January 11, 2011

Moore v. Health Care Authority, 181 Wn.2d 299; 332 P.3d 451 (WA 2014). In this class action case, the State had argued that lost health insurance of workers entitled to recovery should be based on out-of-pocket costs. The Washington Supreme Court said:

The primary flaw in this underlying assumption is that it refuses to acknowledge that those who are wrongfully denied health benefits suffer damage even if they do not incur direct out-of-pocket medical expenses during that particular time period. In its ruling, the trial court pointed to studies showing that people who do not have health insurance do not obtain routine preventive care, which results in deferred medical problems. More significantly, studies show that those without health benefits even put off necessary care for urgent medical issues. Based on these studies, the trial court concluded that the State's method of calculating damages would result in a “great understatement” of the actual damages.

January 17, 2019

Denny v. Kent County Road Commission, 317 Mich. App. 727; 896 N.W.2d 808 (MI App. 2018). This decision of the Michigan Court of Appeals allows survivors of a decedent to recover their own damages under the Michigan Wrongful Death Act (MCL 600.2922) and for the estate of a decedent to also recover for the lost earnings of the decedent. The Court said:

However, a claim for lost financial support under the wrongful-death statute is not the same as a claim for lost earnings. Specifically, lost earnings are damages that decedent could have sought on his own behalf had he lived, whereas damages for lost financial support would be sought by one who depended on the decedent for financial support. See, e.g., id. Because the damages are distinct, the fact that the wrongful-death statute allows for recovery of lost financial support does not change the character of plaintiff's claim for damages for the decedent's lost earnings.

Williams v. Mercy Clinic Springfield Cmtys, 2019 Mo LEXIS 4 (MO 2019). This decision reversed and remanded a trial court decision. The Missouri Supreme Court held that the Missouri periodic payments statute 538.220.2 as used by the trial court resulting in unconstitutional unfair treatment of the plaintiff. The statute specifies a interest rate to be used to distribute periodic payments that was lower than the interest rate used to reduce future payments to present value, with the result that the plaintiff could not receive the full value of the award determined by a jury. The court said:

The application of section 538.220.2 is unconstitutional as applied to Williams because payment of future medical damages at a different interest rate than the interest rate used to compute the present value of the jury's award deprives Williams of the full value of the award and violates her due process rights.

January 21, 2019

Oden v. Chemung County Indus. Dev. Agency, 87 N.Y.2d 81; 661 N.E. 142 (N.Y.  1995). This was a ruling of New York’s highest appellate court, that a jury award of $66,000 for lost retirement benefits would be more than offset by $141,330 in disability benefits that the plaintiff will receive as the result of his injury. At issue was how the collateral source rule operated within categories of damages. Disability benefits and retirement benefits were deemed to have come from the same source from the standpoint of evaluating lost pension benefits, but the Court was clear that the net gain in pension benefits caused by the injury could not be used to offset losses of health and welfare benefits or lost future earnings. The court said:

[P]laintiff's retirement pension benefits have not been shown to replace the lost future earnings  and health and welfare benefits for which the jury awarded him $80,000.  Rather, those benefits are paid in lieu of ordinary pension benefits and do not necessarily correspond to any future earning capacity plaintiff might have had.  Indeed, it is undisputed that, notwithstanding his retirement as an ironworker, plaintiff would have been free to earn income from his labor in other capacities without loss of his disability retirement pension benefits.  Thus, it cannot be said that the disability pension benefits plaintiff expects to receive are duplicative of the award he received for lost future earnings.

February 1, 2019

Walker v. Spina, 2019 U.S. Dist. LEXIS 5275 (D. N.M. 2019). In response to a motion in limine to exclude the hedonic damages testimony of William Patterson, Federal Judge James O. Browning, interpreting New Mexico law, allowed Patterson to explain the general concept of hedonic damages, but relying upon Smith v. Ingersoll-Rand, 214 F.3d 1235 (2000), limited Patterson’s testimony as follows:

The Court, therefore, will allow Patterson to describe hedonic damages, but not to quantify Walker's hedonic damages, e.g., Patterson may not state that S. Walker's "lost value of the pleasure of life is $102,707" or that she lost $10,000.00 in her value of life, or discuss his worksheet showing his calculations for such figures.

