Legal Decisions Developed in 2016

February 3, 2016

Buccina v. Grimsby, 2016 U.S. Dist. LEXIS 9224 (N.D. Ohio 2016). Judge James C. Carr held that “there appears to be no uniform maritime rule governing the admissibility of contractual discounts, and that it is not inappropriate for a federal court exercising admiralty jurisdiction to look at state law for guidance.” At issue was the ruling of the Ohio Supreme Court in Robinson v. Bates, 112 Ohio St. 3d 17 (2006) that “the difference between amount billed and the amount accepted for medical services is not a ‘payment’ for purposes of the collateral source rule. Judge Carr indicated that “I . . accept that the Ohio Supreme Court’s holding that such write-offs do not constitute a benefit from a collateral source.” Other states have held that write-offs of the difference between amounts billed and amounts actually paid for medical services are a secondary insurance benefit that qualifies as excluded by the collateral source rule.

Nieman v. Illinois Central Railroad Company, 2015 IL App (1st) 143098-U; 2016 Ill. App. Unpubl. LEXIS 61 (Ill. App. 2016). James Niemann had been terminated from railroad employment prior to filing an FELA claim based upon repetitive injury. The trial court granted a plaintiff motion in limine to exclude testimony of Dr. Gary Skoog that did not include loss of earnings past the date of Nieman’s termination. Dr. Stan Smith calculated Nieman’s loss of earnings based upon both railroad earnings and non-railroad earnings through age 67 to have a present value of $1,869,695. Smith’s analysis was apparently based upon the assumption that Nieman could have found earnings equivalent to railroad earnings outside the railroad industry. The court of appeals cited Terry Cordray, the plaintiff’s vocational expert, to the effect that Nieman had no transferable skills outside the railroad industry. The court of appeals said: “Thus, evidence of projected railroad wages beyond the date of Nieman’s termination from railroad employment by Smith was not admissible in a retrial on the issue of damages only.” In the retrial, Smith was excluded from testifying in the retrial on damages trial regarding lost earnings after the date of termination. Since Skoog had been excluded by the trial court from testifying because he had limited losses to the date of termination, Skoog would presumably be permitted to testify in the retrial given that the court of appeals limited potential earnings loss damages to the termination date used by Skoog.   

Moorhead v. Crozier Chester Medical Center, 564 Pa. 156; 765 A.2d 786 (PA 2001).  The Pennsylvania Supreme Court affirmed a trial court decision that the plaintiff could recover the amount actually paid for medical services following her injury. The parties had stipulated as to the amount paid by Medicare and accepted by the defendant as payment in full for medical services at $12,167.40. The issue was whether the plaintiff was entitled to recover for amounts originally billed by the defendant for those services at $108,668.31. The Pennsylvania Supreme Court held that the collateral source rule did not apply to the original charge since that amount was not paid by any collateral source. The Supreme Court said:    Clearly, Appellant is entitled to recover $ 12,167.40, the amount which was paid on her behalf by Medicare and Blue Cross, the collateral sources. See Restatement (Second) of Torts § 920A(2), supra, note 2. But the essential point to recognize is that Appellee is not seeking to diminish Appellant's recovery by this amount. Rather, the issue is whether Appellant is entitled to collect the additional amount of $ 96,500.91 as an expense. Appellant did not pay $ 96,500.91, nor did Medicare or Blue Cross pay that amount on her behalf. The collateral source rule does not apply to the illusory "charge" of $ 96,500.91 since that amount was not paid by any collateral source. See McAmis v. Wallace, 980 F. Supp. 181 (W.D. Va. 1997) (collateral source rule did not require that plaintiff recover the amount of the Medicaid write-off since no one incurred the written-off amount); Bates, supra (collateral source rule did not apply to amount written off pursuant to Medicaid contract).

