist, based on a Daubert objection. The Court implicitly held that economic testimony is “nonscientific, expert testimony,” and quoted Kumho Tire Company, Ltd. v. Carmichael, 526 U.S. 137, 119 S.Ct.1167 in holding that “the law grants a district judge the same broad latitude when it decides how to determine reliability as it enjoys in respect to its ultimate reliability determination.” The Court went on to say: “Accordingly the factual basis for an expert opinion determines the credibility of the testimony. It is the responsibility of opposing counsel to explore the factual basis [Pg 7] for the opinion and thus, determine its reliability. An unsupported opinion can offer no assistance to the fact finder, and should not be admitted as expert testimony. . . The trial court’s opinion must be tied to the facts of the particular case. The abuse of discretion standard applies to the ultimate conclusion as to whether to exclude expert witness testimony and to the trial court’s decision as to how to determine reliability. . .Furthermore, when opinions of expert witnesses differ, it is for the trial of fact to determine the most credible evidence and these determinations will not be overturned unless it is proven that the expert’s stated reasons are patently unsound.” At issue was Dr Bettinger’s decision to base the lost earnings of the Plaintiff on his past wages as a truck driver working for an employer and to ignore the truck driver’s earnings while working as an independent contractor. The Plaintiff had not done well as an independent contractor and had returned to working for an employer. The Court quoted portions of Dr. Bettinger’s testimony which clearly explained why he had ignored Plaintiff’s earnings as an independent contractor and said: “The reasons expressed by Dr. Bettinger are logical, reasonable and supported by the evidence. Thus, we cannot say that the trial court abused its discretion in allowing Dr. Bettinger to testify regarding his calculations of Mr. Brown’s lost wages, past and future.”  Suggested by Robert Taylor

Cox v. Shelter Insurance Company, 09-0958 (La.App. 3 Cir. 04/07/10); 2010 La. App. LEXIS 509 (La. App. 2010). The trial court judge had granted a motion in limine to bar the testimony of vocational expert Glenn Hebert in its entirety and to preclude economist Dr. Douglas Womack from testifying on any wage issue, basing its decision on a Daubert standard. The Louisiana Court of Appeals held that it was in error to do so, saying: “The trial court did not base its decision on the defendants' Daubert argument. Instead, it concluded that neither witness could testify concerning loss of earning capacity because, at the time of trial, Mrs. Brown had not enrolled in nursing school and was not then a nutritionist. That being the case, the trial court concluded, any testimony concerning lost wages in either of these two fields would be based on conjecture. The general rule is that ‘the factual basis for an expert's opinion goes to the credibility of the testimony, not its admissibility, and it is up to the opposing party to examine the factual basis of the opinion in cross-examination.’. . . Appellate review of a question of law is simply a decision as to whether the trial court's decision is legally correct or incorrect. . . The fact that Mrs. Brown had not enrolled in nursing school does not, as a matter of law, preclude the Browns from presenting expert testimony on whether Mrs. Brown suffered a loss of earning capacity because she is now unable to become a nurse. The factual basis of the experts' opinions is a credibility issue that should have been resolved by the jury. . .Accordingly, we find that the trial court erred in granting the defendants' motion in limine to exclude the testimony of Mr. Hebert and Dr. Womack.”

D’Ambrosia v. Lang, 2008 La. App. LEXIS 631 (La. App. 2008). Thomas Meunier, a vocational expert, was permitted to testify based on “work-life expectancy tables for people with severe disabilities, and non-severe disabilities compared to people of the same age and level of education,” but did not permit Meunier to reduce future values to present value. Meunier was also not permitted to testify about national average wages of orthopedic surgeons. Meunier’s credentials were described as follows: “[H]e has been a licensed rehabilitation counselor for almost 30 years. He completed graduate course work in psychology but did not complete his Master’s Degree in psychology. . . . Mr. Meunier admitted that he is not an economist and does not have a degree in business, accounting, finance or economics. Instead he works in conjunction with economists. In this regard, he identifies the types of work that people could do after an injury and then provides the economist with their earning capacity. The economist then takes that figure and discounts it to work up an analysis.”  

         Hedonic Damages and Emotional Services

Foster v. Trafalgar House of Oil and Gas, 603 So.2d 284 (La.App.2 Cir. 1992). Ruled that "any evidence, including expert testimony, that attempts to quantify or assign a specific monetary value for alleged loss of the pleasure of life is inadmissible." Luvonia Casperson was not permitted to testify about hedonic damges, but was permitted to testify about other damage categories.

Laing v. American Honda Motor Co., Inc, 628 So.2d 196 (La.App.2 Cir.1993). Rejected hedonic damage testimony by Stan V. Smith, citing Foster v. Trafalgar House of Oil and Gas

Lee v. Entergy Corporation, 09-535 (La.App. 3 Cir. 11/04/09); 2009 La. App. LEXIS 1892.  The jury in this case made no award for the plaintiff’s lost enjoyment of life. The trial court judge had issued a JNOV that awarded $45,000 for lost enjoyment of life. The defendant appealed on several grounds, one of which was that the trial court erred in awarding $45,000 for lost enjoyment of life. The Louisiana Court of Appeals decided that the trial court judge had abused his discretion by making an award as low as $45,000 an raised the amount to $100,000. Since the plaintiff had not made an appeal of the $45,000, this increase would apparently not have occurred if the defendant had not appealed the $45,000.        

Longman v. Allstate Ins. Co., 635 So.2d 343 (La.App. 4 Cir. 1994). Stan V. Smith was not permitted to testify about hedonic damages.

McGee v. A C and S, Inc., 933 So. 2d 770; 2006 La LEXIS 2139 (La. 2006). This decision of the Louisiana Supreme Court held in favor of allowing an award for hedonic damages as a separate category from other intangible losses such as pain and suffering. It provides a very clear discussion of the difference between “special damages” (“those which have a ‘ready market value,’such that the amount of damages may be determined with relative certainty, including medical expenses and lost wages”) and “general damages” (“general damages are inherently speculative and cannot be calculated with mathematical certainty”). The decision points out that “loss of the enjoyment of life falls within the definition of general damages because it involves the quality of a person’s life, which is inherently speculative and cannot be measured definitively in terms of money.” It offers this comparison: “Consider, for example, two boys, one athletic and the other artistic, who are both involved in an accident and suffer similar injuries. Presumably each boy should be awarded a similar quantum of damages for pain and suffering. However, the same injury may affect the boys very differently. The artist’s lifestyle was not drastically altered by the accident, as he was able to resume his artistic activities after the accident, whereas the athlete’s lifestyle is altered significantly, as he has to resign from his team and can no longer participate in athletics.” This decision involved the wrongful death of James McGee from exposure to asbestos. The court pointed out that there was no right to recover for James McGee’s loss of enjoyment of life under Louisiana’s wrongful death act, but that right existed under Louisiana’s survival action. The decision provides a clear discussion of the differences between the two acts. The right to recover for loss of enjoyment of life under the survival action was limited to the period McGee remained alive and thus suffered his loss of enjoyment of life. The decision also reviews decisions on this issue reached in a number of other states. 

Menard v. Lafayette Insurance Company, 09-0029 (La.App.3 Cir. 06/03/09); 2009 La. App. LEXIS 1054 (La. App. 2009). The Lousiana Court of Appeals rejected the plaintiff’s assertion that it was in error for the trial court not to have held a Daubert hearing to determine whether Dr. David Aiken, a medical doctor, should have been barred from testifying because of “extreme bias against personal injury claimants in favor of his clients among the insurance industry.” The Court of Appeals held that bias is not a Daubert issue and that the trial court had allowed full cross examination of Dr. Aiken’s qualifications and possible biases and thus that “the jury was afforded a full opportunity to determine the weight that should be given to Dr. Aiken’s testimony.”

Mistich v. Volkswagen of Germany, Inc., 698 So.2d 47 (1997). This case was remanded by the Louisiana Supreme Court, 666 So.2d 1073 (La. 1996), reversing an award to the estate of the decedent for the decedent's loss of enjoyment of life based on testimony of Melville Wolfson.

Maine

         Basis Income and Fringe Benefits for Projecting Earnings Loss

Ginn v. Penobscot Company, 334 A.2d 874 (Maine 1975). A certified public accountant was prohibited from testifying about the tax returns of the plaintiff regarding earning capacity because: “The testimony of experts is rightly excluded when the subject of inquiry is one which is plainly comprehensible to a jury and of such nature that unskilled persons would be capable of forming correct conclusions without the opinion of experts.” This decision also held that future losses must be reduced to present value.  It also quoted an earlier Maine decision, Goldstein v. Skar, Me, 216 A.2d 298 (1966) in favor of an indirect method of showing loss of earning capacity: “Direct and specific evidence of the extent of the impairment [of earning capacity], measured in money, is not necessary; it is not essential to recovery of damages for permanent disability that there be in evidence for purposes of comparison proof of income before and after the accident in support of diminution of earning power.”  

Poliquin v. Commissioner of Mental Health and Corrections, 1984 Me. Super. LEXIS 118 (Me Supr. 1984).  This case involved an injury to a prisoner in the Maine Correctional Center. The following analysis was provided by the court: “At the time of plaintiff’s injury, it is found that he had a work capacity in the general category of wood working and production. But for the injury, it is found that the plaintiff would have earned $13,000 per year upon his release starting with the year 1980. . . Thus lost wages to date are found to be $58,000. It is found that the plaintiff has a present work life expectancy of 17 years, but for the injury. Future lost earnings by simple multiplication would therefore total $221,000. Plaintiff’s economist, Robert Doucette, testified at trial that future inflation offsets discounting to present value and that the gross lost earnings should be the measure of loss without discounting to present value. The present law of Maine requires the discounting of lost future earnings to present value. Ginn v. Penobscot Co., 334 A.2d 874 (Me. 1975). A conservative investment approach, such as a governmental securities, would dictate an interest rate of 13.5% to produce the sum of $221,000 over a period of 17 years which results in $96,296 as the present value of the loss of future earnings [sentence is as in the original].  

        Standards for  Wrongful Death

Glover v. Spring Harbor Hospital, 2007 Me. Super LEXIS 116 (Me. Super. 2007). This is an order by Thomas E. Delahanty II in response to a motion for partial summary judgement by the defendant on claims of pecuniary loss and pain and suffering by a decedent in a claim for wrongful death. The judge denied partial summary judgement on the claim for pain and suffering, but granted partial summary judgment with respect to pecuniary loss. With respect to the pecuniary loss claim, the judge said: “In order to survive summary judgment, plaintiff must provide some evidence providing a prime facie claim for pecuniary loss to Patricia Glover. Here, Tracey Glover was not a child; she was a twenty-year-old woman, who suffered from mental health problems (and) was being partially supported by her mother. PSMF P 30. There is no evidence of any meaningful employment history, however, plaintiff has offered evidence by an economist as to Tracey Glove’s earning potential. PASM P 15. Patricia Glover believes that Tracey would have supported her in some manner and states that Tracey told her she would take care of Patricia when she got older. PSMF PP 23-24. Patricia’s belief and Tracey’s inadmissible hearsay statements do not meet the elements of a claim for pecuniary damages. The plaintiff’s evidence that Tracey Glover would be able or willing to economically assist her is speculation only; therefore, Patricia Glover is unable to demonstrate that she has personally been economically harmed by Tracey Glover’s death.

