Brown v. United States

615 F. Supp. 391, 1986 A.M.C. 1487, 1985 U.S. Dist. LEXIS 16927
CourtDistrict Court, D. Massachusetts
DecidedAugust 12, 1985
DocketCiv. A. 81-168-T
StatusPublished
Cited by15 cases

This text of 615 F. Supp. 391 (Brown v. United States) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown v. United States, 615 F. Supp. 391, 1986 A.M.C. 1487, 1985 U.S. Dist. LEXIS 16927 (D. Mass. 1985).

Opinion

MEMORANDUM

TAURO, District Judge.

In an opinion issued December 21, 1984, this court narrowly applied traditional tort principles to a unique factual setting in holding the government liable, because of its failure to properly maintain a computerized weather buoy, for the drowning deaths of three lobster fishermen. 1 Brown v. United States, 599 F.Supp. 877 (D.Mass. 1984). On January 28, 1985, a bench trial was held on the issue of damages. After the submission of post-trial briefs, the damages controversy was taken under advisement on June 6, 1985.

Plaintiffs seek to recover damages under the Death on the High Seas Act, 46 U.S.C. § 761-768 (DOHSA), which provides a cause of action “[w]henever the death of a person shall be caused by wrongful act, neglect, or default occurring on the high seas beyond a marine league 2 from the *394 shore ... of the United States.” DOHSA allows “fair and just compensation for the pecuniary loss sustained by the persons for whose benefit the suit is brought.” 46 U.S.C. § 762. In Sea-Land Services, Inc. v. Gaudet, 414 U.S. 573, 584-85, 94 S.Ct. 806, 814, 39 L.Ed.2d 9 (1974), the Court recognized that loss of support is an element of pecuniary loss under DOHSA, and defined loss of support to include “all the financial contributions that the decedent ... would have made to his dependents had he lived.” The Court also recognized that the “monetary value of the services the decedent ... would have continued to provide” is recoverable under DOHSA, including the value of the “nurture, training, education, and guidance that a child would have received.”

In addition to seeking damages under DOHSA, plaintiffs seek compensation for the pain and suffering of their decedents. Plaintiffs’ respective claims are discussed below.

I

Gary Brown

Gary Brown was born on October 3, 1953 and drowned on November 22, 1980 at the age of 27. He married two months before his death. At the time of Gary’s death, his wife, Honour, was pregnant with their daughter, Cary Brown, who was born in 1981.

Honour Brown is entitled to the aggregate income Gary Brown would have earned, less the amounts he would have paid in federal and state taxes, See Jones & Laughlin Steel v. Pfeifer, 462 U.S. 523, 534, 103 S.Ct. 2541, 2549, 76 L.Ed.2d 768 (1983), 3 and for personal maintenance, Higginbotham v. Mobil Oil, 360 F.Supp. 1140, 1144 (W.D.La.1973), aff’d in relevant part, 545 F.2d 422 (5th Cir.1977), rev’d on other grounds, 436 U.S. 618, 98 S.Ct. 2010, 56 L.Ed.2d 581 (1978). In order to make this calculation, this court must determine the rate at which Gary Brown’s income would have increased during the years of his employment.

The defendant’s expert assumed that Gary Brown was a typical fisherman and concluded that his earnings would have increased at a rate of 6% a year. His testimony was based on the fact that fishermen’s wages have increased at that rate during the past ten years (Tr. 5-160). The defendant’s expert, however, did not consider the actual rate at which Gary Brown’s income grew during the years preceding his death. Moreover, he failed to consider that Gary Brown was a lobster-man and not an ordinary fisherman (Tr. 5-169).

Plaintiffs’ expert, on the other hand, examined Gary Brown’s tax returns for the years 1977 to 1980 and concluded that, had he not been killed, his income would have continued to increase at an 11% rate until March 1, 1985. Applying that rate of increase to Gary Brown’s 1980 earnings of $21,555, plaintiffs’ expert calculated that Gary Brown would have had annual earnings of $37,087 as of March 1, 1985 (Tr. 5-131, 150). 4

*395 For the period following March 1, 1985, plaintiffs’ expert made the conservative assumption that Gary Brown would not have made any further career advances and that his wages would have only increased at a rate of 1.5% a year, representing the benefit he would have received from the general increases in productivity that permeate the economy and benefit all American workers (Tr. 5-132). See Jones & Laughlin Steel v. Pfeifer, 462 U.S. 523, 535-36, 103 S.Ct. 2541, 2549-50, 76 L.Ed.2d 768 (1983) (“productivity increases ... have been a permanent feature of the national economy since the conclusion of World War II”); O’Shea v. Riverway Towing Corp., 677 F.2d 1194, 1200 (7th Cir.1982) (plaintiff “could expect her real wages ... to rise ... as average real wage rates throughout the economy rose, as they usually do over a decade or more”).

In calculating the aggregate amount of income a decedent would have earned, a court may not simply add up the salary plaintiff would have received during his work-life expectancy. Rather, the court must discount the decedent’s projected earnings so as to arrive at their present value. Establishing the appropriate discount rate is, of course, the threshold task.

At trial, the parties offered two alternate methods of ascertaining the proper discount rate. Plaintiffs’ expert economist proposed a “real” discount rate. A real discount rate is based on the “fairly constant relationship between interest and inflation rates.” Doca v. Marina Mercante Nicaraguense, S.A., 634 F.2d 30, 37 (2d Cir.1980), cert. denied, 451 U.S. 971, 101 S.Ct. 2049, 68 L.Ed.2d 351 (1981). The real discount rate itself is the margin by which the interest rates of risk-free instruments (such as Treasury securities) historically exceed inflation. 5

Plaintiffs’ expert employed a real discount rate of 3.5%. He made this selection based on his findings that the interest rate on Treasury securities was 2.5% to 3.0% during the fifties, when there was little inflation and slight expectation of future inflation. He also noted that high grade corporate bonds paid interest of 3.5% to 4.0% during the fifties (Tr. 133). The higher rate of interest paid on corporate bonds apparently caused plaintiffs’ expert to opt for a higher discount rate than the rate paid on Treasury securities.

From the plaintiffs’ standpoint, their expert’s selection of a 3.5% discount rate was extremely conservative. The rate of corporate bonds should not have had an impact on the plaintiffs’- expert’s selection of a real discount rate, for even the highest quality corporate bond contains an element of risk that is reflected in a higher interest rate.

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Bluebook (online)
615 F. Supp. 391, 1986 A.M.C. 1487, 1985 U.S. Dist. LEXIS 16927, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-v-united-states-mad-1985.