February 17, 2016

Tucker v. United States, 2014 U.S. Dist. LEXIS 160265 (D. OR 2014). This was a personal injury action under the federal Public Vessels Act (PVA). The Court held that this case was controlled by Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523 (1983). Based on that decision, the magistrate judge John V. Acosta held that all damages should be reduced to present value as of the time of the injury, not the time of trial. Plaintiff’s economic expert Dr. Eugene Silverberg had projected present values as of the date of trial. Judge Acosta reduced all damages by five percent by multiplying each damage element calculated by Silverberg by 0.95. Because the PVA did not authorize pre-trial interest, no pre-trial interest was added to the reduced damages elements. Judge Acosta held that the award for past medical damages should not be based upon amounts originally billed by service providers, but amounts actually paid to satisfy those bills, saying: “It is unreasonable to seek reimbursement for amounts that were never paid. Rather, in this court’s view, an award for past medical expenses should be based upon the actual amount expended.” Judge Acosta also rejected the defendant United States request to base future medical expenses on the Workers’ Compensation Medicare Set-Aside Arrangement (“MSA”) based upon testimony from Ro Baltayan, a vocational expert specialist with a certification for Medicare set-asides, to the effect that the application of Medicare set-asides in liability cases was unclear.
February 20, 2016

Salinas v. State Farm Fire and Casualty Company, 2012 U.S. Dist. LEXIS 153962 (S.D. TX 2012). Gary Kronrad was excluded in this case as an expert to testify about punitive damages. The court said:

Courts have determined that experts cannot testify as to what the amount of punitive damages, if awarded, should be. See Voilas v. General Motors Corp., 73 F. Supp. 2d 452, 464 (D.N.J. 1999) ("[T]here are no credentials that could qualify an individual as a punitive damages expert, primarily because the area of assessing punitive damages . . . rests strictly within the province of the jury and, thus, does not necessitate the aid of expert testimony.") (citing Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 24-25, 111 S. Ct. 1032, 113 L. Ed. 2d 1 (1991) (Scalia, J., concurring) ("[I]t has been the traditional practice of American courts to leave punitive damages (where the evidence satisfies the legal requirements for imposing them) to the discretion of the jury . . . .")). In Voilas, the district court excluded the testimony of an expert who proposed to provide three different approaches for the jury to determine what the expert deemed was a reasonable range for punitive damages. 73 F. Supp. 2d at 463.    

March 4, 2016

Godinez v. Alta-Dena Certified Dairy, LLC, 2016 U.S. Dist. LEXIS 23290 (C.D. CA 2016). The defense successfully argued that there was no legal authority for a “gross up” of taxes to make a plaintiff “whole” under the California Fair Employment and Housing Act (FEHA). The Court said:

[T]his Court finds that a presentation to the jury of possible negative tax consequences resulting from a favorable damages aware is inherently speculative and thus must be excluded in its entirety pursuant to Federal Rule of Evidence 403. In order to proffer such evidence to the jury, Plaintiff would have to establish with “reasonable certainty” what damages Plaintiff would incur.

The Court also noted: “The plain language of the FEHA is . . . silent as to any ‘gross up’ of damages to compensate for any potential negative tax consequences of a lump sum FEHA damages award.”

Nomat v. Motta, 215 IL App (1st) 14102-U; 2015 Ill. App. Unpub. LEXIS 2024 (Ill. App. 2015) This decision of the Illinois Court of Appeals reversed the trial court decision on various grounds. Two grounds were of interest to forensic economists. First, the Court of Appeals rejected the lost earning capacity testimony of Dr. Charles Linke on the ground that Linke had based his projection of lost earnings on pay rates in a job that had been offered to the plaintiff, but the plaintiff had rejected prior to his injury. Second, the trial court had excluded the testimony of Mary Rossi, a certified legal nurse consultant, whose testimony about the reasonableness of medical bills was based on a proprietary software program. The Court of Appeals held that Rossi’s testimony should not have been excluded and should be allowed in a retrial.

