Legal Decisions Developed or Revised during 2023


January 21, 2023

Lee v. Dennison, 2023 U.S. Dist. LEXIS 7509 (D. NV 1-17-2023). Defendants challenged the admissibility of the testimony of Dr. Stan V. Smith regarding hedonic damages and loss of household./family housekeeping management services. Federal District Judge Kent J. Dawson denied the defense motion in limine, saying:
It is true that some speculation is inherent in awarding damages. And although the Court does have some concerns about the generic nature of some of the opinions Dr. Smith will offer during trial, this does not mean his opinion should be altogether excluded. The Ninth Circuit has made clear that "[a]n expert witness-unlike other witnesses-is permitted wide latitude to offer opinions, including those that are not based on firsthand knowledge or observation, so long as the expert's opinion [has] a reliable basis in the knowledge and experience of his discipline." . . . Defendants have not fully convinced the Court that Dr. Smith's methods are flawed, unreliable, or unaccepted in his field. The jury is tasked with weighing the evidence after any vigorous cross-examinations that may occur, whereas the Court is tasked only with prohibiting "nonsense" opinions. . . . Dr. Smith's conclusions and calculations may be incorrect-however, they are still admissible.

February 4, 2023

Villanueva v. Wal-Mart Stores Texas, LLC, 2023 U.S. Dist. LEXIS 17681 (S.D. TX 1-06-2023). In this slip and fall personal injury, Dr. Stan V. Smith offered opinions that the Plaintiff lost between $1,467,717 and $2,446,202 in life enjoyment because of her injury, using a willingness-to-pay methodology. Federal District Judge  Marina Garcia Marmolejo excluded Dr. Smith’s testimony, saying:
Federal courts have long questioned the willingness-to-pay method's soundness and underlying premises. . . Courts and the academic community have also observed that value-of-life studies do not produce reliably consistent results. . . In fact, the "overwhelming majority" of federal courts have excluded testimony estimating hedonic damages.. . . Moreover, numerous courts have specifically excluded Dr. Smith's proposed testimony. . . This Court joins them [case citations omitted].   
Baker v. City of Florissant, 2023 U.S. Dist. LEXIS 16818 (E.D. MO 2-01-2023). This order from Federal Magistrate Judge Nannette A. Baker denied competing motions to exclude the testimonies of Dr. William Rogers for the Plaintiff and Dr. Thomas R. Ireland for the Defendant. Rogers valued time spent by indigent persons in a Florissant Jail at a “the Market Hourly Price Valuation, and the Value of Statistical Life/Willingness-to-Pay Valuation.” Ireland’s proffered testimony was that Rogers methods were examples of “hedonic damages,” which are typically excluded in federal courts. Ireland, however, was precluded from testifying about Rogers’ motivations for Rogers’s valuation methods, legal issues, or that it is possible to pay poor people enough to be willingly incarcerated.  

Ragan v. Norfolk S. Ry. Co., 2023 U.S. Dist. LEXIS 1113 (E.D. TN 1-04-2023). This decision limited the testimony of Dr. Timothy Carpenter’s economic damage testimony regarding lost railroad retirement benefits as follows:
Because § 231b(b) provides a clear formula for calculating [Tier I and Tier II retirement] benefits, Dr. Carpenter's opinion that the amount Norfolk Southern would have paid in Tier I and Tier II taxes should be considered as Ragan's lost income would mislead the jury. See Adams, 865 S.W.2d at 751 ("Any link between the taxes paid and the benefits is too tenuous to provide a true measure of plaintiff[']s loss."). . .Carpenter's expert report includes the value of Tier I and Tier II taxes Norfolk Southern would have paid . Norfolk Southern argues, and the Court agrees, that the only reason for including those amounts in the expert report would be to offer them as evidence of Ragan's lost income. Courts exclude opinion or testimony treating the employer's projected Tier I and Tier II tax payments as lost income to FELA plaintiffs. See Rachel, 891 F.Supp. at 429-30; Edwards v. Atchison, 684 N.E.2d 919, 924 (Ill. Ct. App. 1997);  Adams, 865 S.W.2d at 751; Cephus v. CSX Transp., Inc., NO. 1:14-CV-1891-SCJ, 2016 WL 10591433, at *3 (N.D. Ga. Dec. 7, 2016). . . [Carpenter] may, if he chooses, perform the appropriate calculations under 45 U.S.C. § 231(b) and offer his opinion that Ragan would have received the amount provided by that formula assuming he had worked to his natural retirement age.
February 5, 2023

Urquehart v. Union Pac. R.R. Co., 2021 U.S. Dist. LEXIS 256533 (E.D. AR 12-07-2021). The Plaintiff was awarded $140,000 for lost earnings and $0 for noneconomic losses in response to a Federal Safety Appliance Act (FSAA) claim. U. S. District Judge Billy Roy Wilson said:
The jury awarded Plaintiff solely for economic damages which consisted of lost wages. Because the damages were awarded pursuant to the FSAA and FELA, it is irrelevant whether the lost wages were for past or future earnings. The damages were necessarily connected to his service on the railroad. . . . Defendant is entitled to offset the damages award for Plaintiff's portion of RRTA taxes in the amounts of $8,680.00 for Tier I and $5,203.80 for Tier II taxes. Additionally, under the Court's holding in Loos, Plaintiff's award for lost earnings under his SAA claim are considered "wages" for purposes of medicare taxes.  Accordingly, Defendant is entitled to offset $2,030 for Plaintiff's share of Medicare taxes.
April 5, 2023