         Hedonic Damages and Emotional Services

Phillips v. Eastern Maine Med. Cntr., 565 A.2d 306 (Me. 1989). Hedonic damages are not allowed for the period after death, but may be recovered for the period from injury to death.

         Admission of Expert Testimony

Donatelli v. Unumprovident Corporation, 2004 U.S. Dist. LEXIS 25867 (D. Maine 2004). This decision is a judicial memorandum granting in part and rejecting in part the testimony about lost earnings by plaintiff’s expert Mary H. Fox, Ph.D. in a wrongful termination matter. Dr. Fox is not an expert in accounting or economics, but has a doctorate in applied adult development-assessment and has worked in the field of industrial psychology for approximately 25 years. The court allowed Dr. Fox’s testimony about future employability as a result of plaintiff’s termination, but excluded her damages calculation. The judge provides extended discussion of the reasoning behind his decision that Dr. Fox’s damages calculation did not meet the requirements of Rule 702.  

         Wrongful Termination

Harding v. Cianbro Corporation, 2007 U.S. Dist. LEXIS 2405 (D.ME 2007). This is a memorandum ordering the reinstatement of Ronald Harding, who had been terminated based on discrimination against his disability (as determined by the jury). In light of the reinstatement, the court declined to order front pay for Harding. The court awarded prejudgment interest on the compensatory damages portion of the award, but did not award prejudgment interest on the punitive damages portion.

Warren v. United Parcel Service, 2007 U.S. Dist LEXIS 4405, (D. Me 2007). This opinion reinstates a disabled worker following a determination that he had been discriminated against in employment based on the Maine Human Rights Act, 5 M.R.S.A § 4551, et seq.. Back pay was awarded in the amount of $74,155.99. The judge indicated that front pay would be awarded based on the date agreed to by the parties for the worker’s reinstatement. Judge Hornby awarded partial prejudgment interest, which in Maine is “at 3% above the one-year Treasury bill rate   from the last full week of the calendar year immediately prior to the year in which a notice of claim is served.” In footnote 3, Judge Hornby stated that: “In cases involving higher stakes, such matters are sometimes taken care of by having an economist discount back to present value at a fixed date all later payments, then calculate the interest award forward start (sic) from that fixed date, based on that discounted lump sum.”

Maryland

         Basis Income and Fringe Benefits for Projecting Earnings Loss

Anderson v. Montieth Litzenberg, 115 Md. App. 549; 694 A.2d 150 (Md. App. 1997). The failure of an individual to earn a profit in a self employed business venture does not preclude recovery for lost earning capacity. This case involved Rick Gaskins as an economic expert for the plaintiff. Gaskins estimated the value of the services provided by an injured self employed worker based on the replacement cost of the services to the business provided by that worker. The court said: “There is no fixed rule by which the amount of damages for diminution or impairment may be definitively measured. Instead, all relevant facts on the issue must be considered. . . Impairment of earning capacity is measured by the ‘lost capacity to earn, rather than what a plaintiff would have earned’. . . The prevailing proper measure of lost earning capacity is the difference between the amount that the plaintiff was capable of earning before his injury and that which he is capable of earning thereafter.”  (Submitted by David Curry.)

Ihrie v. Anthony, 205 Md. 296; 107 A.2d 104 (Md. App. 1954). A plaintiff was permitted at the trial court level to testify about her prior earnings even though she had not been employed for a number of years prior to her injury. The Maryland Court of Appeals affirmed, saying: “[T]he appellee had been employed regularly and for comparatively long periods of time. We do not consider the evidence as to the plaintiff’s past earnings too remote to serve as a basis for computing her loss of earnings as a result of injuries sustained in the accident. Her last work as an employee of the City of Baltimore and all of her work in Norfolk were within ten years prior to the accident. . . The problem faced by a jury aided by such evidence would seem to be less difficult than that of estimating the impairment of adult earning capacity of a thirteen month old child injured in an accident.” (Submitted by David Curry.)

Wright v. Hixon, 42 Md. App. 448; 400 A.2d 1138 (Md. App. 1979). At the trial court level, a plaintiff was not permitted to testify about a calculation of his lost earnings based on an estimated amount of commissions in a new employment. Wright was employed as district sales manager of a newly formed corporation two days prior to the accident, with compensation to be based on commissions. The trial court refused to allow testimony on this basis and the Maryland Court of Special Appeals affirmed, citing Waltring v. James, 136 Md. 406; 111 A. 125 (Md. 1920) in which the Maryland Supreme Court had not allowed a plaintiff to calculate lost earnings based on two prior period of temporary employment. (Submitted by David Curry.)

                Standards for Recovery in Wrongful Death

Valk Manufacturing Company v. Rangaswamy, 74 Md. App. 304; 537 A.2d 622 (Md. App. 1988). The trial court had permitted the testimony of Dr.  William Belmont about losses accruing to survivors in a wrongful death matter.  Dr. Belmont had projected the decedent’s loss of earnings as the reduction in profits of his corporation.  The Maryland Court of Special Appeals affirmed, saying: “In a case such as this where the deceased was engaged in a business and profits were earned largely as a result of the personal endeavors of the deceased, one measure of the earning ability of the deceased is the decline in profits following the injury. Generally, courts will admit evidence of the loss of such income if the evidence conforms to the requirement of establishing a reasonable probability that the injury brought about loss of profits and the evidence affords a basis for a reasonable estimate of the amount of such loss.”  (Submitted by David Curry.)

                Household Services

Edmonds v. Murphy, 83 Md. App. 133; 573 A.2d 853 (Md. App. 1990). Household services can be introduced as a separate element of economic damages and thus is not part of the cap on non economic damages in Maryland. The court said: “It was obviously the goal of the legislature to place a limit or cap upon the non pecuniary components of loss of consortium such as affection, society, companionship, and sexual relations, and these services might not be rendered by hired help. . . But . . . we hold that compensation for the damages proved under the joint claim [of the spouses] for services which can, but need not necessarily, be performed by hired help, was not includable within the cap.”  (Submitted by David Curry.)

United States v. Searle, 322 Md. 1; 584 A.2d 1263 (Md. App. 1991). This decision answers three questions certified to the Maryland Court of Appeals by the Federal Court of Appeals of the 4th Circuit relating to household services. The first question had to do with whether this case was subject to a $350,000 cap on solatium damage, given that it was filed before the cap was established. The Court held that it did not need to reach an answer to that question. The second question was: “Whether, in Maryland, household services are encompassed within the term “solatium.” Both parties were agreed that some household services are non pecuniary and some household services are pecuniary, with the government citing Edmonds v. Murphy, 83 Md.App 133, 573 A.2d 853 (1990). The court said: “In Maryland, household services are not encompassed within the term “solatium” if the award is for the pecuniary loss of homemaker services is based on the market value of those lost services.”  

                Lost Chance of Survival

Marcantonio v. Moen, 2007 Md. App. LEXIS 157 (Md. 2007). Maryland does not recognize a wrongful-death cause of action for a substantial loss of chance of survival when a patient dies whose chance of survival at the time of the malpractice is 80 percent and (due to the malpractice) chances of survival are reduced to 50 to 60 percent at the point when appropriate care was commenced. The mathematical reasoning in this decision and in the dissent is interesting. The majority held that a reduction in the chance of survival of from 20 to 30 percent is not sufficient to prove that the malpractice caused the death of a patient. The dissent argued that the malpractice reduced the patient’s chance of survival from 5:1 to 1:1 and that this change should have been treated as the cause of death. 

                Admission of Expert Testimony

Blackwell v. Wyeth, 408 Md. 575; 971 A.2d 235 (Maryland 2009). This decision affirmed the decision of trial court Judge Berger preclude expert testimony claiming that the drug thimerosal in a vaccine might have been the cause of autism in Jamarr Blackwell. In this decision Maryland’s highest court (Court of Appeals) also reaffirmed that Frye-Reed standards applicable in Maryland and not Daubert standards for the admission of expert testimony under Maryland Rule 5-702, which is Maryland’s equivalent of Rule 702 in the Federal Rules of Civil Procedure. The “Frye” part of the Frye-Reed standard is based on the federal decision in Frye v. United States, 293 F. 1013 (D.C. Cir. 1923). Maryland adopted the Frye standard of “general acceptance within the relevant profession” in Reed v. State, 283 Md.375; 391 A.2d 364 (1978). The trial court judge had held a ten-day evidentiary hearing before excluding the testimony of plaintiff’s experts. The Court of Appeals went to great length to describe the testimony in Blackwell and to explain Maryland’s reliance on the “general acceptance” criterion in Frye. However, the Court cited a number of Daubert-based decisions in reporting its analysis, particularly the U.S. Supreme Court decision in Joiner v. General Electric Company, 522 U.S. 136 (1997).  In Joiner, the U.S. Supreme Court spoke about avoidance of an “analytic gap” between the evidence presented and the inferences to be drawn as necessitating speculation on the part of a jury. Joiner was also cited as having “admonished against reliance solely on an expert’s word that his conclusion is appropriate to the underlying data and methods.” The Blackwell Court went on to cite a number of cases in other states in which there was focus on the issue of the “analytic gap” between the evidence to be presented and conclusions to be inferred. Based on those cases, the Blackwell court looked in detail at the basis for the proposed testimony of plaintiff experts and found that none of the methods used by those experts to establish a causal link between thimerosal and autism was generally accepted in the medical professions relevant to admission of the testimony. The trial court judge determined that none of five plaintiff experts was expert in the relevant field, which Judge Berger had determined to be epidemiology. In upholding Judge Berger’s conclusion, the Blackwell Court said: “When a novel theory of science is presented . . . its reliability and validity are dependent not only on the application of generally acceptable methodology and analysis, but also upon the knowledge, skill, experience, training or education of the scientist who purports to utilize them, because the expert must embody expertise in the relevant scientific field to be able to give an opinion regarding the results of the process of scientific discovery.” The Blackwell Court held that since none of the five plaintiff experts had expertise relevant to maintaining  generally accepted standards in analyses relating to autism and its causes, the trial court judge had not abused his discretion in precluding the testimony of those experts. The Court added that: “[W]e agree with the well-reasoned and cogent opinion of Judge Berger.”