April 1, 2016

Galack v. PTS of America, LLC., U.S. Dist. LEXIS 135083 (N.D.GA 2015). Dr. Bruce Seaman was proferred to testify to both the decedent’s lost earnings and a calculation of the decedent’s waking hours (if not killed) times the minimum wage rate of $7.25 per hour as a benchmark for intangible damages that a jury could consider. Judge Harold L. Murphy held that the Georgia Wrongful Death Act allowed recovery for the "the full value of the life of the decedent," which included intangible aspects of life, and said:

Plaintiffs may recover for the intangible aspects of Mr. Galack's life. Dr. Seaman's testimony clearly indicates that his calculation was simply intended to provide an example to the jury. To the extent that Defendants take issue with that calculation or the value that Dr. Seaman used, those matters simply present issues for cross-examination and do not warrant excluding this testimony.

April 11, 2016

Sprester v. Batholow Rental Co., 2016 U.S. Dist. LEXIS 19498 (W.D. TX 2016).  This case involves an appeal from a decision of the magistrate judge not to strike a defense position that the defense

. . should be allowed to present evidence to the jury that Sprester failed to submit his healthcare expenses to a healthcare insurance company, and failed to contract for available insurance benefits, specifically those available under the Affordable Care Act.

The plaintiff argued that this defense position was contrary to the Texas collateral source rule. The defense position was that the failure of the plaintiff to contract for all available insurance benefits constituted a failure to mitigate damages. The Court indicated that this issue could be considered again when this issue came up at trial.

April 12, 2016

Parkview Hospital v. Frost, 2016 Ind. App. LEXIS 68 (IN App. 2016). This case involved a suit by Frost, who was uninsured, charging that Parkview Hospital’s charges for medical services provided to Frost were unreasonably high.  Parkview Hospital had refused to provide information about amounts paid in full satisfaction for the same services by third party providers.. The trial court held that evidence of discounts provided to patients with private insurance or governmental healthcare was admissible and thus held in Frost’s favor. The Indiana Court of Appeals affirmed the trial court, but there was a spirited dissent from Judge Najam.

April 29, 2016

Pontiac National Bank v. Vales, 2013 IL App (4th) 111088; 993 N.E.2d 463 (IL App. 2013). The Illinois Court of Appeals reversed a trial court decision to permit the defense to inquire into a plaintiff’s medical expert’s earnings from expert testimony over the past eight years. The Court of Appeals held that any bias or financial interests of an expert could be adequately exposed if each party was permitted to question the experts for a two year period preceding the existing trial date. The Court of Appeals also held that the plaintiff should have been permitted to show that the attorneys for the defense had retained the expert in the past.  Citing previous decisions of the Illinois Supreme Court, the Court of Appeals said:
In those cases, the supreme court held that it is permissible to cross-examine an expert witness about the amount and percentage of income he generates from his work as an expert witness, the frequency with which he testifies as an expert, and the frequency with which he testified for a particular side, in order to expose any bias, partisanship, or financial interest that may taint his testimony and opinions. . . Nevertheless, cross-examination is not a “free-for-all.” It is not a proper function cross examination to harass expert witnesses or to unnecessarily invade their legitimate privacy. Such unbridled cross-examination discourages reputable professionals from testifying during trial, making it difficult for parties to obtain expert testimony necessary to meet their burden of proof. 

Lee v. City of Richmond, 2014 U.S. Dist. LEXIS 139366 (E.D. VA 2014). Judge Robert E. Payne granted a defense motion to exclude the economic testimony of various witnesses, including economic experts Chad L. Staller and James Markham. Judge Payne’s exclusion of Staller and Markam was based upon their use of unrealistic assumptions about the future earnings of Jatayun Trayvon Fleming, who was shot and killed by Richmond police. Judge Payne said, in part:

Staller and Markham assume that, from 2011 onwards, Fleming's income would bear a reasonable resemblance to that of an average 22-year-old individual with a high school education. They do not even acknowledge that Fleming's past income was drastically less than their averages would suggest, much less attempt to explain why the factors which had depressed Fleming's earnings in the past would not affect him in the future. Indeed, there is no indication that Fleming suffered from any temporary disability or circumstances beyond his control. His history appears to have been a function of his limited work ethic and criminal activities, and no one, not even Staller and Markham, has suggested that Fleming was in the process of rehabilitating himself as a productive member of society.
It is this refusal to distinguish Fleming's employment history, together with the inability to reconcile the future income projections with past amounts of documented income, that leads the Court to conclude that Staller and Markham's proposed testimony about Fleming's lost future earnings is speculative and conjectural, based on unrealistic assumptions, and not the product of reliable methods and principles. Therefore the testimony is inadmissible under Daubert and Rule 702.