February 5, 2019

Kennedy v. Magnolia Marine Transp. Co., 189 F. Supp.3d 610 (E.D. LA 2016). This decision discussed a claim in a life care plan for “financial management damages,” as follows:

Plaintiff's vocational rehabilitation expert and Certified Life Care Planner, Dr. Cornelius Gorman, has developed a life care plan for plaintiff that includes $692,500 for financial management. Following the April 29, 2016 pretrial conference, the Court issued an order stating that it "will not permit plaintiff to argue entitlement to financial management damages at trial." It further ordered that "[i]f plaintiff objects to this ruling, he shall brief the issue to the Court.  Plaintiff has done so. He argues, in short, that "he is entitled to put on evidence in the form of expert testimony as to whether he will need financial management and why [because], [a]s a practical matter, plaintiff needs financial management assistance if he is awarded a large amount of money." []

Even as a matter of first impression, it is clear that such damages are not permitted in this case. This is not a case in which plaintiff lacks the mental capacity to manage his funds or a case in which the accident diminished plaintiff's mental capacity to manage his funds. Plaintiff may be compensated for medical expenses, for loss of earning capacity, for pain and suffering, and for other damages that defendant caused. Even if the need for financial management can be considered as "damages," a finding this Court does not make, plaintiff cannot be compensated for damages not caused by defendant's conduct. The Court's order regarding financial management stands and plaintiff's claim for such damages should be dismissed.

March 7, 2019

Dutton v. Rando, 2019 N.J. LEXIS 27 (N.J. App. 2019). This decision involved a wrongful death action resulting from an automobile accident. During the decison, the New Jersey Court of Appeals addressed the 1980 New Jersey Supreme Court decision in Green v. Bittner, 424 A.2d 2010 (1980), which specifically allows recovery for the advice, council and companionship the decedent might have provided to survivors. The court said (citations removed):

Under New Jersey law, in cases involving the death of a child, plaintiffs may recover for "the pecuniary value of the child's companionship, including his or her advice and guidance, as the parents grow older. With respect to companionship, "the jury's focus is on the existence of [the parent-child] relationship and the value of the advice, guidance and counsel that inhere in it." "Given a normal parent-child relationship, a jury could very well find it is sufficiently probable, had the child lived, that at some point he or she would have rendered . . . companionship services . . . and advice, guidance and counsel[.]"

Once the parent-child relationship is established, juries should employ "an objective standard for calculating the value of advice, guidance and counsel . . . confined to what 'the marketplace would pay' for lost household services or the services of a business adviser, therapist or trained counselor." "[W]hile pecuniary losses under N.J.S.A. 2A:31-5 cannot be premised on speculation, an exact calculation of the plaintiff's damages may not be feasible in every case."

The 11th Circuit also explicitly held that expert testimony is not necessary to establish the value of lost services of this type.

Bobo v. TVA, 855 F.3d 1294 (11th Cir. 2017).  This decision involves the wrongful death of Barbara Bobo from mesothelioma. With respect to damages, the 11th Circuit vacated the portion of the District Court decision that related to damages. At issue was whether the estate could recover for amounts originally billed or only amounts actually paid in satisfaction of those bills. The District Court had held that the estate could recover for amounts originally billed whether or not actually paid, but the 11th Circuit, interpreting Alabama collateral source rule, held that only amounts paid by Ms. Bobo or her insurers for past medical treatments could be recovered.