Reed v. State of Maryland, 2
83 Md. 374, 391 A.2d 364 (Md. 1978). In Maryland, a hearing on a motion in limine to preclude false or inaccurate testimony is called a “Frye-Reed” hearing. “Frye” refers to Frye v. United States, 54 D.C. Cir. 46, 293 F. 1013 (1923). This is the “Reed” part of the Maryland standard and spells out how the Frye ruling applies in Maryland. Frye has been referred to as the “general acceptance” standard that for a scientific premise to be accepted in court, it must be “generally accepted” in the scientific field from which the testimony is derived. In Frye, the relevant field was persons with expert knowledge about the accuracy of lie detector examinations. In Reed, the relevant field was determined to be persons with expert knowledge about voice detection form telephone calls relative to voice samples taken from an accused plaintiff. The decision contains extensive discussion of science and applications of the Frye test in other states. It is well worth reading by economic experts, particularly those contemplating testimony in Maryland courts.  The dissent in this decision is also extended and thoughtful. The Court said: “The introduction of evidence based on a scientific process, not generally accepted in the scientific community, is likely to distract the fact finder from its central concern, namely the rendition of a judgment on the merits of the litigation. Without the Frye test or something similar, the reliability of an experimental scientific technique is likely to become a central issue in each trial in which it is introduced, as long as there remains serious disagreement in the scientific community over its reliability. Again and again, cross-examination of expert witnesses will be as protracted and time-consuming as it was at the trial in the instant case, and proceedings may well degenerate into trials of the technique itself. The Frye test is designed to forestall this difficulty as well. The Court also said: “Our adoption of the Frye standard does not, of course, disturb the traditional discretion of the trial judge with respect to the admissibility of expert testimony. Frye sets forth only a legal standard which governs the trial judge’s determination of a threshold issue. . Testimony based on a technique which is found to have gained ‘general acceptance in the scientific community’ may be admitted into evidence, but only if a trial court judge also determines in the exercise of his discretion, as he must in all other instances of expert testimony, that the proposed testimony will be helpful to the jury, that the expert is properly qualified, etc. Obviously, however, if a technique does not meet the Frye standard, a trial judge will have no occasion to reach these further issues. 

                Legal Procedure

Design Kitchen and Baths v. Lagos, 2005 Md. LEXIS 545 (Md. App. 2005). An undocumented worker injured in the course of his employment is a “covered employee” under § 9-202, and is eligible to receive worker’s compensation benefits. This decision focused on the fact that the undocumented worker did not fill in a Social Security number where requested on the employment form, as compared with the worker who was ruled against in the U.S. Supreme Court decision in Hoffman Plastic Compounds, Inc. v. N. L. R. B., 535 U.S. 137; 122 S. Ct. 1275 (2002). This decision also discussed decisions in other states on this issue.

Maslow v. Vanguri, 2006 Md. App. LEXIS 50 (Court of Special Appeals, MD 2006). The plaintiff and defendant in a medical malpractice case had entered into a high-low agreement such that the defendant would pay $250,000 even if the award was lower than that amount and the plaintiff would accept $1 million even if the award was higher than that amount. The arrangement was subject to an agreement not to appeal. The jury returned a defense verdict and the plaintiff appealed in spite of the high-low agreement, but lost the appeal. The plaintiff then tried to enforce the high-low agreement to collect $250,000. The Maryland Court of Special Appeals held that the plaintiff could not do so after having violated the non-appeal clause of the high-low agreement.

Owens-Illinois, Inc., v. Cook, 148 Md. App. 457; 813 A.2d 280 (Md. App. 2005). This decision deals with an asbestosis related claim such that the substance that was to cause harm to the plaintiff was in his body before his marriage, albeit undiagnosed. The question before the court was whether, under such circumstances, the spouse suffered a loss of consortium when the substance eventually caused harm. Since the harm had already occurred before the spousal relationship was established, could a claim be brought for loss of consortium. The Maryland Court of Appeals reviewed various legal rationales for not allowing such claims to be brought, but held that consortium claims could be brought under such circumstances. A number of other states have held to the contrary and this decision provides a review of many of those decisions.

Wrobleski v. de Lara, 353 Md. 509; 727 A.2d 930 (Md. 1999). This was a decision concerning whether a medical expert witness could be questioned about his earnings as an expert for purposes of showing bias. The Court said: “[W]e believe it is generally appropriate for a party to inquire whether a witness offered as an expert in a particular field earns a significant portion or amount of income from applying that expertise in a forensic setting and is thus in the nature of a ‘professional witness,’ the party may inquire both into the amount of income earned in the recent past from services as an expert witness and into the approximate portion of the witness’s total income derived from such services. The trier of fact may find either or both to be significant in determining the witness’s credibility. We hasten to add, however, two important caveats. First, we do not intend by our decision today to authorize the harassments of expert witnesses through a wholesale rummaging of their personal and financial records under the guise of seeking impeachment evidence. The allowance of the permitted inquiry, both at the discovery and trial stages, should be tightly controlled by the trial court and limited to its purpose, and not permitted to expand into an unnecessary exposure of matters and data that are personal to the witness and have no real relevance to the credibility of his or her testimony. Second, the fact that an expert witness devotes a significant amount of time to forensic activities or earns a significant portion of income from those activities does not mean that the testimony given by the witness is not honest, accurate, and credible. It is simply a factor that is proper for the trier of fact to know about and consider. This decision provides a history of issues relating to expert witnesses starting with the 1858 decision of the U.S. Supreme Court in Winans v. New York  & Erie Railroad, 62 U.S. 88 (1858).      

Wyatt v. Johnson, 103 Md. App. 250; 653 A.2d 496 (Md. App. 1995). Use of an itemized verdict sheet for damages is mandatory regardless of the amounts or number of categories involved.  A judge may zero out elements that are not relevant, but the following elements must be itemized: (1) Past medical expenses; (2) future Medical Expenses; (3) past lost earnings; (4) future lost earnings; (5) noneconomic damages; and (6) other damages. (Submitted by David Curry.)

             Collateral Source

Norfolk Southern Railway Corp. v. Tiller, 944 A.2d 1272 (Md. App. 2008). The court said: “We hold (and this is not dicta) that evidence of future retirement or pension benefits is not admissible on the issue of when an employee, but for the accident, would have been expected to stop working. The probative value is too attenuated to offset the potential misuse that the jury could make of the evidence. Evidence bearing on the expected work-life of the employee is not a cognizable exception to the collateral source rule.” The plaintiff was just under 52 years of age at the time of his injury and had been working for the Norfolk Southern for 29 years and 5 months. He therefore would have been eligible for 30/60 retirement, a fact that the defendant railroad tried to introduce through its expert witness Thomas Walsh. Plaintiff filed a motion in limine to preclude evidence of retirement benefits from being introduced to explain why the plaintiff would have been likely to retire at age 60 in eight years and a few months. The trial court granted the motion in limine. Plaintiff testified that he had intended to work to age 65 and the jury awarded damages on that basis. The decision noted that Walsh had based his own calculations on an expected work-life of 10.5 years, but does not explain how Walsh arrived at that figure. The decision also cites earlier decisions reaching the same conclusion. Damages reported in the decision indicate that there was no award for lost future retirement benefits and apparently also not for loss of medical/dental/vision insurance.  

Haischer v. CSX Transportion, Inc., 381 Md. 119;848 A.2d 620 (Md. App. 2004).  This decision provides extended discussion of the application of the U.S. Supreme Court ruling in Eichel v. New York Cent. R.R. Co., 875 U.S. 253, that the existence of Railroad Retirement Board disability benefits cannot be introduced into evidence to show that a worker is malingering and not attempting to find employment. The Maryland Court of Appeals reversed the Maryland Special Court of Appeals decision in CSX Transp., Inc. v. Haischer, 151 Md. App. 147 (2003), which had ruled that such evidence could be admitted in this case because of statements made by Haischer that were misleading as to his poverty. All parties agreed that disability benefits could not be treated as an offset to lost earnings. The question was whether statements of Haischer’s attorney and Haischer himself about Haischer’s poverty created an exception under Eichel. The Maryland Court of Appeals held that such statements could constitute an exception to Eichel, but that the statements in this case were not sufficient to do so. 

             FELA/Maritime Cases

Haischer v. CSX Transportion, Inc., 381 Md. 119;848 A.2d 620 (Md. App. 2004). See under collateral source.

Norfolk Southern Railway Corp. v. Tiller, 944 A.2d 1272 (Md. App. 2008). See under collateral source.

                Hedonic Damages and Emotional Services

Carolina Freight Carriers Corporation v. Keane, 311 Md. 335; 534 A.2d 1337 (Md. App. 1988).
This decision focuses on whether the language “21 years or younger” for recovery of solatium by parents with a child applies to someone who was 21 years and some months in age. The Maryland statute allows recovery of solatium for parental loss in the death of an unmarried child with whom parents had a close relationship if the child is “21 years or younger” or the parents provided more than 50 percent of the support of the child.  The court ruled that the parents could recover solatium with respect to their decedent son who was 21 years and some months of age.

Monias v. Endal, 330 Md. 274, 623 A.2d 656 (Md. App. 1993).  The Maryland Court of Appeals held that: “[I]n tort actions where a family member is injured, the marital entity has a claim for damages for loss of a spouse’s consortium, but parents and children do not have a claim for loss of each other’s consortium. Parents have a limited common law claim for loss of an injured child’s services, but children have no reciprocal claim for loss of an injured parent’s services. A tort victim’s loss of earnings damages are based on pre-tort life expectancy, but a tort victim’s loss-of-services are based on actual post-tort life expectancy. The court also argued that a child’s “loss of household services” is similar to a child’s claim for “loss of consortium.”

United States v. Searle, 322 Md. 1; 584 A.2d 1263 (Md. App. 1991).  In answering the question whether, in Maryland, household services are encompassed within the term “solatium,” the court said: The element of damages referred to as household services can have both pecuniary and nonpecuniary aspects. Where a claim is made for the nonpecuniary aspect of household services, the award may overlap the claim for solatium damages. But where an award for household services is compensation for the loss of domestic services and is based on the market value of those lost services, the award is pecuniary and is not duplicative of the solatium damages. These are services that can be performed by domestic workers and their replacement value is measured by prevailing wage rates for such services.” (Submitted by David Curry.)

             Wrongful Birth and Similar Issues

Laboratory Corp. of America v. Hood, 2006 Md. LEXIS 815 (MD App. 2006). A wrongful birth claim brought by Maryland parents against a North Carolina corporation must be governed by Maryland law if applying the law in the defendant’s state would deprive the plaintiffs of a remedy. The Hoods had a fetus tested for cystic fibrosis. A North Carolina company performed a test for this disease because both parents were carriers of a gene that can cause cystic fibrosis. The test failed and the pregnancy was continued, resulting in the birth of a child with cystic fibrosis. North Carolina would not have allowed recovery for the cost of raising the child. The highest court in Maryland held that the case must be tried in Maryland because the parents would not have had a cause of action in North Carolina.