May 4, 2016

Alexander v. United States, 2016 U.S. Dist. LEXIS (W.D.WA 2016).  This memorandum decision grants a plaintiff motion to exclude evidence of the plaintiff’s future eligibility for TRICARE medical funding until the plaintiff reached age 21 and then coverage under the Affordable Care Act (ACA) for the remainder of the plaintiff’s life expectancy. TRICARE is provided, in large part, by the United States government, but is partly financed by private contributions. The Court held that partial private funding made TRICARE benefits a collateral source rather than coming from the same source as the defendant United States. The Court also held that evidence of ACA benefits should be excluded for similar reasons.

May 21, 2016

Marlin v. BNSF Ry. Co., 2016 U.S. Dist. LEXIS 29445 (S.D. IA 2016).  The BNSF Railroad withheld $3,698.36 in Railroad Retirement payroll taxes based upon a $75,000 award for injuries while working for the BNSF. This amount was the amount that would have been owed if the $75,000 was treated as wage earnings. Martin relied upon Cowden v. BNSF Ry. Co., 2014 U.S. Dist. LEXIS 91454, in resisting a reduction for payroll taxes from his award, arguing that RRTA (Railroad Retirement Tax Act) does not apply to personal injury awards. The Court considered other decisions on this issue and held that the BNSF wrongfully withheld $3,698.36 from the payment it owed to Martin.

Loos v. BNSF Ry. Co., 2015 U.S. Dist. LEXIS 167603 (D. MN 2015). The BNSF Railroad withheld $3,765 in Railroad Retirement payroll taxes based upon an $85,000 award for injuries while working for the BNSF. This amount was the amount that would have been owed if the $85,000 was treated as wage earnings. Loos relied upon Cowden v. BNSF Ry. Co., 2014 U.S. Dist. LEXIS 91454, arguing that the RTTA (Railroad Retirement Tax Act) does not apply to personal injury awards. The Court ordered that the $3,765 should not have been withheld. This decision also cited Clark v. Burlington Northern, Inc., 726 F.2d 448, 450 (8th Cir. 1984) in holding that BNSF was not entitled to a setoff for amounts paid for medical insurance that paid for the medical expenses resulting from the injury to Loos. The Clark decision had held that: “Medical expenses paid for by insurance are exempt from setoff regardless of whether the employer paid one hundred percent of the insurance premiums.”

Loy v. Norfolk Southern Ry., 2016 U.S. Dist. LEXIS 48824 (N.D. IN).  The Norfolk Southern Railroad withheld $23,838.73 in Tier I and Tier II payroll taxes from a personal injury award of $937,500 won by Low in trial. The Court denied Norfolk Southern’s request to withhold that amount, citing Cowden v. BNSF Ry. Co., 2014 U.S. Dist. LEXIS 91454 and arguing that the RTTA (Railroad Retirement Tax Act) does not apply to personal injury awards.

Liberatore v. Monongahela Ry. Co., 2016 Pa. Super LEXIS 2011; 2016 PA Super 79 (PA Super. 2016). This decision reversed a trial court decision to deny the right of the Monongahela Railroad to withhold $10,521.75 in Tier I and Tier II taxes from an $87,500 award won by Liberatore in a FELA action for earnings loss due to injury while working for the Monongahela railroad. The Superior discussed at some length most of the previous decisions that have been reached for and against railroads subtracting payroll taxes from awards in reaching its opinion, but did not include the most recent three federal district court decisions precluding railroads from deducting payroll taxes. An amicus curiae brief of the U.S. Department of Justice arguing that such taxes should be withheld appears to have played a prominent role in this decision.  

