DeWeese v. United States

419 F. Supp. 170, 1976 U.S. Dist. LEXIS 13748
CourtDistrict Court, D. Colorado
DecidedAugust 5, 1976
DocketMDL-88-1, Civ. A. Nos. C-3097, C-3799
StatusPublished
Cited by7 cases

This text of 419 F. Supp. 170 (DeWeese v. United States) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DeWeese v. United States, 419 F. Supp. 170, 1976 U.S. Dist. LEXIS 13748 (D. Colo. 1976).

Opinion

MEMORANDUM OPINION ON DAMAGES

WINNER, Judge.

After the first opinion which found liability in this ease was filed, 419 F.Supp. 147, a trial was held to determine the amount of damages. I have delayed making the damage determination awaiting guidance from the United States Court of Appeals for the Tenth Circuit on two questions which have troubled me in these and in other cases. I anticipated receiving that guidance from the Court of Appeals in Sanchez v. Denver & Rio Grande Western Railroad Company, 538 F.2d 304. After that case was briefed and set for oral argument, it was partially remanded for me to hear a motion for new trial based on allegedly newly discovered evidence. I did so and denied the motion. This postponed the argument of Sanchez before the Court of Appeals, and it was not decided until July 22,1976. To me, the case clearly decides one of the troublesome questions; i. e., the question of whether I should consider gross or “take-home” pay in awarding damages, but we still have no Tenth Circuit opinion which passes squarely on the “inflation factor” question which bothers me so much.

In Sanchez, the Court said:
“In the present posture of the case the defendant does not complain of the many assumptions made by the expert witness in arriving at his conclusions and the plaintiff cannot so complain except as to the consideration of tax impact. The many complexities noted by Judge Friendly’s opinion in McWeeney v. New York, N.H. and H. R.R., 2 Cir., 282 F.2d 34, cert. denied, 364 U.S. 870, 81 S.Ct. 115, 5 L.Ed.2d 93, and further complicated and confounded by a multitude of subsequent cases within the circuits, although argued and presented to us in briefs, are not here pertinent. The single issue is whether the court erred in insisting that *172 the tax impact be considered by the expert, not the broad question of the acceptability of the expert’s total approach. “The trial court premised its ruling and its firmness, and properly so, on United States v. Sommers, 10 Cir., 351 F.2d 354, in which this court approved consideration of future tax impact in a wrongful death case stating:
“ ‘Undoubtedly situations may arise in which the failure to take into account income tax liability would produce an unconscionable result, and conversely a similar result could be obtained if too great a deduction were applied. When dealing with such an imprecise and speculative subject the best that can be hoped for is reasonableness. It is a determination best left to the exercise of sound discretion of the trial Judge, whether with or without a jury.’ ”

In accordance with my own convictions and with my understanding of Sanchez, I do take income taxes into account and I award damages in these cases on the bases of “take-home” pay. It is argued vigorously in the briefs that gross pay should be the base, but I just simply can’t buy that argument. As I understand damage theory, the award for lost income should be for the income the plaintiffs have lost, and what they have lost is the amount left over after the government takes its inevitable bite. I think that an award of gross pay would be a windfall to the plaintiffs, although I recognize that where, as in Sanchez, the suit is against the employer, the employer is given a break because the employer would have been paying the gross amount to Sanchez and his “partner”, the IRS. In this sense, under the circumstances of Sanchez, the employer benefits from computing damages on a “take-home” pay basis, but even the IRS hasn’t figured out how to intervene to claim in a wrongful death or personal injury suit that it should be compensated for the loss of future withholding taxes. Here, though, the employer is not the tort feasor, and the reasons for using “take-home” pay are even more compelling than they were in Sanchez.

The claim for an inflation factor is a claim for something which is to me too speculative to figure out. I know that in McWeeney v. New York, N.H. & H. Railroad Company, (1960) 2 Cir., 282 F.2d 34, [mentioned by Judge Lewis in Sanchez] Judge Friendly said:

“Though some courts have sanctioned instructions permitting the jury to take into account inflation between the injury and the trial, there is little or no authority in favor of charging the jury to take future inflation into account, see 2 Harper and James, The Law of Torts, § 25.11 (1956). Yet there are few who do not regard some degree of continuing inflation as here to stay and would be willing to translate their own earning power into a fixed annuity, and it is scarcely to be expected that the average personal injury plaintiff will have the acumen to find investments that are proof against both inflation and depression — a task formidable for the most expert investor. The effect of inflation of 1% a year over McWeeney’s 29-year expectancy at trial would go a long way toward offsetting any excess in the verdict due to failure to deduct income tax.”

There will probably be inflation, but how much and at what rate are matters too elusive for me to predict or to calculate in awarding damages which are uncertain to start with. In this case, the • “econometrist’s” calculations were before me, and I found them to be totally unconvincing. After long study, I have concluded that such speculative predictions should not be presented to a jury. I am unconvinced that anyone can foretell economic conditions 45 years down the road, and to permit an alleged expert to do so is to permit testimony which is nothing but crystal ball gazing. It is to be remembered that 45 years ago we were at the bottom of the Great Depression. In 1931, a transcontinental telephone call cost about $20, and for that same $20 one could mail 1,000 letters. Today, the call can be made for less than $1.50, but only 155 letters can be mailed for $20.00. In other words, some costs go up and some go down, *173 and I hope that the fact that Ma Bell is investor owned and the Postal Service is government owned is not the only reason telephone rates have gone down and postal rates have gone up. Forty-five years ago, one of the largest of the building trades was that of the plasterers. Today plasterers are almost a curiosity. The “econometrist’s” predictions assume that there will be a continuing and a growing demand for ever more high priced airline pilots. With the rapid development of automation, who is to say that by the year 2021 commercial airline pilots will not be an occupation of the past. During the last 45 years coal miners have found out a lot about automation just as have the members of many other trades.

I fully agree with Judge Lumbard’s comments in dissent in McWeeney:

“We can only deal in today’s dollar. On any other basis any trial would soon be out of hand with only the sky as the limit.

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419 F. Supp. 170, 1976 U.S. Dist. LEXIS 13748, Counsel Stack Legal Research, https://law.counselstack.com/opinion/deweese-v-united-states-cod-1976.