March 12, 2018

Jordan v. Ventura, 2019 U.S. Dist. LEXIS 37540 (W.D. AR 2019). This decision involved a personal injury in an automobile accident. Ralph Scott was proffered as an economic expert to testify about the lost earning capacity of Jordan. Scott used the national average earnings for truck drivers to project Jordan’s past and future lost earning capacity. Ventura moved to exclude Scott’s testimony regarding past lost earning capacity. Federal Judge Susan O. Hickey granted the defense motion, saying:

Loss of earning capacity is the loss of the ability to earn in the future." Id. In his report, Scott provides a base rate of income that Jordan would have earned but for this accident. Scott uses the national average for earnings of truck drivers to determine what Jordan would have earned but for this accident and provides a calculation for Jordan's past "lost earning capacity" instead of lost earnings. However, past lost earning capacity is not a recoverable element of damage under Arkansas law. Accordingly, the Court will not allow Scott to testify as to any past "lost earning capacity.

Judge Hickey did not make any ruling with respect to Scott’s calculations for “future lost earning capacity.” The apparent meaning of this decision is that past earnings loss must be based on actual past lost earnings, for which there was no clear evidence, but future earnings loss can be based on future loss of earning capacity, which could conceivably be greater than future expected earnings. 

March 17, 2018

Finney v. Morton, 2019 N.Y. App. Div. LEXIS 1776 (N.Y. App. 2019). This order granted a defense motion to reverse a trial court decision that had awarded damages to the plaintiff for past and future lost household services was reversed on the following basis:     [A]lthough the plaintiff's expert economist valued the loss of the decedent's household services based on a statistical average of services performed in a two-person household, there was no evidence in the record as to the nature and frequency of any services actually performed by the decedent prior to his death. Rather, the record was silent on this issue. In addition, there was no evidence of actual expenditures incurred in replacing whatever household services the decedent may have performed in the past, or of any anticipated future expenditures with regard to such services. Accordingly, the plaintiff should not have been awarded damages for past and future loss of household services since, in the absence of any evidence establishing what services the decedent  actually performed, those awards were speculative and were not warranted by the facts.

Hannibal v. TRW Vehicle Safety Sys., 2018 U.S. Dist. LEXIS 134318 (E.D. AR 2018). This wrongful death action resulting from an automobile accident. The defense challenged the projected value for loss of life damages of the plaintiff by economist Dr. Rebecca Summary, saying:

Dr.[Rebecca] Summary proposes to testify regarding Krista's loss of life damages using a method known as the "value of a statistical life." Arkansas law provides that in addition to other elements of damages, "a decedent's estate may recover for the decedent's loss of life as an independent element of damages." Ark. Code Ann. § 16-62-101(b). The Arkansas Supreme Court has construed the statute to allow for damages that a decedent would have placed on her own life. Durham v. Marberry, 356 Ark. 481, 492, 156 S.W.3d 242, 248 (2004). An estate seeking loss of life damages must present some evidence that the decedent valued her life from which a jury could infer that value and on which it could base an award of damages. One Nat'l Bank v. Pope, 372 Ark. 208, 214, 272 S.W.3d 98, 102 (2008).
No court applying Arkansas law has ruled as to whether expert testimony may be admitted to assist the jury in determining loss of life damages. An overwhelming majority of courts from other jurisdictions, however, have concluded that the methodology adopted by Dr. Summary does not meet the Daubert standards and may not be admitted into evidence. Smith v. Jenkins, 732 F.3d 51, 66 (1st Cir. 2013); Kurncz v. Honda North America, Inc., 166 F.R.D. 386, 388-89 (W.D. Mich. 1996). Dr. Summary explains in her report that the value of a statistical life methodology is based upon the trade-off between risk and money. It involves the assignment of monetary values to death risks based upon how much persons are willing to spend for a small reduction in the risk of death. Dr. Summary's value here is based upon government studies used to assign values to human lives in conducting cost/benefit analyses for potential government projects. The First Circuit in Smith has explained why this is not a reliable methodology for determining the value of a human life. 732 F.3d at 66-67. In addition to being unreliable, Dr. Summary's analysis would not assist the jury in determining what value Krista Hannibal placed on her own human life. It has nothing to do with Krista specifically. Cf. id. at 67 ("Even assuming that Dr. Smith's formula is a reliable measure of the value of life, it was of no assistance to the jury in calculating Smith's loss of enjoyment of life.").
 Dr. Summary will not be permitted to testify regarding loss of life damages based upon the value of a statistical life.