May 22, 2016

Green v. Polyester Fibers, LLC. 2016 U.S. Dist. LEXIS 66746 (N.D. MS 2016).  Judge Sharion Aycock excluded testimony of the plaintiff’s economic expert, Ronald Missun, based upon Mississippi substantive law, which relies upon the federal 5th Circuit decision in Culver v. Slater Boat Company, 722 F.2d 114, 121 (5th Cir. 1983). Missun had used a “total offset” calculation for damages in the Green case. Judge Aycock indicated not understanding what Missun was doing by pointing out that Missun had assumed that the growth rate for medical expenses was 4.8% and the discount rate for medical expenses was 4.8% while the growth rate for earnings was 1.1% and the discount rate for lost earnings was 1.1%. The Culver decision specifically rejected total offset. 

May 28, 2016

Langenbau v. Med-Trans Corp., 2016 U.S. Dist. LEXIS 29996 (N.D. IA 2016). This was a memorandum decision regarding a number of evidentiary motions, including a motion to exclude testimony of economic expert John O. Ward regarding the Value of Statistical Life (VSL). Judge Strand excluded Ward’s testimony as not timely disclosed, but also as inadmissible under Rule 702 because Ward had admitted not being an expert qualified to offer expert testimony about the VSL. Ward’s testimony was also excluded under Rule 403 as confusing and overly prejudicial. Since the standard for damages in a wrongful death action under Iowa law is “the net worth or value of the estate which the decedent would reasonably be expected to have saved and accumulated as the result of her efforts between the time of her death and the end of her natural life had she lived, Ward’s testimony would not be relevant. Judge Strand said: “The VSL opinions would not be helpful to the jurors, because such opinions would have little or no tendency to prove the appropriate individualized amount of wrongful death damages under the proper standard.” Judge Strand added:

Third, even if offered simply as “information” that the VSL is an average that may (or may not) be considered by the jury in reaching its damage award, the VSL opinions are potentially unduly misleading and prejudicial, warranting their exclusion under Rule 403. Offering a dollar figure as the “value” of a life may mislead or invite jurors to grasp at this pseudo-official figure as an easy way to resolve the difficulties of deciding wrongful death damages, and the size of the figure could invite some inflation of a damages award on the improper basis of an emotional response.

The defense had retained Dr. Kenneth McCoin in this case. McCoin admitted during this deposition that the VSL is a “valid” concept, but Judge Strand ruled that this admission could not be “twisted” into an acknowledgment that the VSL is a “valid” basis for measuring damages in a wrongful death action. In footnote 5 of the decision, Judge Strand cited a number of legal decisions based on the VSL concept that reached the same conclusion that Judge Strand had reached.

July 12, 2016

Brooks v. Caterpillar Global Mining America, LLC, 2016 U.S. Dist. LEXIS 87800 (W.D. KY 2016). This is a memorandum denied a defense motion to exclude the testimony of vocational expert Dr. Leonard Matheson and granted in part and denied in part a defense motion to exclude  the testimony of economic expert Dr. Stan V. Smith regarding the economic impact of a crushed hand suffered by Plaintiff Brooks. Brooks was continuing to work as a coal miner, but Matheson opined that Brooks would be unable to do so in the long run, but would be suited to be an over-the-road truck driver. Smith’s testimony was based on a calculation of losses if Brooks was able to remain employed for five years or ten years as a coal miner and then become an over-the-road truck driver. The Court rejected defense claims that Smith’s calculations were speculative. Defense also challenged Smith’s use of a 0% net discount rate based upon Paducah Area Public Library v. Terry. The Court held that federal law permits use of a 0% net discount rate as long as it is not represented as required. The defense also moved to exclude portions of Smith’s testimony that projected earnings loss past work-life expectancy to life’s end. The Court noted that Smith had provided loss of earnings before injury to age 67 and after injury to age 62 on page 13 of Smith’s report, but did not exclude Smith’s testimony about earnings to life expectancy, but excluded testimony by Smith on Kentucky law.