        
    Wrongful Termination

Sallitt v. Stankus, 2010 U.S. Dist. LEXIS 51957 (M.D. PA 2010). This is a memorandum rejecting an appeal by the defendants in a wrongful discharge case in which a sheriff punished a deputy for supporting his opponent in a past election. The economist for the plaintiff was Andrew Verzilli. One of the points of appeal by the defendant was that plaintiff suffered no economic damages and should not have been awarded back pay and front pay because he was suspended with pay during a nine month period before the final discharge. The judge pointed out that the jury had not awarded back or front pay, but past and future economic damages based on the impact of the suspension and ultimate discharge on the deputy’s opportunities to obtain other remunerative employment. The defendant also argued that plaintiff’s economic expert Andrew Verzilli was not aware of pertinent facts relating to the other employment opportunities that were lost. The judge said about this argument: The economist was not charged with the task of determining what factors precluded plaintiff from obtaining these jobs. The jury’s task was to determine whether the defendant actually caused these losses. Therefore, whether the economist had pertinent facts regarding the employment at these other places or why plaintiff was precluded from those jobs is immaterial. The defendant also argued that since Verzilli had projected the losses as between $687,000 and $1,657,035, the jury’s award of $125,000 for these losses involved gross speculation. In a footnote, the judge said: “Notably, defense counsel did not request that the court charge the jury that they must at least award the minimum amount suggested by the plaintiff’s expert witness. 

Massachusetts

             Basis Income and Fringe Benefits for Projecting Earnings Loss

             Household Services

Rodgers v. Boynton, 315 Mass. 279; 52 N.E.2d 576 (Mass. 1943). This decision treated household services of an injured wife in a personal injury matter as a part of her lost earning capacity. The decision held that her husband could recover for lost nursing services, if any, but not for the costs of a person hired to care for the home because of the wife’s injury. The court held that her husband had no standing to recover damages caused by the injury to his wife. This upheld a decision of an “auditor”who apparently acted in lieu of a trial court judge in awarding damages. The Massachusetts Supreme Court said: “It is to be noted that the plaintiff’s wife recovered damages for such diminution in earning capacity as the auditor found was due to the injury. Her ability to work belonged to her; and if her capacity to work was lessened by her injury, then she alone was entitled to recover the value of that part of her capacity to earn of which she was deprived. Her time was her own. She had a right to work and her earnings belonged to her. Whether she was gainfully employed or not at the time of the injury, she was entitled to damages for any impairment in her capacity to work and earn.” This appears to be saying that any use of the wife’s earning capacity to provide household services should have been included as part of her lost earning capacity and that her husband had no right to even recover money he spent to have the wife’s household services replaced. Suggested by David Schap.

             Legal Procedure

Gasior v. Massachusetts General Hospital, 2006 Mass. LEXIS 199 (MA 2006).  A worker had filed an age discrimination claim against his previous employer, but died before the claim could be brought to trial. The Massachusetts Supreme Court held that all remedies available to the employee before his death survive his death.

             Loss of Chance 

Renzi v. Paredes, 2008 Mass. LEXIS 553 (Mass. 2008). This is the shorter of two decisions of the Massachusetts Supreme Court on 7/23/08 in which Massachusetts adopts a “loss of chance” approach for dealing with medical malpractice. Suggested by Ralph Frasca.

Matsuyama v. Birnbaum, 452 Mass. 1, 890 N.E.2d 819 (Ma. 2008). The Massachusetts Supreme Court adopted the “loss of chance doctrine” for cases involving medical malpractice, saying: [T]he loss of chance doctrine views a person’s prospects for surviving a serious medical condition as something of value, even if the possibility of recovery was less than even prior to the physician’s tortious conduct.”  The Court went on to say: “We reject the defendents’ contention that a statistical likelihood of survival is a ‘mere possibility’ and therefore ‘speculative.’ The magnitude of a probability is distinct from the degree of confidence with which it can be estimated. A statistical survival rate cannot conclusively determine whether a particular patient will survive a medical condition. But survival rates are not random guesses. They are estimates based on data obtained and analyzed scientifically and accepted by the relevant medical community as part of the repertoire of diagnosis and treatment, as applied to the facts of the plaintiff’s case. . .Where credible evidence establishes that the plaintiff’s or decedent’s probability of survival is 49% , that conclusion is no more speculative than a conclusion, based on similarly credible evidence, that the probability of survival is 51%.” The Court, however, emphasized that its decision was limited to medical malpractice actions and added in a footnote that: “We do not decide today whether a plaintiff may recover on a loss of chance theory when the ultimate harm (such as death) has not yet come to pass.”  
Suggested by Ralph Frasca. 

             Hedonic Damages and Emotional Services  

Norman v. Mass. Bay Transp. Auth., 403 Mass 303, 529 N.E.2d 139 (Mass. 1988). The Massachusetts Supreme Court held that a parent has no right to recover for the lost consortium of a non-fatally injured child even though the child can recover for lost consortium of a non-fatally injured parent: “Although parents customarily enjoy the consortium of their children, in the ordinary course of events a parent does not depend on a child’s companionship, love, support, guidance, and nurture in the same way and to the same degree that a husband depends on his wife, a wife depends on her husband, or a minor or disabled adult depends on his or her parent.” 

Michigan

             Basis Income and Fringe Benefits for Projecting Earnings Loss

Craig v. Oakwood Hospital, 249 Mich. App. 534; 643 N.W.2d 580 (Mich. App. 2002). This is a short decision with a long partial dissent by Justice Jessica R. Cooper that is worth reading on its own.  The decision discusses the opinions of Dr. Robert Ancell, a rehabilitation expert who also makes economic projections for a person who had not finished high school at the time of his injury.  Dr. Ancell apparently had made two projections, one based on earnings of an average high school graduate plus some college, which had a present value of $967,045. The second projection was based on the young man obtaining employment in the automobile industry at $52,000 per year (including fringe benefits) upon graduation in 1998, with a present value of $1,992,138. The trial court judge had refused a remittitur and the court of appeals held that the maximum earning capacity of the young man was $29,893.50 as of 1998. The dissent discusses Michigan’s position that the “Davis-Frye” test required for Michigan cases is stricter than Daubert.  It also discusses at length the circumstances under which reference to racial statistics might be inflammatory. Suggested by Penelope Caragonne.

Farquarson v. Travelers Insurance Company, Mich.App., 329 N.W.2d 484 (1982). Future Social Security benefits were not recoverable because "an employee's interest in such payments is too speculative for it to be considered "income."

Ross v. Auto Club Group, 269 Mich.App. 356; 711 N.W.2d 787 (MI App. 2006).  This is a decision involving whether or not plaintiff could be compensated for three years lost wages from a self owned business. The court rejected the defendant’s claim that because the expenses of plaintiff’s corporation exceeded business income, plaintiff effectively had no net income before his accident. The court said: “In this case, there is no dispute that (1) plaintiff received wages as an employee of the corporation and (2) plaintiff’s remuneration from the corporation was not determined on the basis of the annual net income of the corporation. Plaintiff did not assert a work-loss claim based on the lost profits of the corporation. . . We reject defendant’s argument that plaintiff’s self employment status dictates a calculation of the gross receipts of the corporation less the corporate expenses to determine plaintiff’s net income.”  Suggested by William King. 

       Life and Worklife Expectancies

Rodriguez v. ASE Industries, Inc., 275 Mich. App. 8; 738 N.W.2d 238 (Mich. App. 2007). This decision held that worker’s compensation benefits are a collateral source that cannot be offset against lost earnings recovery “unless they are subject to a valid lien.” ASE also argued that the damage award for wage loss should be reduced “when there is no evidence that plaintiff would have worked past a ‘normal retirement age’ of 65. The Court pointed out that ASE could cite no authority and the Court was aware of no authority that “damages for wage loss are only awardable to age 65, or any other specific age for that matter.” The Court went on to cite its own decision in Scott v. Illinois Tool Works, Inc. 217 Mich. App. 35, 44; 550 N.W.2d   809 (1996), on this issue. In that case, the plaintiff had projected lost earnings to the end of the plaintiff’s normal life expectancy. The Scott Court had pointed out that it was curious that the defendant had not tendered any evidence that plaintiff could not have worked until the day he died. The Scott court was cited to have said: “[W]hile we have serious doubts about the propriety of permitting evidence of plaintiff’s life expectancy to be used as the sole basis for calculation of future wage loss, this happened here because defendants failed to object to the court’s instruction and failed to present their own evidence with respect to damages.”  Suggested by Bill King.

       Standards for Wrongful Death Damages

Baker v. Slack, 319 Mich. 703; 30 N.W.2d 403 (Mich.1948). This decision contains two components of interest to forensic economists. First, in a case involving the death of a homemaker who did not work outside the home, a surviving spouse can recover for loss of services “less reasonable cost of her maintenance.”  (Italics in original.) Second, with respect to “lost accumulations to an estate,”plaintiffs could recover for lost inheritance “only to the extent that deceased was legally obligated to contribute to the support and maintenance of any of them.”

Frontier Insurance Company v. Blaty, 454 F.3d 590 (6th Circ. 2006). This decision interprets Michigan law as not allowing recovery by an estate of “lost enjoyment of life” on the ground that loss of enjoyment must be consciously experienced to be recoverable. It also holds that “federal law does not require, in a section 1983 action, recovery of hedonic damages stemming from a person’s death.” The Court listed damages provided for in the Michigan wrongful death act as: (1) “reasonable medical, hospital, funeral and burial expenses for which the estate is liable,” (2) “reasonable compensation for the pain and suffering, while conscious, undergone by the deceased person during the period intervening between the time of the injury and death,” and (3) “damages for the loss of financial support and the loss of society and companionship of the deceased.” MICH. COMP. LAWS § 600.2922(6). The Court held that hedonic damages might fall into “reasonable compensation for pain and suffering,” but only from the instant of injury to the instant of death. An economic expert does not appear to have been involved in this case. 

          Loss of Chance of Survival or  Recovery

Taylor v. Kent Radiology, 2009 Mich. App. LEXIS 2623 (Mich. App. 2009). This decision explains the different standards that apply to “loss of chance” and standard medical malpractice actions in Michigan. It also defines the need for services to replace lost household services as an “economic cost.” It further held that costs do not have to be incurred to be recoverable. In this case, no claim was being made for past lost household services. The defendant argued that costs of future household service replacement had not yet been incurred. The Court said that future costs do not have to be incurred to be recovered.