Families Advocate v. Corp. V, U.S. Dist. LEXIS 56845 (D. N.D. 2019). This was an order excluding the testimony of economic expert Dr. Stan V. Smith, who had proffered testimony about loss of enjoyment of life, loss of relationship, loss of advice and counsel, and loss of accompaniment services, all of which were previously recommended for exclusion in a report of the magistrate judge. Federal Judge Timothy L. Brooks said in conclusion:

Dr. Smith's opinions are marinated in a proprietary blend of theoretical "studies" (developed for use in other contexts), and peppered with arbitrary "benchmarks" a la ipse dixit, and, finally, tabulated with present value spreadsheets to give the illusion of forensically precise calculations in D.M.'s specific case. Beyond the illusion, the reality is more akin to hocus pocus. And this Court is certainly not alone in finding Dr. Smith's methodologies suspect and unreliable.1Link to the text of the note Dr. Smith's calculations are based on arbitrary figures and assumptions that are unrelated to the facts of the case. An expert's calculations should be excluded when they are "so fundamentally unsupported that [they] can offer no assistance to the jury." Wood v. Minn. Mining & Mfg. Co., 112 F.3d 306, 309 (8th Cir. 1997) (citations omitted).
The problem here is not so much whether Dr. Smith reviewed and incorporated facts from D.M.'s medical findings, as it is Dr. Smith's unreliable methodology--which cannot be properly applied to the facts in this case, at least not in any meaningful or reproducible manner.

May 1, 2019

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

May 3, 2019

Soria v. United States Bank N.A., 2019 U.S. Dist LEXIS 70068 (C.D. CA 2019). This case involved an injury to the credit of Samuel Soria because of identity theft by an employee of U.S. Bank. The plaintiff economic expert was Dr. Stan V. Smith, who projected losses of credit expectancy and the value of the lost time Soria had spent dealing with inaccurate reporting. The court excluded Smith’s testimony on loss of credit expectancy, describing Smith’s testimony as follows:

According to Dr. Smith, Soria could have borrowed as much as $60,000 in year 2016 dollars. (Dkt. 66-1 [Declaration of Dr. Stan V. Smith] Ex. 1 [Expert Report, hereinafter "Smith Rep."] at 5.) Because Soria's credit score declined from 735-740 to 524, however, Soria would have to pay a higher interest rate to obtain this line of credit. (Id. at 4-6.) Based on a peer-reviewed article that Dr. Smith coauthored, Dr. Smith estimated Soria would pay an increased 12 percent per year in costs as a result of his lower credit score. (Id.) The increased cost would last for seven years, the length of time a delinquency remains on a credit report. (Id.) Based on this, Dr. Smith calculated Soria's loss of credit expectancy to be $28,252.

The Court indicated that this part of Dr. Smith’s testimony was inadmissible because Smith provided no analysis regarding how he arrived at the figure of $60,000, which was significantly in excess of Soria’s annual earnings during the previous three years. However, the Court allowed Smith’s testimony regarding Soria’s allegedly lost time, valued at $27.67 in 2017 dollars, indicating that the hourly value goes to the weight, but not the admissibility of Smith’s testimony. Smith had also calculated hedonic damages for Soria, but the plaintiff had withdrawn that claim before this decision.

Kowalewski v. BNSF Ry. Co., 2019 Minn. App. Unpub. LEXIS 339. (MN App. 2019). This decision held that federal law and not Minnesota state law governed the post-judgement interest rate in FELA cases. The Court also said:

BNSF further argues that Kowalewski's entire award should be taxed as earned income and that amounts be withheld to satisfy taxes required by the Railroad Retirement Act (RRTA). FELA damages for lost wages qualify as taxable compensation under the RRTA. See  BNSF Ry. v. Loos, No. 17-1042, 2019 WL 1005830, at *8 (U.S. Mar. 4, 2019). In this case, however, the jury awarded Kowalewski $15,343,753, but none of that amount was designated as wage loss on the special-verdict form. As such, none of the award need be withheld.