State ex rel. Children, Youth and Families Dep’t v. Mercer-Smith, 356 P.3d 26 (N.M. App. 2015). The New Mexico Court of Appeals held that hedonic damages testimony by Dr. Stan V. Smith was not subject to the Alberico standard for admissibility of expert testimony and therefore that the trial court did not err in admitting Smith’s testimony regarding loss of enjoyment of life.

August 4, 2016

Clanton v. United States, 2016 U.S. Dist. LEXIS 101742 (S.D. IL 2016).  This was a ruling by federal judge Nancy J. Rosenstengel that the fact Medicare was paying for the medical expenses of the injured plaintiff could not be mentioned even though Medicare is part of the federal government and thus the source for funds being used to pay for the medical expenses of the plaintiff. A key issue was the fact that the plaintiff had paid Medicare Part A while working and Medicare Part B after retiring and having Medicare Premiums deducted from his disability payments. Judge Rosenstengel cited a number of prior decisions indicating that Medicare payments in similar cases against the federal government could not be mentioned as a collateral source if a plaintiff had paid any amounts for Medicare taxes, which made the plaintiff himself a collateral source. 

August 22, 2016

Cordova v. BNSF Railway Company, 2014 Cal. App. Unpub. LEXIS 7975 (CA App. 2014).  This decision affirmed a decision of the trial court that the BNSF was not entitled to reduce Cordova’s award based upon withholding Tier I, Tier II and Medicare payroll taxes on the entire amount of the award in a personal injury action. The BNSF had argued that it was required by the Railroad Retirement Tax Act (RTTA) to tax the entire amount of an award as lost future earnings subject to payroll taxes. The RTTA contains a provision suggesting that the value of all benefits received by a worker will be treated as lost earnings if not otherwise apportioned. During the trial the BNSF had asked that the award not be apportioned (divided into amounts for lost earnings, lost fringe benefits and pain and suffering) over the objection of Cordova. The trial court had held that BNSF was responsible for the non-apportionment and therefore must bear the consequences of non-apportionment, affirming the trial court opinion in that regard.

October 3, 2016

Licudine v. Cedars-Sinai Medical Center, et al. 2016 Cal. App. LEXIS 803 (Cal. App. 2016). This case clarifies that reasonable certainty is required for the fact of loss of earning capacity and establishes “reasonable probability” as the standard for determining the value of such a loss. The plaintiff in this medical malpractice action was a college senior, intending to become a human rights lawyer. She graduated on time and was accepted for admission by two law schools, but received medical deferments and worked for two years. Plaintiff’s medical expert testified that future problems “would certainly impact [her] … career choice [and] education,” but more specific evidence regarding “but for” or diminished attorney earnings was not presented. Nonetheless, the jury awarded $285,000 in past economic loss (for a period where the plaintiff claimed she would have been a law student but for her injury) and $730,000 in future loss of earning capacity. The appellate court upheld the granting of a new trial, finding there was no evidence of past lost earnings and insufficient evidence to support the amount awarded for future loss of earning capacity, and holding that although the jury “may infer the fact of a loss of earning capacity … [it] may not infer the amount or extent of that loss from the injury alone.” Future earning capacity must be based on what is “reasonably probable she could have earned.” Also, it found the award of just $30,000 for past and future noneconomic loss suggested juror confusion regarding the verdict form. During the trial phase the plaintiff had requested, unsuccessfully, judicial notice of a BLS printout showing median earnings for attorneys, and the decision discusses this method of introducing evidence, sometimes considered as an alternative to expert testimony. Further, the court said that evidence of bar exam passage rates and employment statistics for a specific law school would not be barred by law during the retrial, but subject to the discretion of the trial judge. This listing was developed by Jennifer Polhemus.