          Household Services

Thorn v. Mercy Memorial Hospital, 2008 Mich. App. LEXIS 2441 (MI App.2008). From the decision: “Defendants contend that loss of [household] service damages are available, but fall strictly under the umbrella of loss of society and companionship. Defendants argue that loss of society and companionship is defined in the same manner, and encompasses the same criteria or elements, as loss of consortium and, as such, is noneconomic in nature and, therefore, subject to the damages cap of MCL 600.1483. Defendants’ characterization is inaccurate and comprises an oversimplification of these terms and concepts. While loss of society and companionship and loss of consortium have often been erroneously used interchangeably, defendants are incorrect in asserting that the terms are equivalent in meaning. . .  Although loss of consortium includes loss of service and loss of society as components of damage, that does not make the concepts interchangeable or determine whether they are economic or noneconomic in nature. . . . [T]his Court has recognized not only the availability of loss of service damages, but also acknowledged these damages as economic and separate and distinguishable from compensation for the loss of society or companionship.” 

          Mandatory 5% Discount Rate 

Estate of Shinholster v. Annapolis Hospital, 471 Mich. 540; 685 N.W.2d 275 (Mich. 2004). The Michigan Wrongful Death Act, MCL 600.6311 contains a special provision that when a plaintiff is more than 60 years of age damages are not reduced to present value. At issue in this decision was the legal age of the decedent, Betty Jean Shinholster. She died at the age of 61, but defendants argued that a dead person has no age. The Michigan Supreme Court held that the plaintiff in a Michigan Wrongful Death Action is the decedent and that the decedent’s age for the purpose of § 6311 is the decedent’s age at the time of death. This meant that the decedent was aged 61 and thus over age 60 and that damages should not be reduced to present value. Suggested by Bill King. 

Nation v. W. D. E. Electric Company, 454 Mich. 489 (MI 1997). This 4 to 3 decision held that Michigan’s mandatory 5% discount rate must be discounted as a simple interest rate based on common law considerations unless the legislature has explicitly stated in statute that a compound interest rate should be used. The dissent pointed out that this process exaggerates damages that must be paid by defendants. Footnote 2 of the decision provides an operational directive for how Michigan discount factors should be calculated: “Simple interest reduces damages arithmetically by dividing damages in the first year by 1.05, in the second year by 1.10, in the third by 1.15, etc. Compound interest reduces damages exponentially each year by dividing the first year by 1.05, but then multiplying the denominator in each year by an additional five percent , so that the denominator in year two is 1.1205, in year three is 1.15725, etc. In effect, the compound method adds accrued interest to the principle before charging the applicable rate of interest to the adjusted principle. We do not dispute here that compound interest is the standard generally employed in the business and financial world today.” Suggested by Bill King. 

            Treatment of Taxes

Gorelick v. Department of Highways, 127 Mich. App. 324; 339 N.W.2d 635 (MI 1983). This decision considers whether or not taxes should be subtracted in a personal injury matter with a surviving victim. The Michigan Supreme Court held that the trial court had erred in subtracting income taxes from Plaintiff’s income in making its award. The Court said: “Generally, in fixing damages for lost future earning capacity resulting from personal injuries, courts must disregard the income tax consequences.” After citing several authorities, the court added: “The decisions indicate that deductions for prospective taxes are only proper where specifically provided for by statute.” However, the court also said: “Defendant has not pointed to any other statute which might have authorized the court’s deduction of prospective taxes, but even if it had, the court would still have erred in making such a deduction, because defendant failed to meet its burden of introducing competent expert testimony concerning plaintiff’s prospective tax status. . . Even when the trial court offered defendant an opportunity to present such evidence, defendant chose not to do so, offering instead only raw tax tables whose prospective applicability to plaintiff was open to question. The court lacked a factual basis for reducing plaintiff’s award, and should have declined to do so. We conclude that the reduction of the award for prospective taxes was error, citing Longworth v. Dep’t of State Highways, 410 Mich. 538; 302 N.W.2d. 537 (MI 1981). Suggested by Bill King.

            Collateral  Source

Habercorn v. Chrysler Corporation, 210 Mich. App. 354; 533 N.W.2d 373 (Mich. App. 1995). This decision did not involve an economist, but sets out the nature of the Michigan collateral source rule MCL 600.6303; MSA 27A.6303. That rule limits recovery for medical malpractice to expenses not covered by collateral sources. This means that offsets can be made for “benefits receivable from an insurance policy; benefits payable pursuant to a contract with a health care corporation, dental care corporation, or health maintenance organization; employee benefits; social security benefits; worker’s compensation benefits; or medicare benefits.” Offset against the offset can be made for premiums required to maintain the insurance or collateral benefits subject to a lien on the proceeds of a recovery. This decision reverses a trial court decision that interprets these provisions very narrowly in such a way to exclude offsets due to collateral sources. Suggested by Bill King. 

            Life Care and Medical Expenses

Bonkowski v. Allstate Insurance Company, 2008 Mich. App. LEXIS 1890 (MI App. 2008).  In this case, the Court upheld a trial court decision to base an award to the father of an injured son for providing the 24 hour attendant care needed by the son after an injury on the costs of hiring professionals to provide that care. The father had a high school degree and received four months of training to provide care for his son from Craig Hospital in Colorado. The defendant was willing to pay the father $166,000 per year to provide care for the son.  The plaintiff argued that the father should be paid the full replacement cost in the life care plan for the services being recommended as provided by registered nurses and high-tech LPN’s. The annual cost based on RN and LPN care was not given in the decision, but was substantially greater than $166,000 per year. The jury decided to award the amount recommended by the plaintiff, which was upheld by the judge and by the Court of Appeals.  Suggested by William King.

Burris v. Allstate Insurance Co., 480 Mich. 1081; 745 N.W.2d 101 (Mich. 2008). This decision involved payments to family members for life care under Michigan’s no fault automobile insurance. Burris had been injured at the age of 6 and had multiple surgeries thereafter, but had attended college, obtained employment, married, fathered a child and performed routine activities, including driving. The Court pointed out that he had engaged in fraud in submitting bills to Allstate Insurance, billing the insurance company for life care from his wife for services not actually rendered. He was eventually divorced and went to live with his parents, where he received some amount of life care services from his father, his brother and a friend, all of whom testified that they did not expect payment for the services provided. The jury awarded $78,438 for the providers of the care. The trial court granted the defendants motion to vacate the award for life care on the ground that the plaintiff had “incurred” no expense for life care. The Court of Appeals reversed the trial court and reinstated the jury verdict. The defendant appealed to the Michigan Supreme Court for the right to appeal the decision of the Court of Appeals. The Court went further than the defendant’s appeal and reversed the Court of Appeals and reinstated the trial court judge’s decision that no expenses were “incurred” by the plaintiff. Suggested by William King.

Morales v. State Farm Mutual Automobile Insurance Company, 2008 Mich. App. LEXIS 1108 (Mich. App. 2008). One of the issues in this appeal was whether Linda Kling’s estimate that attendant care would cost between $18 and $24 per hour was admissible. The defendant contended that Kling’s opinion was supported by inadmissible hearsay, contrary to MRE 703, which now requires that facts underlying an expert’s opinion be in evidence. The court held that there was no error in admitting Kling’s testimony. Kling was presented as a life care planning expert with 20 years of experience was a registered nurse. The court said: “Viewing the existing record in the light most favorable to plaintiff, the trial court did not err by inferring that Kling had personal, non-hearsay knowledge on which to base her testimony that aides in 2005 were paid in the range of $18 to $24 per hour. MRE 703 does not preclude an expert from basing an opinion on the expert’s personal knowledge.” The Court also pointed out that plaintiff’s economist, Nitin Paranjpe had corroborated Kling’s testimony regarding the cost of attendant care even though Paranjpe had used Kling’s testimony in his calculations. The Court quoted MRE 803(17) as exempting from the hearsay rule “[m]arket quotations, tabulations, lists, directories, or other published compilations, generally used and relied upon by the public or persons in particular occupations.” The Court then said: “This same hearsay exception applies to government information on wages for different occupations such as health care aide, even though the information was obtained from the internet.”  

            Legal Procedure

Braverman v Pierce, 2008 Mich. App LEXIS 257 (Mich. App. 2008). The trial judge added an additur to the jury award to the plaintiff based a ruling that the jury had misunderstood the impact of inflation on the award. The Michigan Court of appeals found this to be an abuse of discretion on the part of the trial court judge, saying: “At trial, economist  Michael Thompson testified on behalf of plaintiff regarding  the concept of inflation and its effect on an award of future damages. Using a number of graphical aides, Thompson clearly and concisely explained to the jury that if it sought to award future damages and wished the purchasing power of that money to stay the same over the years, the award must be adjusted for inflation. Additionally, we note that the jury was expressly instructed by the trial court that it could consider the effect  of inflation in determining the damages to be awarded for future losses, but that the amount to be awarded was within its "solemn judgment." As recognized by the trial court at the hearing on the parties' motion to enter the amended judgment, the jury could have awarded damages in the manner they did for a multitude of reasons. Under these circumstances, we conclude that the trial court's finding that the jury did not understand the effect of inflation is speculative and, as explained, not supported by the evidence. Accordingly, the trial court abused discretion in granting additur on that ground.”

Jenkins v. Patel, 2003 Mich. App. LEXIS 844.  This decision held that the Michigan medical malpractice cap on damages, MCL 600.1483, does not apply to damage actions brought under Michigan’s wrongful death act (WDA), MCL 600.2922. The ruling was based on the Michigan Court of Appeals interpretation that the legislature had not intended the medical malpractice cap to apply to wrongful death and did not overturn the cap as it applied in personal injury actions. Submitted by William King.   

Wood v. The Detroit Edison Company, 409 Mich 279 (1979). Ruled that wife could not use prior married name in wrongful death action if she had since remarried and taken her new husband's name. This case makes it clear that evidence of remarriage cannot ordinarily be introduced in a wrongful death action in Michigan. The issue in this case was whether she was entitled to present herself to a jury with her previous married name to avoid the inference that she had remarried. The court ruled that she could not misrepresent the truth of her new name to a jury. 

     FELA/Maritime Cases

Ward v. Consolidated Rail Corporation, 2003 Mich. App. LEXIS 1865. This is an unpublished opinion. The Michigan Court of Appeals cited Maylie v. Nat Railroad Passenger Corp, 791 F.Supp. 477 (E.D.Pa. 1992) in holding that since the plaintiff did not claim lost retirement benefits, it was not in error for the trial court to refuse to reduce plaintiff’s lost earnings by the amounts he would have to pay in railroad retirement taxes. 

      Admissibility of Expert Testimony

Craig v. Oakwood Hospital, 2004 Mich. LEXIS 1561 (Mich. 2004). The Michigan Supreme Court held that Davis-Frye standard continues to be the standard for admissibility of expert testimony in Michigan. It reversed a decision of the trial court judge not to hold a Davis-Frye hearing to determine whether the testimony of medical doctor’s testimony was admissible under Michigan’s Rule 702 (MRE 702), saying that expert testimony “must (be) based on a “recognized” form of “scientific, technical, or other specialized knowledge.” The decision provides definitions for the terms “recognized,” “scientific,” and “knowledge.” The Frye part of Davis-Frye refers to Frye v. United States, 54 App. D.C. 46 (D.C. Cir. 1923). The Davis part of Davis-Frye refers to People v. Davis, 343 Mich. 348; 72 N. W.2d 269 (Mich. 1955). Submitted by William King.