May 20, 2019

Families Advocate, LLC v. Sanford Clinic N, 2019 U.S. Dist. LEXIS 60438 (D. N.D. 2019). This decision of Magistrate Judge Alice R. Senechal to recommend the exclusion of the testimony of Dr. Stan V. Smith on hedonic damages, loss of consortium, loss of guidance and counsel, and loss of accompaniment services. Judge Senechal recommend Smith’s exclusion in all of those areas. Her recommendation that Smith’s testimony be excluded includes several pages describing the opinions of Dr. David D. Jones in support of the defense motion to exclude Smith’s testimony. Judge Senechal’s recommendation to exclude Smith’s testimony was accepted by federal district Judge Timothy Brooks in Families Advocate v. Corp. V, U.S. Dist. LEXIS 56845 (D. N.D. 2019).

Knaack v. Knight Transportation Inc., 2019 U.S. Dist. LEXIS 75480 (D. NV 2019). In this case, the defense had moved to exclude Dr. Stan V. Smith’s testimony about loss of family advice, counsel, guidance, instruction and training services and loss of accompaniment services. Federal Judge Larry R. Hicks denied the defense motion.

Dwyer v. Southwest Airlines Co., 2019 U.S. LEXIS 77844 (M.D. TN 2019). The plaintiff had moved to add a claim for her lost household services, which Federal Judge Aleta A. Traugher denied as “futile” because Tennessee law does not allow recover by an individual plaintiff for her own household services. Judge Traugher conducted a survey and concluded that of the 47 jurisdictions that were represented in the consolidated multidistrict litigation including this case, 17 allowed recovery by an individual for his or her own lost household services, while 30 jurisdictions did not. Judge Traugher, however, went on to say that damage for such losses could be sought as part of the plaintiff’s damages for pain and suffering, and that if the plaintiff’s injuries have required her to pay a third party for services she previously performed for herself, she could seek compensation for such payments as part of her economic damages. 

May 28, 2019

Louisville Sw Hotel v. Lindsey, 2019 Ky. App. LEXIS 91 (KY App. 2019). This decision rejected a defense appeal, but granted the plaintiff’s appeal in this wrongful death action. The jury had awarded punitive damages against the Comfort Inn based upon the death of Chance Brooks, a minor child, but had awarded $0 for the lost future earnings of the child, the pain and suffering involved in drowning, and loss of consortium to the child’s parents. The court held that a trial limited to determining amounts for those damages was necessary. Sara Ford of Vocational Economics had testified at trial that the value of the child’s lost lifetime earnings was $1,890,874 with a high school degree and $3,770,805 with a bachelor degree.

July 4, 2019

Lewis v. Ukran, 2019 Cal. App. LEXIS 588 (CA App. 2019). The Court addressed the responsibilities for projecting damages and reducing future losses to present value in California as follows:

We hold, in a contested case, a party (typically a defendant) seeking to reduce an award of future damages to present value bears the burden of proving an appropriate method of doing so, including an appropriate discount rate. A party (typically a plaintiff) who seeks an upward adjustment of a future damages award to account for inflation bears the burden of proving an appropriate method of doing so, including an appropriate inflation rate. This aligns the burdens of proof with the parties' respective economic interests. A trier of fact should not reduce damages to present value, or adjust for inflation, absent such evidence or a stipulation of the parties.

July 9, 2019

Martinez-Morales v. Victualic Co., 2013 U.S. Dist. LEXIS 79996 (D. P.R. 2013).  This decision of U.S. Magistrate Judge Marcos E. Lopez denied a motion to exclude the testimony of Dr. Jaime L. del Valle Caballero. Caballero had used the LPE method to project the earning capacity loss of the plaintiff. The defense challenge focused on whether the LPE method properly took account of the business cycle. Judge Lopez ruled that the probabilistic nature of the LPE method accounted for such issues.

