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.