Doren v. Battle Creek Health System, 187 F.3d 595 (6th Cir. 1999). This is a decision under the Americans with Disabilities Act. The plaintiff alleged she was disabled because of a series of medical conditions. The court’s ruling was that she was not disabled under the meaning of the ADA.  The decision discusses an affidavit issued by Dr. Robert Ancell stating that the plaintiff “was not able to perform the duties (of a nurse) on the adult floor.” The court pointed out that Dr. Ancell’s affidavit did not offer “specific facts showing that there is a genuine issue for trail.”  Suggested by Penelope Caragonne.

Hashem v. Les Stanford Oldsmobile, Inc, 266 Mich. App. 61; 697 N.W.2d 558 (Mich. App. 2005).  Les Stanford Oldsmobile argued that it was entitled to a new trial, or remittatur, as the result of the trial court’s decision to permit the testimony of economist Michael Thompson about the effect of inflation on an award of future noneconomic damages. The court of appeals held that the trial court was not in error to have allowed such testimony.

People v. Lee, 537 N.W.2d 233 (Mich. Ct.App. 1995).  Retained Frye standard, rejecting Daubert as more liberal than Frye.

     Hedonic Damages and Emotional Services

Berger v. Weber, 411 Mich. 1; 303 N.W.2d 424 (Mich. 1982). This decision held that a child may recover for loss of a parent’s society and companionship in cases involving severe permanent injuries to a parent. The case involved a minor child, but the decision is not explicit as to whether this ruling would apply to an adult child. The Court said: “Recognizing the child’s cause of action may result in increased insurance costs, but compensating a child who has suffered emotionally because of the deprivation of a parent’s love and affection may provide the child with the means of adjustment to the loss. The child receives the immediate benefit of the compensation, but society will also benefit if the child is able to function without emotional handicap.”

Breckon v. Franklin Fuel Company, 383 Mich 251 (Mich. 1970).  The Michigan Supreme Court ruled that references in Wycko v. Gnodtke to recover for loss of companionship were dicta and that the Michigan Wrongful Death Act did not provide for damages for loss of companionship. This case provides a review of cases from Wycko until 1970. 

Frontier Insurance Company v. Blaty, 454 F.3d 590 (6th Cir. 2006). This decision of the 6th Circuit discusses the damages section of the Michigan Wrongful Death Act in the context of U.S.C. § 1983, a federal statute that deals with civil rights violations. There was no testimony by an economist about hedonic damages and the jury made no award for hedonic damages. Blaty, as representative of the estate of Melva Dee Parrott, a child who died from bronchitis in foster care. The 6th Circuit interpreted Michigan law as awarding hedonic damages as a part of “pain and suffering” and only “recoverable only to the extent that the decedent experienced a loss of enjoyment before dying.” The decision also held that “federal law does not require, in a section 1983 action, recovery of hedonic damages stemming from a person’s death.” 

Kemp v. Pfizer, Inc., 947 F.Supp. 1139 (E.D.Mi 1996). There is no authorization for hedonic damages in a wrongful death action in Michigan.

McBride v. Pinkerton's, Inc., 1999 Mich. App. LEXIS 1198 (1999). Defense did not properly preserve hedonic damages issue for appeal and the Michigan court did not formally address this issue on appeal, but added dicta to citing a number of  federal district decisions in Michigan rejecting hedonic damages testimony to suggest that it is Michigan law that expert testimony on hedonic damages is inadmissible. 

Thorn v. Mercy Memorial Hospital, 2008 Mich. App. LEXIS 2441 (MI App.2008). From the decision: “Defendants contend that loss of [household] service damages are available, but fall strictly under the umbrella of loss of society and companionship. Defendants argue that loss of society and companionship is defined in the same manner, and encompasses the same criteria or elements, as loss of consortium and, as such, is noneconomic in nature and, therefore, subject to the damages cap of MCL 600.1483. Defendants’ characterization is inaccurate and comprises an oversimplification of these terms and concepts. While loss of society and companionship and loss of consortium have often been erroneously used interchangeably, defendants are incorrect in asserting that the terms are equivalent in meaning. . .  Although loss of consortium includes loss of service and loss of society as components of damage, that does not make the concepts interchangeable or determine whether they are economic or noneconomic in nature. . . . [T]his Court has recognized not only the availability of loss of service damages, but also acknowledged these damages as economic and separate and distinguishable from compensation for the loss of society or companionship.”      

Winnick v. Mark Keith Steele, 2003 Mich. App. LEXIS 2792 (Mich. App. 2003). This is an unpublished opinion. The court said: “Plaintiff’s final argument . . .is that defense counsel improperly disparaged her expert witness, an economist who testified regarding ‘hedonic damages.’ We disagree. It is proper for counsel to ‘discuss the character of witnesses, the probability of the truth of testimony given on the stand, and . . .when there is any reasonable basis for it, [to] characterize the testimony.’”. . .Here, the challenged remarks by defense counsel were proper comments regarding the credibility of plaintiff’s expert, which was a contested issue in the case. Defense counsel was attempting to persuade the jury that the witness’ testimony was not reliable. We are not persuaded that defense counsel’s comments were improper.”

Wycko v. Gnodtke, 361 Mich. 331 (Mich. 1960). This was the Michigan Supreme Court case that established the parental investment approach as the method for valuing parental loss in the death of minor children.

Minnesota

         Basis Income and Fringe Benefits for Projecting Earnings Loss

DeLa Rosa v. DeLa Rosa, 309 N.W.2d 755 (Minn. 1981). Elena DeLa Rosa was awarded restitution for financial support she provided to her husband during their marriage. She had worked to support the family while her husband earned his medical degree. The court held that since Elena was self supporting, she was not entitled to maintenance, but was entitled to compensation for her contribution to the enhancement of her husband’s education. Suggested by David Jones.

          Standards for Recovery in Wrongful Death

Rath v. Hamilton Standard Division of United Technologies Corp., 292 N.W. 2d (Minn. 1980). This decision involved the distribution of a wrongful death award. The court held that the decedent’s daughter should have been able to recover more than her loss of monthly child support payments. In the context of that decision, the Minnesota Supreme Court said that it had “held consistently that nondependent relatives may recover, e.g., the parents of a child beyond majority who has married . . .; or a wife who has since remarried. The Court also quoted an article in Bench and Bar by Judge Hatfield to the effect that: “Unless there is a showing that a child will suffer a pecuniary loss by the death of his parent after he reaches the age of 21, it is my suggestion and practice to determine the number of support years that the surviving spouse and each of the next of kin have lost by reason of the death and divide the funds for distribution proportionately. The article by Judge Hatfield then gave a mathematical example in which the wife would be supported for her 20 year life expectancy, one child for one year to age 21, another child for 11 years to age 21, and a third child for 16 years to 21 for a total of 48 support years. The apportionment would then be 20/48ths, 1/48ths, 11/48ths and 16/48ths. This decision may provide a basis for arguing that age 21 is the normal expected period for a normal health child to be able to recover loss of financial support. Suggested by Dave Jones.   

          Household Services

Nadeau v. Austin Mutual Insurance Company, 350 N.W.2d 368 (Minn.1984). One of the issues in this case was: “Whether plaintiffs can recover replacement service lost benefits for household services performed by an injured person’s spouse, where no expenses were actually incurred by or on behalf of the injured person.” The injured party was the wife, Ferol Nadeau. The court rejected a special exception for household managers because there was “no indication in the record on appeal that Mrs. Nadeau provided care and maintenance of the home on a full time basis.”

Rindahl v. National Farmers Union Companies, 373 N.W.2d (Minn.1985). One of the issues in this case was whether Mrs. Rindal was entitled to recover for replacement household services even though the Rindals had not hired replacement household services under Minnesota’s No-Fault damages action for injuries in automobile accidents. There is a special exception in the act precluding recovery for household services if replacement expenditures were not made if the injured person “normally, as a full time responsibility,” takes care of the home. Under that circumstance, the person can recover for the “reasonable value of her or his own household services.”  In this case, Mrs. Rindal was employed full time on a 40 hour per week basis, but the Court found that she was “primarily responsible for all housework [and] child care” and thus qualified to recover damages for her lost household services. 

         Annuities, Periodic Payments and Reversionary Trusts

Nelson v. Twin City Motor Bus Company, 230 Minn. 276; 58 N.W.2d 561 (Minnesota 1953).  The Minnesota Supreme Court cited the value of annuity as relevant to providing needed life care as follows: “According to the testimony the reasonable charge for nursing services of the character needed is one dollar an hour or eight dollars per day or $2,920 a year. The present value of a life annuity of $2,920 for a 71 year old woman is $16,627.06.” 

          Admissibility of Expert Testimony

Berg v. Degreeff, 1993 Minn. App. LEXIS 409.  The Minnesota Court of Appeals allowed Dr. Karl Egge to project lost earnings both on the basis that a decedent would have become president of his father’s company and that he would not have been able to do so.

Goeb v. Tharaldson, 615 N.W.2d 800 (Minn. 2000). Retained Frye-Mack standard, rejecting Daubert  as more liberal than Frye. Frye refers to Frye v. United States, 293 F. 1013 (D.C. Cir. 1923). Mack refers to State v. Mack, 292 N.W.2d 764 (Minn. 1980).  The court said: “[B]ecause Daubert stresses a more liberal and flexible approach to the admission of scientific testimony, it has been viewed as relaxing the barriers to the admissibility of scientific evidence. . . Daubert takes from scientists and confers upon judges uneducated in science the authority to determine what is scientific. . . By comparison, the Frye general acceptance standard ensures that the persons most qualified to assess scientific validity have the determinative voice.” 

Prectel v. Gonse, 396 N.W.2d 837 (Minnesota 1986). The Minnesota Supreme Court affirmed the trial court’s decision to allow the testimony of Dr. Karl Egge, the plaintiff’s economist. “Dr. Egge, an economist, offered his opinion that a married woman between the ages of 40 and 54 who is employed outside the home and has a child approximately 16 years of age provides approximately $8,000 worth of services to the family per year. He based his opinion on a study by Gaugher and Walker entitled “The Dollar Value of Household Work.”

ZumBerge v. Northern States Power Co., 481 N.W.3d 103 (Minn. App. 1992). The Minnesota Court of Appeals upheld the admission of testimony by Dr. Michael Behr. “The trial court found that Dr. Behr was a qualified economist, and while his methodology was apparently unique, no evidence indicates that it was invalid. Dr. Behr explained in great detail on direct and cross examination how he reached his conclusions and why he made the assumptions he did.”

