Decisions Involving FELA, Maritime and Warsaw Convention Damages
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.
Court of Appeals
Court of Appeals
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.
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.
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.
District Courts in the 2nd Circuit (CT, NY, VT)
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.
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.
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."
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). 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.
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). Concluded that to the extent that certain items were not medical expenses but devices to alleviate physical suffering or mental anguish, they duplicated a separate award for "pain and suffering, bodily injury, mental anquish, and loss of the capacity for the enjoyment of life." Discusses taking into account taxation of a future earnings award. This could 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 tex exempt instruments as considered in Flannery v. United States.
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).
District Courts in the 5th Circuit (LA, MS, TX)
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
Court of Appeals
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.
District Courts in the 6th Circuit (KY, MI, OH, TN)
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.
District Courts in the 7th Circuit (IL, IN, WI)
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.
District Courts in the 8th Circuit (AR, IA, MN, MO, NE, ND, SD)
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.
Court of Appeals
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).
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.
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.
District Courts in the 9th Circuit (AK, AZ, CA, HI, ID, MT, NV, OR, WA, Guam, Northern Mariana Islands)
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.
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.
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.
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).
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.
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.
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.
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.”
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.
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.”
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.
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.
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.
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.”
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.
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.
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. A subsequent act of the Mississippi legislature held tht hedonic damages testimony by an expert witness is not permissible in Mississippi.
Adams v. Burlington Northern Railroad Company, 865
S.W.2d 748 (Mo.App.W.D. 1993). Held that
employer payments of Railroad Retirement Taxes and Medicare Taxes
cannot be treated as proxies for benefits lost by an injured railroad
worker. Mandated that lost benefits must be calculated on the basis of
the defined benefit formula for those benefits. Implied that Railroad
Retirement Taxes and Medicare Taxes paid by the employee were taxes in
the normal meaning established by Liepelt
and Pfeifer. Explicates as dicta the "doctrine of curative
admissibility" as possibly applying to this case if the defense had
preserved this issue on appeal. The suggestion was that the plaintiff
by presenting testimony about the employer costs of benefits might have
opened the door for the "curative admissibility" by the defense of
explaining what benefits would actually be lost.
First Nat’l. Bank of Fort Smith v. Kansas City Southern Ry., 865 S.W.2d 719 (Mo. App. 1993). The testimony of Wilbur Swearingen, a life care planning expert, was held inadmissible even though the court ruled that Swearingen was qualified to testify. The issue was he foundation for Swearingen’s assumption that the needs motivating the life care plan would exist in the future. The Court said: “It is not enough for the doctor to testify to the possibility of a certain result; his testimony should show that it is reasonably certain to follow the injury. Consequences which are contingent, speculative, or merely possible are not proper to be considered by the jury in ascertaining the damages, for it would be plainly unjust to compel one to pay damages for results that may or may not ensue and which are merely problematical.”
Ingle v. Illinois Central Gulf Railroad Company, 608 S.W.2d 76 (Mo. App. 1980). This decision was reached very shortly after Norfolk & Western v. Liepelt, 444 U.S. 490, 100 S. Ct. 755 (1980) and held that Liepelt should be applied retrospectively to this case. Liepelt held that taxes should be subtracted from lost earnings, but had done so to prevent juries from adding to damages to cover taxes that would not be subtracted. The court held that the awarded damages in this case had not been the kind of excess Liepelt was designed to prevent and affirmed trial court decision in spite of the failure to subtract taxes.
Kauzlarich v. The Atchison, Topeka, and Sante Fe Railway Company (en banc), 910 S.W.2d 254 (Missouri, 1995). This decision reversed the trial court and the Missouri Court of Appeals and remanded the case for a new trial on damages. The trial court had refused the railroad’s request for a jury instruction that an injured railroad worker was required to mitigate his damages in the grounds that such an instruction was not included in the Missouri jury instruction MAI No. 8.02. The Missouri Supreme Court discussed at some length the U.S. Supreme Court decision in St. Louis Southwestern Ry. v. Dickerson, 470 U.S. 409, 105 S.Ct. 1347 (1985), in which the U.S. Supreme Court in a Missouri case had ruled that federal substantive law applied in FELA cases, not state law. Based on federal substantive law, the Kauzlarich Court held that the railroad was entitled to a jury instruction like the one requested by the railroad that: “With respect to any claimed loss of earnings, if you believe that the plaintiff failed to act as an ordinary prudent person and failed to minimize his damages, you must not award plaintiff such damages as might have been prevented by reasonable efforts on his part.” Suggested by Kurt Krueger and John O. Ward.