Zarling v. Abbott Labs., 2023 U.S. Dist. LEXIS 51191 (D. MN 3-27-2023). The hedonic damage testimony of Dr. Stan V. Smith was excluded in a case that involved alleged defamation and employment termination of the plaintiff. U.S. District Judge Michael A. Davis found four reasons for excluding Smith’s testimony: (1) That it depended on Zarling’s self-reported percentage reduction in his enjoyment of life and not on “objective indicia;” (2) No peer-reviewed evidence was provided regarding the application of Smith’s methodology to nonphysical injuries; (3) Neither Zarling nor Smith have provided the Court with any indication of the error rate or standards governing the calculation of hedonic damages resulting from defamation; (4) There was no indication that Smith’s methodology for determining loss of enjoyment resulting from defamatory reports is generally accepted; (5) The fact that the studies used by Smith contain wide ranges of values for a human life suggestes that the average value that Smith used is not generally accepted.

Norfolk & W R Co. v. Holbrook, 235 U.S. 625 (2015). Justice McReynolds, speaking for the majority said:
Under the Employers' Liability Act, where death is instantaneous, the beneficiaries can recover their pecuniary loss and nothing more; but the relationship between them and the deceased is a proper circumstance for consideration in computing the same. The elements which make up the total damage resulting to a minor child from a parent's examination where the beneficiary is a spouse or collateral dependent relative; but in every instance the award must be based upon money values, the amount of which can be ascertained only upon a view of the peculiar facts presented.. . . In the present case there was testimony concerning the personal qualities of the deceased and the interest which he took in his family. It was proper, therefore, to charge that the jury might take into consideration the care, attention, instruction, training, advice and guidance which the evidence showed he reasonably might have been expected to give his children during their minority, and to include the pecuniary value thereof in the damages assessed. But there was nothing -- indeed there could be nothing -- to show the hypothetic injury which might have befallen some unidentified adult beneficiary or dependent next of kin.
May 19, 2023

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 Stevens 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 with 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.
The court discussed a number of previous decisions that used various methods. Then, instead of mandating 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 specific ruling in the case was that the Pennsylvania Supreme Court was not allowed to mandate a total offset rate. As regards discount rates, the Court said:

    Although we find the economic evidence distinctly inconclusive regarding an essential premise of those approaches,  we do not believe a trial court adopting such an approach in a suit under  5(b) should be reversed if it adopts a rate between 1 and 3% and explains its choice.

May 21, 2023

Passafiume v. Jurak, 2023 IL App (3d) 220232 (IL App. 5-10-2023). This decision held that household services in a wrongful death act could be calculated as a loss of material services that does not terminate at remarriage of the surviving spouse. Other Illinois decisions described in the decision had held that household services were a part of consortium, which existing Illinois law held was terminated at remarriage. In this case, and in at least one previous Illinois appellate decision, material benefits include household services that are like loss of financial support and can be provided by persons with no relationship to the spouse. This is unlike guidance and counsel that is specific to a marriage relationship, and is terminated upon remarriage. Dr. Stan V. Smith was the plaintiff economic expert in this case. He was permitted to testify about loss of household services that can be replaced in the commercial marketplace at values that can be calculated by an economic expert, but was not permitted by the trial court to testify dollar values for companionship, guidance, and counsel, which are intangible elements of consortium.

June 1, 2023

Gray v. Imperial Pacific International (CNM), LLC, 2023 WL 3714156 (D. NMI 5-30-2023).  This was a mixed wrongful termination and wrongful retaliation decision in favor of the plaintiff that involved decisions with respect to back pay, front pay, and loss of future earning capacity. Nik Volkov, economic expert for the plaintiff, projected grossed up back pay losses $464,083 for 42 months. The company,  however, had terminated all operations in March of 2020, and the court awarded grossed-up back pay losses of $121,546. Because the defendant had terminated operations, no front pay was awarded. The plaintiff also claimed loss of future earning capacity based on difficulties in finding new employment because of termination.  Volkov’s calculations for front pay were used by the court to determine a loss of $1,475,685 an appropriate amount for future lost earnings.  However, the court was constrained to award only $300,000 for loss of earning capacity because “[a]lthough Title VII does not impose a cap on front pay, ‘lost future earnings are subject to Title VII’s damages cap[.]’” Thus, although calculations for front pay were used to estimate an appropriate amount for lost earning capacity, “lost earning capacity” falls into the category of “noneconomic damages” under Title VII of the Civil Rights Act, citing decisions of the 7th and 9th Circuits to that effect.