      No Fault Automobile Insurance Act 

Hoper v. Mutual Service Casualty Insurance Company, 359 N.W.2d 318 (Mn. App. 1984). This decision in a No-Fault insurance claim held that: “The Hopers are not entitled to replacement services benefits for services performed by a new wife and stepmother for which survivors incurred no expenses. Nor have they shown a loss of contributions of money or other tangible things of value due to the death of Bonita Hoper.” The decision involved the death of  farm wife Bonita Hoper in an automobile accident that also killed two of the three Hoper children. Her husband remarried and his new wife Doris took over the essential functions performed by his previous wife Bonita. The Court indicated that the Minnesota No-Fault provision for survivor’s replacement services is based on the Uniform Act (UM-VARA), which limits recovery to “expenses reasonably incurred.” The trial court had granted recovery for loss of Bonita Hoper’s household services or contribution to farm income, which was reversed. The Hoper court added that “tangible things of economic value” could have been claimed, “including vegetable garden produce, proceeds of a household business, such as crafts or day care, or labor furnished to the farm business.  The Court, however noted that the “Hopers did not attempt any valuation of such items, relying instead on the theory that Marla Hoper has lost her mother’s one-half share of the farm income.” The Court, however, pointed out that there was no loss of farm income. In this case, the plaintiff had presented testimony of vocational expert Warren Green and the defense had presented testimony of economist “Dr. Knighton” (his first name “Daniel” was not given in the decision). The decision cited cases in Michigan and Kentucky that had reached similar conclusions about “expenses reasonably incurred.”

      Legal Procedure

Kroning v. State Farm Insurance Company, 567 N.W.2d 42 (1997). This decision of the Minnesota Surpreme Court does not specifically mention the “curative admissibility" exception to the collateral source rule, but provides an illustration of how that exception works. The dissent provides extensive discussion of the meaning and history the collateral source rule in Minnesota. The case involves an automobile injury to a husband that rendered him unable to work. His testimony, which was not apparently at issue, was that he was forced by his injury into earliler retirement with the effect that his retirement benefits were smaller than he had planned to have. The wife's testimony, which was at issue, was very emotional and suggested that the Kronings were in "dire financial straights." The defense was allowed to breach the collateral source rule to show that her comments about the "dire financial straights" were not correct because of payments from collateral sources. That is the "curative admissibility" exception to the collateral source rule. The dissent focused on whether her comments reached the point that the exception should have been invoked.

      Hedonic Damages and Emotional Services

Cruz v. Harris, 1999 Minn. App. LEXIS 741 (MN App. 1999). “In reviewing a compensatory damage award, the following factors are relevant: past and future pain, permanent disability, life expectancy, ability of plaintiff to follow his usual occupation, loss of earning power, the effect on plaintiff’s enjoyment of the amenities of life, degree of disfigurement, and the inflationary trend of the economy. . . No finding were made regarding past pain, permanent disability, life expectancy, ability of respondent to pursue her occupation, loss of earning power, enjoyment of the amenities of life, disfigurement or inflation. The district court’s only pertinent finding was that the respondent still suffered from a sore shoulder. . . Here, the findings of fact do not support the district court’s conclusion that respondent suffered $100,000 in compensatory damages. We reverse the award of compensatory damages.” Suggested by David Jones.

Fussner v. Andert, 261 Minn. 347 (Minn. 1962). This decision expanded the concept of “pecuniary loss” to include the loss of advice, comfort, assistance and protection of the decedent, even if a minor child.  This decision, however, did not address the “investment theory” that loss could be valued by the amount of parental investment in the child.

Gravley v. Sea Gull Marine, Inc., 269 N.W.2d 896 (Minn.1978).  The Minnesota Supreme Court reaffirmed that to include the loss of advice, comfort, assistance and protection of a decedent is a part of pecuniary damages, but specifically rejected the theory that parental investment in raising a child measures that pecuniary value, saying: “A child, however, is not a monetary investment, and we do not find the analogy persuasive.” 

Leonard v. Parrish, 420 N.W.2d 629 (Minn.App. 1988). Held that a specific instruction on loss of the enjoyment of life was not necessary because it was covered under the general instruction on damages.

Polyak v. Reus, Inc., 1990 Minn. App. LEXIS 815 (MN App. 1990). “Minnesota Courts have never recognized loss of enjoyment of life as a separate element of damages . . . There is no Minnesota authority for a specially worded instruction on loss of enjoyment of life and we decline to impose such a requirement here. . . Dr. Smith would have testified about how to calculate damages for loss of enjoyment of life. Because Polyak’s evidence consisted of his emotional reaction to the shooting and not loss of enjoyment of life, thre was no foundation for Dr. Smith’s testimony. . . Therefore the trial court’s exclusion of Smith’s testimony was proper." Suggested by David Jones.

Youngquist v. Western Nat’l Mut. Ins. Co., 716 N.W.2d 383 (Minn. App. 2006). The Minnesota Court of Appeals affirmed the trial court decision that loss of future aid, advice, comfort, and companionship should be reduced to present value in contrast to damages for future pain, future disability and future emotional distress, which are not reduced to present value. The district court had reasoned that future aid, advice, comfort and companionship were “services” within the meaning of the Minnesota Wrongful Death Act and not like future pain, future disability and future emotional distress in that regard. Suggested by David Jones.

Mississippi

             Basis Income and Fringe Benefits for Projecting Earnings Loss

Wells v. Tru-Mark Grain, Inc., 2004 Miss. App. LEXIS 1085 (Miss. App. 2004). This case involved the wrongful death of a 17 year old boy, for which the jury awarded $270,000 in damages, but found defendants only 30 percent liable, for jury verdict in the amount of $81,000. The plaintiff mother of the decedent had presented testimony by Dr. Robert Culbertson, “an economist who performed a loss of earning capacity analysis. Culbertson determined that Roderick had a life expectancy of at least fifty-two more years. Culbertson further concluded that, based on Roderick’s grades and basketball ability, he would have attended college, entered the workforce after graduating, and worked approximately forty-two years. Culbertson noted that he did not take into account a professional basketball career in determining Roderick’s loss of earning capacity. Culbertson determined Roderick’s net loss of earning capacity as a result of his death to be $1,413,304. On cross examination, Culbertson admitted that it sounded reasonable for the work life expectancy to be ten years less than he had stated originally, or thirty-two rather than forty-two years. Culberson also agreed that only one in three college scholarship basketball players actually graduate. Furthermore, Culbertson did admit that he based Roderick’s post-college starting salary on jobs related to engineering, chemistry, mathematics and physics. According to Culbertson, the starting salary for a graduate in humanities would be about $40,000 and the social sciences would be about $38,000.

             Life and Worklife Expectancies.

Wells v. Tru-Mark Grain, Inc., 2004 Miss. App. LEXIS 1085 (Miss. App. 2004). See under "Basis Income and Fringe Benefits for Projecting Earnings Loss"  

            Household Services

Wooldridge v. Wooldridge, 856 So. 2d 446 (MS App. 2003). This decision involved claims by an ex-wife who had resumed living with her ex-husband for compensation for her provision of household services during the period after the divorce. It also involved the admissibility of expert testimony from a vocational expert regarding the value of her household services. On the first issue, the Court said: “As any freshman economics student knows, services and in kind contributions have an economic value as real as cash contributions. In such situations, where one party to a relationship acts without compensation to perform work or render services to a business enterprise or performs work or services regarded as domestic in nature, these are nevertheless economic contributions....  They are to be valued by reference to the cost of similar services in the marketplace. Where, as here, the man accepted the benefit of such services, he will not be heard to argue that he did not need them and that their economic value should not be considered as the woman’s economic contributions to the joint accumulation of property between them.” (Italics as in the original.) The vocational expert, David Horn, testified that the value of Ms. Woodridge’s  household services and child care was $100,800 based on 70 hours of domestic work per week over a period of from 1983 to 1994. The divorce chancellor reduced that amount to $70,000. The Court of Appeals upheld the decision of the chancellor to admit this testimony.

             Standards for Recovery in Wrongful Death  

Betterton v. Edwards, 2006 U.S. Dist. LEXIS 60629 (N.D. Miss. 2006). This is a judicial memorandum from a federal judge interpreting the Mississippi Wrongful Death Statute prior to the adoption of Mississippi Code Ann. § 11-1-69. Judge Pepper said: “[T]his court is certain that the types of wrongful death damages stated in McGowan [McGowan v. Estate of Wright, 524 So.2d 30] were nonexclusive in nature, especially given the wrongful-death statute upon which McGowan is based allows ‘all damages of every kind.’ Therefore, hedonic damages are available in this case. Mississippi Code Ann. § 11-1-69, prohibiting hedonic damages in wrongful death actions, was not effective until after the instant case was filed.

Campbell v. Schmidt, 195 So. 2d 87 (Miss. 1967).  “We hold that testimony may be introduced to show the remarriage of the widow, after the death of the husband, for which the suit is brought.”

Classic Coach, Inc. v. McBride, 823 So. 2d 517 (Miss. 2002). This case involved the wrongful death of two young men. Larry McBride was 21 and was newly married with an infant son. Matthew Johnson was also 21 but single and survived by his parents and three sisters. C. David Channell, the economic expert for the plaintiffs, projected three potential alternative income streams based on each decedent having minimum wage earnings, earnings of a high school graduate, and earnings of a college graduate. The Court held that it was a rebuttable presumption that each decedent would have had earnings equivalent to the national average as set forth by the U.S. Department of Labor. Based on the evidence provided in the trial, the trial court judge accepted college earnings as most accurate. Chanell had used the same 30% reduction for the personal consumption of each decedent based on the Cheit report and rejected defense reports based on 67% personal consumption. The Supreme Court found that the verdict was large, but “we are not able to say that the amount of the verdict was the result of passion, prejudice or corruption.”   

Greyhound Lines, Inc. v. Sutton, 765 So. 2d 1269 (Mississippi 2000). This decision involved the wrongful death of three children. The plaintiff had retained Carroll David Channell as its economist, while the defense had retained Kenneth J. Boudreaux. Channell had projected real wage growth of 0.87% per year and used a personal maintenance factor of 30 percent from the Cheit tables, starting from average earnings of a high school graduate “plus the employer paid portion of social security adjusted for taxes.”  Boudreaux had projected wage increases of 5 percent a year, starting from $8,000, with a 94 percent personal consumption rate based on the Statistical Abstract. The decision does not mention what discount rate Boudreaux used.  The key issues at stake were: (1) How should the future income of a minor child be projected; and (2) How should personal consumption be determined?  On the first issue, the Court said: “[W]e hold that in cases brought for the wrongful death of a child where there is no past income upon which to base a calculation of projected future income, there is a rebuttable presumption that the child’s income would have been the equivalent of the national average as set forth by the U.S. Department of Labor.” On the second issue, the Court held that personal consumption should be  be subtracted from lost earnings, but that the percentage to be subtracted should be “determined solely by the finder of fact.” At issue was whether personal consumption should be based on possible future families of minor children or not.  The Court indicated that this was up to the trier of facts.