Melton v. Illinois Central Gulf Railroad Co., 763 S.W.2d 321 (Mo. App. 1988). The defendant railroad sought a setoff against any jury award to Melton for the contributions of $48,650.26 for payments previously made by it to the Railroad Retirement Board in Melton’s behalf for disability benefits which he had received. The railroad argued that payments made under the Railroad Retirement Act should be set off just as payments under voluntary disability plans are deductible. The court held that “Railroad was responsible for these contributions to which respondent was entitled under the Railroad Retirement Act whether or not he was injured on the job.” Citing Folkestad v. Burlington Northern, Inc, 813 F.2d 1377 (9th Cir. 1987), on the meaning of section 5 of the Railroad Retirement Act, the Melton Court said: “The court further related that the statute in part codifies the common law collateral source rule which prevents a tortfeasor (the employer) from reducing its liability by payments that the injured party has received from sources collateral to the tortfeasor . . .the court specifically stated that payments under the Railroad Retirement Act, a social program funded by collections from the employer and the employee and to a limited extent from the general public, and designed to facilitate the retirement of elderly railroad employees, were likewise deemed to come from a collateral source.”
Moore v. Missouri Pacific Railroad Company, 825 S.W.2d 839 (Missouri 1992). In testimony, the plaintiff stated in testimony that he did not have money to pay for therapy. The trial court held that this opened the door for testimony about collateral sources that would have paid for his therapy and allowed such testimony. The Missouri Supreme Court upheld the decision of the trial court to allow testimony about collateral sources that would ordinarily not have been allowed. Suggested by Kurt Krueger and John O. Ward.
Ramsey v. Burlington Northern, 2004 Mo. App. LEXIS 149 (Mo.App. 2004). The Court held that if a plaintiff does not claim lost retirement benefits from the Railroad Retirement System, Railroad Retirement Board payroll taxes do not have to be subtracted from lost earnings.
Bell v. Montana Rail Link, 1994 Mont. Dist. LEXIS 613. (Mt. Dist. 1994). Hedonic damages cannot be recovered in a Wrongful Death Action.
Dallas v. Burlington Northern, Inc., 212 Mont. 514; 689 P.2d 273 (Mont. 1984). There are two interesting observations in this decision. First, the Dallas Court ruled that failure to give the instruction that the award was not taxable did not constitute reversible error in spite of Norfolk and Western RR v. Liepelt, 444 U.S. 490, 100 S.Ct. 755 (1980) since the jury had awarded the exact amount recommended by the economist. The Dallas Court went on to conjecture that the U.S. Supreme Court in Liepelt felt that the jury was adding amounts to the trial court award to account for future tax liabilties. The Liepelt jury had awarded $775,000 for lost earnings even though the plaintiff’s own economist had projected lost earnings at $302,000. The second observation of interest was the discussion of “reasonable medical certainty:” “Although we still formally adhere to a “reasonable medical certainty” standard, the term is not well understood by the medical profession. Little, if anything, is ‘certain’ in science. The term was adopted in law to assure that testimony received by the fact finder was not merely conjectural but rather was sufficiently probative to be reliable. We are striving for, what in fact, is a probability rather than a possibility.”
Gulf, Colorado & Sante Fe Railway Company v. Hampton, 358 S.W.2d 690 (Tex. Civ. App. 1962). The Texas Court of Civil Appeals held that annuity evidence was permissible in a damages context, citing the decision of the Texas Supreme Court in Houston and Texas Central Railway Company v. Willie, 53 Texas 318 (1880), as follows: “If compensation for lessened ability to labor be assumed as the true measure of actual damages, then it would seem that it should not be such a sum as would bring an annual interest corresponding to the annual value of this lessened ability, leaving the principle sum still belonging to the plaintiff after his death, although he had then become wholly incapacitated for labor; but would be an amount which would purchase an annuity equal to this interest, during the probable life of the plaintiff, calculated upon a reliable basis of the average duration of human life.”