July 10, 2019

Economy v. Sutter East Bay Hospitals, 31 Cal. App. 5th 1147; 243 Cal. Rptr. 3d. (CA App. 2019). One of the issues in this appeal was the calculations of Dr. Barry Ben-Zion for tax neutralization of the award. Tax neutralization means adjusting the size of an award so that the after-tax value of the award would be the same as it would have been if loss amounts had not been lost. The court said:

Although an award to compensate for an income-tax disparity for lost future wages is inherently speculative, as is any award for lost future income, we see no reason why this factor cannot be established with sufficient certainty. As the trial court noted, plaintiff's expert provided “detailed testimony regarding his calculations of (i) plaintiff's total tax liability had plaintiff not been terminated and had he continued to earn income, (ii) the amount plaintiff would have to pay in taxes if awarded the computed loss of earnings (back and front pay), and (iii) the tax neutralization amount, i.e., the amount of money needed to generate a net amount equal to the adverse tax consequence.” We agree with the trial court that the foundational information relied on by the expert, including the applicable tax rates, provided a reasonable basis for his opinions.

The Court also provided a review of decisions in the federal circuits regarding the tax neutralization question. The California Supreme Court has since denied certiorari for an appeal of this decision.

July 12, 2019

Blue Book Servs. v. Amerihua Produce, Inc., 337 F. Supp. 3d 802 (N.D. IL 2018).  This memorandum by Federal Judge Edmond E. Chang denied a defense motion to exclude the testimony of Blue Book’s damages expert, C. Kenneth White, saying:

Amerihua []challenges that White is not qualified to testify as an expert in this case, arguing that he does not meet any of the purported "Gold Standards" for expert testimony set forth by their own rebuttal expert, Stan Smith. Def. Br. at 14.  The argument goes that because White does not have a doctorate degree, has never taught a college course, and has not authored a university textbook, he is not a witness "qualified as an expert by knowledge, skill, experience, training, or education." Def. Br. at 14; Fed. R. Civ. P. 702. But the list of factors picked by Amerihua are not conclusive and are most definitely not required by Daubert and Kumho Tire. [] White has been an independent financial consultant since 2003, and before that, he held senior positions at Ernst & Young as a certified public accountant. R. 54, DSOF Sealed Exhibits Exh. V, White Report (sealed) at 36. More importantly, he has over 40 years of professional experience with specialization in valuation and damage analyses. Id. He has a bachelor's degree in accounting and a master's degree in business administration, on top of passing the CPA examination. Id. He has similarly served as an expert in myriad cases. Id. Just because White has focused his career on applying his skills to concrete cases rather than teaching courses or publishing articles does not disqualify him from expert analysis—nor does Rule 702 suggest as much. See Kumho Tire, 526 U.S. at 148-49; Tuf Racing, 223 F.3d at 591.

Bland v. Green, 2019 La. App. LEXIS 1171 (LA App. 6-27-2019). This decision reversed and remanded a trial court decision that had granted a defense motion in limine to exclude the testimony of economic expert Dr. Randolph Rice because Rice did not expressly incorporate the plaintiff’s pre–injury earnings as a foundation for his projection of the plaintiff’s lost earning capacity. Rice had relied upon the analysis of vocational expert Carla Seyler for his opinions about the plaintiff’s pre-injury earnings record. The Court of Appeals said:

Dr. Rice relied on Ms. Seyler's figures that were the result of her consideration of Mr. Bland's seasonal work history and prior earnings. In essence, Dr. Rice adopted Ms. Seyler's work product. He also was provided Mr. Bland's pre-injury tax returns. After having considered the past tax return earning history of Mr. Bland, and adopting the lost earning capacity determination of Ms. Seyler, which alsoincluded her own consideration and estimation of Mr. Bland's work and earning history, Dr. Rice gave a range of values based upon the potential length of Mr. Bland's working life and the annual lost earning capacity figures provided by Ms. Seyler. Dr. Rice calculated that Mr. Bland's losses ranged from $483,021 to $595,863, depending on how much longer he expected to work. In sum, Dr. Rice [Pg 5] provided a lump-sum value equal to the total of Mr. Bland's lost earning capacity through his remaining life based upon the annual earning capacity figures determined by Ms. Seyler.