Jones v. Shaffer, 573 So. 2d 740 (Mississippi 1990). This decision involved the wrongful death of a 22 year old man. The economic expert for the plaintiff, Dr. Paul Oliver testified that Jones had a worklife expectancy of 41 years with a present value of $171,000 based on a 26 percent personal consumption rate. Oliver was asked by defense to reduce lost earnings by 40% and by 67% for personal consumption. The jury was awarded nothing for the net loss of earnings of Jones, which was one reason the Mississippi Supreme Court gave for reversing the trial court decision.    

McGowan v. Estate of Wright, 524 So.2d 30 (MS 1988). This decision sets out the damages available in a wrongful death case under Mississippi Code ann.§ 11-7-13 (Supp. 1984) prior to the adoption of Mississippi Code Ann. § 11-1-69, effective 1/1/02, as follows: “[I]n a wrongful death action the party or parties suing shall recover such damages as the jury may determine to be just, taking into consideration all the damages of every kind to the decedent and all the damages of every kind to any and all parties interested in the suit. The statutory language has been held to include: (1) the present net cash value of the life expectancy of the deceased, (2) the loss of companionship and society of the decedent, (3) the pain and suffering of the decedent between the time of injury and death, and (4) punitive damages.”

Nowell v. Universal Electric Company, 792 F.2d 1310 (5th Cir. 1986). This decision interpreted Mississippi law regarding the effect of remarriage on a wrongful death action. Mississippi is among the minority of states allowing remarriage to be considered by the jury in awarding damages. The 5th Circuit cited the decision of the Mississippi Supreme Court in Campbell v. Schmidt, 195 So. 2d 87 (Miss. 1967) in reaching its conclusion. Submitted by David Jones. 

Spotlite Skating Rink, Inc., v. Barnes, 2008 Miss. LEXIS 322 (Mississippi 2008). This decision was in response to an appeal by the defendant of an award of $600,000 in the death of a ten year old girl. The defense argued that the testimony of Dr. George Carter was unreliable. The Court indicated that the standards for calculating loss in the death of a child was set out in Greyhound Lines, Inc. v. Sutton, 765 So. 2d 1269, 1277 (Mississippi 2000), in which the Court had held that there is a rebuttable presumption that the deceased child’s income would have been the equivalent of the national average as set forth by the United States Department of Labor. The Court said: “Dr. Carter testified that the net present value of the life expectancy of Bianca was $502,379. To arrive at this figure, Dr. Carter reviewed this court’s decision in Sutton. He took the national average income established by the U.S. Department of Labor, multiplied that number by her work life expectancy, and subtracted taxes, personal consumption, and education costs. He then added fringe benefits and entitlement benefits to arrive at his final figure. Dr. Carter was vigorously cross examined, explaining that characteristics specific to Bianca were not included in his analysis. He testified that his results were calculated from the national average, not the average wage for the Mississippi Delta. Dr. Carter explained that his assumption that Bianca would marry and go to college was based on the typical American female. He also testified that he was not told that Bianca had a rare congenital cyst that might have decreased her life expectancy.” Dr. Carter’s testimony had been challenged under Daubert standards, which have been adopted more recently than the Sutton decision. On this issue, the Court said: “This Court’s adoption of Daubert is not a basis for amending Sutton. The Sutton opinion specifically rejects the idea that the income of children should be based on the average income for a person in the community in which they lived. This Court found that this method was ‘unfair and prejudicial’ and would ‘result in potentially disparate recoveries for children from affluent communities . . . as opposed to children from less affluent areas.’”

             Lost Chance of Survival or Recovery

Wolfe v. United States, 2010 U.S. Dist. LEXIS 31813 (S.D. Miss. 2010). The Court held that: “Under Mississippi law, in order to establish a legal ‘causal’ connection the plaintiff must show that the claimed proper treatment (in a medical malpractice case) . . . would have provided him with a greater than fifty percent chance of a better result than was in fact obtained (parentheses added, bolding in original).” In this case, a “better result” would have been survival of the decedent if the decedent had been admitted to the medical facility two days earlier in spite of the decedent’s refusal to be admitted to the facility.

             Life Care Plans and Future Medical Expenses

Blake v. Clein, 903 So. 2d 710; 2005 Miss. LEXIS 235 (Miss. 2005). Nathaniel Fentress, a rehabilitation counselor testified that David Clein would have future medical expenses in the amount of $597,446.50 and $115,200 in future wage loss. The Mississippi Supreme Court added the following footnote: “Although not raised on appeal, and not objected to at trial, this Court cautions against the use of a rehabilitation counselor to determine the present net value of future medical expenses and future wage loss, an area usually reserved for economists.”  

Francois v. Colonial Freight Systems, Inc., 2008 U.S. Dist. LEXIS 648 ( S.D.Miss. 2008). This is a memorandum from Judge William H. Barbour, Jr., ruling on various motions in limine, one of which was directed at plaintiff’s life care planning expert, Nathaniel Fentress for two reasons. The first reason related to underlying medical testimony that the court found admissible in response to a separate challenge, which was therefore rejected. Regarding the second reason, the Court said: “Colonial also seeks to exclude Fentress’s testimony regarding the cost of future home health care on the grounds that it is not supported by an actual estimate but merely ‘the going rate.’ The Court finds that this challenge relates to the credibility of Fentress’s testimony, not its admissibility and, therefore, finds this objection likewise lacks merit.” The court went on to cite Blake v. Clein, 903 So. 2d 710 (Miss. 2005) as having “cautioned against the use of a rehabilitation counselor [(specifically Fentress)] to determine present net value of future medical expenses and future wage loss [because this is] an area usually reserved for economists.” 

             Annuities, Periodic Payments and Reversionary Trusts

Rayner v. Lindsey, Admr., Etc., 243 Miss. 824; 138 So. 2d 902 (Miss. 1962). The plaintiff challenged the admissibility of testimony about income from an annuity. The Mississippi Supreme Court held: “The evidence with respect to annuity value was therefore admissible, but the weight and worth of the testimony is a question for the jury.”

          Hedonic Damages and Emotional Services

Choctaw v. Hailey, 2002 Miss. Lexis 181 (2002). Loss of the enjoyment of life is recoverable in a wrongful death action. A subsequent act of the Mississippi precluded hedonic damages in a death case and precluded an expert witness from testifying about hedonic damages in a personal injury action.

Dorrough v. Wilkes, 817 So. 2d 567 (MS 2002). This decision predates Mississippi tort reform legislation precluding hedonic damages in a death case and holding that there can be no expert opinion about hedonic damages. The Court held that hedonic damages were allowable in a death case if pain and suffering was lengthy before death as in the Dorrough case, but struck the hedonic damages testimony of Robert Johnson after Johnson’s testimony. The jury was told they could award hedonic damages, but should ignore report Robert Johnson’s testimony in arriving at its award.

Kansas City Southern Railway Company, Inc. v. Johnson, 798 So.2d 374 (2001). Allows hedonic damage testimony in a personal injury case at the discretion of the trial court judge. Testimony by Stan V. Smith ruled proper.

K.M. Leising, Inc.et al. v. Butler, 1999 Miss.App. Lexis 591 (1999). Trial court admission of testimony by Stan V. Smith in a personal injury matter was proper. 

Upchurch v. Rotenberry, 1998 Miss. LEXIS 524 (1998). Hedonic damages testimony in a death case was not allowable in a wrongful death action, apparently overturned by Choctaw v. Hailey in 2002

Missouri

         Basis Income and Fringe Benefits for Projecting Earnings Loss

Brickner v. Normandy Osteopathic Hospital, Inc., 746 S.W.2d 108 (Mo. App.1988). In this wrongful death action, there had been a retrial before which several defendants had settled with the plaintiff. One of the co-defendants had settled based on a lump sum, but the other had agreed to a structured settlement. One of the issues in the appeal was to determine the present value of the structured settlement for the purposes of determining the set-off to the jury verdict in the second trial. Dr. Leroy Grossman was the economic expert for the plaintiffs. “In the first jury trial Dr. Grossman that a discount rate of 8.5 percent should be used to determine the present value of James Brickner’s future loss of wages. At the hearing to determine the present value of the structured settlement, he used a discount rate of 11 percent.” The court said: “We see no inconsistency in the use of different discount rates for different purposes. Dr. Grossman explained that in calculating the present value of future wages during the contemplated work-life of James Brickner, the 8.5 percent was not based upon current interest rates. Rather, it is an assumed figure based upon his expertise and experience, of the average interest rates available on secure investments over the next 30 years. Present value of future earnings is determined by application of the difference between this assumed discount rate and assumed wage increases, which is a ‘net discount rate.’ See Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523, 536-51, 103 S. Ct. 2541, 76 L. Ed. 2d 768 (1983). Since there is historically a correlation between the fluctuations of interest rates and wage increases, the real net discount rate will remain constant regardless of possible error in assumptions. On the other hand, the calculation of the present value of a structured settlement, according to Dr. Grossman, is based upon ascertainable fact: the rate of interest payable on a particular type of investment on the date of the settlement.  The interest rate on high grade tax-free municipal bonds at the time of the structured settlement in this case was approximately 11%.”

Graves v. Atchison-Holt Electric Coop, 886 S.W.2d 1 (Mo. App.1994). The decision involved whether a survey conducted by Christopher Pflaum that was described in some detail in the decision had directed the standard of care in a way that was contrary to the court’s instruction. The court of appeals held that the survey did not violate the court’s instruction.

Firestone v. Crown Center Development Corporation, 693 S.W.2d (Missouri 1985).  Harold Goldstein was the economist for the plaintiff and Gerald Olson was the economist for the defense. The Missouri Supreme court’s failure to understand that Dr. Goldstein’s 1.6 percent discount rate was a “more than offset” discount rate is interesting, as is the Court’s probable failure to understand that Gerald Olson’s 9.5 percent discount rate (in 1985) was probably his nominal discount rate and not comparable to Goldstein’s net discount rate.

Lorentz v. Missouri State Treasurer, 72 S.W.3d 315 (Mo. App. 2002).  The decision discusses the testimony of vocational experts James England for the defense and James Israel for the plaintiff before an administrative law judge.

Spain v. Brown, 811 S.W.2d 417 (Mo. App. 1991). In this case, Dr. Leroy Grossman based his calculations of damages on the earnings of two selected chiropractors who had very high earnings and found the present value of the plaintiff’s lost earnings to be between $2,650,772 and $3,876,860. Defendants appealed the admission of Dr. Grossman’s testimony as not “representative” of earnings of chiropractors and “without foundation.” The appeals court held that it was not an abuse of discretion for the trial court judge to have allowed Dr. Grossman to present a projection based on two specific chiropractors who had done much better than average.

Wolfe v. Kansas City, 334 Mo. 796; 68 S.W.2d 821 (Mo.1934). This decision described the meaning of “earning capacity” in Missouri: “It seems plain that wrongful interferen