McGuire v. Ensco Marine Company, 136 F. Supp. 2d 650 (S.D. Tex.2001). This is one of a number of reported decisions of Judge Samuel B. Kent in which Dr. Kenneth McCoin was the plaintiff economic expert and Dr. James Yaeger was the defense economic expert. This was a Jones Act decision. The Court positively cited Dr. McCoin’s report as using an appropriate “below market” discount rate and excoriated Dr. Yaeger’s “flawed” methodology as projecting an income figure for 1998 that was below “what Plaintiff actually earned through the middle of November that year.” The court went on to say: “Dr. Yaeger was not even aware of Plaintiff’s daily wages at the time of the accident or what changes there have been to Ensco Captain and Relief Captain’s wages since November 1, 1998. In short, this Court does not find Dr. Yeager’s testimony or economic analysis either reliable or persuasive.”
SeaRiver Maritime v. Pike, 2006 Tex. App. LEXIS 4904 (Tex. App. 2006). SeaRiver appealed the trial court decision to allow Dr. Robert Voogt to testify, relying significantly on the exclusion of Dr. Voogt in the case of Norwest Bank v. K-Mart, 1997 U.S. Dist. LEXIS 3426 (N.D. Ind. 1997). The Court held that: “Norwest is plainly distinguishable. As we read Dr. Voogt’s testimony, his approach in this case avoided the mistakes in Norwest. He based much of his cost evaluation upon the records and recommendations of the treating physicians. Unlike Norwest, other qualified health care providers testified and related many of the components of the health care plan. Further, unlike Norwest, SeaRiver also provided health care evidence through its own life care expert. The pharmaceutical prescriptions were based on Pike’s past treatment history, which Voogt delineated. Taken as a whole, Dr. Voogt demonstrated special knowledge concerning most of the very matters on which he gave an opinion. . . . Under these circumstances, we cannot say the trial court abused its discretion by refusing to exclude the totality of the expert’s testimony.” (Parts of Dr. Voogt’s testimony were excluded, but those parts were not part of the appeal.)
Webb v. Ensco Marine, 135 Supp. 2d 756 (E.D.Tex 2001).
This is a maritime personal injury lawsuit. The plaintiff presented
expert economic testimony by Dr. Kenneth McCoin , while
the defense presented expert economic testimony by Dr. James Yeager.
This is a decision by Judge Howell Cobb and his decision itemizes and
evaluates differences between the economic experts on base earnings,
fringe benefits, real growth rates, and discount rates. Judge Cobb also
accepted McCoin’s calculations for
household services and future medical care, which were not evaluated by
Dr. Yaeger. In evaluating Dr. Yeager’s
projection of wage growth, Judge Cobb said: “Dr. Yeager, on the other
hand, testified that while Webb would have had a real increase in wages
of approximately point five percent (0.5%) through 2006, for the
following ten years he dcould expect real
wage decreases of one point three percent (1.3%) and for the year after
that a real wage decrease of two point eight percent (2.8%). The Court
finds Dr. Yeager’s testimony on this issue not to be credible. First,
Dr. Yeager testified that he obtained these figures from a federal
government report whose name he could not cite. Dr. Yeager
admitted he did not know how the federal government
gathered this data or whether it was reliable. He further
admitted that the federal government had not reached these conclusions
about real wage decreases, but these were opinions he drew from the raw
data allegedly accumulated by the federal government. Dr.Yeager admitted that he had not subjected his
interpretation of raw data to the rigorous process of peer review and,
to his knowledge, only one economist had. The Court shall not mention
that economist’s name, other than to say he has previously testified in
my court and the Court did not find him credible. While I did not
strike Dr. Yeager’s testimony on these matters, as requested by
Plaintiff, the Court does not find it credible and rejects it.”